CORPORATE REPORT2014

Total ICT Solutions: Contributing to the Realizationof a Brighter Future by Bringing People Together andForming Connections with Society*ICT is an acronym for Information and Communications Technology.

Corporate Philosophy:

Cultivating Technological
Capabilities, Seeking
Affluence andContributing to Society
1

Corporate Report 2014

The corporate philosophy of the KYOWA EXEO Group, which is the basic
guideline for our corporate social responsibility, includes cultivating technological capabilities, seeking affluence and contributing to society. The corporate philosophy clearly answers the question: “Why does the KYOWA EXEO
Group exist?” The utmost ground for existence is the Group’s technologicalcapabilities. Throughout its existence, the Group has aimed to be a corporate group that always anticipates and pursues better technologies at theforefront of leading-edge technologies. The technological capabilities cultivated through these efforts will help create more affluent living environmentsfor people. The Group intends to be a valuable enterprise by contributing tosociety through activities in the pursuit of state-of-the-art technologies.

Building a better,brighter future together

Corporate Report 20142

To help you better understand thecorporate activities of the KYOWA EXEO
Group, we are providing an integratedversion issue of the Annual Report andthe CSR Report.
Corporate Data
Company Name

KYOWA EXEO CORPORATION

EstablishedMay 17, 1954

Paid-in Capital¥6,888 million (as of April 1, 2014)

Stock ListingFirst Section of the Tokyo Stock Exchange

Representatives

Kunio Ishikawa, Chairman
Fuminori Kozono, President

Net Sales¥318.5 billion (consolidated)¥247.3 billion (non-consolidated) (as of March 31, 2014)

Number of
Employees

7,553 (consolidated)
3,552 (non-consolidated) (as of March 31, 2014)

Head Office29-20, Shibuya 3-chome, Shibuya-ku, Tokyo
TEL: +81-3-5778-1111 (switchboard)
URL: http://www.exeo.co.jp

West Japan Head
Office6-13, Kyomachibori 3-chome, Nishi-ku, Osaka
TEL: +81-6-6459-1581

Number ofBusiness Offices

Branch offices: 13
Sales offices: 15

Major Banks

Mizuho Bank, Ltd., Sumitomo Mitsui Banking Corporation, The Bankof Tokyo-Mitsubishi UFJ, Ltd.

Independent
Auditor

Kudan Audit Corporation

Editorial Policy
Period Covered by the Report:

From April 1, 2013, to March 31, 2014
(However, in some cases, activities before and after the coverage period are also included inthis report.)
Organizations Covered by the Report: Companies subject to consolidation of the KYOWA EXEO Group(However, in some cases, KYOWA EXEO CORPORATION’s non-consolidated data are usedinstead of consolidated data.)
Reference Guidelines:
GRI “Sustainability Reporting Guideline Version 3.1”
Ministry of Environment “Environmental Reporting Guidelines (Fiscal 2012 Version)”
ISO26000 “Guidance on social responsibility”
Issuance:
August 2014
Next Issuance Scheduled:

August 2015

KYOWA EXEO CORPORATION
http://www.exeo.co.jp/overseas/index.html
29-20, Shibuya 3-chome, Shibuya-ku, Tokyo 150-0002, Japan

3

Corporate Report 2014

CONTENTS

05
07
15
17

Milestones of the KYOWA EXEO Group

29 CSR Concept

Business Overview
Consolidated Financial Highlights

TOP MESSAGE

REVIEW
2013
Review of Fiscal 201319 Business Results for Fiscal 2013
20 Tasks Addressed andAchievements in Fiscal 2013

Management Systems

31
32
33

Corporate GovernanceCompliance
Risk Management

Involvement in the Environment

35
39
53
54

Environmental Management

Financial Section
Stock Information
Board of Directors

GROWTHSTRATEGY
Growth Strategies
Pick Up!
In Focus:
Value Created by TEAM EXEO

23 1 Mobile
25 2 System Solutions

Notice on forward-looking statements:
This Corporate Report 2014 contains forward-looking statements such as the future business performance of KYOWA EXEO. As thesestatements are based on the information available at the time of the preparation of this report, the actual results might differ materiallyfrom the content described or suggested therein due to various factors. As this corporate report is not intended for the purpose of soliciting investment, all users of this report are advised to undertake decisions concerning investment at their own discretion.
The figures stated in units of ¥100 million and ¥1 million are rounded down.

Corporate Report 20144

t o r yH

si Milestones of the KYOWA EXEO Group
Since its foundation in May 1954 as Kyowa Densetsu Kaisha, Ltd.,KYOWA EXEO has continued to create “Linkages” in society.
Business Topics

System Solutions

Environmental/Social
Infrastructure

Communications
Infrastructure

Corporate History
May 1954

Company established as Kyowa Densetsu Kaisha, Ltd.

May 2010

Made Ikeno Tsuken Co., Ltd., a consolidated subsidiary

Jul. 1954

Qualified to participate in telecommunications facility tenders
for Nippon Telegraph and Telephone (now NTT)

Aug. 2011

Feb. 1963

Listed on the Second Section of the Tokyo Stock Exchange

WAKO ENGINEERING CORP., Daiwa Densetsu Corporation
and Ikeno Tsuken Co., Ltd., were converted into wholly
owned subsidiaries

Sep. 1963

Began engaging in telecommunications and electric power
construction outside that for NTT

Nov. 2011

ICOMSYSTECH Co., Ltd., was converted into a wholly
owned subsidiary

Feb. 1972

Listed on the First Section of the Tokyo Stock Exchange

Apr. 1982

Branched out into the software business

Jun. 1986

Entered the environment business

May 1991

Changed company name to KYOWA EXEO CORPORATION

Apr. 1998

Entered into the NI business.

Mar. 1999

Relocated head office to current address in Shibuya-ku, Tokyo

Apr. 2004

Acquired Daiwa Densetsu Corp.

May 2004

Acquired WAKO ENGINEERING CORP.

Apr. 2005

Acquired KANAC Corp.

Sep. 2009

KANAC Corp. was converted into a wholly owned subsidiaryYear ended September
1974:
Achieved annual net sales of¥50 billion
May 1954
Company established
as Kyowa Densetsu
Kaisha, Ltd.

May 1991
Changed company
name to KYOWA EXEOCORPORATION

Year ended September
1988:
Achieved annual net sales of¥100 billion

1982
Branched out into thesoftware business
1983
Started developing billingsystems.

Feb. 1963
Listed on the Second
Section of the Tokyo Stock
Exchange

Feb. 1972
Listed on the First Sectionof the Tokyo Stock
Exchange

1986
Entered the environment business(Water treatment)
1988
Acquired a construction technology
evaluation statement from the
Minister of Construction for thedevelopment of a rainfall storage
penetration system

1992
Started work on PDC (mova)

1963
Started overseas work
(Honduras)
Started service tunnel(communications tunnel) work
adopting the shield tunnelingmethod.

1975
Started establishing a railway
communications network
inside Tehran Province in Iran.

1955
Started coaxial cabling work.

1983
Started optical fiber work.

1986
Started CATV work.

1956
Started telex work.

1954
5

Corporate Report 2014

1990
Entered the food plant
wastewater treatment
business and riverpurification business

Mobile phone base station

1960

1970

1980

1990

Year ended March
2006:
Achieved annual net sales ofYear ended March
1997:
Achieved annual net sales of¥200 billion

May 2000
Acquired ISO14001
certification
Apr. 2001
Merged with Showa
Technos Corp.
Nov. 2001
Instituted a complianceprogramSep. 2003
Acquired OHSAS18001
certification

Jan. 1997
Acquired ISO9001
certification

Mar. 1999
Completed
construction of the
new company buildingin Shibuya(head office)1998
Entered into the NI
business.
1999
Developed the Social
Insurance System
Developed SOA
solutions.
1994
Developed the Air
Traffic Control System

1995
Started workon the C·C·Box.
1996
Started Internet
compliant systemestablishment work.

May 2004
Acquired WAKO
ENGINEERING CORP.
Apr. 2005
Acquired KANAC Corp.
Jun. 2005
Won a gold medal atthe 38th World Skills
Competitions in Helsinki,
FinlandNov. 2007
Won a gold medal atthe 39th World Skills
Competitions in Shizuoka,
Japan (second consecutive
championship).
Sep. 2009
KANAC Corp. wasconverted into a wholly
owned subsidiaryTokyo Integrated
Engineering Center(TEC) started operation(Heiwajima).
Oct. 2009
Won a gold medal at
the 40th World Skills
Competitions in Calgary,
Canada (third consecutive
championship).
May 2010
Made Ikeno Tsuken
Co., Ltd., a consolidated
subsidiary

2001
Started developing an
Administrative Organ
Accounting System.

2003
Sold an Internet videoconference system

Started developing a“Work Management
System.”2002
2002
Started customer services. Entered into the2000
Started the dioxincountermeasure-compliant
incinerator business
2001
Entered into the livestock
excreta disposal business.

1994
Acquired a construction
technology evaluation
statement from the Ministerof Construction for thedevelopment of a highefficiency river purification
systemApr. 2004
Acquired Daiwa
Densetsu Corp.

Mar. 2006
Obtained the Privacy
Mark.

2002
Acquired the ash fusionbusiness from Niigata
Engineering Co., Ltd.

installation of solar
power generation
facilities.
2003
Completed the first bio
plant (Iwate Prefecture)
2005
Operated the thermitestyle dual-side ash
fusion furnace businessin a full-scale

2003
2001
Started IMT (FOMA) work. Started analog antenna
exchange work compliant
with ground digital
broadcasting.
2004
Entered into the KDDI aubase station construction
business full scale.
Started to reestablish therailway communication
network along with thequadruple track extensionof private railway lines in
Mobile phone base station Tokyo
2002
Shifted the B FLET’S
work to full scale.

2000

2009
Entered into an SOA
service agreementwith the Tokyo Stock
Exchange.

Aug. 2011
WAKO ENGINEERING CORP., Daiwa
Densetsu Corporation and Ikeno
Tsuken Co., Ltd., were converted into
wholly owned subsidiaries
Oct. 2011
Won a gold medal at the 41st World
Skills Competition in London (fourthconsecutive championship).
Nov. 2011
ICOMSYSTECH Co., Ltd., wasconverted into a wholly owned
subsidiary

Milestones of the
KYOWA EXEO Group¥300 billion

Jan. 2006
Acquired the ISMS
certification

Nov. 2013
Won a gold medal at the 51st
National Skills Competition in Chiba(for the fifth time).
May 2014
Formed a capital and businessalliance with Eponet, Inc. and
WHERE, Inc.
2011
Received the IBM Excellent
Partner Award Japan 2010
Authorized as a Core
Business Partner of NTT
DATA CORPORATION
2012
Stated selling the Adaptive
Biz Service.
2013
Newly established the
ICT Solution businessheadquarters.

2006
Entered into thewood biomass boiler
business.

2012
Received an order to construct
a large-scale cleaning plant(Wakayama).

2006
Started long-term
comprehensive businessconsignment services at
general waste treatmentsites (Tochigi Prefecture)

Shifted the installation of themega solar power generation
facilities to full scale.
Started selling electricity.

2010
First general waste
incinerator completed(Aomori Prefecture)

2009
Started WiMAX work.
2010
Shifted the regional
intranet establishment
business to full scale.

2011
Entered into the Softbank
mobile project.
Engaged in the Great East
Japan Earthquake recovery
work.

Started LTE work.
Shifted the analoganalog antenna
exchange work
compliant with grounddigital broadcasting tofull scale.

Started A−XGP work.

2006
Started work on the nextgeneration network (NGN).

2012
Started the Platinum Band
Project (900 MHz).

Shifted the MNP work to
full scale.

Mar. 2014
Conducted construction
work for the post-disaster
restoration of Izu Oshima.

2010

2013
Corporate Report 20146

Business Overview

Linking all Communications.
We Contribute to Creating
an Affluent Society
with Two Types of Solutions.
The KYOWA EXEO Group works to contribute to
the realization of an affluent society and perform its
corporate social responsibility by providing highvalue-added ENGINEERING SOLUTIONS andSYSTEM SOLUTIONS.

ENGINEERING SOLUTIONS

Telecommunications Infrastructure
As broadband services are expanding toward the building of a safe and secure ICT society, the diversificationand sophistication of various technologies are underway. We provide consistent quality services from planning and design to construction, operation and maintenance for all types of communications equipment andfacilities throughout the country based on performanceover the years and excellent technologies.

To page 9

7

Corporate Report 2014

Business Overview

Building a better, brighter future together

SYSTEM SOLUTIONS

Environmental and Social Infrastructure:
By developing the electrical and engineering technologies that

Drawing on our ICT technologies, we are offering

we have nurtured in building a telecommunications infrastruc-total solutions in both the network integration (NI)ture, we have accumulated experience in the design andfield, which is establishing LAN/WANs and Internet

construction of electrical and air-conditioning facilities andenvironments, and the system integration (SI) field,

equipment. Utilizing such technologies in the environmental

which is establishing systems for corporations

field, to realize a recycling-oriented society, we are working tosuch as communications carriers, financial institu-

establish a social infrastructure that includes new energy

tions and manufacturers.

facilities, urban civil engineering structures and environmental
plants.

To page 11

To page 12

Corporate Report 20148

Business Overview

ENGINEERING
SOLUTIONNTT Group

We are working to establish various telecommunications facilities for the NTT Group companies.
Access engineering:
We lay optical fiber cable networks,
which are indispensable for highspeed communications networking,and install the Fiber To The Home
(FTTH) system to provide broadband
services such as the Internet tocorporations and households. EXEO’s
world-leading, high-quality construction technologies, which have won
the gold medal at the World Skills
Competition four consecutive years,
are supporting theever-evolving
information
communications age.

9

Corporate Report 2014

Network engineering:

Mobile engineering:

We inspect, design, build, monitor

We provide total services to achieve
comfortable mobile communications
environments not only inside buildings where people gather but also
inside station premises and tunnels.
Our services include negotiations for
installation, prior investigations anddesign of wireless phone basestations, and we establish mobile
communications facilities in general,
conduct
qualitysurveys andprovidevarious typesof maintenance.

and operate next-generation networks (NGNs) using leading-edge
routers and servers. We also design,
construct and maintain switchers,transmission equipment and power
equipment at nationwide legacy facilities, all of which support today’scommunications networks.

Business Overview

Building a better, brighter future together

Global development
Starting with orders received for communications cable installation work in Honduras inSouth America in 1963, we have long engaged
in various projects overseas. We have sent
engineers to nearly 100 countries.
Countries to which we have sent engineers since 1992
( Local corporations/ Locations to which our engineers were sent)

Currently, we have local operational bases in Manila,
the Philippines, and Bangkok, Thailand, contributing
to establishing and expanding local telecommunications facilities. Our consolidated subsidiary in thePhilippines, MG EXEO NETWORK INC., in particular,
has an operational structure that can handle projects
in neighboring countries.
ENGINEERING
SOLUTION

Multi-carriers

Establishing various telecommunications facilities forcustomers other than the NTT Group companies
Telecommunications facilities:
We construct telecommunications facilities
for new common carriers (NCCs) such as theKDDI Group and the Softbank Group, municipalities, government agencies, cable television companies, railway companies and othercustomers.
Many of our recent projects support Japanese companies that are developing businesses overseas. Whensuch companies launch large-scale factories overseas,
we are contributing to establishing the local IT environment for them such as constructing LANs and WANs.

Corporate Report 201410

Business Overview

ENGINEERING
SOLUTION

Electricity supply

Urban civil engineering

Environmental engineering

Drawing on the Group’s long-nurtured business results and technologies for stable electricity supply totelecommunications facilities, we areproviding a broad range of consistent
services from design and construction to maintenance for officebuildings and commercial buildings,
as well as telecommunications,power generation, air-conditioning
and hygiene facilities nationwide. We
can handle various projects fromgeneral electrical work to intricate
electric power construction that
requires highly advanced technologies. We are also contributing tosociety inenergy-saving
fields such as
mega solar
power generation and LED
lighting
projects.

With our long-nurtured technologies
in the construction of information
telecommunications facilities, weestablish telecommunications
facilities such as manholes andunderground conduits, rehabilitatebuilding structures and install electricity cables underground. We areestablishing a social infrastructurethat addresses the needs of new
generations with a consistent operational structure from design andconstruction to maintenance. Furthermore, drawing on our experience
as a trailblazer of the shield tunnelingmethod(non-drilling),
we arecontributing to
the installationof lifelines
such as watersupply andsewage.

The Group contributes to thepreservation of the global environment and creating a society where
people can live with a sense of
security. To this end, we utilize ourwaste treatment technologies forincineration and recycling facilities
and our wood biomass boilers andother such renewable energy
technologies and water treatment
technologies for industrial wastewater treatment facilities andsewage treatment facilities. We
offer such comprehensive ecotechnologies
with lowenvironmental
burden fromplanning,
proposal andconstruction
to operation.

11 Corporate Report 2014

Business Overview

Building a better, brighter future together

SYSTEM SOLUTIONS

Network Integration (NI)

System Integration (SI)The Group offers various types of services such as

To help customers solve their management issues, we

designing, constructing and operating servers and LANs

provide system solution services tailored to a variety offor corporations, and improves server/Internet environ-customer needs, which encompass everything fromments and security.

consulting to development, construction, maintenance

Major solutions
Network and server solutions
Wireless LAN solutions
Security solutions
Cloud solutions
Sound (e.g., IP-PBX) solutions
Video solutions
Smart sensing solutions
Energy management solutions
Operation, monitoringand maintenance services

and operation, by drawing on the latest technologies
such as service-oriented architecture (SOA) and our
powerful solutions.
Major solutions
SOA solutions
EAI/ESB, BPM, BRMS, ETL/BI, etc.

Business support solutions
Adaptive Biz Service (ABS)

Customer-specific billing
solutions
Facility and equipment
management solutions
Financial solutions
Corporate Report 201412

Business Overview

Strength of the KYOWA EXEO Group
Drawing on the Group’s strengths of “Total Process,” “Total Solution” and “Nationwide Expansion,” wecontinue to provide high-quality services to meet diversifying customer needs through the concertedGroup-wide power.

Total Process
We respond to customers’
needs with one-stop
services from planning anddevelopment to construction,
operation and maintenance,
which are sustained by highengineering and technologicalcapabilities.

Total Solution
We meet diversified
customers’ needs byfully drawing on the latest
technologies in a wide
variety of fields such as
telecommunications, civilengineering, electricity,
network integration (NI)and system integration(SI).

From Planningto Maintenance

Nationwide Expansion

Group ofProfessionals Who
Are Acquainted
with Every Kind ofTechnology

SupportNationwide

We are prepared to meet
every kind of customer
need, which can becovered by our operatingbases and Group
companies locatedthroughout the nation.

Total Process (through-process construction)

Planning and development

Construction

Operation and maintenance

SYSTEM SOLUTIONS

Total Solution

ENGINEERING SOLUTIONS

Optical access network
Next-generation network (NGN)
Mobile (Speeding up) 3G

LTE

LTE-Advanced

Underground installation of electricity cables
NI solutions and SI solutions
New energy (solar light, etc.) eco businessElectric equipment
Home ICT and Smart Houses

Nationwide operation, multiple carrier compliant and migration-compliant

13 Corporate Report 2014

Group Structure

Business Overview

Building a better, brighter future together(As of July 1, 2014)

KYOWA EXEO CORPORATIONTh r e e M a jor C o n s o l i d a t e d S u b s i d i a r i e s
Daiwa Densetsu Corporation

WAKO ENGINEERING CORP.

Ikeno Tsuken Co., Ltd.

31 Other Consolidated Subsidiaries
Accessengineering

Shinyei Tsushin Co., Ltd., Suncrex Corporation, FUJI DENSETSU CO., LTD., Ecos Hokuei Corporation, Sankyo-Techno Co., Ltd.,KANAC Corporation, K. Technos Co., Ltd., WAKO CTEC Co., Ltd., WAKO Itech Co., Ltd., Technos Co., Ltd., Sigmax Co., Ltd.,
Vertec Co., Ltd., EUNice Co., Ltd.

Civil
engineering

Exeo Infra Corporation, Infratechno Corporation

Networks

Kyowa Synax Corporation, DAITOH INDUSTRY CO., LTD., Shinkyo Engineering Co., Ltd., Multimedia Engineering Co., Ltd.

Mobile telecommunications

Exeo Mobile Corporation, Toho Communications Co., Ltd., Yuaituken Corporation, Kyoei Densetsu Kogyo Corporation, Denseisya
Corporation

IT

ACCRESCO CO., LTD., ICOMSYSTECH CO., Ltd.

Other

KYOWA SECURITY SYSTEM CORPORATION, Kyokuyoh Corporation, Shinwa Seisakusyo Corporation, Exeo Butsuryuu Service
Corporation, Exeo Business Corporation, ASAHI DENWA KOGYO CORPORATIONBusiness Bases
Domestic bases:((As of July 1, 2014)
Branches/

Offices)Head Office: 29-20, Shibuya 3-chome, Shibuya-ku, Tokyo
Nishi-Nippon Head Office: 6-13, Kyomachibori 3-chome, Nishi-ku, Osaka-shi, Osaka
Hokkaido Branch: 2-20, Minami 21-jo Nishi 7-chome, Chuo-ku, Sapporo-shi, Hokkaido

Iwate Office: 5-7, Honcho-dori 2-chome, Morioka-shi, Iwate

Tohoku Branch: 5-1, Omachi 2-chome, Aoba-ku, Sendai-shi, Miyagi

Yamagata Office: 9-10, Minami Yonban-cho, Yamagata-shi, Yamagata

Koshin Branch: 602-2, Ochiai-cho, Kofu-shi, Yamanashi

Niigata Office: Cosmo Shinano, 4-27 Shinano-machi, Chuo-ku, Niigata-shi, Niigata

Minami Kanto Branch: 12-1 Kanagawahoncho, Kanagawa-ku, Yokohama-shi, Kanagawa

Nagano Office: NTT Kurita Building No. 1, 2423, Inaba, Nagano-shi, Nagano

Tokai Branch: Nishiki SIS Bldg., 10-33, Nishiki 3-chome, Naka-ku, Nagoya-shi, Aichi

Ibaraki Office: 1486 Kasahara-cho, Mito-shi, Ibaraki

Kansai Branch: 6-13, Kyomachibori 3-chome, Nishi-ku, Osaka-shi, Osaka

Chiba Office: Chiba West Building, 24-9 Shinmachi, Chuo-ku, Chiba-shi, Chiba

Miyako Branch: 539-20, Omiya Nishiiru Monzen-cho, Oike-dori, Chukyo-ku, Kyoto-shi, Kyoto

Kanto Naka Office: NTT Shirahata, 1-23, Shirahata 5-chome, Minami-ku, Saitama-shi, Saitama

Hyogo Branch: 1-13, Ekiminami-dori 2-chome, Hyogo-ku, Kobe-shi, Hyogo

Wakayama Office: 1704, Nakanoshima, Wakayama-shi, Wakayama

Hokuriku Branch: Kanazawa Fit Building, 53-1 Futakuchi-machi-Ni, Kanazawa-shi, Ishikawa

Matsuyama Office: Sumitomo Seimei Matsuyama Ichibancho Building, 15-2,
Ichibancho 1-chome, Matsuyama-shi, Ehime

Shikoku Branch: 136, Mitani-cho, Takamatsu-shi, Kagawa
Chugoku Branch: 7-11, Ogawachi-machi 2-chome, Nishi-ku, Hiroshima-shi, Hiroshima

Yamaguchi Office: 19-2, Ekiminami-machi, Hofu-shi, Yamaguchi

Kyushu Branch: 7-8, Tamagawa-machi, Minami-ku, Fukuoka-shi, Fukuoka

Kumamoto Office: 27-23, Egoe 1-chome, Minami-ku, Kumamoto-shi, Kumamoto

Okinawa Branch: 30-52, Oroku 1-chome, Naha-shi, Okinawa

Kitakyushu Office: 1320-13, Aza Otsuka, Oaza Maeda, Yahatahigashi-ku, Kitakyushu-shi, Fukuoka
Nagasaki Office: NTT WEST Higashi Nagasaki Building, 823 Tanaka-machi, Nagasaki-shi, Nagasaki
Oita Office: NTT Harashin Building, 5-1, Harushinmachi, Oita-shi, Oita
Minami-Kyushu Office: 6, Kasuga-cho 4-chome, Kagoshima-shi, Kagoshima

Bases of Three Major Consolidated Subsidiaries
WAKO ENGINEERING CORP.:

Daiwa Densetsu Corporation:

Ikeno Tsuken Co., Ltd.:

1-23, Heiwajima 4-chome, Ota-ku, Tokyo

5-1, Omachi 2-chome, Aoba-ku, Sendai-shi, Miyagi

1-23, Heiwajima 4-chome, Ota-ku, Tokyo

Overseas Bases
Philippines
MG EXEO NETWORK INC.
9/F Floor, DPC Place Building 2322 Chino Roces Ave. 1231
Makati City, Philippines

Thailand
THAI EXEO CORPORATION LTD.
56/8 Moo 1 Soi Chaengwattana 14 Chaengwattana Road,
Thungsonghong, Laksi, Bangkok 10210, THAILAND
Corporate Report 201414

Consolidated Financial and Non-financial Highlights

Financial Information(Billions of yen)

2009

2010

2011

2012

2013

2014 (plan)

Orders received

276.2

273.7

288.5

317.8

304.2

320.0

Net sales

271.2

282.2

273.1

301.3

318.5

320.0

Operating income

13.8

12.3

8.9

18.0

20.7

22.0

Net income

8.3

7.7

7.8

11.3

14.9

14.1

Capital expenditures

9.6

4.0

1.9

3.3

7.3

—

Depreciation expenses

2.9

3.0

2.9

2.3

2.2

—

Total assets

180.1

196.9

181.2

200.4

217.0

—

Net assets

105.3

112.2

113.4

122.3

135.6

—

Interest-bearing Debt

18.0

21.3

8.1

9.9

13.3

—

Net cash provided by (used in) operating activities

10.9

0.6

16.4

7.1

9.8

—

Net cash provided by (used in) investing activities

10.6

1.5

4.5

2.1

7.4

—

Net cash provided by (used in) financing activities

4.0

3.6

17.5

3.0

0.9

—

Cash and cash equivalents

22.2

17.6

12.3

14.6

16.2

—

Operating results (Fiscal year):

Financial position (at year-end)

Cash flows (Fiscal year)(¥)

Per share of common stock:
EPS

79.75

75.58

74.96

109.25147.75144.28Cash dividend

20.0

20.0

20.0

22.0

24.0

24.0
(%)

Financial indicators:
Operating Income to Net Sales

5.1

4.4

3.3

6.0

6.5

6.9

ROE (Note 2)

8.6

7.6

7.2

9.6

11.6

—

ROA (Note 3)

4.7

4.1

4.2

5.9

7.1

—

Equity ratio

55.4

53.9

62.4

60.9

62.3

—

2009

2010

2011

2012

2013

7,132

7,729

7,872

7,521

7,553

Number of new graduates employed (Note 1)

129

105

92

66

61

Number of days of paid leave taken per employee (Note 1)

9.2

9.4

11.1

10.1

10.0

Turnover rate for employees with up to three years of service (%) (Note 1)

6

6

2

1

5

Number of employees with IT-related expert qualifications (Note 1)

116

139

167

190

219

6,469

5,975

5,082

6,343 (Note 2)

6,859 (Note 2)

Notes: 1. Amounts less than ¥100 million were truncated.
2. ROE = Net income ÷ Total shareholders’ equity (yearly average)
3. ROA = Net income ÷ Total assets (yearly average)

Non-Financial Information
Number of employees

CO2 emissions (t-CO2) (Note 1)

Notes: 1. On a non-consolidated basis.
2. These increases are attributable to the change in emission coefficients for power companies that was released by the Ministry of the Environment.

15 Corporate Report 2014

Building a better, brighter future together

Orders received (¥Billion)

Net sales (¥Billion)

276.2 273.7

288.5

304.2

320.0
271.2

282.2 273.1

301.3

318.5 320.0
Environmental andSocial Infrastructure¥33.1 billion(10.4%)SYSTEM
SOLUTIONS¥34.5 billion(10.9%)NTT Group¥173.5 billion(54.5%)

Multi-carriers¥77.2 billion(24.2%)

2009

2010

2011

2012

2013

Operating income (¥Billion)

20.7

2014
(plan)

2009

22.0

Net income (¥Billion)

2010

2011

18.0

2012

Consolidated Financial andNon-financial Highlights

317.8

Net Sales by Segment

2013

14.9

2014
(plan)EPS (¥)

147.7514.1

11.3

144.28109.25

13.8
12.3

8.3

7.7

7.8

2010

2011

79.75

75.58 74.96

8.9

2009

2010

2011

2012

2013

2014
(plan)

Number of new graduates employed(Foreign students, Male/Female)

Female

Male

2009

2012

2013

Number of employees with IT-related
expert qualifications

2009

2010

2011

2012

2013

CO2 emissions (t-CO2)

219
6,469

190
3
102

2014
(plan)% of foreign citizens

5
124

2014
(plan)

5,975

167

21
4.9
71

6,859

14
52

13

6,343
5,082

139
116

48

1.1
0.0

0.0

2009

2010

0.0
2011

2012

2013

2009

2010

2011

2012

2013

2009

2010

2011

2012

2013

Corporate Report 201416

Message from the President
Greetings
I hereby express my sincere gratitude for your understanding andsupport for the Group’s business activities.
Established in May 1954 to meet the increasing demand for the installation of large-scale telecommunications facilities, the KYOWA
EXEO Group reached its 60th anniversary on May 17, 2014.
Since its establishment, the Group has promoted business activities
drawing on its expertise in the creation of information communications
infrastructure as a core competence, and provided consistent and integrated services nationwide for the installation of various information
communications facilities and equipment.
Currently, in addition to establishing the information communications infrastructure, the Group is providing various ICT solution services such as development of ICTs and software. Furthermore, we haveproduced many business results in the establishment and management of an environmental and social infrastructure harnessing ourlong-nurtured environmental, civil engineering and electrical facility
technologies.
The EXEO of the KYOWA EXEO Group is the Latin exeo, which refers to breaking the mold and continually venturing out to address
new challenges. Reaffirming the meaning of the company name, wewill continue to provide high-value-added total ICT solutions by gathering the strength of the entire Group, thereby contributing to the sustainable growth of society as a corporation creating an affluent living
environment. Your continuing support is highly appreciated.

Fuminori Kozono
President
KYOWA EXEO CORPORATION

17 Corporate Report 2014

Review of Fiscal 2013

REVIEW
2013
Review of Fiscal 2013
CONTENTS

19
20

Business Results for Fiscal 2013
Tasks Addressed and Achievements in
Fiscal 2013

Corporate Report 201418

Review of Fiscal 2013

REVIEW 2013
Fiscal 2013 got off to agood start as the first yearof the medium-term
management plan.

Business Results for Fiscal 2013social infrastructure, including the acceleration of investments for restoration, disaster prevention/mitigation, renewable energies and aging infrastructure, and the increasing applications for ICT technologies.
The decision to host the 2020 Tokyo Olympic andParalympic Games further contributed to increasing thepossibility of our business expansion in the medium term.
Under these business circumstances, orders received
in fiscal 2013 attained the third highest level in history, although declining 4% to ¥304.2 billion, compared with theprevious year, which experienced a temporary increase inorder receipts associated with the construction of a large
waste treatment plant.
Consolidated net sales for fiscal 2013 reached a record
high of ¥318.5 billion (up 6% year over year), chiefly reflecting increasing demand for the construction of LTE-related mobile facilities and solar power generation facilities,
as well as plenty of construction projects brought forward

We enjoyed favorable business results for fiscal 2013,
achieving record-high net sales, operating income and net
income. It was an excellent start as the first year of themedium-term management plan for 2013 to 2015.
The business environment for the KYOWA EXEO Groupwas favorable as a whole.
In the field of telecommunications infrastructure, a corebusiness of the Group, we suffered consecutive year-onyear decreases in the business performance of fixed telecommunications facilities, whereas the acceleration of LTE(Long-Term Evolution)–related investments boosted thebusiness results related to mobile telecommunications facilities. In addition, with the sentiment of economic recovery expanding nationwide against the backdrop of Abenomics, we enjoyed favorable trends throughout fiscal
2013 for our businesses in the field of environmental andOperation highlight
Orders received (¥billion)

Net sales (¥billion)

320.0

317.8

19 Corporate Report 2014

2013

320.2

20.7

22.0

18.0

304.2

2012

318.5

Operating income (¥billion)

301.3

2014
(plan)

2012

2013

2014
(plan)

2012

2013

2014
(plan)

from the previous fiscal year.
Operating income jumped 15% from the previous year,
hitting a record ¥20.7 billion, the first new high in sevenyears. This was attributable to the effect of streamlining
measures such as the continued reorganization of Group
companies and the consolidation of operational bases, inaddition to the net sales increase.

Tasks Addressed and Achievements in
Fiscal 2013

Our involvement in solar power generation
Orders for installation work
received (¥billion)¥5.0 billion
5.0 or more
0.2
2011

1.5
2012

2013

2014
(plan)

Accumulated output of thepower generation business
(MW)

15 MW
or more

0

0.1

2011

2012

5
2013

Kyowa Exeo Minami Boso Solar Farm (in-house power generation)

2014(plan)

Review of Fiscal 2013

In fiscal 2013, we not only produced solid businessachievements but were also active in planting seeds forcontinued future growth.
Let me introduce some of our activities. First, I would
like to cite our solution business.
In April 2013, we launched the ICT Solutions Headquarters to develop the solution business into a new pillarof the Group’s businesses. Unlike the conventional styleof business by taking contracts for the construction of
telecommunications infrastructure, the ICT Solutions
Headquarters focuses on designing and proposing solutions to potential clients.
The IC Solutions Headquarters’ staff of about 150 employees is working actively to promote the new solution
business, while capitalizing on the accumulated experience in the conventional field of business. In fiscal 2013,
more than ten new projects were initiated. The staff is experiencing the birth pangs of a new business, but we are
beginning to produce promising results.
Second, our involvement in the energy business, centering on solar power generation, has been enlarged significantly.
Although we have been actively involved in solar power
generation for 10 years, the order receipts for this business in fiscal 2013 reached ¥5.0 billion, or triple the orders received in the previous fiscal year, making the business a pillar of the Group’s environment and social
infrastructure businesses.
We have also engaged in in-house power generation. In
fiscal 2013, we started generation at four locations, with a

combined power output of about 6 MW. The use of biomass technology—a realm of expertise of the Group—for
power generation is under consideration.
The third task we are addressing is to globalize theGroup’s business activities.
Except for a brief period in the past, the Group has notbeen active overseas. However, because it is highly likelythat the domestic market will eventually shrink, we havedecided to increasingly focus on overseas markets toseize business opportunities.
Some practical moves have already started in Southeast Asia, including the order receipt in May 2014 for alarge access-engineering project centering on the wiring
work for telecommunications for homes and offices in thePhilippines.
From the perspective of increasing the efficiency of theGroup’s business operations, we made focused efforts forthe optimal relocation of human resources, while promoting the reorganization of the Group companies and theconsolidation of operational bases.
In fiscal 2013, we shifted about 150 employees Groupwide from fixed telecommunications to the growing business fields of mobile and solutions.
A shortage of workers is becoming a big problem inJapan, and job opportunities tend to concentrate in certain areas, including Tokyo and the Tohoku region.
The Group has a large workforce of more than 10,000
employees; accumulated expertise in various fields including
fixed and mobile telecommunications, electricity, civil engineering, ecology and software; and an extensive network
covering the entire nation to implement construction works.
To enhance the productivity of our businesses, it is important to use these resources flexibly and swiftly in the mostappropriate places. With this recognition, we will continue topromote the flexible distribution of our resources.

The Group’s global
development toward thefutureMG Exeo Network Inc., a consolidated subsidiary of Kyowa Exeo
Corporation, received an orderfrom Philippine Long Distance
Telephone Company for accessengineering work, which involves
the installation and maintenanceof 15,300 telecommunication lines
for general subscribers eachmonth in the provinces of Laguna
and Batangas in the suburbs ofManila, the capital of the Philippines. The project started on May
1, 2014. This will give us a wider
view of overseas markets andpromote globalization of theGroup’s businesses.

Japan
ManilaProvince of Laguna
Province of Batangas

Philippines

Areas covered by the Philippines
access-engineering work project
Corporate Report 2014

20

GROWTHSTRATEGY
Growth Strategies
Pick Up!

In Focus:
Value Created by TEAM EXEO
23 1 Mobile
25 2 System Solutions

21 Corporate Report 2014

Growth Strategies

GROWTH STRATEGYBusiness Outlook for Fiscal 2014
For fiscal 2014, we aim to continue sales and profit increases to achieve record-high order receipts, net sales
and operating income.
This may sound challenging, considering the declining demand for the Group’s mainstay fixed telecommunications infrastructure business, but we still believe
we can achieve these targets.
The forecast for orders in fiscal 2014 is ¥320.0 billion(up 5% year over year), as the mobile business is expected
to remain favorable and some promising projects will likely
become concrete.
The forecast for net sales is ¥320.0 billion (up 0.5% year
over year) due to a greater contribution from the expansionof order receipts to more than offset a decline in projects
brought forward from the previous year.
The forecast for operating income is ¥22.0 billion (up
6% year over year), which we intend to achieve by con-Growth Strategies

We will focus on mobile
engineering projects in theimmediate future, while
gradually increasing
involvement in systemsolutions to make it a newcore business of the Group.
tinuing measures to increase the efficiency of business operations.
Fiscal 2014 coincides with the 60th anniversary of theCompany, and we therefore would like to make it an epoch-making year with the rise of new businesses.
With the recognition that expanding order receipts is essential to the continued growth of the Group, we havebeen making aggressive efforts to receive orders from the
beginning of fiscal 2014, without being content with the favorable results in fiscal 2013. The seeds of projects planted during fiscal 2013 will be gradually taking shape in fiscal
2014.
Regarding the Group’s business development in the
coming years, we will focus on the mobile engineeringbusiness in the immediate future as a leading force to garner earnings, while increasing involvement in system solutions to make it a new core business of the Group.
Let me explain more about these two businesses.

Medium-term management plan
Net sales (¥billion)

Operating income (¥billion)

EPS (¥)

301.3
282.2

273.1

Medium-term management plan (2013–15)
318.5

320.0

14.7

14.4

20.7

22.0

2013

2014
(plan)

10.9
7.5

7.4
18.0

12.3
2010

Larger net sales
and income /Greater earnings
per share (EPS)

8.9
2011

2012

2015
(plan)

Note: The figures are rounded down to the nearest ¥billion.
Corporate Report 201422

Growth Strategies

GROWTH STRATEGYThe EXEO Group’s Growth Strategies

Value Created by TEAM EXEO (1):

MobileExternal environment
The mobile telecommunications market continues to be
active.
Due to the rapid spread of smartphones over the past
few years, smartphone users now constitute about half ofmobile phone users. The traffic of mobile telecommunications has been almost doubling each year. This rapid paceof growth is expected to continue for a while.
The competition for better connectivity among domestic mobile telecommunications carriers remains severe,
keeping capital investments in networking systems at highlevels.
LTE is now the mainstream of mobile telecommunications,and LTE-Advanced, which is 10 times faster than LTE, will
start in fiscal 2014. In addition, considerations have started for the practical application of fifth-generation (5G) services toward 2020. The evolution of technologies for mobile telecommunications will continue at a rapid pace inthe coming years.
Under these circumstances, strong demand is expected to continue for the construction of telecommunications
infrastructure, including mobile phone base stations,which is covered by the Group’s mobile telecommunications business.

The current status of and outlook for themobile telecommunications business
For fiscal 2013, the Group’s orders received for the mobile
telecommunications business increased about 10% fromthe previous year. In and after the third quarter, when NTT
DoCoMo launched the sale of iPhones, orders for LTE
construction increased more than expected, contributing
to better business results for the mobile business.
In fiscal 2014, orders for the construction of mobile
telecommunications facilities, especially LTE-related ones,
are expected to achieve a higher level than the previous
fiscal year.
Beginning with the second half of fiscal 2014, orders
for the construction of base stations using the 700-MHz
band will occur, as well as those for the construction of
LTE-Advanced communications facilities.
Beginning in fiscal 2014, we will start to undertake thework of preventing the interference of radio waves in the
700-MHz band from mobile phones with digital terrestrial
broadcast reception. The Group will be involved in thiswork for some years to come by receiving such orders in
the Kanto and Koshinetsu regions.
In fiscal 2015, the demand for LTE-related construction
might decrease somewhat, but the full-scale start of LTE-

Trends of Japan’s Mobile engineering technologies
2016

2012

2020

LTE
LTE-Advanced
5G (fifth generation)
WiMAX
WiMAX2+
A-XGP
Improve reception between subway stations

23 Corporate Report 2014

Promote use of the 700-MHz band (improve digital terrestrial broadcast reception)
Promote public WiFi connections

Advanced-related construction jobs is expected to ensure
a high level of overall order receipts.
Regarding the outlook for fiscal 2016 and thereafter, we
anticipate that the building of the LTE-Advanced infrastructure will continue steadily toward 2020 when the Tokyo Olympic and Paralympic Games are held in Japan. In
the meantime, the introduction of 5G (fifth generation) service will be on the horizon.
Japan lags behind the Western countries in public WiFi
connections, which will increase in Japan in the foreseeable future. These situations will continue to provide manybusiness opportunities for the Group.

Tasks ahead

Motoyuki Takahashi
Facility Construction Department, Mobile Engineering Division
DoCoMo Business Headquarters

Growth Strategies

The most important issue for the Group’s mobile telecommunications business is to optimize the use of its resources to maximize efficiency in addressing these abundant
prospects.
Recently, construction projects for mobile telecommunications have been concentrated in Tokyo, Nagoya andOsaka, where the communication traffic is busier thanother areas. The LTE-Advanced construction jobs are alsoplanned to start in high-traffic areas.
An increasingly larger regional difference in the volume
of projects must be addressed through the flexible shiftingof resources. The July 2014 consolidation of two mobileengineering Group companies was part of our measures
to enable the efficient application of resources.
While ensuring efficient management of the Group’s resources, we will best meet the needs of our customers—
mobile telecommunications carriers—by continuing to offer high-quality and speedy services.

Enhancement of “connectivity”
contributes to society

I am currently engaged in LTE-related outdoor
works for NTT DoCoMo. We are in charge ofmore than 1,000 projects in Tokyo’s 23 wards,
corresponding to 300–400 base stations. Due tothe huge number of projects, I have difficulty
planning operation schedules, coordinatingschedules with customers and negotiating withthe owners of the buildings where facilities are installed. However, I feel greatly rewarded when I
realize the communication speed for smartphones and tablet PCs becomes faster in the areas for which our projects have been completed.
Although the number of orders received by theGroup for the construction of fixed telecommunications infrastructure has been on a decline, ourdepartment, which is in charge of the mobile engineering work that enjoys active demand, is determined to offer quality services to win the trustof our customers so we can continue to achieve
stable order receipts. I am confident that our projects contribute to society, and I know that our
careful work according to the time and other requirements of customers will eventually benefit
smartphone and tablet PC users. This is something I can tell my family with pride.
As it is expected that the mobile telecommunications infrastructure will evolve from LTE to LTEAdvanced, and 5G (fifth generation), I will continue
to upgrade my engineering abilities so that I candeal with the installation of any advanced facilities, and provide advice to younger engineers.

Corporate Report 201424

Growth Strategies

GROWTH STRATEGYThe EXEO Group’s Growth Strategies

Value Created by TEAM EXEO (2):System Solutions
System solutions the Group aims to offer
Since I assumed the office of President one year ago, I
have focused particularly on the expansion of the systemsolutions business.
The telecommunications infrastructure business accounts for 80% of the Group’s net sales. However, the demand for fixed telecommunications facilities has been declining, and I do not think the mobile engineering market,
although it is currently booming, will see a big leap forwardin the years ahead.
To ensure the continued growth of the Group, it is essential to create a new core business, which I believe is thebusiness of system solutions.
This is not a completely new field for the Group, and I do
not envision competing head to head with leading system
integrators. The Group’s traditional field of expertise should
be best utilized to achieve a competitive edge in offeringsystem solutions.

As mentioned earlier, the Group has an extensive rangeof technologies in such fields as fixed and mobile telecommunications, electricity, civil engineering, ecology and software, and an extensive network covering the entire nation
for implementing construction works. I believe optimal
combination of these technologies and resources will generate added value, enabling us to offer competitive solution
services that capitalize on our strengths.

Achievements in fiscal 2013
During fiscal 2013, which was designated as the year ofchallenge, we tapped into the scope of “new solutions,” aswe call it, that had not been actively explored before.
Major target areas in the scope of new solutions include
energy, for which greater market expansion is expected as
the deregulation of the electric power industry moves forward; geo services through the use of smartphone, GIS

New Solutions
Target Areas

Order Receipts Targets (¥billion)

EnergyMedical Care /Health /Expansion
Welfareof

5.0
Sensors

New Fields

Thin Clients /Security

25 Corporate Report 2014

10.0

Geo Services

2.0
2013

Challenge

2014(target)2015(target)New Pillar
Development A
of BusinessDevelopment and sale of EXTravel,
an application that provides
information for sightseeing anddisaster prevention.

Growth Strategies

and mapping technologies; and the areas of sensors, thinclients, medical treatment and healthcare related to thegovernment-led national resilience action plans and ICT
growth strategies.
Orders received in this “new solutions” field in fiscal 2013
amounted to only ¥2.0 billion, but I believe that was sufficient to pave the way for expansion in fiscal 2014 andthereafter.
Through the efforts to expand business opportunities inthe scope of new solutions, we built alliances with various
companies that we had not traded with, and established
new and good business relationships with large trading
firms, manufacturers, vendors and small businesses. One
example is the capital and business alliance we formed in
May 2014 with Eponet Inc. and WHERE, Inc. Although not
all such efforts have generated good results, preparations
for the expansion of the system solutions business havebeen steadily under way.

Kumiko Kamibayashi
Solution Consulting Department, Solution Promotion Division
ICT Solutions Headquarters

Looking forward
Various seeds of “new solutions” were planted during fiscal
2013. I expect these seeds to take root, sprout and growbig in fiscal 2014.
For the past year, I have been speaking about the importance of the solution business inside the Company,
which has helped change the awareness of employees significantly.
Given its declining population, Japan needs to increase
the productivity of each citizen to continue economic
growth. Utilizing ICT technologies is an effective way toachieve that, and we will see more and more opportunities
for the solution business using ICT technologies.
We will make Group-wide efforts to promote the systemsolutions business so that it will provide a new core sourceof earnings in the future.

When the ICT Solutions Headquarters was established in April 2013, we would often discuss what
could be a pillar of our businesses. During those
discussions, someone suggested that we develop an application combining information for sightseeing and disaster prevention. That was the startof the EXTravel application. We carefully designed
a business model, for which we acquired internal
cooperation and consensus, while simultaneously
engaging in application development jointly with asoftware house with expertise in that field, and finally got to the point of selling the application. I
think we acted speedily from the initial suggestion
to the start of selling the application.
The difficult part of the marketing efforts for theapplication was how to make its distinctive features and benefits better understood by customers. The sales point of EXTravel was the information for disaster prevention offered in addition totourist information. Because the target customers
were individuals who were not necessarily Japanese, the application had to be available in multiple languages. The application underwent otherrefinements based on the consideration of possible events in times of a disaster before it grew into
something that could fully meet customers’ expectations.
If EXTravel can be used with satisfaction by foreigners visiting Japan, it will not only increase thenumber of its users but also lead to more foreign
tourists visiting Japan.
In the future, we hope to see this application
on every smartphone and tablet PC carried byforeigners visiting Japan when the Tokyo Summer
Olympic and Paralympic Games are held in 2020.

Image of EXTravel in use

Corporate Report 201426

Growth Strategies

GROWTH STRATEGY
We will continue toundertake new challenges
in fiscal 2014.

Other business fields of focus
Even in the markets other than mobile engineering andsystem solutions, we expect to engage in a higher-thanusual number of promising projects in fiscal 2014.
In the field of fixed telecommunications infrastructure,
the construction works for restoration of the disasterstricken Tohoku region will be fully active. In relation to
the 2020 Tokyo Olympic and Paralympic Games, agrowing number of orders are expected for the undergrounding of overhead power lines and the installationof electrical and air-conditioning equipment. In particular,
we have been actively involved in the redevelopment of

the Shibuya district where the Company’s head office islocated.
Demand for the construction of solar power plants is
expected to remain strong, and we will likely acquire
some orders related to waste treatment plants in fiscal
2014.
For the globalization of the Group’s activities, a large
access-engineering project has begun in the Philippines
this year (see page 20). Taking this opportunity, we intend to expand the range of overseas businesses chiefly
in Southeast Asia.
The term exeo in the Company’s name partiallymeans “breaking the mold.”

Businesses related to the Tokyo Olympic and Paralympic Games

Year

2014
Winter (Sochi)

2015

2016
Summer (Rio)

2017

2018
Winter (Pyeongchang)

2019

2020
Summer (Tokyo)

Enhancement of the mobile telecommunications environment (LTE, LTE-Advanced and public WiFi)
Telecommunications
infrastructure

Enhancement of the fixed telecommunications environment (4K/8K television, data offloading to WiFi, etc.
Telecommunications works associated with the enhancement of facilities, roads, airports and railways; Installation of surveillance cameras
Construction and removal of telecommunications equipment for the Olympic facilities

Environmental
and social
infrastructure
System solutions

27 Corporate Report 2014

Undergrounding of power lines
Installation of electrical and air-conditioning equipment associated with the Olympic facilities, redevelopment of theTokyo metropolitan district and enhancement of accommodation facilities and transportation systems, etc.
Various solutions for disaster prevention, sightseeing, security, charging of electric vehicles, barrier-free facilities, etc.

I believe the value of an enterprise lies in taking on
something new. We experienced many challenges in fiscal 2013, and that attitude will continue throughout fiscal 2014.
The business environment for the Group is rapidlychanging, but we must never be afraid of making small
mistakes and quickly taking on new challenges to ensure continued growth.

CSR Management

CSR

Distributing returns to shareholders
The KYOWA EXEO Group regards profit distribution toshareholders as an important managerial issue and has
a basic policy of stable and continuous profit distribution to shareholders.
Under our basic policy, we raised the annual dividend
to ¥24 per share in fiscal 2013, and the same annual
dividend is planned for fiscal 2014.
We also plan to purchase ¥3.0 billion in shares oftreasury stock in fiscal 2014. The recent level of the total return ratio—the sum of dividends paid and sharebuybacks as a proportion of consolidated net income—should be high enough to fully satisfy our shareholders.
Doing a good job and being appreciated by customers, which enhances employee morale and thereby
boosts business performance, results in the distributionof higher profits to shareholders. We will strive to enhance corporate value through raising business performance and aggressively distributing profits to shareholders.

Growth Strategies

Since its establishment in 1954, the KYOWA EXEO
Group has continued to grow based on the core competence of building telecommunications infrastructure.
Therefore, we recognize that our corporate social responsibility (CSR), especially for our clients and users of
the infrastructure, can be fulfilled when we realize a
comfortable environment for telecommunications byproperly conducting the core business.
When the Great East Japan Earthquake occurred on
March 11, 2011, we swiftly responded by setting up aunit to promote the recovery of the Tohoku region,
through which we have contributed in various ways to
the restoration of the afflicted areas. We are still engaged in construction works for the greater convenience of the people in those areas. When a large mudflow caused by a typhoon hit Izu Oshima (Oshima-cho,Tokyo) in October 2013, we sent a recovery team thefollowing day to help restore the telecommunications infrastructure.
The Group’s high technological excellence is provenwith our engineers having won four consecutive WorldSkills championships in the category of Information Net-

work Cabling. Integrating our accumulated expertise in
the construction of telecommunications infrastructurewith other extensive technologies of the Group in thefields of environment and social infrastructure and software development will enable the offering of total ICT
solutions by Team EXEO, an interdepartmental force ofexperienced engineers. In this way, I hope the Group’s
capabilities will contribute to the creation of a safer,more secure and more comfortable society.

Distributing returns to shareholders
Dividend paid per share

Treasury stock purchased(yen)(¥billion)

20

20

22

24

24

2.9

3.0

3.0

3.0

0
Restoration after the mudflow disaster in Izu Oshima2010 2011 2012 2013 2014
(plan)

2010 2011 2012 2013 2014
(plan)

Corporate Report 201428

CSR Concept

Performing Corporate Social Responsibility (CSR) through Its Primary Businesses
The KYOWA EXEO Group’s basic CSR policy is to materialize its corporate philosophy and perform its social
responsibility through its daily business activities. The Group seriously addresses promoting corporate governance, compliance and risk management and works to ensure sincere and highly transparent business operations to contribute to the sustainable growth of society.

Basic CSR Policy
The KYOWA EXEO Group will,through its business activities,
conduct environment-friendly
management and contribute to thepreservation of environment andsustainable growth of society inorder to realize the corporate
philosophy.

CSR Structure of
the KYOWA EXEO Group
Corporatephilosophy
Development
Developmentof the KYOWA
of society
EXEO Group

ENGINEERING
SOLUTIONSThe corporate philosophy of the KYOWA

SYSTEM
SOLUTIONS

EXEO Group, which is the basic guideline forour corporate social responsibility, includes
cultivating technological capabilities, seeking
affluence and contributing to society, and wework to make integrity and transparency thefundamental norms of our management.
We recognize that efforts to achieve ourcorporate philosophy are indeed efforts toward CSR, and we are working to promote

Guidelines for CSR activities

Self-awareness of contribution to society as a company
Promotion of contribution to society and social contribution
activities through business activities
Establishment of a culture of safety and quality
Full information disclosure and communication
Adherence to corporate philosophy and respect for human rights
Environmental protection activities
Creation of workplaces conducive to satisfactory work

ComplianceCorporate governanceRisk management

Business operations with integrity and transparency as the norm

CSR.

Our Themes to Be Addressed in Fiscal 2014 (Classification by ISO26000 Standards)
Core themes in
Major
the ISO26000 stakeholders

Our themes
Promotion of compliance

Measures to be taken
Educating on and improving the awareness of laws and regulations and the Basic
Ethics of the KYOWA EXEO Group through compliance-promoting activities
Thorough adherence to social norms

Organizational
governance

Human rights

29 Corporate Report 2014

All
Operation of corporate governance(Corporate
philosophy)(Basic ethics)(Actionguidelines)
Appropriate risk management

Employees

Principle that human resources are our chief asset,
Fermentation of the Connection Culture

Analysis of the causes, responses and background of recent conflicts and incidents, aswell as the prevention of recurrence via lateral intra-organizational information exchanges

Organization in
chargeRisk
Management
Division

Fermentation of information security literacy to ensure zero information accidents Risk Management
Division
The Group’s acquisition of certification for management system standards
Reduction of management risk

Corporate Planning Division

Reinforcement of business continuity planning (BCP)

General Affairs Division

Enhancement of internal audits of the Group

Risk Management
Division

Respect for human rights and utilization of diversified human resources (Promo- Human Resources
tion and reinforcement of diversity)
Division

Building a better, brighter future together

CSR Promotion Systems (Relationships with All Stakeholders)Continuing to be a Company Trusted
by All Stakeholders
In addition to striving to ensure ever-greater
information disclosure, the KYOWA EXEO Groupwill engage in proactive communication with all our
stakeholders in order to fulfill our corporate social
responsibility. Effective from fiscal 2011, theGroup’s relationships with various stakeholders areclassified based on the seven core themes set
forth in the ISO26000* standard.
*The ISO26000 standard provides organizations including
companies with the best international guidance on socially
responsible behavior and possible actions.

Core themes in
Major
the ISO26000 stakeholders

Our themes

CSR Committee(chaired by the President of KYOWA EXEO)

Secretariat (CSR Activities Division)
Staffers in charge (a staff member in charge of CSR is assigned to every
department or office and to every Group company)of CSR

Customers

ConsumerissuesOrganizational
consideration

Business
partners

Shareholders
and investors

CSR Concept

Rather than having a specific division responsible
for CSR activities, at the KYOWA EXEO Group, we
recognize that CSR is something that every member of the staff should put into practice throughout
the business process. In 2009, we reorganized the
CSR Promotion Division that until then had beentasked with promoting CSR, and we establishedthe new CSR Activities Division as the department
responsible for disseminating information about
activities.
In 2010, we launched the CSR Committee,
chaired by the President, with meetings held
whenever necessary. Moreover, as a lower-level
organization of the CSR Activities Division, a staff
member in charge of CSR is assigned to every department or office and to every Group company
so that there is a group-wide system of CSR
promotion.

Fair businesspractice

Corporatephilosophy
Participation inand establishmentof communities
Basic Ethics

Society/
Environment

Basic Actions Declaration

P.32
Labor
practice

P.32

Group
companies

Environment

Employees
Human rights

Measures to be taken

Organizationin charge

Development and cultivation of human resources
Human Resources
Division
Creation of ideal working conditions (Promotion and reinforcement of work-life balance)
Group Business
Promotion of reorganization to raise the consolidated competitive edge
Development Division
Environmental preservation activities toward the prevention of global warming Promotion of energy-saving activities General Affairs Division
Thoroughly impartial transactions in accordance with the “Procurement Policy including Green Procurement” Procurement Division
Construction departments
Assurance and improvement of quality
Rooting of the “safety quality culture”
Safety & Quality Control
Elimination of serious accidents (physical for employees and at equipment/facilities)
Customers
Headquarters
ConsumerissuesSales departments and Safety
Improvement of customer satisfaction Thorough management of customer satisfaction& Quality Control Headquarters
Shareholders and investors Emphasis on return of profits and communications Enhancement of IR activity for impartial and fair information disclosure Corporate Planning Division
Promotion of social contribution activities
General Affairs
Contribution to society and local communities
Participation in
Division
Promotion of local community contribution activities
and development
Society
Verification of external questionnaires, Compliance with the ISO26000
General Affairs Division,of communities
Improvement of social evaluation
standards, Issuance of integrated reports
Corporate Planning DivisionPrinciple that human resources are our chief
asset,Fermentation of the Connection Culture
Development of group businesses andGroup companies
improvement of consolidated operating results
Environment
Environment Promotion of environment-friendly management
Fair business practice Business partners Ensuring transparency and the fair competition principle
Labor practice

Employees

Corporate Report 201430

Management Systems

Establishing Various Mechanisms to Promote Globally
the Overall Group

Corporate GovernanceEndeavoring to ensure transparent management by establishing sound management systems and strengthening internal controls
The KYOWA EXEO Group aims to maintain the full trust ofshareholders and all other stakeholders by operating withintegrity and a high standard of transparency. To this end,
we are confident that it is one of the significant management
issues to establish and maintain an organizational structure
and management systems through which corporate governance can effectively function. Moreover, it is our basic CSR
policy to make ongoing improvements to strengthen corporate governance mechanisms that are suitably tailored to
the Group’s circumstances, including the assessment ofstructures for monitoring management in light of changes insocial conditions, laws and other developments.

stipulated the Basic Guideline for Establishing Internal
Control Systems in accordance with the relevant provisionsof the Companies Act and addresses its appropriate andefficient operation.
The Internal Control Committee, which was established in
April 2003, reviews the execution of duties by the directors
to further promote reinforcing internal control systems.
In June 2014, the Risk Management Division was established to integrate compliance-related duties, which had
been distributed among more than one department, thereby
enabling the centralized management and treatment ofcompound risks.

Promotion of internal control
The KYOWA EXEO Group works to thoroughly adhere tocompliance, manage various risks and properly and efficiently execute business operations. At the same time, toensure the reliability of financial reporting, the Group has

To view the Basic Guideline for Establishing Internal
Control Systems, visit

http://www.exeo.co.jp/overseas/management/cg.html

KYOWA EXEO’s Corporate Governance System

As of June 24, 2014

General meeting of shareholders
Board of Corporate Auditors
Statutory auditors(four, including one independent officer)

President
Management Council
Operating officers and organizational heads
Representatives of Group companies
Business and administrative departments and branches
Supervising

ReportingGroup companies

Internal Control Committee
CSR Committee
Compliance Committee
Information Security Committee

Information Security Management Office

Corporate Lawyer

Risk Management Division
Examination Office
Legal Office
Credit Control Office

Independent Auditor

Board of Directors
Directors(12, including one independent officer)

Nomination Committee
Compensation Committee

The Nomination Committee deliberates such matters as the designation of candidates for directors, the Internal Control Committee deliberates such mattersas the oversight of execution of duties by directors and the Compensation Committee deliberates such matters as the remuneration and bonuses todirectors. The results of these discussions are reported to the Board of Directors.

31 Corporate Report 2014

Building a better, brighter future together

ComplianceIn the KYOWA EXEO Group, everybody on the management team maintains a high standard of ethics—integrity—when conducting business.
Furthermore, individual directors and employees make principled actions grounded in compliance to fulfill their social responsibility.

—EXEO Group Basic Actions Declaration—
In case we are forced to select either earnings or
ethics in our own activities, we shall prioritize without

Compliance program

hesitation laws and regulations and corporate ethics.
Individual directors and employees of the Group makeprincipled actions grounded in compliance, the guiding force ofour business activities, in the practice of our business activities;
engage in socially trusted management; and perform their social

Tools:
Compliance ManualGroup’s corporate philosophy, Basic Actions
Declaration, Basic Guideline for Establishing Internal
Control Systems, matters to be observed and so on

Manuals by risk at each Group company
Compliance training materials, etc.

and legal responsibilities. They promote compliance toward therealization of the corporate

Systemphilosophy of “Contributing
to Society,” in accordanceDevelopment:

Actions Declaration,” a code

Evaluation oncompliance observance
Monitoring

Compliance planning
Compliance training
Support Desk
Lawyer Hot Lineof conduct of the Group.

Compliance training for management executives

Please refer to the website below for the full text of
EXEO Group Basic Actions Declaration

http://www.exeo.co.jp/csr/compliance.html#kihonkoudou

B a s i c E t h i c s o f t h e K Y O WA E X E O G r o u p

Corporate Governance/ComplianceFollow-up:

Matters to be observed in business activities
Relationships with customers
Elimination of accidents; assurance of quality; improvement of and respect for technologies; transparent
transactions; appropriate inducement; confidentiality
Relationships with industries and business partners
Fair competition; compliance with industry-specific laws and regulations; impartial transactions; fairtransactions
Matters to be observed regarding societyManagement with responsibility; information disclosure; control of insider information; protection of theenvironment; ensuring the security of society; resolute attitude against antisocial forces
Matters to be observed internally at the company
Respect for human rights; ensuring the physical safety of employees; conservation of company assets;
appropriate accounting procedures; observance of authority; maintenance of discipline

Corporate Report 2014

32

Management Systems

with the “EXEO Group BasicManagement Systems

Promotion Systems and Activities

Initiatives to Promote
Measures taken

Description

Conducting training for management executives (e.g.,
Chairman, President, General Managers of the Head
Office, Branch Managers, Presidents of the Group
companies) by inviting outside experts as lecturers

Evaluation oncomplianceobservance

Inspecting the observance status of compliance plans,
which have been prepared by the respective branches
and Group companies, as well as the relevant laws
and regulations, for evaluation; compliance mind-set ofeach employee is checked in terms of his/her level ofunderstanding

Compliance promotionand enhancement
month

October was designated as theannual Compliance Promotion
and Enhancement Monthin 2010. Various campaign
measures such as signage
and meetings encourage indepth understanding of andraise awareness among
employees.

Guidance
Legal Office,Risk Management Division(Support Desk)

Compliance Committee
Collaboration

Guidance andcontrol

Whistle-blowing system[Departments and Branches]
Responsible Compliance
Promoter
Persons in Charge of
Promoting Compliance
Employees

Collaboration

Compliance training
for management
executives

Advisory andcollaboration

Group Business Development Division

Conducting basic training for new employees and brushup training with specific themes to be observed inbusiness activities

CommandManagement andcontrol of thepromoting system

Compliance training

KYOWA EXEO Group
Compliance Officer(President of KYOWA EXEO)

Guidance andoversight on the spot
and of trading units

Establishing the Support Desk regarding complianceand the Lawyer Hot Line for direct consulting orcommunicating with corporate lawyers

KYOWA EXEO CORPORATION:

Referrals andconsulting

Whistle-blowing
systemPromoting System

Corporate lawyers (Lawyer Hot Line)

The Company instituted a compliance program in November
2001 and extensively applied the program to Group
companies in March 2003. Consequently, the group-wide
EXEO GROUP Compliance System was established.
To promote compliance, the formulation of the EXEO
Group Compliance Manual and the establishment of a
dedicated promotional department followed. Compliancetraining is given to employees of the Group companies on
an ongoing basis.

Group companies
Compliance Officer at each company (President)
Responsible compliance promoter at each company
Employees of each Group company

Risk Management
Establishing the promoting system, the KYOWA EXEO Group actively addresses risk management in all its
business fields.

Basic Stance on Risk Management
To realize further business expansion and new growthmight occur in overall business activities. Meanwhile, it isthrough the provision of the total ICT solutions, the KYOWA

necessary for the Group to minimize the economic loss and/

EXEO Group strives to appropriately control risk factors byor damage in case of exposure to any risk. The Group’s risk

reducing exposure to risks and adverse effects for risk thatmanagement is set up on such recognition.

33 Corporate Report 2014

Building a better, brighter future together

Risk Management System
The KYOWA EXEO Group takes appropriate risk control
measures after grasping and analyzing various risks
surrounding the Group management to conduct soundbusiness activities.
In accordance with the Risk Management Rules, which
provide basic guidelines regarding risk management, various
risks are classified as shown in the table below. According to
the characteristics of the respective risks, efforts are madeto streamline and sophisticate risk management methods
and systems. The appropriate monitoring of risk status,
cross-sectional responses and lateral, intra-organizational
information exchanges are also conducted to manage risks.
Furthermore, the Audit Division formulates an audit
plan every year and conducts audits to check whether
improvement measures or actions have been taken
appropriately from an independent standpoint. The audit

results are reported to the management and to conferences
at which the heads of organizational units attend according
to the plan-do-check-act (PDCA) cycle.
Risk management system

Presiden of KYOWA EXEO
Internal audit organization
Examination Office,Risk Management Division

Risk management organizations
Management Planning Division (for management risk)
Safety and Quality Management Group (for process risk)
General Affairs Division (for disaster risk)

Responsible persons for risk management
Heads of Head Office organization units and Branch Managers
Presidents of the Group companies

Initiatives to Promote
Responsible division Business risk
Business environment risk

Risk in the business environment

Management
strategy risk

Risk in decision making for management
strategies or business strategies

Corporate
Planning
DivisionManagement
risk

General Affairs
Division

Disaster risk

Risk of various disasters such as
earthquakes, fires and typhoons

The Disaster Countermeasure Rules shall be stipulated to cope withthe risk. Meanwhile, disaster prevention-related capital investment
and disaster exercises shall be proactively made.

Process risk

Risk in daily business operations

General manager of each department or branch manager shall be
responsible for taking measures to reduce the risk concerned.

Credit risk

Risk of uncollectible credits with regard
to transactions with new customers andlong-term and large-sum projects

The appropriate scale of trading with customers is examined anddetermined to prevent trading problems and minimize risk damage.
Meetings of the Extended Order Study Committee, which consists of theheads of related organization units, are held as required.

—Initiatives at the Information Security Committee—
The KYOWA EXEO Group established the Information
Security Committee in June 2004 to handle diverse
requests for security-related requests from customers. The

Compliance/Risk Management

Promoting Information Security

Major initiatives taken in fiscal 2013 were as follows:
Improved group-wide security
Thoroughly executed employee training toward enhanced awareness of information security(Conducted during July–September every year) (DVDs for trainings prepared and distributed)
Upgraded antivirus measures
Enhanced inspections of private-use personal computers at homecommittee is committed to bolstering protective measureswith regard to information security related accidents andincidents.
The Information Security Committee, which is chaired by
the Chief Information Security Officer (CISO) and consistsof committee members (responsible information managers),
meets four times per year (April, July, October and January).

TimingJun. 2004

Implemented an information management system
Established the Information Security Committee

Jul. 2006

Assigned the Chief Information Security Officer(CIO) at the Information Security Committee

May 2009

Extended the information management system
to the Group companies

Corporate Report 201434

Management Systems

RiskManagement
DivisionIssues shall be solved by establishing a task force and/or holding abusiness strategy conference to find the best solutions, according to
the instructions of management.

Involvement in the Environment

While Promoting Resources Recycling and Effective Utilization of Resources,
Developing Environment Preservation Activities Toward the Prevention of
Global Warming and Other Concerns

Environmental Management
The Group works to reduce the environmental impact accompanying business activities,
and every employee acts with “what he/she can and he/she should do” in mind.

Basic Stance on Environment Preservation Activities

Environmental Education

Coexistence with the global environment is a social responsibilityof corporations and is a significant element in creating asustainable society.
The KYOWA EXEO Group engages in business activities
as a company that offers customer-satisfying solutions basedon its core IC networking technologies. The Group therefore
pays careful attention to coordination with the environment in its
business activities and endeavors to reduce the environmental
impact that inevitably accompanies such activities. Meanwhile,
every employee of the Group is committed to environment
preservation activities with “what he/she can and he/she shoulddo” in mind—always taking into account the effects of businessactivities on global environment.

Environment preservation activities cannot be achieved without
low-key efforts for the activities and strong consciousness ofevery employee regarding the improvement of environmental
issues. Consequently, the Head Office and branches prepare
their respective plans and conduct environmental education
programs so that all the employees can understand theimportance of environmental preservation and voluntarily andpositively participate in such activities in their daily lives. With
this approach, precise knowledge and consciousness ofenvironmental issues and preservation initiatives have beensteadily disseminated among employees.
The educational training courses in fiscal 2012 were as
follows: In-house environmental auditors’ training for the
purpose of obtaining qualification as in-house auditors; in-houseenvironmental auditors’ brush-up training for the purpose of
upgrading skills as auditors; environmental operation training forthe purpose of mastering knowledge of promoting environmental
activities; and basic environmental management training mainly
targeting new employees. A total of 592 persons attended thecourse lectures.

Promotion of an Environmental Management System
In promoting the environmental management system (ISO14001),
of which certification has been continuously obtained since
May 2000, the Company works to reduce the environmental
impact on an ongoing basis through companywide environment
preservation activities according to the PDCA cycle. The
Company identifies predictable environmental risks, which are
determined depending on onsite working environments, thelocation conditions of the building and other factors, sets up
specific environment-related targets and extensively applies themto all the departments at the Head Office and branches.

 Number of qualified persons as in-house environmental
auditors and participants in various training courses
Fiscal 2011 Fiscal 2012 Fiscal 2013
In-house environmental auditors

870

894

971

President
Training course nameMS Operating Committee
Responsible MS manager
Responsible auditing staff
Responsible environmental promoter
Each department

35 Corporate Report 2014

Responsible environmental promoter
Each department

Responsible environmental promoter
Each department

TargetFiscal 2011 Fiscal 2012 Fiscal 2013 Description

In-house
Prospective
environmental
in-house
auditors’ training auditors

48

74

Qualification
129 as in-house
auditors

In-house environmental
In-house
auditors’ brush-up
auditors
training

187

92

Enhancing
43 skills of inhouse auditors

Environmental
Regularoperation training employees

202

263

Mastering knowledge
159 of environmental
activities

Industrial waste
training

Regularemployees

1414

Mastering
0 knowledge ofindustrial waste

New
Basic environmental
employees,
management training
etc.

127

149

Basic knowledge
183 of environmental
MS

Total

578

592

514

Building a better, brighter future together

Initiatives toward Prevention of Global Warming and Preservation of Biodiversity
EXEO’s forests (Mori), which extending
nationwide, are groomed by employees’ hands
Embracing the opportunity of the Company’s 50th
anniversary of its foundation, forest preservation
activity started and the Company continues tomaintain government-owned forests for up to 60 years.

Seizing the opportunity of the 50th anniversary of its foundation, theCompany became strongly conscious of the prevention of global
warming and contributing to local communities. Giving its approval tothe maintenance enhancement campaign of forest resources, which
was then promoted by the Forestry Agency, the Company entered into a
profit-sharing afforestation contract* with the Hokkaido, Tohoku, Kansai,
Kyushu, Chugoku and Kyushu regional forest offices regarding so-called
corporate forests. The Company named the forests “EXEO’s forests” andcontinues their maintenance activity, which also serves as an occasion
for social assembly and recreation among employees and their families.
*Profit-sharing afforestation contract: Agreement on the maintenance activities ofgovernment-owned forests (natural forests), which are premised on there being no logging.

Degree of environmental contribution of EXEO’s forests (Mori), achievement in fiscal 2013

(According to the Forestry Agency Report)

Degree of environmental contribution: One year (effects for the period ofApril 2012–March 2013 converted in the respective units shown below)

Area
Absorbed and fixed CO2(ha) Watershed pondage or water Sediment runoff prevention
quality purification volume volume (in terms of a 10-ton
volume (in terms of CO2
emitted by a person in a year)(in terms of 2-L PET bottles)
truck loading 5.5 m3)

Term of contract

RegionLocation

60 years(1/2005–3/2065)

KyushuKarimawashi-yama government-owned
forest, Uto-shi, Kumamoto Prefecture

5.36

3,711 m3
(1,855,000 bottles)

70 m3(13 trucks)

15 t(48 persons)

21 years(2/2005–3/2026)

Kansai

Kitayama government-owned forest,
Nishinomiya-shi, Hyogo Prefecture

1.14

465 m3(233,000 bottles)

14 m3(3 trucks)

3t(9 persons)

60 years(8/2006–3/2066)

Hokkaido

Chitose government-owned forest,
Chitose-shi, Hokkaido Prefecture

3.10

1,181 m3
(591,000 bottles)

40 m3(7 trucks)

8t(26 persons)

22 years(10/2006–3/2028)

TohokuFubosan government-owned forest,
Shiroishi-shi, Miyagi Prefecture

2.48

656 m3(328,000 bottles)

20 m3(4 trucks)

5t(16 persons)

20 years(3/2007–3/2027)

Chugoku

Noroyama government-owned forest,
Kure-shi, Hiroshima Prefecture

3.29

1,664 m3
(832,000 bottles)

40 m3(7 trucks)

7t(20 persons)

15.37

7,677 m3
(3,839,000 bottles)

184 m3(34 trucks)

38 t(119 persons)

Total

Content of Activities
Five branches, of which the business area is located near EXEO’sforests (Mori), regularly conduct forest preservation and cleaning
activities such as maintenance of walking trails, mowing ofbottom weeds, cutting ivy and putting up bird houses.

Forest exploration is also conducted as part of the recreation
activities for employees and their families. Such events are also
used for enlightening activities to explain the importance ofpreventing global warming and biodiversity preservation.

Kansai Branch Office

Hokkaido Branch OfficeEnvironmental Management

Chugoku Branch Office

Involvementin the Environment

Chitose-shi, Hokkaido

Shiroishi-shi, Miyagi

Uto-shi, Kumamoto

Kyushu Branch Office

Kure-shi, Hiroshima

Nishinomiya-shi, Hyogo

Tohoku Branch Office
Corporate Report 201436

Involvement in the Environment

Fiscal 2013 Material Balance of the Company (Non-consolidated)
To make environment-friendly business activities effective and reduce the accompanying environmental load as much as possible, we strive
to understand and analyze the kinds of resources and energy sources that are used and the environmental load that has been produced.
INPUT

OUTPUT

Total energy input
Electric power purchased

196,931 GJ

1,956 MWh

Total greenhouse effect gas emissions

14,622 tons (CO2 conversion)

13,076 MWh

Solar power generation electricity output

68 MWhCity gas

87 km3LPG

2 km3

Gasoline

1,221 kℓLight oil

109 kℓKerosene

15 kℓ

Water resource input

Electricity soldEnvironmentfriendly businessactivities

44 km3

Electric power sourced

6,620 tons (CO2 conversion)

Fuel sourced

3,930 tons (CO2 conversion)

Waste sourced

5,001 tons (CO2 conversion)

Water resource sourced

9 tons (CO2 conversion)

Power generation and electric power selling sourced

939 tons (CO2 conversion)

EXEO’s forests (Mori) sourced

38 tons (CO2 conversion)

Waste emissions and recycled volume

21,921 tons

Industrial waste emissions

5,215 tons

General waste emissions

245 tons

Total recycled volume

16,460 tons

Total displacement

44 km3

The Company’s CSR initiatives (nonconsolidated; environment/society-related), fiscal 2013 targets and full-year results of activities and fiscal 2014 activity targets
Measures taken①Reduction in power
consumption:
Set power consumption
management targets
Work to precisely grasp
monthly management of power
consumption values

Reduction ②Reduction in gasoline used:in CO2
Review reduction in the number
emissionsof vehicles owned
Implement gasoline card-based
management measures③Use of green energy:
Promote the use of solar power
generation systems, etc.

Content of specific initiative(on the basis of medium- and long-term planning based on the revised
Energy Conservation Law)
Monthly management of total power consumption
Turning off lights during break time, room temperature setting,economy in electricity
Enhanced use of “Cool Biz” and “Warm Biz” ambient-temperaturecompliant wear
Review of conversion to energy-saving equipment and devices at their
new installation or renewal (e.g., air conditioners, PCs, LED lights)
Gasoline card control (monthly management of amounts used)
Purchase and renewal of vehicles with good fuel consumption
Study on partial introduction of hybrid/idling-stop/electric vehicles
Eco-driving education
Reduction in the number of vehicles owned
Implementation of “telematics”④Reduction in paper consumption:
Take paperless-oriented
initiatives to reduce paper
consumption volume⑤Promotion of rooftop greening
Initiatives ofpromotinggreenery of ⑥Promotion of greenery within the premises
buildings

37 Corporate Report 2014

Fiscal 2013 targets
1) Economy in power used
Against fiscal 2009: 1% reduction every year for fiveconsecutive years towarda cumulative total of 4% or more(target) 10.53 kWh/m2
2) Restriction on peak power used
Hokkaido Electric Power's jurisdiction
Tokyo Electric Power's jurisdiction
Kansai Electric Power's jurisdiction
Kyushu Electric Power's jurisdiction
Other Electric Powers’ jurisdictions

Summer7%
10%
10% (government's target)
10% (government's target)
5%

Against fiscal 2009: 1% reduction every year for five consecutive years toward a cumulative total of 4% or more(target) 99.9 l/thousand km

To be implemented at four or more operating bases:
Review of implementing solar power generation systems on May 2013: 1,300 kW planned in Kose, Kofu City
August 2013: 1,400 kW planned in Shimpu, Nirasaki City
company-owned buildings
September 2013: 100 kW planned at the Kagawa Technology Center
Participation in the solar power generation business
December 2013: 2,400 kW planned in Minamiboso City

CO2 emissions (total of the above items ①-③)

Reductionin generalwaste

Fiscal 2013 targets and full-year results of activities

Against fiscal 2009: 1% reduction every year, for fiveconsecutive years toward a cumulative total of 4% or more

Actual inventory of paper materials
Reduction in stored volume of paper materials (reduction in the file
Against fiscal 2010: 4% reduction every year for five consecumeter (fm)-converted volume)
tive years toward a cumulative total of 12% or more
Storage via the digitization of materials
Simultaneous campaign to designate a day to destroy documents (once per month) (target) 17.981 fm
Studying targets regarding permanently owned company assets
Studying possible implementation of measures at parking lots on company-owned premises

To be studied at the target facility on a case-by-case basis:
Greening is planned to be executed at the Kagawa Technology Center.
Greening is planned to be executed at the Sendai Integrated Engineering Center.

Building a better, brighter future together

Fiscal 2013 Initiatives Regarding the Prevention of Global Warming
As for the reduction of power consumption, power-saving
measures for equipment are taken including the conversion ofelectric appliances to energy-saving type ones and the enhanced
use of inverters for diverse equipment. In addition, companywide
initiatives mainly taken by the responsible person on each floor
Change in power consumption (per square meter)

Change in city gas consumption (at the Head Office building) (per square meter)(m /m )

(kWh/m )
16

3

2

12

10.96

10.69

10.63

9.53

9.72

4
2009

2010

2011

2012

2

6
5
4
3
2
1
0

8

0

include setting the energy-saving mode for PCs, removing
unnecessary lighting devices, turning off lights during lunchtime
hours and setting appropriate temperatures for air conditioners.
Moreover, every employee aggressively promotes electricitysaving activity in his/her daily actions.

2013

5.1
3.7

3.4

5.4

Change in gasoline and light oil consumption (per travel distance)( /thausand km)
104.0
120

4.0

101.0

94.6

93.5

87.1

2010

2011

2012

2013

80
40

2009

2010

2011

2012

0

2013

2009

Promotion of Recycling and Effective Utilization of Resources
The KYOWA EXEO Group proactively addresses abating volumes
and the appropriate treatment of waste, as well as promoting
its reuse as recycled resources in the pursuit of reduced waste
volume and complete recycling. The waste category covered bythis initiative is industrial waste produced from the construction
work of information and communication facilities and generalwaste discharged from offices.
Change in industrial waste emissions (per value of finished work)

Change in general waste emissions (per person)(kg/person)(kg/¥million)

254.6

300

184.1

200
100

60.1

0

2009

82.2

Asphalt, concrete debris, electric wire trash, etc., are properly
treated via a sorting control for further reuse or recycling.
Moreover, ongoing initiatives include the enhanced use of properamounts for work materials, requests for collection of packaging
materials to suppliers and guidance on the necessary steps toworkers for recycling via onsite patrols.

40

33.8

36.1

35.2

(tons)

32.9

30,000

25.3

30

107.2
2011

2012

2013

0

2009

Fiscal 2013 (full-year): 9.72 kWh/m2

Summer

2010

2011

2012

2013

0

2009

2010

2011

2012

2013

Fiscal 2013 (full-year): 87.1 l/thousand km

End of March 2014: 17,882 fm

Three kinds of sweet potatoes were planted on the rooftop of the Kyushu
Branch Building (4F).
Trees were planted, instead of concrete fences, along the site boundariesof the Sendai Integrated Engineering Center.
3) October 25 Part of the parking grounds was planted with trees at the Kagawa
Technology Center.

① Economy in power used
Against fiscal 2009: 1% reduction every year for five consecutive years toward a cumulative total
of 5% or more in accordance with the Energy Conservation Law.
(target) 10.42 kWh/m2② Restriction in peak power used
Summer Autonomous targets are set against fiscal 2010, in response to the “power-saving
consciousness rooted among consumers”
Tokyo, Kansai & Kyushu Electric Powers’ jurisdictions
10%
Hokkaido Electric Power’s jurisdiction
7%
Other Electric Powers’ jurisdictions
5%
In accordance with the Energy Conservation Law, a 1% reduction every year, for fiveconsecutive years toward a cumulative total of 5% or more against fiscal 2009.
(target) 98.9 l/thousand km
To sell electricity of 10 mW or more in total (5 mW or more to be introduced)
January 2015 660 kW planned in Ishioka City
March 2015 1,160 kW planned at the Ishioka Technology Center
March 2015 100 kW planned at the Hyogo Technology Center

Environmental Management

7%
17%
17%
20%
28%

Already implemented at four operating bases:
A solar power generation system with output capacity of 1,385 kW was implemented in Shimpu, Nirasaki-shi in August 2013.
A solar power generation system with output capacity of 100 kW was implemented in the Kagawa Technology Center in October 2013.
A solar power generation system with output capacity of 1,064 kW was implemented in Kose, Kofu-shi in December 2013.
A solar power generation system with output capacity of 2,414 kW was implemented in Minamiboso-shi in December 2013.
Fiscal 2009 (full-year) 6,469 t-CO2 Fiscal 2013 (full-year): 6,859 t-CO2
Reduction rate: 6.0% (Reflecting the rise in the conversion factor used by powercompanies)
End of March 2010: 20,324 fm
Reduction rate: 12.0%

16,460Involvementin the Environment

Fiscal 2009 (full-year) 104.0 l/thousand km
Reduction rate: 16.2%

20,533 19,103

Fiscal 2014 activity targets② Results of restriction in peak power used
Hokkaido Electric Power's jurisdiction
Tokyo Electric Power's jurisdiction
Kansai Electric Power's jurisdiction
Kyushu Electric Power's jurisdiction
Other Electric Powers' jurisdictions

18,32020,00010,000Full-year results of activities① power used
Fiscal 2009 (full-year) 10.96 kWh/m2
Reduction rate: 11.3%

29,236

20
10

2010

Change in total recycled volume

1% reduction every year for five consecutive years toward a cumulative
total of 5% or more against fiscal 2009
4% reduction every year for five consecutive years toward a cumulative
total of 16% or more against fiscal 2010
(target) 17,262 fm

1) Late June
2) July 25

Future green spaces for the technology center and branch buildings are underconsideration.

Corporate Report 201438

Financial Section

Financial Highlights (Consolidated)■Orders Received ■Net Sales■Gross Profit(¥Millions)(¥Millions)
317,862
282,264

271,230
276,2890273,788

2010/3

2011/3

288,532

301,319 304,201

308,513

38,54336,113

273,134

31,29530,29926,806

2012/3

2013/3

2014/30

2010/3■Operating Income■Ordinary Income(¥Millions)(¥Millions)

2011/3

2012/3

2013/3

2014/3

20,73420,602
18,11918,046
13,867

14,425
12,39013,246
9,178

8,919

0

2010/3

2011/3

2012/3

2013/3

2014/3■Net Income0

2010/3

2011/3

2012/3

2013/3

2014/3■Total Assets ■Net Assets(¥Millions)(¥Millions)
14,910217,091
200,412

196,9188,378

0

2010/3

7,780

7,856

2011/3

2012/3

105,3072013/3

181,291

180,128

11,313

2014/30

2010/3

113,411112,232

2011/3

2012/3

135,687

122,387

2013/3

2014/3(¥Millions)

Orders Received
Net Sales
Gross Profit
Operating Income
Ordinary Income
Net Income
Total Assets
Net Assets

39 Corporate Report 20142010/3

2011/3

2012/3

2013/3

2014/3

276,289271,230
31,295
13,867
14,425
8,378
180,128
105,307273,788282,264
30,29912,39013,246
7,780
196,918
112,232

288,532
273,134
26,806
8,919
9,178
7,856
181,291
113,411317,862
301,319
36,11318,04618,11911,313
200,412122,387

304,201
318,513
38,543
20,73420,602
14,910217,091
135,687

Building a better, brighter future together

Trends by Segment (Consolidated)
Orders Received by Business Segment (Consolidated)(¥Millions)
317,862276,2890

2010/3

273,788

2011/3

288,532

Telecommunications infrastructure (NTT group engineering)
Telecommunications infrastructure (Non-NTT telecom engineering)
Environmental and social infrastructure
SYSTEM-SOLUTIONS

304,201(¥Millions)

2012/3

2013/3

2014/3

2010/3

2011/3

2012/3

2013/3

2014/3

Telecommunications infrastructure(NTT group engineering)

169,261

164,421

171,061

178,869

171,084

Telecommunications infrastructure(Non-NTT telecom engineering)

62,65359,18464,07568,83866,934

Environmental and social
infrastructure

23,26524,90528,991

37,65931,883SYSTEM-SOLUTIONS

21,10825,277

24,40432,49434,299276,289273,788288,532

317,862304,201Total

Net Sales by Business Segment (Consolidated)(¥Millions)

Telecommunications infrastructure (NTT group engineering)
Telecommunications infrastructure (Non-NTT telecom engineering)
Environmental and social infrastructure
SYSTEM-SOLUTIONS

318,513
301,319
271,2300

2010/3282,264

2011/3

273,134

2012/3(¥Millions)

2013/3

2014/3

2010/3

2011/3

2012/3

2013/3

2014/3

Telecommunications infrastructure(NTT group engineering)

169,583

164,562

166,199

173,321

173,544

Telecommunications infrastructure(Non-NTT telecom engineering)

50,327

69,601

56,11463,801

77,259Environmental and social
infrastructure

29,79823,782

26,39931,795

33,117

SYSTEM-SOLUTIONS

21,52024,317

24,42032,401

34,592271,230

282,264

273,134

301,319

318,513

Total

Outstanding Orders by Business Segment (Consolidated)(¥Millions)

117,996
103,758

87,7320

2010/3Financial Section

101,054

Telecommunications infrastructure (NTT group engineering)
Telecommunications infrastructure (Non-NTT telecom engineering)
Environmental and social infrastructure
SYSTEM-SOLUTIONS(¥Millions)

85,634

2011/3

2012/3

2013/3

2014/3

2010/3

2011/3

2012/3

2013/3

2014/3

Telecommunications infrastructure(NTT group engineering)

36,28738,99243,85449,352

46,893

Telecommunications infrastructure(Non-NTT telecom engineering)

24,988

16,83024,81230,301

20,051

Environmental and social
infrastructure

23,181

25,57628,16834,03132,796SYSTEM-SOLUTIONS

3,274

4,234

4,218

4,310

4,016

87,732

85,634

101,054

117,996

103,758

Total

Corporate Report 201440

Financial Section

Profitability Indices (Consolidated)■Gross Profit to Net Sales■Operating Income to Net Sales

(%)

(%)
11.5

12.1

12.0
10.7

6.0

9.8

6.5

5.1
4.4
3.3

0.0

2010/3

2011/3

2012/3

2013/3

2014/30.0

2010/3

2011/3■Ordinary Income to Net Sales■Net Income to Net Sales

(%)

(%)

2013/3

2014/3

4.7
3.8

6.5

6.0
5.3

2012/3

3.1

4.7

2.8

2.9

2011/3

2012/33.4

0.0

2010/3

2011/3

2012/3

2013/3

2014/30.0

2010/3■Return on Equity ■Return on Assets■Total Assets Turnover(%)(Times)2013/3

2014/3

1.58

1.53

2013/3

2014/3

11.6
9.6
8.6

7.6

7.2

1.51

1.50

1.44

2010/3

2011/3

2012/3

7.1
5.9
4.7

0.0

2010/3

4.1

4.2

2011/3

2012/3Gross Profit to Net Sales (%)
Operating Income to Net Sales (%)
Ordinary Income to Net Sales (%)
Net Income to Net Sales (%)
Return on Equity (%)
Return on Assets (%)
Total Assets Turnover (Times)

41 Corporate Report 20142013/3

2014/30.0

2010/3

2011/3

2012/3

2013/3

2014/3

11.5
5.1
5.3
3.1
8.6
4.7
1.51

10.7
4.4
4.7
2.8
7.6
4.1
1.50

9.8
3.3
3.4
2.9
7.2
4.2
1.44

12.0
6.0
6.0
3.8
9.6
5.9
1.58

12.1
6.5
6.5
4.7
11.6
7.1
1.53

Building a better, brighter future together

Stability Indices (Consolidated)■Shareholders’ Equity to Total Assets■Current Ratio

(%)

(%)
62.4
55.4

62.3

60.9

240.9

53.9

215.0

206.4

206.3

2011/3

2012/3

2013/3

2014/3

61.0

59.8

57.7

56.2

58.7

2010/3

2011/3

2012/3

2013/3

2014/3177.9

0.0

2010/3

2011/3

2012/3

2013/3

2014/30.0

2010/3■Quick Assets to Current Liabilities■Fixed Assets Ratio

(%)

(%)

189.3
164.3

157.8

162.6

2012/3

2013/3

2014/3133.5

0.0

2010/3

2011/30.0■Interest Coverage Ratio■Debt Equity Ratio(Times)

(%)

19.2

17.7

672.2

9.9
6.7

289.7
117.5

6.7
0.0

2010/3

2011/3

2012/3187.0

2014/30.0

2010/3

2011/3

2012/3

2013/3

2014/3

2010/3

2011/3

2012/3

2013/3

2014/3

55.4
240.9
189.3
61.0
672.2
17.7

53.9
177.9
133.5
59.8
6.7
19.2

62.4
215.0
164.3
57.7
289.7
6.7

60.9
206.4
157.8
56.2
117.5
7.6

62.3
206.3
162.6
58.7
187.0
9.9

Corporate Report 2014

Financial Section

Shareholders’ Equity to Total Assets (%)
Current Ratio (%)
Quick Assets to Current Liabilities (%)
Fixed Assets Ratio (%)
Interest Coverage Ratio (Times)
Debt Equity Ratio (%)

2013/37.6

42

Financial Section

Stock Price Indices(Consolidated)■Earnings Per Share■Book-value Per Share(¥)

147.75(¥)
1,350.05
1,199.86

109.25973.13

0.0

79.75

75.58

74.96

2010/3

2011/3

2012/3

2013/3

2014/30.0

1,027.98

2010/3

2011/3■Price Earnings Ratio■Price Book-value Ratio(Times)(Times)

1,084.44

2012/3

2013/3

11.0
9.9

9.7

0.0

2010/3

2011/3

2012/39.2

2013/31.0

9.0

2014/3

0.0

0.8

0.8

2010/3

2011/30.7

2012/30.8

2013/3■Cash Dividends Per Share■Payout Ratio ■Total Shareholder Return Ratio

(¥)

(%)

20.0

20.0

20.0

22.0

2014/3

2014/3

63.5

24.0
51.5

46.5
36.3
26.5

25.1

0.0

2010/3

2011/3

2012/3

Earnings Per Share (yen)Book-value Per Share (yen)Price Earnings Ratio (Times)
Price Book-value Ratio (Times)
Cash Dividends Per Share (yen)Payout Ratio (%)
Total Shareholder Return Ratio (%)

43 Corporate Report 20142013/3

2014/30.0

2010/3

26.5

26.7
20.1

2011/3

2012/316.2

2013/3

2014/3

2010/3

2011/3

2012/3

2013/3

2014/379.75
973.13
9.7
0.8
20.0
25.1
51.5

75.58
1,027.98
11.0
0.8
20.0
26.5
26.5

74.96
1,084.44
9.9
0.7
20.0
26.7
63.5

109.25
1,199.86
9.2
0.8
22.0
20.1
46.5

147.751,350.05
9.0
1.0
24.0
16.2
36.3

Building a better, brighter future together

Other Indices (Consolidated)■Selling, General and Administrative Expenses■Capital Expenditures(¥Millions)(¥Millions)

17,42817,90817,886

18,067

9,635

17,809

7,372

4,045

3,360
1,964

0

2010/3

2011/3

2012/3

2013/3

2014/30

2010/3

2011/3■Depreciation Expenses■Interest-bearing Debt(¥Millions)(¥Millions)
2,992

3,039

2012/3

2013/3

2014/3

21,326
2,947

18,0952,308

2,264
13,374
9,908
8,178

0

2010/3

2011/3

2012/3

2013/3

2014/3

7,521

7,553

2013/3

2014/30

2010/3

2011/3

2012/3

2013/3

2014/3■Number of employees(People)7,132

0

2010/3

7,729

7,872

2011/3

2012/3

2011/3

2012/3

2013/3

2014/3

17,428
9,635
2,992
18,095
7,132

17,908
4,045
3,039
21,326
7,729

17,886
1,964
2,947
8,178
7,872

18,067
3,360
2,308
9,908
7,521

17,8097,372
2,264
13,374
7,553

Corporate Report 2014

Financial Section

Selling, General and Administrative Expenses (¥Millions)
Capital Expenditures (¥Millions)
Depreciation Expenses (¥Millions)Interest-bearing Debt (¥Millions)
Number of employees (People)

2010/344

Financial Section

Consolidated Balance Sheets(¥Millions)

2010/3

2011/3

2012/3

2013/3

2014/3ASSETS
Current assets
Cash and deposits
Notes receivable, accounts receivable from completed construction contracts
Short-term investment securities
Costs on uncompleted construction contracts and other
Deferred tax assets
Other current assets
Allowance for doubtful accounts
Noncurrent Assets
Property, plant and equipment
Buildings and structures
Machinery, vehicles, tools, furniture and fixtures
Land
Other property and equipment
Intangible assets
goodwill
Other intangible assets
Investments and other assets
Investment securities
Net defined benefit asset
Deferred tax assets
Other investments and other assets
Allowance for doubtful accounts
Total assets

119,239
6,136
70,917
16,63019,404
3,329
3,021
(199)
60,88945,22818,166
1,218
25,429
413
2,932
—
2,932
12,729
6,379
—
924
7,444
(2,019)180,128

133,466
17,18582,462499
25,617
3,451
4,372
(122)
63,452
48,447
17,777
1,067
29,179
422
2,435
98
2,337
12,569
7,001
—
495
7,468
(2,396)
196,918

116,010
5,849
76,311
6,515
21,799
2,971
2,632
(68)
65,28047,736
16,975887
29,319
553
4,938
3,294
1,644
12,605
6,872
—
617
7,363
(2,248)181,291

131,906
8,306
86,245
6,315
24,082
4,037
2,995
(77)
68,50547,707
16,528727
29,364
1,087
4,658
2,621
2,036
16,139
9,847
—
916
6,820
(1,444)200,412

137,656
10,29392,307
5,919
22,521
4,131
2,548
(65)
79,43450,767
17,5411,700
30,923
601
4,894
—
4,894
23,773
13,991
7,575
—
4,053
(1,846)217,091

LIABILITIESCurrent liabilities
Notes payable, accounts payable for construction contracts
Short-term loans payable
Income taxes payable
Advances received on uncompleted construction contracts
Provision for bonuses
Provision for directors' bonuses
Provision for warranties for completed construction
Provision for loss on construction contracts
Provision for asset retirement
Provision for Loss on dissolved welfare pension fund
Other current liabilities
Noncurrent liabilities
Convertible bond-type bonds with subscription rights to shares
Long-term loans payable
Deferred tax liabilities
Provision for retirement benefits
Provision for directors' retirement benefits
Allowance for investment loss
Negative goodwill
Net defined benefit liability
Other noncurrent liabilities
Total liabilities

49,49428,722
—
3,738
2,948
424
75
201
257
—
—
13,12525,32615,000
2,450
852
4,469
410
373
385
—
1,385
74,82175,03335,482
—
4,419
3,787
435
87
154
350
—
—
30,317
9,653
—
2,139
1,411
4,367
423
104
—
—
1,205
84,686

53,95731,025
1,237
3,809
4,400
562
105
704
246
—
—
11,864
13,922
—
6,310
1,042
4,875
410
102
—
—
1,182
67,87963,91635,553
3,563
6,663
1,662
1,029
127
405
269
101
—
14,54014,107
—
5,694
2,131
4,705
392
93
—
—
1,090
78,024

66,72035,089
7,550
5,441
1,971
1,039
142
359
824
—
123
14,178
14,683
—
5,367
3,532
—
397
48
—
4,456
881
81,404

NET ASSETS
Shareholders' Equity
Capital stock
Capital surplus
Retained earnings
Treasury stock
Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Subscription rights to shares
Minority interests
Total net assets
Total liabilities and net assets

99,215
6,888
6,009
97,590(11,272)
652
652
—
—
272
5,167
105,307180,128

105,543
6,888
6,097
103,315(10,758)
639
639
—
—
361
5,687
112,232
196,918

112,170
6,888
6,230
109,067(10,016)
1,002
1,002
—
—
217
19
113,411
181,291

119,077
6,888
6,300
118,296(12,408)
2,904
2,895
9
—
231
174
122,387
200,412

129,868
6,888
6,645
130,822(14,487)
5,446
3,631
21
1,794
175
195
135,687
217,091

45 Corporate Report 2014

Building a better, brighter future together

Consolidated Statements of Income(¥Millions)

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Dividends income
Reversal of allowance for doubtful accounts
Land and house rent received
Commission fee
Foreign exchange gains
Amortization of negative goodwill
Other
Non-operating expenses
Interest expenses
Provision of allowance for investment loss
Bad debts expenses
Impairment loss
Loss on retirement of noncurrent assets
Loss on sales of noncurrent assets
Provision for bonuses
Loss on liquidation of subsidiaries

Provision of allowance for Loss on dissolved welfare pension fund

Other
Ordinary income
Extraordinary income
Gain on revision of retirement benefit plan
Gain on negative goodwill
Gain on reversal of subscription rights to shares
Gain on sales of noncurrent assets
Gain on bad debts recovered
Extraordinary loss
Loss on disaster
Reversal of allowance for doubtful accounts
Income before income taxes and minority interests
Income taxes-current
Income taxes-deferred
Total income taxes
Income before minority interests
Minority interests in income(loss)
Net income

2010/3
271,230
239,934
31,295
17,42813,867
880
118
136
—
111
93
—
199
221
322
19
85
33
—
—
—
—
—
—
184
14,425
—
—
—
—
—
—
776
—
—
13,649
4,406
611
5,017
8,631
253
8,378

2011/3282,264
251,965
30,29917,90812,390
2,218
70
191
—
126
—
—
—
1,830
1,362
92
—
—
90
—
51
—
—
—
1,127
13,246
517
517
—
—
—
—
315
315
—
13,449
4,683
633
5,316
8,132
352
7,780

2012/3
273,134
246,327
26,806
17,886
8,919
1,310
37
284
—
181
—
—
—
806
1,051
60
—
—
196
84
—
—
—
—
709
9,178
2,863
—
2,660
203
—
—
—
—
—
12,041
4,199
145
4,344
7,697
(158)
7,856

2013/3
301,319
265,205
36,11318,06718,046
1,845
39
170
—
186
—
364
—
1,084
1,772
59
—
—
545
224
—
265
231
—
445
18,119
—
—
—
—
—
—
—
—
—
18,1198,192(1,405)
6,786
11,332
19
11,313

2014/3
318,513279,969
38,54317,80920,734
1,083
20
173
122
146
—
—
—
620
1,215
51
—
—
318
—
163
—
—
123
558
20,602
3,797
—
—
—
2,238
1,559
571
—
571
23,828
8,837
76
8,914
14,914
4
14,910Financial Section

Consolidated Statements of Comprehensive Income(¥Millions)

Income before minority interests
Other comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Total accumulated other comprehensive income
Comprehensive income
BreakdownComprehensive income attributable to owners of the parent
Comprehensive income attributable to minority interests

2010/3—

2011/3
8,132

2012/3
7,697

2013/3
11,332

2014/3
14,914

—
—
—
—

(32)
—
(32)
8,099

371
—
371
8,068

1,892
22
1,915
13,247735
29765
15,680

—
—

7,767
332

8,219
(150)

13,21433

15,65821
Corporate Report 201446

Financial Section

Consolidated Statements of Changes in Net Assets(¥Millions)Shareholders' equity
Capital stock
Balance at the beginning of current period
Changes of items during the period
Total 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
Increase (decrease) in cash and cash equivalents
resulting from merger and acquisition(consolidated
subsidiary and nonconsolidated subsidiary)
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
Change of scope of consolidation
Increase (decrease) in cash and cash equivalents
resulting from merger and acquisition(consolidated
subsidiary and nonconsolidated subsidiary)
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 the treasury stock
Change of scope of consolidation
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
Purchase of treasury stock
Disposal of the treasury stock
Change of scope of consolidation
Increase (decrease) in cash and cash equivalents
resulting from merger and acquisition(consolidated
subsidiary and nonconsolidated subsidiary)
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'equityTotal changes of items during the period
Balance at the end of current period
Foreign currency translation adjustment
Balance at the beginning of current period
Changes of items during the period
Net changes of items other than shareholders'equityTotal changes of items during the period
Balance at the end of current period
Remeasurements of defined benefit plans
Balance at the beginning of current period
Changes of items during the period
Net changes of items other than shareholders'equityTotal 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
Change of items during the period
Net changes of items other than shareholders'equityTotal changes of items during the period
Balance at the end of current period
Subscription rights to shares
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
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
Purchase of treasury stock
Disposal of treasury stock
Change of scope of consolidation
Increase (decrease) in cash and cash equivalents
resulting from merger and acquisition(consolidated
subsidiary and nonconsolidated subsidiary)
Net changes of items other than shareholders' equity
Total changes of items during the period
Balance at the end of current period

47 Corporate Report 20142010/3

2011/3

2012/3

2013/3

2014/3

6,888
—
—
6,888

6,888
—
—
6,888

6,888
—
—
6,888

6,888
—
—
6,888

6,888
—
—
6,888

5,959

6,009

6,097

6,230

6,300

50

87

133

69

324

—

—

—

—

20

50
6,009

87
6,097

133
6,230

69
6,300

344
6,645

91,184

97,590103,315

109,067

118,296(2,127)
8,378
154(2,054)
7,780—(2,103)7,856—(2,084)
11,313—(2,429)14,910
—

—

—

—

—

44

6,405
97,5905,725
103,315

5,752
109,067

9,228
118,296

12,525130,822(8,494)(11,272)(10,758)(10,016)(12,408)(3,297)519—(2,778)(11,272)

(1)
546
(30)
514
(10,758)(2,691)
3,464
(31)
741
(10,016)(3,000)608—(2,392)(12,408)(3,003)924—(2,079)(14,487)

95,537

99,215105,543

112,170

119,077(2,127)
8,378(3,297)569
154(2,054)
7,780
(1)
634
(30)

(2,103)7,856(2,691)3,597(31)(2,084)
11,313(3,000)678—(2,429)14,910(3,003)
1,249
—

—

—

—

—

64

3,677
99,215

6,327
105,543

6,627
112,170

6,906
119,077

10,791
129,868

250

652

639

1,002

2,895

401

(12)

363

1,892

736

401
652

(12)
639

363
1,002

1,892
2,895

736
3,631

—

—

—

—

9

—

—

—

9

11

—
—

—
—

—
—

9
9

11
21

—

—

—

—

—

—

—

—

—

1,794

—
—

—
—

—
—

—
—

1,794
1,794

250

652

639

1,002

2,904

401

(12)

363

1,901

2,542

401
652

(12)
639

363
1,002

1,901
2,904

2,542
5,446

181

272

361

217

231

90
90
272

89
89
361

(143)
(143)
217

13
13
231

(56)
(56)
175

5,908

5,167

5,687

19

174

(740)
(740)
5,167

520
520
5,687

(5,668)(5,668)
19

155
155
174

21
21
195

101,878

105,307112,232

113,411

122,387(2,127)
8,378(3,297)569
154(2,054)
7,780
(1)
634
(30)

(2,103)7,856(2,691)3,597(31)(2,084)
11,313(3,000)678—(2,429)14,910(3,003)
1,249
—

—

—

—

—

64

(248)
3,429
105,307596
6,924
112,232(5,448)
1,179
113,411

2,070
8,976
122,387

2,507
13,299135,687

Building a better, brighter future together

Consolidated Statements of Cash Flows(¥Millions)

2011/3

2012/3

2013/3

2014/3

10,98913,649
2,992
—
(192)
—
(650)
(1,018)
—
—
(255)
19
—
1,029
1,751
975
59
(2,076)37
308
16,630257(16)(5,881)(10,600)(8,963)
168
(714)
(611)
251

614
13,449
3,039
—
—
(278)
188
(854)
—
—
(262)
92
—
(9,263)(2,902)(1,409)5,269(156)(2,766)
402
4,548
262
(91)
(4,104)(1,535)(3,449)
746
(387)
(675)
—

16,435
12,041
2,947
196
215
—
(201)
93
47
—
(322)
60
—
6,951
3,931
836
(4,579)612
485(2,442)
20,875321(56(4,704)(4,523)(1,545)
496
(590)
(36)
317

7,160
18,119
2,308
545
678
—
(796)
(169)
466
—
(209)
59
—
(9,842)(2,214)(3)
4,516(2,738)1,810(145)
12,385208(60)(5,373)(2,160)(2,359)
426
(430)
(565)
720

9,888
23,828
2,264
318
688
—
388
(4,705)
10
(470)
(193)
51
(2,074)(6,008)
1,581
4,343
(473)
308
170
(10)
20,015
195(52)(10,269)(7,477)(5,575)2,890(2,002)(3,233)309——(3,752)

—

—

—
324
(1,055)(4,095)
(992)
—
2,450
—
(3,297)—(2,127)
(82)
(45)
(1)
(3,706)
26,261
(325)

—
315
1,915
(3,650)(892)(1,041)
50
(180)
(3)
677
(2,054)
(68)
(138)
(22)
(4,594)22,229
—

(173)
236
522
(17,533)(2,015)(1,114)5,000(15,180)(2,691)829(2,104)
—
(258)
(10)
(5,631)
17,634
301

(267)
125
190
(3,038)
2,450
(739)
—
—
(3,000)580(2,083)
—
(244)
32
1,993
12,304
313

(17)
119
31
(905)
4,000
(340)
—
—
(3,003)
1,127(2,429)
—
(259)
43
1,548
14,611
—

—

—

—

—

53

22,22917,634

12,304

14,611

16,213
Corporate Report 2014

Financial Section

Net cash provided by (used in) operating activities
Income before income taxes and minority interests
Depreciation and amortization
Impairment loss
Amortization of goodwill
Gain on negative goodwill
Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in provision for retirement benefits
Increase (decrease) in provision for bonuses
Increase (decrease) in net defined benefit asset (liability)
Interest and dividends income
Interest expenses
Gain (Loss) on sales of noncurrent assets
Decrease (increase) in notes and accounts receivable-trade
Decrease (increase) in costs on uncompleted construction contracts and other
Decrease (increase) in other operating assets
Increase (decrease) in notes and accounts payable-trade
Increase (decrease) in advances received on uncompleted construction contracts
Increase (decrease) in other operating liabilities
Other, net
Sub-totalInterest and dividends income received
Interest expenses paid
Income taxes paid
Net cash provided by (used in) investing activities
Purchase of property and equipment
Proceeds from sales of property,plant and equipment
Purchase of intangible assets
Purchase of investment securities
Proceeds from sales of investment securities
Purchase of investments in subsidiaries
resulting in change in scope of consolidation
Payments of loans receivableCollection of loans receivable
Other, net
Net cash provided by (used in) financing activities
Net increase (decrease) in short-term loans payable
Repayment of long-term loans payable
Proceeds from long-term loans payable
Redemption of bonds
Purchase of treasury stock
Proceeds from sales of treasury stock
Cash dividends paid
Cash dividends paid to minority shareholders
Other, net
Effect of exchange rate change on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Increase (decrease) in cash and cash equivalents resulting from change of scope of consolidation
Increase (decrease) in cash and cash equivalents resulting from merger
and acquisition(consolidated subsidiary and nonconsolidated subsidiary)
Cash and cash equivalents at the end of period

2010/348

Financial Section

Financial Highlights (Non-consolidated)■Orders Received ■Net Sales■Gross Profit(¥Millions)(¥Millions)
243,418
216,315

213,973

222,980
204,6780

2010/3

2011/3247,358
227,593
235,305

218,527 200,061

22,783

21,495

2012/3

2013/3

2014/30

2010/3■Ordinary Income(¥Millions)(¥Millions)

2011/3

2012/3

12,444
10,5829,201

2011/3

2012/3

2013/3

2014/30

2010/3

2011/3■Total Assets ■Net Assets(¥Millions)(¥Millions)
10,334
152,090

2012/3

2013/3

2014/3

185,730

172,435

159,787

153,493

7,274

6,494
5,624

76,2944,466

2010/3

12,747

7,259■Net Income0

2014/3

9,753

6,651

2010/3

2013/3

11,956

11,347

0

24,20718,320■Operating Income

10,01923,3392011/3

2012/3

2013/3

2014/30

2010/384,53380,5992011/3

2012/395,75489,0682013/3

2014/3(¥Millions)

Orders Received
Net Sales
Gross Profit
Operating Income
Ordinary Income
Net Income
Total Assets
Net Assets

49 Corporate Report 20142010/3

2011/3

2012/3

2013/3

2014/3

222,980
216,315
22,783
10,01910,582
6,494
152,090
76,294

204,678
213,973
21,495
9,201
9,753
5,624
159,787
80,599218,527
200,061
18,320
6,651
7,259
4,466
153,493
84,533

243,418
227,593
23,33911,347
11,956
7,274
172,435
89,068235,305
247,358
24,207
12,444
12,747
10,334
185,730
95,754

Building a better, brighter future together

Trends by Segment (Non-consolidated)
Orders Received by Business Segment (Non-consolidated)(¥Millions)

243,418
222,980

235,305

218,527
204,678

Telecommunications infrastructure (NTT group engineering)
Telecommunications infrastructure (Non-NTT telecom engineering)
Environmental and social infrastructure
SYSTEM-SOLUTIONS(¥Millions)0

2010/3

2011/3

2012/3

2013/3

2014/3

2010/3

2011/3

2012/3

2013/3

2014/3

Telecommunications infrastructure(NTT group engineering)

134,288

122,680

124,821

132,355

130,375

Telecommunications infrastructure(Non-NTT telecom engineering)

57,38647,03955,52859,66059,783

Environmental and social
infrastructure

15,475

17,332

21,86329,88623,484SYSTEM-SOLUTIONS

15,82917,625

16,31321,517

21,661

222,980

204,678

218,527

243,418

235,305Total

Net Sales by Business Segment (Non-consolidated)(¥Millions)

247,358
216,315

227,593
213,973

Telecommunications infrastructure (NTT group engineering)
Telecommunications infrastructure (Non-NTT telecom engineering)
Environmental and social infrastructure
SYSTEM-SOLUTIONS

200,061(¥Millions)0

2010/3

2011/3

2012/3

2013/3

2014/3

2010/3

2011/3

2012/3

2013/3

2014/3

Telecommunications infrastructure(NTT group engineering)

134,267

123,041

119,991

126,691

131,193

Telecommunications infrastructure(Non-NTT telecom engineering)

44,41957,666

46,26555,07969,832

Environmental and social
infrastructure

21,547

16,662

17,18024,606

24,581SYSTEM-SOLUTIONS

16,081

16,602

16,624

21,21521,751

216,315

213,973

200,061

227,593247,358

Total

Financial Section
Corporate Report 201450

Financial Section

Non-consolidated Balance Sheets(¥Millions)

2010/3

2011/3

2012/3

2013/3

2014/3ASSETS
Current assets
Cash and deposits
Notes receivable-trade
Accounts receivable from completed construction contracts
Short-term investment securities
Costs on uncompleted construction contracts
Raw materials and supplies
Short-term loans receivable
Prepaid expenses
Deferred tax assets
Other current assets
Allowance for doubtful accounts
Noncurrent assets
Property, plant and equipment
Buildings
Structures
Machinery and equipment
VehiclesTools, furniture and fixtures
Land
Lease assets
Construction in progress
Intangible assets
Software
Other intangible assets
Investments and other assets
Investment securities
Stocks of subsidiaries and affiliates
Long-term loans receivable
Claims provable in bankruptcy, claimed provable in rehabilitation and other
Long-term prepaid expenses
Prepaid pension cost
Other investments and other assets
Allowance for investment loss
Allowance for doubtful accounts
Total assets

100,115
5,061
173
56,592
16,63013,433
340
4,666
226
2,322
842
(172)
51,97433,60414,302
551
121
14
726
17,525
342
20
2,582
2,379
203
15,787
4,096
7,001
1,698
73
183
2,637
2,183
(288)
(1,798)152,090

105,593
15,720201
61,896499
15,148
43
7,649
202
2,210
2,115
(94)
54,19334,877
13,44647085
2642
19,952
270
7
1,981
1,764
216
17,334
3,951
9,118
1,630
134
157
2,769
1,811
(237)
(2,002)
159,787

91,3754,259
154
56,7496,506
14,072
113
6,850
214
1,817
690
(54)
62,11834,80912,855
408
101
1
536
20,547
352
6
1,370
1,201
169
25,937
4,326
17,263
1,634
229
133
3,362
1,116
(162)
(1,966)
153,493

106,015
5,662
231
67,312
6,315
16,212
314
6,032
235
2,511
1,252
(63)
66,41935,05912,407434
94
0402
20,795
416
508
1,823
1,004
818
29,536
7,418
17,144
1,599
58
108
3,941
890
—
(1,624)
172,435

109,286
8,489
106
72,095
5,919
15,213
47
3,434
242
2,595
1,201
(59)
76,44438,966
12,809
1,274
829
0
670
22,973
266
143
2,771
2,635
136
34,706
11,562
17,173
488
56
83
4,918
2,107
—
(1,684)
185,730

LIABILITIESCurrent liabilities
Notes payable
Accounts payable for construction contracts
Short-term loans payable
Lease obligations
Convertible bond-type bonds with subscription rights to shares
Accounts payable-otherAccrued expenses
Income taxes payable
Advances received on uncompleted construction contracts
Deposits received
Provision for warranties for completed construction
Provision for loss on disaster
Provision for loss on construction contracts
Provision for asset removal
Other current liabilities
Noncurrent liabilities
Convertible bond-type bonds with subscription rights to shares
Long-term loans payable
Lease obligations
Deferred tax liabilities
Allowance for investment loss
Other noncurrent liabilities
Total liabilities

57,277484
29,058
—
86
—
1,590
5,586
3,185
2,479
13,960
181
—
223
—
440
18,51815,000
2,450
280
117
369
301
75,79676,201
485
32,615500
91
15,000
720
5,303
3,565
2,127
14,653
118
145
207
—
666
2,986
—
1,904
202
499
104
275
79,187

61,690—29,027
1,000
130
—
749
4,982
2,778
3,707
18,209
372
—
181
—
551
7,269
—
6,296
249
381
102
239
68,96075,835—34,511
3,500
160
—
1,292
6,458
4,542
1,228
22,959
62
—
245
101
775
7,531
—
5,694
287
1,375
93
80
83,367

82,375—34,663
7,500
113
—
1,277
6,683
3,453
1,457
25,638
98
—
729
—
758
7,601
—
5,367
177
1,837
48
169
89,976NET ASSETS
Shareholders' equity
Capital stock
Capital surplus
Legal retained earnings
Reserve for advanced depreciation of noncurrent assets
General reserve
Retained earnings brought forward
Treasury stock
Valuation and translation adjustments
Valuation difference on available-for-sale securities
Subscription rights to shares
Total net assets
Total liabilities and net assets

75,358
6,888
6,009
1,547
171
64,200
7,813(11,272)
663
663
272
76,294
152,090

79,498
6,888
6,035
1,547
313
68,900
6,541(10,727)
739
739
361
80,599159,787

83,273
6,888
6,738
1,547
325
72,300
5,483(10,010)
1,042
1,042
217
84,533
153,493

86,141
6,888
6,814
1,547
323
74,6008,375(12,408)
2,695
2,695
231
89,068172,435

92,291
6,888
7,139
1,547
1,348
74,60015,255(14,487)
3,287
3,287
175
95,754
185,730

51 Corporate Report 2014

Building a better, brighter future together

Non-consolidated Statements of Income(¥Millions)

2011/3

2012/3

2013/3

2014/3

Net sales

216,315

213,973

200,061

227,593247,358

Cost of sales

193,531

192,477

181,740

204,254

223,150

Gross profit

22,783

21,49518,32023,33924,207

Selling, general and administrative expenses

12,763

12,294

11,66911,991

11,763Operating income

10,019

9,201

6,651

11,347

12,444

901

1,565

1,198

1,563

1,152

Interest income

36

38

37

41

33

Interest on securities

94

43

14

14

8

Dividends income

235

256

241

133

129

Land and house rent received

251

408

478

473

468

Reversal of allowance for doubtful accounts

98

—

—

—

305

Foreign exchange gains

—

—

—

446

—

Reversal of allowance for investment loss

—

—

77

171

—

Other

185

817

348

284

208

338

1,012

590

954

848

Interest expenses

24

51

49

72

66

Provision of allowance for doubtful accounts

—

—

—

—

—

Bad debts expenses

33

102

28

14

17

Provision of allowance for investment loss

85

—

—

—

—

Loss on debt waiver of subsidiaries and affiliates

58

—

—

—

—

Loss on disposal of equipment and materials

—

—

8

118

—

Loss on disposal of fixed assets

—

—

13

177

—

Penalty for contract breach

—

—

—

—

86

Rent expenses

—

141

126

157

152

Impairment loss

—

—

—

280

187

Other

137

716

364

133

339

10,582

9,753

7,259

11,956

12,747Extraordinary income

432

—

203

—

3,709

Extraordinary loss

234

196

—

—

571

Income before income taxes

10,781

9,557

7,462

11,956

15,885

Income taxes-current

3,180

3,491

2,790

5,297

5,499

Income taxes-deferred

1,106

440

206

(615)

51

Total income taxes

4,286

3,932

2,996

4,681

5,550

Net income

6,494

5,624

4,466

7,274

10,334Non-operating income

Non-operating expenses

Ordinary income

Corporate Report 2014

Financial Section

2010/352

Stock Information(as of March 31, 2014)

Major Shareholders
Fiscal Year-End

March 31Annual Shareholders’MeetingJune 24, 2014

Stock Listing

Number of shares Percentage of total
held (thousand)shares issued (%)

5,766

4.89

Tokyo Stock Exchange (First Section)

Japan Trustee Services Bank, Ltd. (Sumitomo ElectricIndustries, Ltd., Retirement Benefit Trust Account reentrusted
by Sumitomo Mitsui Trust Bank, Limited)

Ticker Code1951

The Master Trust Bank of Japan, Ltd.
(Trust Account)

5,178

4.40

Common Stock

Authorized: 300,000,000
sharesIssued: 117,812,419 shares

Japan Trustee Services Bank, Ltd.
(Trust Account)

4,694

3.98

Total Number of 10,185
Shareholders
Transfer Agentand Registrar

Sumitomo Mitsui Trust Bank,
Limited 1-4-1, Marunouchi,
Chiyoda-ku, Tokyo, JapanESOP Association of KYOWA EXEO CORPORATION

3,830

3.25

JUNIPER

2,311

1.96

CMBL S. A. RE MUTUAL FUNDS

2,231

1.89

SUMITOMO LIFE INSURANCE COMPANY

2,000

1.70

Japan Trustee Services Bank, Ltd.
(Sumitomo Mitsui Trust Bank, Retirement Benefit Trust Account)

1,834

1.56

Sumitomo Realty & Development Co., Ltd.

1,695

1.44

Japan Trustee Services Bank, Ltd.
(Trust Account 1)

1,688

1.43

Note: In addition to the above, treasury stock of 17,107,000 shares (14.52%) is held by theCompany.

Composition of Shareholders
Treasury stock
14.52%

Financial
institutions
31.85%

Individuals
and others
14.70%

Securities
companies
0.82%

Foreigncompanies
29.40%

Other
corporations
8.71%

Stock Price Range and Trading Volume on the Tokyo Stock Exchange
Stock Price
(¥)
1,500

1,000
Trading Volume(Million Shares)
500

20

15

10

5

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2009

53 Corporate Report 2014

2010

2011

2012

2013

2014

0

Board of Directors
Building a better, brighter future together(as of June 24, 2014)

Director and Executive
Operating Officer

ChairmanPresident

Kunio Ishikawa

Fuminori Kozono

Director and Executive
Operating Officer

Director and Managing
Operating Officer

Director and Managing
Operating Officer

Director and Managing
Operating Officer

Director and Managing
Operating Officer

Takayuki Watanabe Toshio Tsuda

Takashi Sakai

Yoshiharu Yamazaki Yoshiaki Matsuzaka

Noritsugu Totani

Director and Managing
Operating Officer

Director

Director

Hisashi Yazawa

Yuki Sakuyama

Director(Independent Director)

Standing Statutory
AuditorStanding Statutory
AuditorKumiko Kitai

Yuji Sugita

Shigeru Tanaka

Tsutomu Ota

Akira Yamada

Statutory Auditor(Independent Auditor)

Operating Officers

Takashi Shikano
Haruhiko Watanabe
Kenjiro Tsunoda
Yoshiharu Takizawa
Hisamitsu Hoshi
Yasuo Ohtsubo

Toshimitsu Kiribayashi
Kazuyuki Kaihatsu
Atsuo Yuhara
Genzaburo Oe
Keiji Kakura
Hiroshi Yamashita
Hideyuki Goto

Masafumi Yoshihara
Junichi Sato
Hideki Obara
Hideo Higuchi
Tomohiro Kurosawa
Fumio Kumagai
Yuji Sato

Kozo Meguro

Corporate Report 2014

Stock Information/
Board of Directors

Statutory Auditor

Managing Operating Officers

5429-20, Shibuya 3-chome, Shibuya-ku, Tokyo 150-0002, Japan
URL: http://www.exeo.co.jp/overseas/index.html