ANNUALREPORT

For the year ended
March 31, 20122012

Profile
Since its foundation in 1881, Toda Corporation has remained steadfastly
committed to construction that contributes to safe, secure, and comfortablecommunities guided by our motto of realizing high-quality construction,safely and on time. Today, together with our Group Companies in Japanand overseas, and led by our primary segments of construction and civil

Okuma Auditorium,
Waseda University(1927)

engineering, we continue to grow as a business that places our priority on
quality and trust.
Today’s business climate is one of drastic change, and our clients

Pacifico Yokohama(1991)

want more value as their needs become more diverse and complex. To giveour clients what they need in this new business climate, Toda Corporation

Marunouchi oazo
Marunouchi
Kitaguchi Building(2004)

is evolving into a full-service construction firm that applies its technology
and expertise to providing solutions that accurately address our client’s
construction issues across the entire building lifecycle. We also place ahigh priority on fulfilling our corporate social responsibility, and we intend
to continue the efforts that maintain the trust of our clients and broader
society, including addressing environmental concerns such as reducing
CO 2 emissions and promoting reusable energy, making efficient use

Haneda Airport
International Flight
Passenger Terminal(North Wing) (2010)of social capital stock, and promoting seismic safety and recovery andreconstruction assistance.

About Cover PhotoKumamoto Shintoshin Plaza
Location: Kumamoto, Japan
Client: Kumamoto City

Contents

Forward-looking Statements

Financial Highlights ................................................................................... 1
Message from Management ................................................................... 2
Special Feature: A strategic approach to building new business areas ... 6
Business Review by Segment ..................................................................

8

Corporate Governance ...........................................................................

9— Financial Section —Consolidated Balance Sheets ................................................................ 10
Consolidated Statements of Income .................................................... 12
Consolidated Statements of Changes in Net Assets ........................ 13
Consolidated Statements of Cash Flows ............................................. 14
Notes to Consolidated Financial Statements ..................................... 15
Independent Auditors’ Report ................................................................ 28
Corporate Information/ Board of Directors,
Corporate Auditors and Managing Officers ..................................... 29

This report contains forward-looking
statements regarding Toda Corporation’s
corporate plans, strategies, forecasts andother statements that are not historical facts.
They are based on current expectations,estimates, forecasts and projections about
the industries in which Toda Corporation
operates. As the expectations, estimates,
forecasts and projections are subject
to a number of risks, uncertainties andassumptions, including and without
limitation, changes in economic conditions;fluctuations in currency exchange rates;changes in the competitive environment;
the outcome of pending and future
litigation; and the continued availabilityof financing, financial instruments andfinancial resources, actual results may differ
materially from those presented in theseforward-looking statements.
Toda Corporation, therefore, wishes tocaution that readers should not place undue
reliance on forward-looking statements and,further, that Toda Corporation undertakes
no obligation to update any forward-looking
statements as a result of new information, orother future developments.

Financial Highlights

ANNUAL REPORT 2012500

Toda Corporation and Consolidated Subsidiaries—Years ended March 31

400

300

Thousands of
U.S. Dollars (Note 1)

Millions of yen

2008*

2009*

2010*

200
2011*

2012

2012

¥467,113¥464,762¥475,653

100¥452,499¥489,385$5,954,319

Ordinary income (loss)

6,372

5,480

7,460

7,265

(6,690)(81,397)

Net income (loss)

3,358

2,533

2,906

03,567(19,872)(241,790)

Consolidated
Net sales–––(2,586)(17,167)(208,879)

Total net assets

214,814

179,851

194,859

189,581

171,537

2,087,081

Total assets

608,102540,856

501,189

499,111487,160

5,927,250¥ 675.51¥ 563.76¥ 617.42¥ 602.35¥ 537.53

		 Net income (loss)

10.63

8.10

9.36

		 Cash dividends applicable to the year

7.00

7.00

7.00

Net cash provided by (used in) operating activities ¥ 6,669
Net cash provided by (used in) investing activities(2,171)¥ (8,577)(8,478)Comprehensive income (loss)

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

Net cash provided by (used in) financing activities
Cash and cash equivalents at end of period
Number of employees
Non-consolidated
Orders received

500

400

$

6.540

11.53
4

		 (64.28) 		

(0.782)

7.00

		

0.073

¥ 32,152¥ 10,379
3¥(7,948)(5,278)(6,525)

4,422(3,089)52,25839,30260,459

4,866

4,996

5,051

¥440,785¥434,428¥402,755

300

200

6.00

		

(48) $(7,837)(592)(95,363)(1,557)(18,944)

61,65452,024

632,979

5,034

5,101

¥452,122
0¥411,691(3,754)2

1$5,009,018* As restated (See Note 2)
100
Notes: 1. The rate of ¥82.19=US$1.00, the foreign exchange rate on March 31, 2012, has been used for translation.
2. On December 14, 2011, the Company announced that inappropriate transactions had been conducted
at Sipco Industries Co., LTD. (”Sipco“),-1a consolidated subsidiary of the Company. After the investigation, the Company determined the accumulated total loss on this inappropriate
transactions occurred at Sipco was ¥2,192 million(US$26,672 thousand) and allocated this loss to respective financial years. As a result, the0consolidated financial statements and related notes for 2011 and previous years have been restated.

Net Sales

Net Income (Loss)

Orders Received

Billions of yen

Billions of yen

Billions of yen(Consolidated)(Consolidated)(Non-consolidated)

500

4

500

400

3

400

300

2

300

200

1

200

100

0

100

0

-1

0

1

Message from Management
Aiming to be a company
that creates new answers» A review of fiscal 2011
Lower construction profitability and declining
real estate values lead to decreased profits andunfulfilled targets

Shunzo Inoue, President

Despite the gradual recovery of Japan’s economy in theaftermath of the Great East Japan Earthquake, the global
economic slowdown triggered by the EU financial crisis,
a rising yen, and other unwelcome developments have
reduced revenue for Japanese firms and contribute to apersistently uncertain economic outlook. Financial results for
the Toda Group amid these challenging business conditions
for the fiscal year ending March 31, 2012 (fiscal 2011) are
as follows.
Consolidated net sales were 489.3 billion yen, a yearon-year increase of 8.2%, due mainly to progress madeon outstanding orders by our overseas subsidiaries anda subsequent increase in sales of completed contracts.
Nonetheless, orders remain sluggish for our primarybusiness of building construction and a recovery in the
profitability of outstanding orders has yet to materialize,
resulting in a 4.7 billion yen increase in the provision forloss on construction contracts. In addition, our real estatebusiness experienced a 7.3 billion yen decrease in thevalue of real estate for sale, resulting in a 15.1 billion yen
gross profit, a 3.1% decrease and a year-on-year 3.7-point
decline. The overall result was a 7.9 billion yen operatingloss. Moreover, a loss on valuation of investment securities
and other extraordinary losses, a reduction of deferred tax
assets due to the drop in the corporate tax rate, and the likeresulted in a fiscal year net loss of 19.8 billion yen.
The previous three-year Medium-Term Management
Plan launched in 2009 focused on increasing the ratio

Review of the Former Medium-Term Management Plan (FY2009–11)
Target (FY2011)

FY2008FY2011

Ratio of renovations to completions

25%

15%

14%

Ratio of orders in the priority areas

70%

68%

64%

Overseas orders received (consolidated)¥20.0 billion¥9.7 billion¥21.5 billion

Real estate investment(cumulative total for the period of the plan)¥23.0 billion+—¥19.1 billion

Ratio of sales in the Tokyo metropolitan area

60%

51%

56%

(total of architectural construction and civil engineering)2

ANNUAL REPORT 2012of orders for our priority business areas and revenue
from the Tokyo metropolitan area, overseas construction
orders, deploying environmental technology, among otherobjectives. While the plan achieved a certain degree ofsuccess, it did not meet its performance targets due to a
profit outlook that deteriorated more quickly than anticipated
as a result of such factors as increasing competition andsharply rising labor costs.
With these developments very much in mind, in April
2012, we launched the latest Medium-Term Management
Plan. The plan’s main priority is a recovery in businessperformance in the near term along with a united effort bygroup companies to achieve further growth.

at adding momentum to our drive to synergize our Group’s
dynamism, achieve “value co-creation” in partnership withour clients, and secure sustained growth.
The Medium- to Long-Term Management Strategy
is guided by the concept that the problems of a new era
require creating new answers. With the Strategy as its
guide, Toda Group Companies will work together to create
solutions with a breadth and depth that surpass thoseformulated within the conventional construction businessframework. In addition, the Strategy sets the goal of
attaining a consolidated operating margin of over 3% by
fiscal 2017. Achieving these goals will require successfully
meeting the following three challenges.

(1) Total commitment to the facility lifecycle
Building a total business operation, from facility project
proposals (upstream) to operation and maintenance(downstream), that can provide our clients with longterm value.

» Medium- to long-term growth strategies
Making positive social contributions through aninnovative, total business model unfettered byconventional thinking
The shift to the sustainable use of existing building stock,
the need to come to grips with globalization, redeveloping
infrastructure, disaster prevention, the environment, and themany other pressing social problems in need of solutions
today have contributed to a more diverse and complex world
for our clients and for society in general. The fact is the old
construction business model can no longer provide adequate
solutions in today’s business environment. Acutely aware ofthis basic fact, in April 2012 the Toda Group launched thesix-year Medium- to Long-Term Management Strategy aimed(2) Total commitment to client’s management concerns
Global- and environmentally oriented technology andoperations that provide better solutions for our client’s
management concerns.
(3) Total commitment to the entire project cycle
By maintaining financial health and using our real estate
investments and business capital even more effectively, Toda
Group will take the initiative on creating new value.

Medium- to Long-Term Management Strategy FY2012–17

Our Vision“Create New Answers”
Creation by people. Created with people

3 Challenges for Growth
Total commitment to:• Give “construction” a wider and deeper significance.
• Seek the best results for our customers.

Client’s Management
Concerns

Facility Lifecycle

Social Issues to Work On

Sustainable
Use of Existing
Building Stock

Growth Target

Operating Margin

Redevelopmentof Infrastructure

DisasterPrevention

Entire Project Cycle

Globalization

GlobalEnvironmental
Issues

3 % or higher
3

Message from Management» Our initiatives over the next three years
Our back-to-growth strategy: near-term return toprofits and new value creation
The first step in our Medium- to Long-Term Management
Strategy is the New Medium Term Management Plan, athree-year plan spanning fiscal 2012 through 2014.
The Plan’s main objectives are improved profitability
in the near term and new value creation through theGroup’s combined business operation. The Plan’s businessperformance targets are consolidated revenues in the 500
billion yen range and operation margin over 2% for fiscal
2014. The plan’s first priority is improving construction
revenues. The Toda Group will perform a meticulous
reevaluation of every process with an eye on revitalizing
its core businesses and securing a completed work profit
ratio of 7% for the parent company. Specifically, starting
immediately from the commission stage, our management
process features combined management and construction
plan due diligence and meticulous risk management. In
addition, the plan will strengthen our technical planningand comprehensive valuation methods, and enhance
our core business areas, most notably medical, healthand welfare, manufacturing, office, and educational
facilities for our building construction departments; andurban infrastructure, including roads, rail, surface andunderground water services for our civil engineering
departments. Moreover, along with rationalizing our costmanagement and purchasing functions, we are striving toeliminate defects, rework, and waste during the construction
process. Finally, we are focusing on reducing total costs,
including selling, general, and administrative expenses
and non-operating income and expenses and intensifying

our effort to meet recovery demand in the aftermath of theGreat East Japan Earthquake.
In summary, we will strengthen our order selection andcost management based on sound orders-received targets,and thereby improve construction revenue and achieve abusiness-performance rebound in the near-term.
Our second major priority is executing a Group-wide
growth strategy. Specifically, while staying in step with thechanging business environment, we will synergize ourGroup’s dynamism to create new value and take a stepby-step approach to building an infrastructure that secures
stable revenue. As part of the comprehensive approachto our long-term strategy, we will thoroughly reorganize
our business processes and focus on three areas that wehave strategically targeted for development and growth:
overseas markets, investment (real estate, PFI and PPP), andenvironment and energy. We are also striving to build amore robust management infrastructure.
Moreover, while the construction sector for fiscal 2012
can expect increased public-sector orders as part of theGreat East Japan Earthquake recovery effort as well asa gradual increase in private-sector construction orders,
we nonetheless expect the current challenging businessenvironment to continue. Given the business climate, for the
Toda Group’s fiscal 2012 we forecast consolidated net salesof 477.8 billion yen (a year-on-year decrease of 2.4%), a
4.1 billion yen operating profit (the previous year saw a 7.9
billion yen operating loss), ordinary income of 5.2 billion
yen (compared to a 6.6 billion loss the previous year), andnet income of 2.7 billion yen (compared to a 19.8 billion
yen net loss the previous year).

Growth Strategies for the Next Six Years (FY2012–17)
Operating margin target

FY 20122013

2 % or more

3 % or more

2014
2015

FY2012–14:

Create growth opportunities
Implement group-wide comprehensive strategies

4

1

Renovating business processes

2

Developing three strategic business areas

3

Strengthening our management base

2016

2017

FY2015–17:

Realize further growth
Ensure stable revenues

ANNUAL REPORT 2012

Laying the Groundwork
for a successful Group-wide growth strategy

1 Renovating business processes
Meeting client needs from both the technologicaland operational sides
To move our Group-wide growth strategy forward we are shiftingfrom the conventional "build-and-sell" approach to building
a comprehensive business model encompassing everythingfrom such upstream processes as engineering and design todownstream processes such as operation and maintenance.
Moreover, along with strengthening our ties with our
subcontractors and bringing together talented engineers, we areenergetically pursuing capital and business partnerships with firms
and organizations outside the Group. We will reform our businessprocess so that it builds a framework that can meet client needs
both in the technological and operational sense throughout theentire building lifecycle.

2 Developing three strategic business areas
Building a new profit base with the strategic
development of three key areas
We have applied a strategic approach to developing andstrengthening three key areas: overseas markets, our investment
business, and environment and energy. For the especially promisingoverseas market segment, we have a goal of 35 billion yen inrevenue for fiscal 2014 followed by 50 billion yen—equivalent to
10% of total revenues—in fiscal 2017, the final year of the Mediumand Long-Term Management Strategy. We are bolstering thisbusiness area with a focus on three regions: Brazil, Southeast
Asia and China, and West Africa. For our investment business,
we are aiming for 4 billion yen in income from real estate andother investments in fiscal 2014 and 5 billion yen for fiscal 2017.
Our effort in the environment and energy segment is driven bypartnerships with businesses in different fields than our own, withan eye on developing environmental technology that stimulates
construction orders and commercializing renewable energy.

Subcontractors

Secure capable
techniciansEngineeringand Design

External collaborators
Strategic alliancesand partnerships

Secure our criticaltechnologies andknow-howConstruction
Work

Lifelong Care
Integrate
maintenance,
management, andrenovation

Take advantage ofcustomer confidence;
implement drastic
streamlining

Three strategic business areas:

Overseas Markets

Building our presence in three
emerging markets

Investment Business

Optimizing investments andmaking 5 billion yen in newinvestments every business year

Environment and Energy

Environmental solutions anda stronger commitment torenewable energy
For more about our efforts in these areas, see the following page.

3 Strengthening our management base
Steady progress on three priorities
Our drive to build a more solid management foundation is guided
by three priorities: the management framework, improvementin the performance of fundamental management tasks, andhuman resource development. First, we are building a combinedGroup management framework capable of optimizing thesynergies of the Toda Group. In addition, we are redoubling oureffort to improve how we perform fundamental management
responsibilities, most notably compliance, quality control,
environmental conservation, health and safety, and business
continuity planning. Moreover, we are focusing on humanresource development by building an education and training
system that can pass on our technical know-how and develop andsecure the human resources that a global firm requires.

Management
Framework

Performance
Improvementin Fundamental
Tasks• Compliance• Quality, environment, safety• Business continuity plan (BCP)• Optimizing groupsynergies

Developmentof HumanResources• Passing on technical know-how• Global human resources

5SPECIAL FEATURE

A strategic approach tobuilding new business areas
The Toda Group has targeted three business areas—overseas markets, investment
business, and environment and energy—for strategic development and growth within
the Group-wide growth strategy, and we have launched a concerted effort to build ourbusiness in these key business areas.

Overseas Markets
Building our presencein three emerging markets
For over a century, through the diverse overseas
projects, the Toda Group has contributed to thedevelopment of countries all over the world.
Today our focus is on building our businessin developing countries from bases in three
regions: Brazil, Southeast Asia and China,
and West Africa.
In Brazil, we are leveraging our extensive
experience and know-how acquired fromyears of doing business in this market toward
an effort to further deepen our businesspresence in this rapidly growing economy. For
Southeast Asia and China, we established a local
subsidiary in the Philippines in July 2011, which
will pave the way into new countries and markets.
And in West Africa, we are concentrating on asteady stream of project commissions and building
a solid record in civil engineering construction,
mainly from Japanese government–funded
overseas direct assistance.

Southeast
Asia& ChinaWest Africa(ODA)

International Topic

1

Southeast Asia regional office
to open in Thailand

Toyal Zhaoqing Co., Ltd. Processing Plant (Third Phase)
Location: Guangdong, China
Client: Toyal Zhaoqing Co., Ltd.

6In Southeast Asia, Toda has already establishedlocal subsidiaries in Thailand, Vietnam, and thePhilippines to establish our presence in these markets.
In September 2012, we plan to open a Southeast
Asia regional office in Thailand whose staff will
include design, estimate survey, and quality-control
specialists. The new office will be a hub in theseregions for making the work process more efficientand bolstering our competitiveness. It will also
consolidate the skills and expertise we have acquired
from factories and other constructions we havecompleted there, thus creating increased value.

ANNUAL REPORT 2012

Investment Business
Optimizing investments andmaking 5 billion yen in newinvestment every business year
We intend to improve rental occupancy rates andmaximize the value of the properties we own throughrefurbishing, rebuilding, and redevelopment. In addition,
we will establish a real estate investment advisory boardthat will make around 5 billion yen in new investments
based on strict criteria in income generating properties
each business year. Our investment business will also
provide support for our construction and building
management segments.

Environment and Energy
Environmental solutions
and a stronger commitment torenewable energy
CO2 emissions and energy conservation are among
the environment and energy concerns that are drawing
increasing attention. The Toda Group is leveraging its
broad range of expertise acquired in the environment andenergy field to promoting floating wind turbine power
generation and other renewable energy technology and todeveloping environmentally friendly urban grand designs
for regions recovering from disasters. In addition, weare developing and expanding on new environmental
technology and systems by energetically collaborating withother industries. The task and ambient lighting technology
we are jointly developing with Murata Manufacturing Co.,
Ltd. is just one of our many successful joint projects.

BrazilToyota Boshoku Do Brasil Ltda.
Sorocaba Plant
Location: Sao Paulo, Brazil
Client: Toyota Boshoku Do Brasil Ltda.

International Topic

2

Power generation by
floating wind turbines

Toda celebrates 40 years in Brazil
Founded in 1972 in Sao Paulo, Brazil’s largest
city, Construtora Toda Do Brasil S. A. celebrates its
40th year this year. From the moment it entered theBrazilian market, Construtora Toda steadily establisheditself as a regional business, earning the trust ofJapanese and Brazilian corporate clients alike. The
company has completed over 850 building projects in
Brazil to date. The Toda Group is committed to further
growing its business in and contributing to the growthof Brazil—a nation that will host the 2014 Soccer
World Cup and 2016 Olympics and whose economy
is expected to become even more vibrant in the years
ahead—by bolstering our construction capability as
well as through mergers and acquisitions.

Lighting control using the task and ambient
lighting system

7

Business Review by Segment (Consolidated)
Building Construction
Net sales for construction were 374.1 billion, a 4.2% year-onyear increase. Segment operating income was 3.5 billion yen,
71.1% year-on-year decrease. Revenues from orders received
were 1.8 billion yen for overseas construction, a 67.5% year-onyear increase, while revenue from public-sector construction in
Japan was 49.2 billion yen, a year-on-year 37.9% decrease. Total
segment revenues were 329.4 billion yen, down 9.1% year-on-year.

Percentage of total sales

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

359.2

374.1

12.2

76.0 %Nakano Central Park East
Location: Tokyo, Japan
Client: TMK Nakano Station Area
Development

Yokohama Momijizaka Residence
Location: Kanagawa, Japan
Clients: Hanasaki Apartment
Complex Reconstruction Consortium;
Nippon Steel City Produce, Inc.;
Mitsubishi Jisho Residence Co., Ltd.

3.5

2011

2012

Civil Engineering
Net sales for the civil engineering segment were 104.6 billion
yen, a 24.1% year-on-year increase. Segment operating income
was 1.3 billion yen (the previous fiscal year recorded a 7 million
yen loss for the segment). Revenues from orders received were
19.8 billion yen for private-sector projects in Japan, a 30% rise
year-on-year, while public-sector projects in Japan were 53.6
billion yen, a year-on-year 19.4% decline. Overall revenue forthe segment, including overseas, was 73.8 billion yen, a 10.2%
decrease year-on-year.

Percentage of total sales

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

84.2

104.6
1.3

22.2%
-0.0
2011

Koyasudai air ventilation, tunnel,
and abutment constructions
Location: Kanagawa, Japan
Client: Metropolitan Expressway
Company Limited

2012

The Mie-Shiga Line mountain tunnel
construction
Location: Shiga, Japan
Client: Osaka Gas Co., Ltd.

Real Estate
Net sales were 14.5 billion yen, a 6.3% year-on-year increase.
The segment recorded a 5.4 billion yen operating loss (theprevious fiscal year recorded a 1.8 billion operating income forthe segment).

Percentage of total sales

1.8 %

8

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

13.7

14.5

1.8

-5.4

2011

2012

ANNUAL REPORT 2012

Corporate GovernanceToda Corporation aims to continue to raise its corporate value through the efficient execution of business
operations and by building a monitoring structure, securing the transparency and integrity of management
and strengthening compliance.

Strengthening

An Enhanced

Building

the function of the board of
directors and business execution

auditing structure

an internal control structure

In addition to company bodies required
under the Corporation Law, such as
shareholders’ meetings, the Board of
Directors and the Board of Corporate
Auditors, the Company has built its own
control systems, including an executive
officer system and internal audits.
The Board of Directors is currently
composed of nine directors who conduct
management decision making andsupervise the execution of business. In orderto clarify management responsibilities,
strengthen the management structure, andenable a swift response to changes in the
management environment, the term ofoffice is set at one year for directors, so thatthey must face a vote at the annual general
meeting of shareholders.
The Company has also adopted an
executive system in its aim to ensure a
prompt and efficient business execution
structure. Executive officers selected by the
Board of Directors execute the duties of
the Company under the direction of the
President and in accordance with the basic
policies of management determined by the
Board of Directors.

Toda maintains a Board of Corporate
Auditors, which is composed of fivecorporate auditors, including threeexternal corporate auditors. Corporate
auditors conduct audits for the legality andappropriateness of business execution byattending board of directors’ meetingsand other important company meetings.
With regard to personnel matters andorganizational changes within or involving
the Corporate Auditor Office (thedepartment that assists the activities of thecorporate auditors), the Company stipulates
that opinions rendered by the Board of
Corporate Auditors or by a corporate
auditor (who has been designated inadvance by the Board of Corporate
Auditors) be sought or asked for, thereby
ensuring the independence of corporate
auditors and the staff assisting them fromdirectors and executive officers.
The Company established the Audit
Office as an internal audit authority, andthis department periodically conducts
internal audits of the business status ofeach business division in the Company.
In addition, corporate auditors ensure
mutual cooperation by receiving audit result
reports and other documents from, andexchanging views with, the Audit Office andthe accounting auditors.

In accordance with the Corporation Law,
Toda stipulates the maintenance of aneffective internal control system in its basic
policy. This system encompasses such key
areas as compliance and risk management.
In addition, the Company maintains
internal controls over financial reportingin compliance with the Internal Control
Reporting System under the Financial
Instruments and Exchange Law, which cameinto effect from April 2008. Toda’s Internal
Control Project Office has been the main
department responsible building and formaintaining an internal control structure
for financial reporting. In each year since
FY2008, Toda’s management has evaluatedand confirmed that the Company’s internal
control over financial reporting has
functioned effectively and, with the audit
and verification by the independentaccounting auditors, submitted an Internal
Control Report stating to that effect.
Toda Corporation aims to maintainthe reliability of financial reporting andwill continue making efforts to realize
improvement.

9Consolidated Balance Sheets

Toda Corporation and Consolidated Subsidiaries—As of March 31, 2011 and 2012
Thousands of
U.S. dollars (Note1)

Millions of yen
restated
2011 As(Note1)

2012

2012

ASSETS
Current assets:
Cash and deposits (Notes 7 and 9)¥ 42,268¥ 36,935$ 449,396

Notes and accounts receivable—trade (Note 9)

132,541

164,203

1,997,855

Short-term investment securities (Notes 9 and 10)

20,06915,999194,670

Real estate for sale

28,631

19,541

237,762

Costs on uncompleted construction contracts

51,04730,976

376,883

Other inventories

2,033

596

7,255

Deferred tax assets (Note 13)

7,327

10,230124,475

Other

3,552

3,871

47,100Allowance for doubtful accounts
Total current assets

(918)

(991)

(12,062)

286,554281,364

3,423,336

18,131

17,765

216,146

Noncurrent assets:
Property, plant and equipment: (Notes 3.1) and 14)
		 Buildings and structures, net
		 Machinery, vehicles, tools, furniture and fixtures, net
		 Land (Notes 3.3) and 7))

799

709

8,636

69,13966,589810,195

		 Lease assets, net

140

134

1,642

		 Construction in progress

895

2,165

26,351

89,10687,365

1,062,971

427

372

4,526

		 Other

1,843

2,640

32,127

		 Total intangible assets

2,270

3,012

36,653

		 Investment securities (Notes 3.2), 3), 9 and 10)

110,251

110,715

1,347,070

		 Long-term loans receivable (Notes 3.3) and 9)

1,422

1,405

17,105

		 Deferred tax assets (Note 13)

5,592

229

2,790

		 Total property, plant and equipment

Intangible assets:
		 Goodwill

Investments and other assets:

		 Other

7,410

4,623

56,251

		 Allowance for doubtful accounts(3,498)(1,555)(18,929)

121,179

115,418

1,404,287

Total noncurrent assets

212,556

205,796

2,503,913

Total assets¥499,111¥487,160$5,927,250

		 Total investments and other assets

See accompanying notes to consolidated financial statements.

10

ANNUAL REPORT 2012

Thousands of
U.S. dollars (Note1)

Millions of yen

2012

2012

¥118,101¥132,799$1,615,766

43,91337,059450,895

restated
2011 As(Note1)

LIABILITIESCurrent liabilities:
Notes and accounts payable—trade (Note 9)
Short-term loans payable (Note 9)
Income taxes payable (Note 9)
Advances received on uncompleted construction contracts
Deferred tax liabilities (Note 13)
Provision for bonuses
Provision for warranties for completed construction
Provision for loss on construction contracts
Provision for loss on disaster
Deposits received
Other
Total current liabilities

620

732

8,909

55,471

41,270502,137

39

–

–

3,286

2,570

31,269926

940

11,4449,271

14,010170,461

297

218

2,662

15,844

15,253

185,585

8,176

10,918132,842

255,949

255,773

3,111,975

14,20920,443248,729

251

3,172

38,599Noncurrent liabilities:
Long-term loans payable (Note 9)
Deferred tax liabilities (Note 13)
Deferred tax liabilities for land revaluation (Note 13)

11,8889,780

118,998

Provision for retirement benefits (Note 12)22,73822,030268,038

Provision for directors’ retirement benefits

241

245

2,987

Asset retirement obligations

155

156

1,906

Other

4,095

4,021

48,933

Total noncurrent liabilities

53,58059,850728,193309,530

315,623

3,840,168

Total liabilities
NET ASSETS
Shareholders’ equity:
Capital stock

23,001

23,001

279,858

Capital surplus

25,59525,502

310,288

Retained earnings

125,893

103,746

1,262,270(6,683)(5,956)(72,477)

167,806

146,293

1,779,940

15,59417,007

206,923

Treasury stock
Total shareholders’ equity
Accumulated other comprehensive income:
Valuation difference on available-for-sale securities
Deferred gains (losses) on hedges
Revaluation reserve for land (Note 3.7))

(15)

57

699

4,561

6,073

73,899Foreign currency translation adjustment(1,812)(2,066)(25,146)

Total accumulated other comprehensive income

18,32721,071

256,376

3,447

4,172

50,764

Total net assets

189,581

171,537

2,087,081

Total liabilities and net assets¥499,111¥487,160$5,927,250

Minority interests

11Consolidated Statements of Income

Toda Corporation and Consolidated Subsidiaries—For the years ended March 31, 2011 and 2012
Thousands of
U.S. dollars (Note1)

Millions of yen

2012

2012

¥439,701
12,797452,499¥475,603
13,782
489,385$5,786,629
167,6905,954,319

411,659
10,306421,966

455,982
18,256474,2395,547,905
222,1315,770,037

28,0422,490
30,532
24,766
5,766

19,620(4,474)
15,14623,140(7,994)

238,723(54,440)
184,282
281,550(97,268)

191
1,691
270
433
2,586

260
1,792
278
226
2,557

3,174
21,805
3,388
2,751
31,120

794
160
–
132
1,087
7,265

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

9,348
2,070
2,106
1,725
15,250(81,397)

77
11
1
386
–
476

–
6
31
47
5
90

–
76
386
579
61
1,104

0
172
30
203
364
109
63
945
6,797
665
2,498
3,164
3,633
65
¥ 3,567

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

3,100
30,279–40,820
2,182
–
1,679
78,062(158,355)
9,636
72,55482,191(240,546)
1,244$ (241,790)

restated
2011 As(Note1)

Net sales:
Net sales of completed construction contracts
Net sales of real estate business and otherTotal net sales
Cost of sales:
Cost of sales of completed construction contracts (Notes 4.1) and 4))
Cost of sales of real estate business and other (Note 4.2))
Total cost of sales
Gross profit:
Gross profit on completed construction contracts
Gross profit (loss) on real estate business and otherTotal gross profit
Selling, general and administrative expenses (Notes 4.3) and 4))
Operating income (loss)
Non-operating income:Interest income
Dividend income
Dividend income of insurance
Other
Total non-operating income
Non-operating expenses:
Interest expenses
Commission fee
Provision for allowance for doubtful accounts
Other
Total non-operating expenses
Ordinary income (loss)
Extraordinary income:Reversal of allowance for doubtful accounts
Gain on sales of noncurrent assets (Note 4.5))
Gain on sales of investment securities
Gain on negative goodwill
Other
Total extraordinary income
Extraordinary loss:
Loss on sales of noncurrent assets (Note 4.6))
Impairment loss (Note 4.7))
Loss on sales of investment securities
Loss on valuation of investment securities
Loss on disaster (Note 4.8))
Loss on adjustment for changes of accounting standard for asset retirement obligations
Other
Total extraordinary losses
Income (loss) before income taxes and minority interests
Income taxes—current
Income taxes—deferred
Total income taxes (Note 13)
Net income (loss) before minority interests
Minority interests in income
Net income (loss) (Note 17)
See accompanying notes to consolidated financial statements.

Consolidated Statement of Comprehensive Income

Toda Corporation and Consolidated Subsidiaries—For the years ended March 31, 2011 and 2012

Thousands of
U.S. dollars (Note1)

Millions of yen

2012

2012

¥ 3,633¥ (19,770)$ (240,546)(5,734)

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

17,138890
17,047(3,409)31,666(208,879)

restated
2011 As(Note1)

Income (loss) before minority interests
Other comprehensive income (loss) (Note 5):
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Revaluation reserve for land
Foreign currency translation adjustment
Total other comprehensive income
Comprehensive income (loss)
Comprehensive income (loss) attributable to:
Owners of the parent
Minority interests
See accompanying notes to consolidated financial statements.

12

12
–
(499)
(6,220)(2,586)¥(2,654)

59¥(17,240)

72$(209,759)

879

ANNUAL REPORT 2012

Consolidated Statements of Changes in Net Assets

Toda Corporation and Consolidated Subsidiaries—For the years ended March 31, 2011 and 2012
Thousands of
U.S. dollars (Note1)

Millions of yen
restated
2011 As(Note1)

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

2012

2012

¥ 23,001
		–¥ 23,001¥ 23,001
		–¥ 23,001$
		
$279,858–
279,858¥ 25,595¥ 25,595$

311,414		–		–¥ 25,595

(92)
		
(92)
		
¥ 25,502

						

(1,126)¥ 124,656¥ 125,893$ 1,531,737

		 (2,167)
		
3,567
(163)
		
		
1,237
¥ 125,893(2,163)				 (19,872)(111)
				 (22,147)¥ 103,746(26,318)				 (241,790)(1,357)				 (269,466)$ 1,262,270(1,126)
310,288¥(6,478)¥(6,683)$(81,316)

		
		
		
¥

(204)

		
		
		
¥

(13)
740
726
(5,956)

		
		
		
$

(169)
9,007
8,838
(72,477)–(204)(6,683)¥ 166,774¥ 167,806$ 2,041,694(2,167)

		
		
3,567
(204)
		
		
–
(163)
		
		
1,032
¥ 167,806(2,163)(19,872)
(13)

		
		
		
		
647
(111)
		
		 (21,513)¥ 146,293(26,318)				 (241,790)
(169)
		
		
7,881
(1,357)				 (261,753)$ 1,779,940¥ 21,334¥ 15,594$

189,736		 (5,739)
		 (5,739)¥ 15,594

		
		
¥

1,412
1,412
17,007				
$17,187
17,187
206,923

¥

(28)

¥

(15)

$

(191)

		
		
¥

(15)

12
12

		
		
¥

73
73
57

		
		
$

890
890
699

¥

4,397

¥

4,561

$

55,494

		
		
¥

163
163
4,561

		
		
¥

1,512
1,512
6,073

		
		
$

18,404
18,40473,899¥(1,318)¥(1,812)$(22,052)

		
		
¥

(493)

		
		
¥

(254)
(254)
(2,066)				
$(3,094)(25,146)¥ 18,327
			
		
2,744
		
2,744
¥ 21,071$

222,987				
$33,38833,388256,376(493)(1,812)¥ 24,384					 (6,057)
		 (6,057)¥ 18,327(3,094)

¥

3,700

¥

3,447

$

41,941

		
		
¥

(253)

		
		
¥

725
725
4,172

		
		
$

8,823
8,823
50,764

(253)
3,447

¥ 194,859¥ 189,581$2,306,623(2,167)(2,163)(19,872)(13)(26,318)				 (241,790)
(169)
		
		
7,881
(1,357)				
42,212(
		 219,541)$ 2,087,081

		
		
3,567
(204)
		
		
–
(163)
		
		 (6,310)
		 (5,278)¥ 189,581

		
		
		
		
647
(111)
		
		
3,469
		 (18,044)¥ 171,537

See accompanying notes to consolidated financial statements.

13

Consolidated Statements of Cash Flows

Toda Corporation and Consolidated Subsidiaries—For the years ended March 31, 2011 and 2012
Thousands of
U.S. dollars (Note1)

Millions of yen

Net cash provided by (used in) operating activities:
Income (loss) before income taxes and minority interests
Depreciation and amortization
Loss on impairment loss
Amortization of goodwill
Increase (decrease) in allowance for doubtful accounts
Decrease in provision for retirement benefits
Increase in other provision
Gain on negative goodwill
Loss (gain) on valuation of investment securities
Loss (gain) on sales of investment securities
Loss (gain) on sales of property, plant and equipment
Interest and dividend income
Interest expenses			
Decrease (increase) in notes and accounts receivable—trade
Decrease in costs on uncompleted construction contracts
Decrease in real estate for sale
Increase (decrease) in notes and accounts payable—trade
Decrease in advances received on uncompleted construction contracts
Other, net
SubtotalInterest and dividend income received
Interest expenses paid
Income taxes paid
Net cash provided by (used in) operating activities
Net cash provided by (used in) investing activities:
Payments into time deposits
Proceeds from withdrawal of time deposits
Proceeds from sales and redemption of securities
Purchase of property, plant and equipment
Proceeds from sales of property, plant and equipment
Purchase of intangible assets
Purchase of investment securities
Proceeds from sales and redemption of investment securities
Payments of loans receivableCollection of loans receivable
Other, net
Net cash provided by (used in) investing activities
Net cash provided by (used in) financing activities:
Net decrease in short-term loans payable
Proceeds from long-term loans payable
Repayment of long-term loans payable
Cash dividends paid
Cash dividends paid to minority shareholders
Purchase of treasury stock
Proceeds from disposal of treasury stock
Other, net
Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of current period
Cash and cash equivalents at the end of current period (Note 7)
See accompanying notes to consolidated financial statements.

14

restated
2011 As(Note1)

2012

2012

¥6,797
2,013
172
55
501
(1,810)
3,039
(386)
203
29
(11)
(1,882)794(35,062)
26,156
1,119
17,510(7,433)(1,828)
9,979
1,878
(789)
(689)
10,379¥(13,015)
2,088
2,488
55
(1,869)
(703)
3,958
(47)
3,355
(31)
248
(2,053)768(31,784)
20,063
10,574
14,789(14,191)
4,627
(679)
2,051
(766)
(654)
(48)

$(158,355)
25,41530,279678(22,744)(8,562)
48,159(579)
40,820(386)
3,023(24,980)
9,346(386,719)
244,113
128,657
179,938(172,670)
56,296(8,269)24,955(9,321)(7,958)
(592)

(197)

(382)

407
–
(4,782)
19
(325)
(855)
241
(88)
191
111
(5,278)83
70(3,419)384(1,106)(3,641)
68
(64)
81
89
(7,837)(4,657)
1,012
851(41,607)
4,680(13,464)(44,307)
832
(779)
989
1,086
(95,363)(3,532)(2,272)
10,225(8,573)(2,163)
(16)
(13)
1,330
(72)
(1,557)(27,653)
124,406(104,310)(26,318)
(200)
(169)
16,186(886)(18,944)(186)(2,264)(117,164)
750,144
632,979

4,030(1,965)(2,167)
(17)
(27)
–
(75)
(3,754)(150)
1,194
60,45961,654(9,629)61,65452,024

ANNUAL REPORT 2012

Notes to Consolidated Financial Statements
Toda Corporation and Consolidated Subsidiaries

1. Basis of Presenting Consolidated Financial Statements
The consolidated financial statements presented herein of Toda
Corporation (the “Company”) and its consolidated subsidaries(together, the “Companies”) are prepared in accordance with theprovisions set forth in the Financial Instruments and Exchange Law
of Japan, and in conformity with accounting principles generally
accepted in Japan.
These consolidated financial statements incorporate certain
modifications in format so as to make the financial statements moremeaningful to readers outside Japan.
These modifications have no effect on total assets, net sales,
retaind earnings or net income.
(U.S.Dollar Amounts)
The U.S.dollar amounts are included solely for convinience andhave been translated, as a matter of arithmetical computation only,at the rate of ¥82.19 = US$1, the exchange rate prevailing on theTokyo foreign exchange market on March 31, 2012, and havebeen then rounded down to the nearest thousand. This translation
should not be construed as a representation that the yen amounts

actually represent, have been or could be converted into U.S.
dollars at this or any other rate.
(Restatement of Consolidated Financial Statements)
On December 14, 2011, the Company announced that
inappropriate transactions had been conducted at Sipco Industries
Co., LTD. (“Sipco”), a consolidated subsidiary of the Company.
The Company did more investigation and set up the
Independent Committee to verify the investigation “results ofexistence or non-existence similar disposition at other subsidiary
Companies.”
Finally, the Company determined the accumulated total loss
on this inappropriate transactions occurred at Sipco was ¥2,192
million (US$26,672 thousand) and allocated this loss to respective
financial years. As a result, the consolidated financial statements
and related notes for the year ended March 31, 2011 have been
restated.
The summary of the effects of such restatement is as follows:

Millions of yen

Total net sales
Operating income
Net income
Total assets
Total equity

2011

2011

After restated

Before restated¥452,499
5,766
3,567
499,111
167,806¥452,762
6,004
3,774
500,831
169,409

Variance
¥

(263)
(238)
(206)
(1,719)(1,602)

2. Summary of Significant Accounting Policies
1) Scope of consolidation
The accompanying consolidated financial statements include theaccounts of Toda Corporation and 17 subsidiaries, namely Toda
Road Co., Ltd., Toda Reform Co., Ltd., Chiyoda Kenkou Co., Ltd.,
Chiyoda Staff Service Co., Ltd., Sipco Industries Co., LTD., APEC
Engineering Co., Ltd., Chiyoda Tochi Tatemono Co., Ltd., Yachiyo
Urban Co., Ltd., Toda Finance Co., Ltd., Towa Kanko Kaihatsu Co.,
Ltd., Toda America, Inc., Construtora Toda do Brasil S/A, Toda
Construction (Shanghai) Co., Ltd., Thai Toda Corporation Ltd., Toda
Vietnam Co., Ltd., ABTD, INC. and Toda Philippines, INC.
			 Other subsidiaries were not consolidated, as they were
not significant in terms of the effect on total assets, net
sales, net income or retained earnings of the consolidated
financial statements.
2) Application of the equity method
All non-consolidated subsidiaries and affiliates were notaccounted for using the equity method, as these companies were
not significant in terms of the effect on net income or retained
earnings of the consolidated financial statements.
3) Fiscal year of consolidated subsidiaries
Of the consolidated subsidiaries, Toda America, Inc.,
Construtora Toda do Brasil S/A, Toda Construction (Shanghai)Co., Ltd., Thai Toda Corporation Ltd., Toda Vietnam Co., Ltd.,
ABTD, INC. and Toda Philippines, INC. close their fiscal year
on December 31 each year.
			 In preparing the consolidated financial statements, theCompany used financial statements as of December 31 of allthese subsidiaries.

			 However, adjustments necessary for the purpose of
consolidation have been made for fiscal year-end.
			 The fiscal year-end of all other consolidated subsidiaries is
the same as the consolidated fiscal year-end.
4) Standards and evaluation methods for important assets(a) Held-to-maturity debt securities
			 Amortized cost method (straight-line method)
			 Available-for-sale securities•Securities with a fair value:
Stated at fair value, determined by the market price at
the consolidated fiscal year-end date (the difference
between the book value and the fair value is recorded as acomponent of net assets, while the cost of securities sold iscomputed using the moving-average method)•Securities with no fair value:
Stated at cost, determined by the moving-average method(b) Inventories
			 Costs on uncompleted construction contracts
Stated at cost, determined by the specific identification
cost method
			 Real estate for saleStated at cost, determined by the specific identification cost
method (The book value on the consolidated balance sheetsis presented after write-down for decline in profitability.)

15

Notes to Consolidated Financial Statements

5) Methods of depreciation and amortization
depreciable assets(a) Property, plant and equipment (excluding lease assets)
The declining-balance method is primarily used. However, thestraight-line method is used for buildings (excluding building
fixtures) acquired on and after April 1, 1998.
			 Standards identical to regulations in the Corporate Income Tax
Law are utilized to determine expected lifetime and residual value.
(b) Intangible fixed assets (excluding lease assets)
The straight-line method is used.
Standards identical to regulations in the Corporate Income Tax
Law are utilized to determine expected lifetime and residual
value.
			 However, the amortization of software used by thecompanies is computed using the straight-line method based on
the estimated useful life.
(c) Lease assets
Leased assets under finance leases other than those that are
deemed to transfer ownership to lessees.
			 Depreciation is based on the straight-line method over thelease term of the leased assets with no residual value.
6) Allowances and provisions(a) Allowance for doubtful accounts
The allowance for doubtful trade receivables and loans has been
provided based on historic loss experience for general accounts
and also includes the aggregate amount of the estimated loss forthe accounts for which concern actually exists for collectibility.
(b) Provision for bonuses
This is provided for the payment of bonuses for employees,
based on expected payment amount.
(c) Provision for warranties for completed construction
To cover expenses for defects claimed concerning completed
work, this is provided based on the estimated amount ofcompensation in the future for the work completed during theconsolidated fiscal year.
(d) Provision for loss on construction contracts
The provision for loss on construction contracts is provided at theestimated amount for the future losses on contract backlog at the
fiscal year-end which will be probably incured and which canbe reasonably estimated.
(e) Provision for retirement benefits
The provision for retirement benefits for employees is calculated
based on estimated amounts of retirement benefit obligations
and pension assets as of the consolidated fiscal year-end.
			 Actuarial differences are amortized commencing thefollowing year after the difference is recognized primarily by thestraight-line method over a period of five years.
			 Prior service cost is amortized by the straight-line method overa period of five years.
(f) Provision for directors’ retirement benefits
To prepare for the payment of retirement benefits for executive
officers and subsidiaries’ directors, the provision is provided at
the amount to be paid according to internal regulations if they
had retired at the consolidated fiscal year-end.
(g) Provision for loss on disaster
The provision for loss on disaster is provided at the estimatedamount for the cost for restration of property or the loss
caused by the Great East Japan Earthquake which struck on
March 11, 2011.
7) Recognition of net sales from construction contracts andrelated costs
The Companies apply the percentage of completion method
to those contracts in which the percentage of completion at theconsolidated fiscal year-end can be reliably estimated, and othercontracts are recorded under the completed contract method.

168) Translation of foreign currency assets and liabilities
All monetary assets and liabilities denominated in foreign
currencies are translated into Japanese yen at the exchange rates
prevailing at the consolidated fiscal year-end. The resulting gains
and losses are included in net income or loss for the consolidated
fiscal year.
			 Assets and liabilities accounts of foreign consolidated
subsidiaries are translated into Japanese yen at the exchange
rate prevailing at the consolidated fiscal year-end.
			 Income and expense accounts of foreign consolidated
subsidiaries are translated into Japanese yen at the averageannual exchange rate.
			 The resulting translation adjustments are included in foreign
currency translation adjustment and minority interests in the net
assets of the consolidated balance sheets.
9) Hedge accounting
The Companies apply hedge accounting as follows:(a) Method of hedge accounting employed
Deferral hedge accounting
If the interest rate swap contracts are used as hedge and meetcertain hedging criteria, net amounts to be paid or received
under the interest rate swap contracts are added to or deductedfrom the interest or liabilities for which the swap contract were
executed.
(b) Measure and objects
1. Measures: Forward foreign exchange contracts
			 Objects: Transactions to be paid in foreign currencies in				cases of overseas construction
2. Measures: Interest rate swap
			 Objects: Borrowings(c) Hedging principles:
Based on internal regulations which stipulate the execution
authority regarding on derivative transactions and those fortransaction limits, the Companies utilize hedges to minimize
the risk of currency exchange rate and interest rate fluctuations
associated with the hedge objects.
(d) Evaluation method of effectiveness of hedging:
During the period from the time when the hedging first started
until the consolidated fiscal year-end, the Companies have beenassessing the hedge effectiveness primarily by comparing, interms of variation amounts, (1) cumulative cash flow changes or
exchange rate changes of the hedge objects and (2) cumulative
cash flow changes or exchange rate changes of the hedge
measures.
			 However, the evaluation of hedge effectiveness is omitted
for interest swaps as they meet certain hedging criteria for the
exceptional treatment.
10) Cash and cash equivalents
For the consolidated statements of cash flows, cash and cash
equivalents are defined as cash on hand, deposits that can bewithdrawn at any time, and highly liquid short-term investmentswith a maturity date within three months after acquisition.

ANNUAL REPORT 2012

3. Notes to Consolidated Balance Sheets
Thousands of
U.S. dollars

Millions of yen

As of March 31

2011

2012

2012

1) Accumulated depreciation of property, plant and equipment
2) Investments in non-consolidated subsidiaries and affiliates
included in investment securities
3) Assets pledged as collateral:
Land
Investment securities
Long-term loans receivable
Total4) Contingent liabilities
5) Discounts on notes receivable6) Loan commitment agreement:
Maximum limit under the agreement
Loan balance outstanding
Difference (unused portion)¥33,921¥ 34,961$425,374¥ 1,332¥ 1,386$ 16,871

¥
9
		
385
		
692
¥ 1,087
¥ 598
¥ 380

¥
9
		
488
		
656
¥ 1,154
¥
552
¥
603

$

¥40,000		–¥40,000¥40,000		–¥40,000$486,677–$486,677

110
5,939
7,991
$ 14,041$ 6,716$ 7,337

7) Land revaluation
Based on the Land Revaluation Law, the Company has revaluated land held for business use and has recorded any discrepancies in
the consolidated balance sheets as revaluation reserve for land.

4. Notes to Consolidated Statements of Income
Thousands of
U.S. dollars

Millions of yen

For the years ended March 31

2011

2012

2012

1) Provision for loss on construction contracts included in costs of sales
2) Valuation loss on real estate for sale included in costs of sales
3) Principal components of selling, general and administrative expenses:
Employees’ salaries and allowances
Provision for bonuses
Retirement benefit expenses
Provision (reversal) of allowance for doubtful accounts
4) Research and development expenditures included in selling, generaland administrative expenses and construction costs5) Gain on sales of noncurrent assets:
Land
Machinery, vehicles, tools, furniture and fixtures
Total
6) Loss on sales of noncurrent assets:
Buildings and structures
Land
Other
Total

¥ 5,893¥786¥ 10,017¥ 7,387$121,885$ 89,887¥ 11,400
		 1,187
		
828
		
617

¥ 10,612
		 1,314		 1,031
		 (388)$129,118
15,992
12,549(4,722)¥ 1,906¥ 1,903$ 23,163

¥
		
¥

9
2
11

¥
		
¥

0
5
6

$

¥
		
		
¥

–
–
0
0

¥
		
		
¥

26
228
0
254

$

$

11
65
76

325
2,774
0
$ 3,100

7) Impairment loss on fixed assets
The group puts its assets for business purposes, primarily into main office and branch office. And other assets are put each properties.
Impairment loss on fixed assets were as follows.
For the year ended March 31, 2011
Location

Hakusan-shi, Ishikawa, and other

PurposeType

Idle assets

Land

Impairment loss
(Millions of yen)

¥172

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

For the year ended March 31, 2012
Location

Kiyota-ku, Sapporo-shi, and other

PurposeType

Idle assets

Buildings, structures and land

Impairment loss

Impairment loss

(Millions of yen)(Thousands of U.S. dollars)¥2,488$30,279

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

17

Notes to Consolidated Financial Statements

Thousands of
U.S. dollars

Millions of yen

2011

For the years ended March 31

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

2012

¥364

2012

¥179

$2,182Millions of yen

Thousands of
U.S. dollars¥ (128)
		 233
		 104
		 1,304¥ 1,408$ (1,564)
		 2,836
		 1,272
		 15,865$17,138

92
26
119
(46)
73

$ 1,130		
320
		 1,450		 (559)$ 890¥ 1,401¥ 1,401$17,047$17,047¥ (280)¥2,602$ (3,409)$31,666

5. Notes to Consolidated Statement of Comprehensive Income
Reclassfication and tax effect of comprehensive income for the year ended March 31, 2012

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

¥
		
		
		
¥

6. Notes to Consolidated Statements of Changes in Net Assets
Number of shares

For the year ended March 31, 2011

Class of shares

April 1, 2010

Increase

Issued stock
Treasury stock

Common stock
Common stock

322,656,796
13,046,446–
596,502

For the year ended March 31, 2012

Class of shares

April 1, 2011

Increase

Issued stock
Treasury stock

Common stock
Common stock

322,656,796
13,642,948

Decrease

March 31, 2011––

322,656,796
13,642,948

Number of shares–
47,083

Decrease

March 31, 2012–
2,391,354

322,656,796
11,298,677

Number of shares

For the year ended March 31, 2011

Class of shares

Total dividends

Dividends per share

Record date

Effective dateJune 29, 2010 resolution by annual
general meeting of shareholders

Common stock¥2,181 million¥7.00

March 31, 2010

June 30, 2010

June 29, 2011 resolution by annual
general meeting of shareholders

Common stock¥2,179million¥7.00

March 31, 2011

June 30, 2011

Note: Total dividends include dividends to consolidated subsidiaries (an amount that correspnds to their equity holding).

18

ANNUAL REPORT 2012

Number of shares

For the year ended March 31, 2012

Class of shares

Total dividends

Dividends per share

Record date

Effective dateJune 29, 2011 resolution by annual
general meeting of shareholders

Common stock¥2,179 million¥7.00

March 31, 2011

June 30, 2011

June 28, 2012 resolution by annual
general meeting of shareholders

Common stock¥1,868 million¥6.00

March 31, 2012

June 29, 2012($26,521 thousand)($22,729 thousand)Note: Total dividends include dividends to consolidated subsidiaries (an amount that correspnds to their equity holding).

7. Notes to Consolidated Statements of Cash Flows
Reconciliation between cash and deposits on the consolidated balance
sheets and cash and cash equivalents at the fiscal year-end:

Millions of yen

Thousands of
U.S. dollars

As of March 31

2011

2012

2012

Cash and deposits of the consolidated balance sheets(Less) time deposits with maturities of more than three months
Cash equivalents
Cash and cash equivalents of the consolidated statesments of cash flows¥42,268(614)
20,000¥61,654¥36,935(911)
15,999¥52,024$449,396(11,087)
194,670$632,979

8. Lease Transactions
Millions of yen

As of March 31

Future minimum lease payments under noncancellable operating leases:
Due within one year
Due after one year
Total
Future minimum lease income under noncancellable operating leases:
Due within one year
Due after one year
Total

Thousands of
U.S. dollars

2011

2012

2012

¥

55
74
¥ 130

¥ 107
		 187¥ 294$ 1,303
2,282$ 3,586¥1,3487,227¥8,575¥ 1,666
		 6,465¥8,131$20,276
78,659$98,935

9. Fair Value of Financial Instruments
Millions of yen

As of March 31, 2011

Book value

Fair value(1) Cash and deposits¥ 42,268¥ 42,268¥ –(2) Notes and accounts receivable—trade132,541

132,536(5)(3) Short-term investment securities,
investment securities (Note)

118,811

118,836

25

1,422

1,423

0

¥295,044¥295,064¥20¥118,101¥118,101¥ –43,913

43,913–(4) Long-term loans receivable
Assets total(1) Notes and accounts payable—trade(2) Short-term loans payable(3) Income taxes payable

620

620

–

14,20914,25949¥176,845¥176,894

¥49

(26)

¥ –

(4) Long-term loans payable
Liabilities total
Derivative transactions

Difference

¥

(26)

¥

Notes:
1. The fair value of unlisted stocks is considered
to be extreamly difficult to calculate, as there
are no market prices and no valuations of
future cash flow. Therefore, these stocks are notincluded in “Short-term investment securities andinvestment securities.”
2. The value of assets and liabilities arising fromderivative is shown at net value, and with theamount in parentheses representing net liability
position.

19Notes to Consolidated Financial Statements

Unlisted stocks:
As of March 31, 2011 (stated at book value)

Millions of yen

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

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

¥

89
188
1,055

¥6,245
3,427
505

Millions of yen

As of March 31, 2012

Book value

Fair value(1) Cash and deposits

Thousands of U.S. dollars
DifferenceBook value

Fair value

Difference$¥ 36,935¥ 36,935¥ –$ 449,396$ 449,396(2) Notes receivable, accounts receivablefrom completed construction
contracts and other

164,203

164,172(31)

1,997,855

1,997,470(385)(3) Short-term investment securities,
investment securities (Note)

117,746

117,7470

1,432,610

1,432,619

8

1,255

1,280

24

15,28015,579299¥320,141¥320,135¥ (6)$3,895,142$3,895,066$ (76)

132,799

132,799–

1,615,766

1,615,766–

37,05937,059–450,895

450,895–(4) Long-term loans receivable
Assets total(1) Notes payable, accounts payable forconstruction contracts and other(2) Short-term loans payable

732

732

–

8,909

8,909

–

20,443

20,46320

248,729

248,983

254¥191,034¥191,055¥20$2,324,300$2,324,554

$254

92

¥ –

$

$

$

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

Derivative transactions

¥

92

¥

1,121

1,121

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

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

Millions of yen

Thousands of
U.S. dollars

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

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

20

–

114
217
1,055

$ 1,388
2,648
12,836¥5,8561,716
9$71,257
20,882
117¥–

ANNUAL REPORT 2012

10. Marketable Securities and Investment Securities
Millions of yen

As of March 31, 2011

Book value

Fair value

Difference

Held-to-maturity debt securities:
Securities with a fair value that exceeds
the book value
Securities with a fair value that does notexceed the book value
Total¥1,415¥1,441

		
¥25

113

113

(0)

¥1,529¥1,555¥25

Millions of yen

As of March 31, 2011

Book value

Acquisition cost

Difference

Available-for-sale securities with a fair value:		Securities with a book value thatexceeds the acquisition cost:
			Stocks¥ 77,140¥ 44,204¥32,936

			Subtotal

77,140		 44,204

32,936

			Stocks

20,032

		 26,681(6,649)

			Bonds

108

			Others

20,000		 20,000–

			Subtotal

40,140		 46,831(6,691)¥117,281¥ 91,036¥26,245

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

		

150

(41)

Note: The Companies recognized losses on write-down of ¥203 million for available-for-sale securities.
Millions of yen

For the year ended March 31, 2011

Available-for-sale securities sold

Sales amount

Total gain on sales Total loss on sales

¥1

¥36

¥30

Millions of yen

As of March 31, 2012

Book value

Fair value

Thousands of U.S. dollars
DifferenceBook value

Fair value

Difference

Held-to-maturity debt securities:
Securities with a fair value that exceeds thebook value
Securities with a fair value that does notexceed the book value
Total¥1,731¥1,737¥6$21,071$21,145

$74

791

786

(5)

9,632

9,567

(65)

¥2,523¥2,524¥0$30,703$30,712$ 8

21

Notes to Consolidated Financial Statements

Thousands of U.S. dollars

Millions of yen

As of March 31, 2012

Book value

Acquisition cost

DifferenceBook value

Acquisition cost

Difference		 Stocks¥76,258¥43,640¥32,618$ 927,833$ 530,970$396,862

		 Subtotal

76,25843,64032,618927,833

530,970

396,862

		 Stocks

21,751

27,978(6,227)

264,650

340,415(75,765)

		 Bonds

209

250

(40)

2,554

3,041

(487)

		 Others

17,002

17,002–

206,869

206,869–

Available-for-sale securities with a fair value:
Securities with a book value that exceeds
the acquisition cost:

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

38,96445,231(6,267)474,073

550,326(76,252)

		 Total¥115,222¥88,871¥26,350$1,401,907$1,081,297$320,610

Note: The Companies recognized losses on write-down of ¥264 million (US$3,213 thousand) for available-for-sale securities.
Thousands of U.S. dollars

Millions of yen

For the year ended March 31, 2012

Available-for-sale securities sold

Sales amount

Total gain on sales Total loss on sales

Sales amount

¥–

$828

¥68

¥31

11. Derivative Transactions
For the year ended March 31, 2011

Derivative transactions to which the hedge accounting method is not applied:
None.
Derivative transactions to which the hedge accounting method is applied:(1) Currency-related transactions
Millions of yen
Objects

Contract
amountMore than
1 yearEstimated
fair value

		 Buy EUR

Forecasted purchasingtransaction

¥399

¥–

¥(22)

		 Buy USD

Forecasted purchasingtransaction

322

–

(3)

¥721

¥–

¥(26)

Method of processing

Measures

Forward foreignexchange contracts
Method in principle

Total

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

(2) Interest-related transactions
Millions of yen
Method of processing

Exceptional treatment
of interest rate swaps

Measures

Objects

Contract
amountMore than
1 yearEstimated
fair value

Interest rate swaps
Payment fixed,
receive floating

Long-term loans payable 			 			¥3,500¥3,500** These interest rate swaps, subject to the exceptional treatment, are treated en bloc with the relevant long-term loans payable.
Therefore, the fair value of the contracts are included in the fair value of the relevant long-term loans payable.

22

Total gain on sales Total loss on sales

$386

$ –

ANNUAL REPORT 2012

For the year ended March 31, 2012
Derivative transactions to which the hedge accounting method is not applied:
None.
Derivative transactions to which the hedge accounting method is applied:(1) Currency-related transactions
Millions of yen
Method of processing

Measures

Objects

Thousands of U.S. dollars

Contract
amountMore than
1 yearEstimated
fair value

Contract
amountMore than
1 yearEstimated
fair value

Forward foreignexchange contracts
Method in principle

		 Buy EUR

Forecasted purchasingtransaction¥1,306¥89¥54$15,894$1,083$ 662

		 Buy USD

Forecasted purchasingtransaction

673

–

37

8,196

–

458

¥1,980¥89¥92$24,091$1,083$1,121

Total

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

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

Millions of yen
Method of processing

Exceptional treatment
of interest rate swaps

Measures

Objects

Contract
amountMore than
1 yearInterest rate swaps
Payment fixed,
receive floating

Long-term loans payable 			 			¥3,960Contract
amountEstimated
fair value*¥1,960More than
1 yearEstimated
fair value

		
		 		
$48,181 $23,847** These interest rate swaps, subject to the exceptional treatment, are treated en bloc with the relevant long-term loans payable.
Therefore, the fair value of the contracts are included in the fair value of the relevant long-term loans payable.

12. Retirement Benefits
The Company had a defined benefit plan that consists of a defined benefit pension plan and a lump-sum benefit plan.
Additional retirement benefits are paid in certain circumstances. Domestic consolidated subsidiaries have lump-sum benefit plans.
Thousands of
U.S. dollars

Millions of yen

As of March 31

2011

2012

2012

Retirement benefit obligation
Pension assets
Unfunded retirement benefit obligation
Unrecognized actuarial differences
Unrecognized prior service costs
Provision for retirement benefits¥(46,724)
23,572(23,151)
1,601(1,187)¥(22,738)¥(44,425)
22,549(21,876)737(890)¥(22,030)$(540,524)
274,355(266,168)
8,970(10,839)$(268,038)
Thousands of
U.S. dollars

Millions of yen

For the years ended March 31

2011

2012

2012

Service cost
Interest cost
Expected return on pension assets
Amortization of actuarial differences
Amortization of prior service costs
Retirement benefit costs¥1,789
961
(292)
184
(296)
¥2,345¥1,810
907
(281)
712
(296)
¥2,852$22,026
11,046(3,420)8,670(3,613)$34,70923

Notes to Consolidated Financial Statements

For the years ended March 31

Basis of calculating retirement benefit obligation:
Periodic allocation method of projected retirement benefit obligation

2011

2012

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

2.00%
1.20%
5 years
5 years

Discount rate
Expected return on pension assets
Amortization period of prior service costs
Amortization period of actuarial differences

13. Deferred Tax Accounting
The tax effects of temporary differences which gave rise to deffered tax assets
and liabilities at March 31,2011 and 2012 are as follows:

Thousands of
U.S. dollars

Millions of yen

As of March 31

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

2011

2012

¥

¥ 2,982
1,774
1,088
901
965
5,222
7,957
5,789
2,509
29,190(9,963)¥19,227$ 36,285
		 21,590
		 13,238
		 10,963
		 11,742
		 63,544
		 96,815
		 70,445
		 30,536
		 355,161
		 (121,225)$ 233,935(2,152)

		 (26,189)
		 (114,484)
		 (4,596)
		 (145,270)$ 88,665

666
1,018
23
1,474
1,334
3,773
9,190
8,248
2,491
28,222(1,877)¥26,345(2,725)(10,709)(281)(13,716)¥12,629(9,409)(377)(11,939)¥ 7,2872012

In addition to the above, the Companies recognized deferred tax liabilities of ¥11,888 million and ¥9,780 million (US$118,998 thousand) related to revaluation
reserve for land at March 31, 2011 and 2012, respectively.

2011
Reconciliation between the statutory tax rate and the effective tax rate:
Statutory tax rate
Expenses not deductible for income tax purposes
Non-taxable income
Gain of negative goodwill
Inhabitant taxes (per capita levy)
Valuation allowance
Other
Effective tax rate

40.7%
7.4
(5.1)
(2.3)
4.5
0.7
0.4
46.5%

2012
–
–
–
–
–
–
–
–

For the year ended March 31, 2012, the reconciliaton is not presented because there was a net loss before adjustment for income taxes.
On December 2, 2011, new tax reform laws were enacted in Japan, which will reduce the corporation tax rate and will impose special
corporation tax for reconstruction of the Great East Japan Earthquake for fiscal years beginning on or after Aplil 1, 2012. Consequently,
the effective statutory tax rate used to measure deferred tax assets and liabilities changed from 40.7% to 38.0% for expected reversal of
temporary differences during fiscal years beginning on or after Aplil 1, 2012 until March 31, 2015. The rate will be changed to 35.6%
for expected reversal of temporary difference during fiscal years beginning on or after Aplil 1, 2015.
As a result of these tax rate changes, net deferred tax liabilities as of March 31, 2012 decreased ¥810 million (US$9,855
thousand), while deferred income taxes, valuation difference on available-for-sale securities and revaluation reserve for land increased¥2,191 million (US$26,666 thousand), ¥1,379 million (US$16,780 thousand) and ¥1,401 million (US$17,047 thousand) respectively.

24

ANNUAL REPORT 2012

14. Investment and Rental Properties
Millions of yen

As of March 31, 2011

Book value

Fair value

Real estate for rent

¥54,527¥76,238
Thousands of U.S. dollars

Millions of yen

As of March 31, 2012

Book value

Fair value

Book value

Fair value

Real estate for rent

¥54,522¥74,005$663,376$900,414

Total

Reconciliations

Consolidated

15. Segment Information
Millions of yen
Reporting segments

For the year ended
March 31, 2011

Building
construction

Net sales:
Customers
Inter-segment
Total
Segment profit (loss)¥ 356,517
		
2,722
		 359,239¥ 12,279

Depreciation and amortization
Amortization of goodwill

¥
¥

Civil
engineering

Real estate¥ 83,142¥ 12,299
		 1,142 		 1,426
		 84,284 		 13,726(7) 		 1,836
¥

337
55

¥
¥

42
–

		
		

945
–

Other

¥ 540
		 714
		 1,255¥ 97¥¥¥ 452,499¥ 452,499¥––
		6,006 		 (6,006) 		
		 458,505 		 (6,006) 		 452,499¥ 5,766¥ 14,206¥ (8,440)

16
–

¥
¥

1,341
55

¥
¥

¥
¥

672
–

2,013
55

Millions of yen
Reporting segments

For the year ended
March 31, 2012

Building
construction

Civilengineering

Net sales:
Customers
Inter-segment
Total
Segment profit (loss)¥ 371,871
		 2,285
		 374,156¥ 3,544¥ 103,731
		878
		 104,609¥ 1,371

Depreciation and amortization
Amortization of goodwill

¥
¥

380
55

¥
¥

39
–

Total
Real estate¥ 565¥ 13,216
		 1,376 		 750		 14,593 		 1,315¥ 99¥ (5,483)
¥
¥

968
–

Reconciliations

Consolidated

Other

¥
¥

9
–

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

1,397
55

¥
¥

691
–

¥
¥

2,088
55

Thousands of U.S. dollars
Reporting segments

For the year ended
March 31, 2012

Building
construction

Civilengineering

Total
Real estate

Reconciliations

Consolidated

Other

Net sales:
Customers
Inter-segment
Total
Segment profit (loss)$4,524,534 $1,262,093$ 6,881 $5,954,319$160,809$– $ 5,954,319
		
27,803 		
10,685 		 16,749 		 9,129 		
64,367 		 (64,367) 		
–		 4,552,338 		 1,272,779 		 177,558 		 16,011 		 6,018,687 		 (64,367) 		 5,954,319(5,693)$ 43,123 $ 16,689$ 1,212 $$ (66,718)$(91,574) $ (97,268)

Depreciation and amortization
Amortization of goodwill

$
$

4,624
678

$
$

483
–

$ 11,782
$
–

$
$

113
–

$
$

17,003
678

$
$

8,412
–

$
$

25,415678• Reconciliations of segment profit (loss) includes negative ¥197 million and negative ¥200 million (US$2,436 thousand) elimination ofintersegment transactions and negative ¥8,243 million and negative ¥7,326 million (US$89,138 thousand) corporate expenses which are
not allocated to the reporting segments for the years ended March 31, 2011 and 2012, respectively.
• The corporate expenses mainly consist of selling, general and administrative expenses which do not belong to the reporting segments.
• Segment profit (loss) is adjusted in accordance with operating income as recorded in the consolidated statements of income.

25

Notes to Consolidated Financial Statements

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

16. Related Party Transactions
1. Related party transactions between the Corporation and related parties
Parent Company and major shareholders (Company, etc. only), etc., of the Corporation
For the year ended March 31, 2011

Not applicable.

For the year ended March 31, 2012
Category

Relatedparty

Mainshareholder

DaichiShokusan
Co.,Ltd.*1

Address

Capital orinvestment

Type ofbusiness(Millions of yen)Chuo-ku,
Tokyo

Amounts of transaction

Nature oftransaction

Millions of yen

Thousands of
U.S. dollars

¥21

$264

Rental ofland*2

Account–

Relationship(Held by others)

Real estatebusiness

12

Percentage ofvoting rights held

Direct:(11.77%)

Concurrentlyofadministrator

Balance at the end of the year
Millions of yen

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

2. Related party transactions between subsidiaries and related parties
Parent Company and major shareholders (Company, etc. only), etc., of the Corporation
For the year ended March 31, 2011

Not applicable.

For the year ended March 31, 2012
Category

Relatedparty

Address

Capital orinvestment

Type ofbusiness(Millions of yen)Mainshareholder

Nature oftransaction

26

DaichiShokusan
Co.,Ltd.*1

Chuo-ku,
Tokyo

Amounts of transaction
Millions of yen

Thousands of
U.S. dollars

Borrowing
funds*2¥ 300$3,650

Payment forinterests*2¥$

Parentcompany’s
stock acquisition
that held byconsolidated
subsidiary*3

¥ 796

3

Account

Relationship(Held by others)

Real estatebusiness

12

Percentage ofvoting rights held

Direct:(11.77%)

Balance at the end of the year
Millions of yen

Thousands of
U.S. dollars

–

–

–

40

–

–

–

$9,695–––

Concurrentlyofadministrator

ANNUAL REPORT 2012

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

17. Per Share Information
Yen

As of March 31

Net assets per share of common stock
Net income (loss) per share of common stock

U.S. dollars

2011

2012

2012

¥602.35
11.53¥537.53(64.28)$6.540(0.782)Millions of yen

Years ended March 31

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

Thousands of
U.S. dollars

2011

2012

2012

¥189,581
3,447¥186,134
309,013,848
shares¥171,537
4,172¥167,364
311,358,119
shares$2,087,081
50,764$2,036,316¥ 3,567¥ 3,567
309,427,740
shares¥(19,872)¥(19,872)
309,180,409
shares$ (241,790)$ (241,790)

27

Independent Auditors’ Report
Toda Corporation and Consolidated Subsidiaries

Independent Auditors’ Report28

ANNUAL REPORT 2012

Corporate Information
As of June 28, 2012
Company Name:TODA CORPORATIONFounded:January 5, 1881

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

Stock Listings:
Tokyo Stock Exchange andOsaka Securities Exchange

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

Capital Stock:¥23.0 billion (as of March 31, 2012)
Number of Employees:
5,101 (Consolidated)
4,072 (Non-Consolidated)(as of March 31, 2012)

Board Of Directors, Corporate Auditors and Executive Officers
As of June 28, 2012

Directors

Executive Officers

Chairman and Representative Director
Hisao Kato

President and Chief Executive Officer
Shunzo Inoue

President and Representative Director
Shunzo Inoue

Senior Managing Executive Officers
Masayuki Shirai
Noboru Nomura
Yushi Kikutani
Masami Yamashita

Representative Directors
Masayuki Shirai
Noboru Nomura
Yushi Kikutani
Directors
Hideshige Toda
Masami Yamashita
Director and Senior Adviser
Toshiro Oka

Corporate Auditors

Managing Executive Officers
Katsuaki Fukushima
Hatsuaki Matsumoto
Kazuo Yamane
Masanori Imai
Yutaka Nishizawa
Shunichi Akiba
Teruo Sahashi

Executive Officers
Norimasa Togami
Toshihiro Abe
Yasushi Miyazaki
Tetsunaga Yamaguchi
Koichi Iwamori
Masashi Nishimura
Koji Tada
Hiroaki Inoue
Noboru Yamaki
Hideo Inagaki
Takeshi Nishimaki
Hiroyuki Miyazaki
Keiichi Ebihara
Yuji Yokomizo
Toshihiro Otomo
Tetsuo Ota
Makoto Hayakawa
Toshio Hirata
Kenichi Okabe
Hiroshi Uekusa

Standing Corporate Auditors
Morimichi Toda
Etsuo Nonoguchi
Corporate Auditors
Yoshiaki Kaji
Katsutoshi Suzuki
Fumiyuki Akikusa

29

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

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

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