Annual Rerort

2015

Leading to the Future with ourTechnology of Protection

HEADQUARTERS
14-14, 8-Chome, Ginza, Chuo-ku, Tokyo 104-0061 Japan
TEL +81-3-3542-9111
FAX +81-3-3542-9119
International Department
TEL +81-3-3542-4567
FAX +81-3-3542-9220

JAKARTA Representative Office
Epicentrum Walk Lantai 5 Unit B515 Jl. HR Rasuna Said, Kuningan,Jakarta
12940, Indonesia
TEL +62 (21) 5610-0988
FAX +62 (21) 2994-1991

NITTOC CONSTRUCTION CO., LTD

Advantage ofAdvantageof Nittoc

NITTOCFor
Shareholders

Our
Business
field

Sustainability

Since the establishment of Nittoc,
we have cultivated our unique expertise through our construction experience more than half century.
NITTOC is a leading company in the field of foundation work at Japan.
Nowadays, we have different field of technique to respond the needs of society,“Disaster Prevention and Environmental Conservation”, “Urban Regeneration”,
and “Maintenance and Renovation”.
Our technology contributes safety andsecurity environment to the society.

With efficient management and comprehensive technical capabilities in foundation work,
we are a company that provides safety and security society and contributes to the country.

VISIONWe are leading disaster prevention and environmental conservation as the expert offoundation work by accumulated our reliable technology ability.

CONTENTNITTOC specializes in slope related technique whichaccumulates a brilliant achievement.
Now in this ageing of social infrastructure century,
we developed our own diagnostic techniques as well as
repair method of the existing slopes,
we also established a control system that canbe coordinates in maintenance work totally.
In addition, we have developed special materials for long distance pumping,high strength and introduced in heavy environment, mountain area orlong distance tunnel for headrace channel.

P06

P04

Disaster Prevention andEnvironmental Conservationear

A Message from the President
Urban Regeneration
Maintenance and Renovation
Disaster Prevention and Environmental Conservation
Sustainability
Financial Highlights
Financial Statements

Maintenanceand Renovation

We

P02
P04
P06
P08
P10
P12
P14

We must restructure in order to reborn the city
under the strong disaster.
It is not an easy project in this city which has
so many compressed buildings.
Even under the compress buildings situation,
NITTOC have developed to work earthquake resistant,liquefaction prevention and existing pile
removal method to contribute the society.

i
ld
ho

ng

20

Since Japan has geographical conditions that make it prone tobeing affected by natural disasters,
large scale disasters have become more frequent in recent years.
For this reason, in order to build a friendly, trusty and safely society in Japan,
we have developed our slope protection method does not use concrete,using a method for spraying vegetative material base instead,or greening method by using surplus soil left in the site,
based on the consideration of the disaster prevention environment.
In addition, Anchor Method is necessary to slope disaster prevention,
NITTOC accumulates a brilliant achievement about this method.

hod

MISSION

Urban
Regenerationsed

Leading to the Future with ourTechnology of Protection

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01

Advantage
of Nittoc

A Message
from thePresident

For
Shareholders

Our
Business
field

Sustainability

A Message from the President

Established in 1947 as a firm involved in thethe “General Contractor excelling at a Certain

foundation work for dam,we at Nittoc Construction

Specialized Civil Engineering Work”.

have since been producing many outstanding

The construction is now under a very harsh climate

records in a wide range of civil engineering works

in the business we’ve never been experiencing

for dam,river,road,sewage,water supply and land

before, while the social needs for national landdevelopment.

conservation, preservation of natural environment
and furthermore, reinforcement and maintenanceIn our Nittoc,large numbers of professionals areof infrastructure have also been increasing more

enrolled respectively as civil engineer, geologist

and more in recent years.

and other specialist, who are also richly
experienced in the actual on-site construction

We at Nittoc look on such harsh circumstances

works.To meet the requirements of the days, they

as a good opportunity for further development inhave been working hard to develop a variety ofour business and thus,exert ourselves to solidify

innovative technologies and to create related

a company’s business foundation and at theengineering methods or applications in the spheresame time,make our best efforts to aim at a highlyof “Environment,Disaster Prevention,Renovation

reliable company in the society by offering theand Maintenance”,the very area of expertise theoriginal technologies we possess to be appliedcompany has been offering to date,in particular.

faithfully to the works.

Displaying all the collective strength upon theYour cordial support and cooperation to us,Nittoc

united teamwork between the technical orConstruction,will be very much appreciated intechnological staffs and those involved in theadvance.

Tamotsu Nakamori
President & Representative Director

actual on-site works of engineering for thefoundation,slope stabilization,soil improvement,
geological survey,etc.,we at Nittoc have also
been working hard to offer the services of highquality under the authentication of ISO9001 as

02 ANNUAL REPORT 2015

03

1

Our
Business
field

Urban Regeneration

Advantageof Nittoc

Construction Performance andMethod and Technology

We must restructure in order to reborn the city under the strong disaster. It is not an easy projectin this city which has so many compressed buildings.
Even under the compress buildings situation, NITTOC have developed to work earthquake resistant,liquefaction prevention and existing pile removal method to contribute the society.

Soldier Pile
Panel Wall Method

Standard
Type

Jakarta MRT ProjectIndonesia

Our technology has been active at Jakarta MRT Project which is work in progress now.

Sustainability

Power BlenderMethodNETIS No.CB-990007-V
Target Design Comparison Technology

Combination of soldier pile andconcrete panel also with lightweight type

Our
Business
field

For
Shareholders

NETIS No.CB-980012-V
Year 2011 Recommendation Technology

Improvement for Shallow andMiddle Depth
Shallow and Middle Layer Mixing Method
Slurry Shooting Method

LightweightType• Possible to install for road widening or recovery from theroad side collapse and small soil cutting• Self-supporting type (~4m wall height) and shoring work(~10m wall height) are available to choose• Available for over 12m wall height when using light materials at theback embankment• Trencher type mixer• Applicability up to 13m depth• Well improved body by vertical mixing method

Through this project, we could get a lot of experiences of construction work in Indonesia.

WinBLADE Method
New Soil Improvement Method
Underground Diameter Expanding Type
Soil Mixing Improvement Method• Improvement method avoiding
underground object• Applicability for vertical, horizontal and slanting• Good improvement by monitoring system

Earth retaining temporary anchor for the station building

Chemical grouting for corner reinforcement of
diaphragm wall corner for the station building

Sleeve Grouting
MethodExpacker-N Method

Rich experience for large depth
construction
Improvement on complicated ground

Liquefaction Prevention
High Capacity and Speedy
Grouting Method• Rich experience for large depth improvement• Improvement for temporary and permanently use• Available for grouting on bedrock• Reliable permeation point will be ensured• Speedy permeation grouting for wide scopeof ground• Applicability for narrow working area

NETIS No.KK-080040-A (since October 2014)

Close
up

Ground Improvement Method

Power Plant Construction ProjectIndonesia

In Indonesia, we are advancing on infrastructure provision which is remarkable of economic development.
We joined the underground power plant and thermal power plant construction project.

For many years experience, we are well known about the underground related construction work.
We provide the most suitable technique for each different case. From the general ground improvement to the special casein earthquake resistant and liquefaction prevention, we provide large range of ground improvement method.

Splits Anchor Method
NETIS No.HR-030031-A (since October 2014)

Fixed on the Soft Ground
Large Diameter, High-Strength
Expand Diameter Type Anchor• High pull-out resistance through large diameteranchorin soft soil
Bit open

EinBand Drill

Enlarged diameterdrillingby opened bit

The Biggest Class Rotary Percussion Machine in Japan,
available for large diameter and depth drilling

Soldier Pile Panel
Wall Method

Re-Born Pile Method

Spits Anchor
MethodRiprap
Layer
Drilling by Ein
Band Drill machine

4.8m
Anchor for
New ACE Method Architecture
work

Small
DiameterPile
65~350mm

SleeveGrouting
MethodDCS
Methodmm

SUPERJET Method

Power Blender Method

Soldier Pile Panel Wall
Method(Combination Use
with Ground Anchor)

Cutterwing

2.2m

04 ANNUAL REPORT 2015

• Compare with conventional trencher: 3 times torque; 2.5 times feeding strength• High drilling capacity, large diameter and depth for anchor work
• Drilling on hard rock and boulder accurately

Soil improvement for thermal power plant foundation

800

PS anchor and grouting at underground power plant

WinBLADE Method

Embankment
Shaft

Existing Tube
Maximum
Depth
13m

Maximum Diameterof Improvement
5.0m

1000~1500mm

Spits Anchor
MethodSmall Diameter Pile
Ground Anchor

05

Improved body

Expacker-N Method
1,200mm

Advantage
of Nittoc

Maintenance and Renovation

2

Our
Business
field

Our
Business
field

For
Shareholders

Sustainability

Method and Technology

NITTOC specializes in slope related technique whichaccumulates a brilliant achievement.
Now in this ageing of social infrastructure century,
we developed our own diagnostic techniques as well as repair method of the existing slopes,
we also established a control system that can be coordinates in maintenance work totally.
In addition, we have developed special materials for long distance pumping,high strength and introduced in heavy environment,
mountain area or long distance tunnel for headrace channel.

HiSP Method

Kiro fukeru Method

NETIS No.TH-040022-A (since October 2014)

NETIS No.TH-040022-A (since October 2014)

Shotcrete Mortar for High PlaceLong Distance Shotcrete
1km to Destination of 18 N/mm² Mortar Shotcrete• Possible on long distance and high place• Very low material separating keeps high strength• Operation by compacted plant equipments• Long distance mortar shotcrete by special material• Mortar and accelerator controllable by electron system

New ReSP Method
Ageing Shotcrete Slope Rebuild
Ageing Shotcrete Slope Maintenanceand Renovation• Keeping existing mortar shotcrete• Organic fiber renovation mortar shotcrete• Stable shotcrete quality with general machine• Well adhesion in new and existing shotcretewith shear bolt installation* BC fiber is excellent in adhesion of the mortar, because it has atensile strength is more than 600N/mm², to grant the highbending toughness to the mortar. Pump distance (Hose
Extend, Vertical)/ Shotcrete Machine: 100m, ±45m Pump:
200m, ±45m
Pump Distance
Horizontal: 700m
Height 160m Situation: 300m
Design Strength: 18N/mm² or over

Antifriction Hose

Hardening
Accelerator Hose

Hardening
Accelerator

NETIS No.TH-040022-A (since October 2014)

Air Hose

Ageing Shotcrete Slope Diagnosis
Ageing Shotcrete Slope Diagnosis System

Air Hose forHardening Accelerator
Air Hose for Mortar Pumping

Airing Tube

Grout Mixer

Taper Tube

• By non-destructive method based,diagnosis without ruining the environment• The report of diagnosis is applied for optimal
designing with social needs

Concrete
Pump

Anti-HighPressure Hose

Diagnosis Method: Infrared Rays
Deflection Shake Method
Cord Investigation(under conditions)

Compressor

Compressor
Generato

Receiver
Tank

Concrete Tube

Materials
Materials Pump

Agitator

Parfait Grout Method

Advantage Method

NETIS No.KT-090052-V

NETIS No.KK-050004-A (since October 2011)

Filling of Cave and Gap
High Quality Plasticity Grout Filling Method

Concrete Building Long Lasting Method
High Performance Materials for Maintenance Work
with 100% Inorganic• Strong at standing water• Controllable flow rate and pressure by <COGMA System>• Mixture variation adjusted to the pump distance, strength and gravity
boulder

Pump for
Hardening
Accelerator

Compressed Air

SlopeDoctor

COGMA
SystemGrout Pump

Hardening
Accelerator

Thick Paste
Condition in Air
Pumping Part

Shooting Nozzle• High quality, long lasting and trackable cover• Low cost performance without using giant machine

Kiro fukeru Method
for consolidation

HiSP Methodfor High Place

Kiro fukeru Method
for Repair on long distancetunnel for headrace channel

Void-Filling behind
the Structure

New ReSP Method
for the Maintenance andRepair of Shotcreted Slope

CavityAgeing Shotcrete
Slope Diagnosis System-Slope Doctor-

Advantage Method
for the protection of
concrete surface

06 ANNUAL REPORT 2015

Waterway

Void-Filling behind
the Structure

Pump Distance: ~2,000m (under conditions)
Design Strength: 1.5~24N/mm²

Standard construction thick: 2mm~
Compressive strength: 57N/mm²

07

3

Our
Business
field

Disaster Prevention andEnvironmental Conservation
Construction Performance andSince Japan has geographical conditions that make it prone
Method and Technology
to being affected by natural disasters,
large scale disasters have become more frequent in recent years.
For this reason, in order to build a friendly, trusty and safely society in Japan,
we have developed our slope protection method does not use concrete,using a method for spraying vegetative material base instead,or greening method by using surplus soil left in the site,
based on the consideration of the disaster prevention environment.
In addition, Anchor Method is necessary to slope disaster prevention,
NITTOC accumulates a brilliant achievement about this method.

Advantageof Nittoc

Geofiber Method
NETIS No.KT-980183-VE

Sustainability

Using the sand fromthe right side nozzle,
polyester continuous
fiber from left side
nozzle is injecting by
the jet water,
to making continuous
fiber reinforced soil.

Practical use facilitation technology

Non-Concrete Technology
Environmental Friendly Slope Protection Method• Instead of shotcrete method, decrease in using CO2• All round slope greening• Brilliant slope greening record+

Our
Business
field

For
Shareholders=

Slope Protection Project
In order to protect the house at the upper slope, we have constructed the slope disaster prevention measures
by Japanese technology.

Indonesia

Close
up

Recycle Greening Method
We have various recycle greening methods with surplus soil and chip in accordance with needs

Nekko Chip Method

Plant Leading Spraying Method

Recycle Greening Method by
Existing Soil and Chip Material

NETIS No.QS-980200-V

Using the deforestation material to be a foundationmaterial of greening work

• Possible for raw chip material recycle• Possible for using original soil seed economically• Construction by efficiency and effectively professional machine

Slope Collapse• Using existing seeds from forest, native recovery greening• Also possible to greening on natural penetration* under conditions, it is cheaper than vegetation materials base spraying work

50%

50%

Chip Material

Surplus soil

Seeding

Ground Anchor Work in Progress

Non-Seeding90%
Chip Material

Seeding

Existing
Seeds Use

10%
Soil Improvement
Materials

Non-Seeding

Existing
Seeds Use

Construction Work Completed

Greening Project on Dumps Slope
For the dump slope after coal extraction, we have constructed a greening test work by Japanese technology.
We arranged our existing technologies according to the local ability oftechnology and human resources and taught to Vietnam.
The greening project will be continued to lead by Vietnam local engineer in future.

Vietnam

TSURU-KAME
Soil Method

Kaerudo-Green
MathodNekko Chip Method

Plant Leading
Spraying Method

Chip Material

Surplus soil
100%

100%

Greening ofComplicated Area

Sander Green Method

Fiber Soil Greening
Step Method

Slope Protection
without Destruction of
Original Landscape

Greening Work byusing the existing Seeds
return to Ecosystem

Geofiber Method

Native Recovery Greening Method

Spraying of Seeds and Foundation Soils

Greening Work on Shear Mountain

Acidic Soil08

ANNUAL REPORT 2015

Steep Slope, Rock Slope

Shrines, Temples, Historical Property

Natural Park09

Advantage
of Nittoc

Sustainability Plan
Sustainability

For the sound growth and development with legality and high transparency,
Nittoc establishes “Basic Compliance Policy” or “Quality Management Policy” forbusiness decisions and execution of operations.
In addition, we enhance environmental activities including introduction ofenvironmental management system in accordance with ISO 14001,
or development of slope protection technique without cement.

Corporate Governance
Basic Policy on
Corporate GovernanceTo respond to stakeholder’s expectations, wewill follow not only the laws and norms, inadditions, recognizing the importance incompliance to corporate ethic with social
sense and common sense, to continue thedevelopment of company and acquire thesocial credibility. Elimination of illegal payoff
against anti-social group, transparency ofmanagement, enhancement of integrity, builds
up an organization that can contribute to thedevelopment of social infrastructure. We
comply with these issues for basic policy on
corporate governance.

Basic Compliance Policy
We are aware of corporate social responsibility
as a business operator, with a social sense as
well as comply with laws, internal and external
rules. We act as the follows:• We will contribute to the economical activities
and social development by running under
the slogan of <advancing day by day> andcode of conduct of <Safety First>, <Trust
Establishing> and <Efforts for Technology
Development>.
• We are not only complied with the law andcompany rules, we will be proud of a Nittoc
people through faithful activities based on
the company ethics, and strive to be trusted
from the society.
• We will strive to reflect the voices from thesociety, including the stakeholders, in
corporate activities, as well as carry out theprovision of corporate information properly
as a <Opened Company>.
• We will recognize that efforts to environmental
issue is essential to the existence andactivities of the company, we will act
voluntarily and actively.
• We strive for contribution in harmony withthe local community as a company who
work in the region and local community, participate voluntarily in community activities.

Company Quality Policy
We contribute to country in security and safety
environment by total technology ability andefficient management. We aim to establish an
efficient management foundation in the harshcompetition environment among companies,<Advancing Day by Day> as our slogan that
contributes to safety and security nationallands. We will continue working as thefollowings issues:• Prerequisite for safety to ensure the quality.

We strive to ensure the safety first as ourcompany slogan.
• Regard the needs of the customer accurately;
we strive to utilize high technology toestablish the credit of customer.
• Aim to improve quality by technology development that corresponds to social needs,
and fulfill the corporate social responsibility.
1st April 2014
NITTOC Construction Co., Ltd.
Tamotsu NAKAMORI
President & Representative Director

Basic Policy ofInformation Disclosure
Our company group, for every stakeholder,shareholders and investors, we fairly disclose
the appropriate information in time, we do notgive specific information to specific person
inequitably.
We quickly publish important information
which is comply with the rules for timely
disclosure stipulated by the Tokyo Stock
Exchange. (hereinafter referred as “Timely
Disclosure Rules”)

Our Overseas
Contribution in Future

Currently, Jakarta Indonesia representative
office was established, we are focusing on
overseas construction projects. We are going
through the construction along with trial anderrors with Indonesia local workers since thedifferences of culture and customs between
two countries. In the future, we are also learning
as well as to educate the local workers, toachieve the construction performance.

Since Indonesian landslides are similar to
Japan, we expect to utilize our knowledge,
our history of fighting the landslides disasterto Indonesia. We believe that it is possible
to meet the needs from abroad and Japanese
worldwide companies by our valuable
performance and experiences. Now, Japan istrying to export her national policy “Disaster
Prevention Technology” to foreign countries,
our company also will contribute to this field asa specialist and showcase to the world.

Training of Global Talent
To respond the international community, we
have trainings Indonesian engineer by overseas training, language training and overseas
construction site training. Here we introduce
our one of global employee.

10 ANNUAL REPORT 2015

Our
Business
field

Sustainability

Environmental Responsibility
Environmental Policy
NITTOC has general power with that specializes
in <Disaster Prevention and Environmental
Conservation>, <Urban Regeneration> and<Maintenance and Renovation>, listed in one of
the management philosophy of contributing to
the society. Technology Division establishes thefollowings issue as our environmental policy
based on our management philosophy.
• Technology Division recognizes global environment conservation as one of the business activities. We are aim to reduce theload of global environment by improving theenvironmental management system.
• Effective utilization of limited resources andreduce the load of environment to be aresource recycling society. We promote theresearch, development, design and study
to construct an environmental symbiosis
society for earth biological including humans.
• Promote all activities about waste reduction,
increase recycling rate, resources saving,energy saving, ecosystem conservation,
landscape conservation and environmental
friendly products utilization.
• Comply with environment related laws andregulations, agreements, customer andindustry requirements, actively fulfill social
responsibility for environmental protection.
• Education for personnel of Technology Division to improve environmental conservation
awareness.
• Expose the implementation of environmental
policy and environmental conservation
activities as needed in order to cooperatewith customers and the community.

Promotion of Environment
Management System by ISO14001
In February 1999, we composed <Environment Committee Bureau> by Environmental Management
Promotion Committee of each environment related departments. In October 1999, we established aconsultative organization <Environmental Committee>, which is chaired by the Environmental
Management Officer. In November of the same year, we announced the <NITTOC Construction
Co., Ltd. Technology Division Environmental Policy>. After that, we aimed to build an environmental
management system, in March 2000, registered in the ISO14001 Environmental Management
System.

Technology Division Environmental Management System Network
General Manager ofTechnology Division

Technology Development GroupOperation and Management related to Research,
Business Development and Quality Control

Greening Work
Laboratory

Environmental
Management Officer

SaitamaLaboratory

Environmental
Committee
Environment
Committee Bureau

Technology Business GroupOperation and Management related to
Design and Investigation BusinessResources Management GroupOperation and Management related toAdministration Business

Environmental Protection Technology.
Landscape Conservation Technology of Cultural Property

Social Responsibility
About Overseas
Construction

For
Shareholders

Sound of
Local Employee
I have started working from October 2014 since
NITTOC is expands the active area in Indonesia.
I was assigned a slope protection project inRancamaya for the first time. I was involved invariety of works such as construction, quality
management, safety and cost management. It
was felt very interesting because it was justassigned one work task for one employee only
when I was worked at previous company. Now
I am in a training scheme in Japan for the
purpose of whole business skill up. I am pleasethat company gives me this opportunity. I
would like to learn a lot and contribute to thedevelopment of Indonesia.

Yesi Pratiwi
International Department,
Strategy Division
Nationality: Indonesia

Environmental Greening(Geofiber Method)
Environmental friendly slope protection
technology without using concrete
Geofiber method is totally greening environmental
friendly type slope protection method that can beapply to land, river and dams revetment. It is
harmonized with the surrounding environment,
response to biological diversity and ecosystemconservation, formation of a recycling society,cost reduction and various functions, we have anumber of performances done.

Landscape Conservation of Cultural Property
Our technology also helps to restore the landscape while protecting the valuable cultural propertyof historic spot in safety.

Kiyomizu-dera temple (Kyoto)
The slope of the Kiyomizu-dera, theworld Heritage has collapsed cause ofheavy rain by typhoon No.13 on
September 2013. The period from year
2014 to 2015, the collapsed slope wasreinforced by ground reinforcement
work and ground anchor work, andcovered with Geofiber method. From
now on the plants grows up, and it will
come back to landscape with full ofgreenery.
• View from the stage of Kiyomizudera• Slope under the Koyasu-no-tou,
National important cultural property

11

Financial Highlights
Operating income∙Ratio to Net Sales

Net sales
Thousands of
U.S. dollars

Millions of yen

2011

2012

2013

2014

2015

2015

Operating income

Special Civil Engineering
General Civil Engineering
General Building
Others(Millions of yen)

(Millions of yen)

80,0004,000

Ordinary income∙Ratio to Net Sales

Ratio to Net Sales

4,198
6.9%

Ordinary income

Ratio to Net Sales(%)(Millions of yen)

(%)

7.0

4,000

7.0
3,905

Net sales¥50,642¥52,079¥53,247¥57,264¥60,703

6.4%$505,145
6.0

Ordinary income

1,509

1,877

2,249

2,904

3,905

32,501

Net income

2,318

1,823

3,532

1,663

1,664

13,8485.3%

60,70360,0003,000

57,26450,642

52,079

6.0

5.1%

3,000

53,247

4.6%

5.0

3,035

5.0
2,904
4.2%

Comprehensive income

2,280

1,838

3,632

1,715

1,694

14,102

3.9%

2,438

4.0

3.6%

Total net assets

10,403

12,04415,02916,37018,116

150,756

40,0002,000

35,62036,576

39,111

41,04742,306352,054

Net cash provided by (used in) operating
activities

3,566

723

4,933

1,011

2,435

20,268Net cash provided by (used in) investing
activities

32

(202)

(206)

(189)

(277)

(2,306)

Net cash provided by (used in) financing
activities(1,191)(936)(1,756)

(678)

(775)

(6,453)

Cash and cash equivalents at
end of period

9,578

9,163

12,132

12,277

13,698113,994

2,249

2,000

2,026

3.0%

3.0

1,803

Total assets

4.0
3.6%

1,877

3.0

1,509
2.0
20,000

1,000

2.0
1,000

1.0

0

0
2011

2012

2013

2014

2011

Net income∙Ratio to Net Sales
Net income

2012

2013

2014

0

2015

Interest-bearing debt

0
2011

2012

6.7%

2013

2014

2015

Total net assets∙Equity Ratio

Ratio to Net Sales(Millions of yen)

4,000

0

2015

1.0

Total net assets

Equity Ratio(%)(Millions of yen)

(Millions of yen)

(%)

7.0

6,000

20,000

50
42.8%

6.0

39.9%

5,000
38.4%

3,000

3,552

5.0
4,000

32.9%

3,800

29.2% 12,044

3,086
10,000

3,000

3.5%

2.9%

1,823

2.7%

1,664

20
2,000

2,000

1,600

2.0
1,000

1,200
1.0

0
2011

12 ANNUAL REPORT 2015

2012

2013

2014

2015

10,403

3.0

1,663

0

15,029

30

4.0

2,318
2,000

40

16,37015,000

4.6%

18,116

5,000
10

1,000

0

0
2011

2012

2013

2014

2015

0
2011

2012

2013

2014

2015

13

1. Consolidated Financial Statements, etc.
(1) Consolidated Financial Statements
1) Consolidated Balance Sheets

Millions of yen
2014
2015

March 31, 2014 and 2015
Millions of yen
2014
2015
AssetsCurrent assets
Cash and deposits

Thousands of
U.S.Dollars（＊）
2015

12,277

13,698113,994

Notes receivable, accounts receivable fromcompleted construction contracts and other

16,631

16,702

138,988

Merchandise and finished goods
Real estate for sale
Costs on uncompleted construction contracts
Raw materials and supplies
Deferred tax assets
Other

22
0
1,499
163
349
430

20
0
1,618
148
591
681

172
0
13,472
1,234
4,922
5,674

(16)

(192)

(1,600)31,35933,270276,858*5

Allowance for doubtful accounts
Total current assets*5

Non-current assets
Property, plant and equipment
Buildings and structures, net

1,027

*1

829

6,899

329

*1

446

3,715

5,340
*1 25
8

4,560
*1 40
1

37,948339
9Other, net*4*4

Total property, plant and equipment

Machinery, vehicles, tools, furniture andfixtures, net
Land
Leased assets, net
Construction in progress

*1
*1

2

16

6,733

5,879

48,928

212

223

1,858

708
1,626
409

831
1,593
539

6,920
13,2594,486

Allowance for doubtful accounts

(2)

(31)

(258)

Total investments and other assets

2,742

2,933

24,408

9,688

9,036

75,19541,04742,306352,054

Intangible assets
Investments and other assets
Investment securities
Deferred tax assets
Other

Total non-current assets
Total assets*22

Liabilities
Current liabilities
Notes payable, accounts payable for construction
contracts and other
Short-term loans payable
Advances received on uncompleted construction
contracts
Lease obligations
Income taxes payable
Provision for warranties for completed
construction
Provision for loss on construction contracts
Provision for bonuses

Thousands of
U.S.Dollars（＊）
2015

14,634

12,175

101,321

400

400

3,328

1,820

2,487

20,702

21
657

20
1,491

169
12,408

18

77

645

89
543

748
4,523

881

2,086

17,358

Total current liabilities

18,981

19,372

161,205

Non-current liabilities
Long-term loans payable

1,200

800

6,657

31
98
4,241

34
134
3,831

289
1,122
31,888

123

16

134

5,695

4,817

40,091*5

Other

Lease obligations
Deferred tax liabilities
Net defined benefit liability
Other
Total non-current liabilities

69
477

*5

Total liabilities

24,67724,189201,297

Net assets
Shareholders’ equity
Capital stock
Capital surplus
Retained earnings

6,052
2,022
8,774

6,052
2,022
10,50050,365
16,82887,382

Treasury shares

(540)

(551)

(4,585)

Total shareholders’ equity

16,30818,024

149,991

178

282

2,353

(116)

(190)

(1,588)

61

91

765

16,37018,116

150,756

41,04742,306352,054

Accumulated other comprehensive income
Valuation difference on available-for-salesecurities
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Total net assets
Total liabilities and net assets＊Refer to the note “Basis of Presenting Consolidated Financial Statements”＊Refer to the note “Basis of Presenting Consolidated Financial Statements”

14 ANNUAL REPORT 201515

[Consolidated Statements of Comprehensive Income]Fiscal Years Ended March 31, 2014 and 2015

2) [Consolidated Statements of Income and Consolidated Statements of Comprehensive Income][Consolidated Statements of Income]Fiscal Years Ended March 31, 2014 and 2015
Millions of yen
2014
2015
Net sales
Net sales of completed construction contracts

Cost of sales
Cost of sales of completed construction contracts*1

56,991

60,578504,104

272

125

1,041

Remeasurements of defined benefit plans, net of tax

57,26460,703505,145

49,14050,808422,801

165

40

336

49,30650,848423,138

7,851

9,770

81,302

107

84

704

9,854

82,007

5,656

47,067

3,035

4,198

34,939

1
12
32

0
16
22

7
140
185

Other

10

19

166

Total non-operating income

57

60

500

48
55
50
22

38
51

320
425
－
251
1,446

Cost of sales on other businessTotal cost of sales
Gross profit
Gross profit on completed construction contracts
Gross profit - other businessTotal gross profit
Selling, general and administrative expenses

*1

7,958
*2,3

4,923

Operating income
Non-operating income
Interest income
Dividend income
Patent income

Non-operating expenses
Interest expenses
Guarantee commission
Implementation charge for payables factoring
Factoring fee for receivables
Provision of allowance for doubtful accounts

*2,3

－

－
30
173

Other

12

59

494

Total non-operating expenses

188

353

2,938

2,904

3,905

32,501

Ordinary income
Extraordinary income
Gain on sales of non-current assets

*4

3

*4

32

－

9

78

Total extraordinary income

3

41

348

2

25

978

8,143

*5

2

*5

Impairment loss－

Total extraordinary losses

2

981

8,169

Income before income taxes and minority interests*6

Total other comprehensive income

Millions of yen
2014
2015
1,663
1,664

*1

Thousands of
U.S.Dollars（＊）
2015
13,848

51

104

868

－

(73)

(614)

30

253

Comprehensive income

1,715

1,694

14,102Comprehensive income attributable to
Owners of parent

1,715

1,694

14,102－－－

Minority interests

51*1＊Refer to the note “Basis of Presenting Consolidated Financial Statements”

270

Gain on sales of investment securities
Extraordinary losses
Loss on retirement of non-current assets

Income before minority interests
Other comprehensive income
Valuation difference on available-for-sale securities

Sales on other businessTotal net sales

Thousands of
U.S.Dollars（＊）
2015

2,906

2,965

24,681

Income taxes - current

733

1,699

14,140

Income taxes - deferred

508

(397)

(3,308)

Total income taxes

1,242

1,301

10,832

Income before minority interests

1,663

1,664

13,848Net income

1,663

1,664

13,848＊Refer to the note “Basis of Presenting Consolidated Financial Statements”

16 ANNUAL REPORT 2015173) Consolidated Statements of Changes in Net Assets
Fiscal year ended March 31, 2014

Fiscal year ended March 31, 2015
(Millions of yen)

(Millions of yen)

Shareholders’ equity
Capital stock
Balance at beginning of current
periodCapital surplus

6,052

Retained earnings

2,022

7,366

Shareholders’ equity
Total shareholders’equityTreasury shares(539)

Cumulative effects of changes
in accounting policies
Restated balance

6,052

2,022

7,366

(539)

Capital stock

14,902

Balance at beginning of current
period－Cumulative effects of changes
in accounting policies

14,902

Changes of items during period

Restated balance

Capital surplus

6,052

Retained earnings

2,022

8,774

Total shareholders’equityTreasury shares
(540)

358
6,052

2,022

9,133

16,308358(540)

16,667

Changes of items during period

Dividends of surplus

(255)

(255)

Dividends of surplus

(340)

(340)

Net income

1,663

1,663

Net income

1,664

1,664

Purchase of treasury shares
Disposal of treasury shares

(0)

(1)

(1)

Purchase of treasury shares

00

Disposal of treasury shares－

Change of scope of
consolidation

Change of scope of
consolidation
Net changes of items otherthan shareholders’ equity

(10)

(10)

0

0

0
43

43

Net changes of items otherthan shareholders’ equity

Total changes of items during
period

－

(0)

1,408

(1)

1,406

Total changes of items during
period

－

0

1,367

(10)

1,356

Balance at end of current period

6,052

2,022

8,774

(540)

16,308

Balance at end of current period

6,052

2,022

10,500(551)

18,024

Accumulated other comprehensive income

Balance at beginning of current
periodValuation difference
on available-for-salesecurities
126

Accumulated other comprehensive income

Remeasurements of Total accumulated otherdefined benefit plans comprehensive income－

126

Cumulative effects of changes
in accounting policies
Restated balance

126

－

126

Total net assets

15,029Balance at beginning of current
period－Cumulative effects of changes
in accounting policies

15,029Changes of items during period

Restated balance

Valuation difference
on available-for-salesecurities
178

Remeasurements of Total accumulated otherdefined benefit plans comprehensive income
(116)

61

Total net assets

16,370
358

178

(116)

61

16,729Changes of items during period

Dividends of surplus(255)

Dividends of surplus(340)

Net income

1,663

Net income

1,664

Purchase of treasury shares(1)

Purchase of treasury shares(10)

Disposal of treasury shares

0

Disposal of treasury shares

0－Change of scope of
consolidation

43

Change of scope of
consolidation
Net changes of items otherthan shareholders’ equity

51

(116)

(65)

(65)

Net changes of items otherthan shareholders’ equity

104

(73)

30

30

Total changes of items during
period

51

(116)

(65)

1,341

Total changes of items during
period

104

(73)

30

1,387

Balance at end of current period

178

(116)

61

16,370

Balance at end of current period

282

(190)

91

18,11618 ANNUAL REPORT 2015194) [Consolidated Statements of Cash Flows]

Fiscal year ended March 31, 2015
(Thousands of U.S.Dollars(＊))

Fiscal Years Ended March 31, 2014 and 2015
Thousands of
U.S.Dollars（＊）
2015

Shareholders’ equity
Capital stock
Balance at beginning of current
periodCapital surplus

50,365Retained earnings

16,82873,021

Cumulative effects of changes
in accounting policies
Restated balance

Total shareholders’equityTreasury shares(4,500)2,985
50,365

16,82876,006

135,715
2,985(4,500)138,700

Changes of items during period
Dividends of surplus(2,835)(2,835)

Net income

13,848

13,848Purchase of treasury shares
Disposal of treasury shares
Change of scope of
consolidation
Net changes of items other thanshareholders’ equity
Total changes of items during
periodBalance at end of current period

(85)

(85)

0

0

0
362

362

－

0

11,376(85)

11,29150,365

16,82887,382(4,585)

149,991

Accumulated other comprehensive income

Balance at beginning of current
periodValuation difference
on available-for-salesecurities

Remeasurementsof defined benefit
plans

Total accumulated
other comprehensive
income

1,484

(973)

511

Cumulative effects of changes
in accounting policies
Restated balance

Total net assets

136,226
2,985

1,484

(973)

511

139,211

Changes of items during period
Dividends of surplus(2,835)

Net income

13,848Purchase of treasury shares(85)

Disposal of treasury shares

0Change of scope of
consolidation
Net changes of items otherthan shareholders’ equity
Total changes of items during
period

868
868

(614)

253

11,545

Balance at end of current period

2,353(1,588)765

150,756

362
(614)

253

253

Millions of yen
2014
2015
Cash flows from operating activities
Income before income taxes and minority interests
Depreciation
Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in provision for warranties forcompleted construction
Increase (decrease) in provision for loss on
construction contracts
Increase (decrease) in provision for bonuses
Increase (decrease) in provision for retirement benefits
Increase (decrease) in net defined benefit liability
Loss (gain) on sales of property, plant and equipment
Loss on retirement of property, plant and equipment
Interest and dividend income
Interest expenses
Foreign exchange losses (gains)
Loss (gain) on sales of investment securities
Impairment loss
Decrease (increase) in notes and accounts receivable trade
Decrease (increase) in costs on uncompleted
construction contracts
Decrease (increase) in other assets
Increase (decrease) in notes and accounts payable trade
Increase (decrease) in advances received on
uncompleted construction contracts
Increase (decrease) in accrued consumption taxes

2,906
198
(156)

2,965
257
204

24,681
2,136
1,700

(7)

59

495

37

20

168

63
(4,034)
4,060
(3)
2
(14)
48

64

534

－
38
(32)
2
(17)
38

－
319
(270)
24
(148)
320

－
－
－

3
(9)
978

28
(78)
8,144

(1,947)

(45)

(380)

73

(102)

(852)

(51)

(466)

(3,874)1,401(2,471)(20,567)

(385)

657

5,474

(524)

5

45

Increase (decrease) in other liabilities

(203)

1,131

9,414

Subtotal

1,463

3,282

27,314

Interest and dividend income received
Interest expenses paid

14
(48)

17
(38)

148
(320)

Income taxes paid

(416)

(826)

(6,874)

Net cash provided by (used in) operating activities

1,011

2,435

20,268

(61)
(113)
3

(3)
(353)
35

(26)
(2,939)
291

－

185

1,539

(26)
－
0
(6)

(54)
19
1
(114)

(450)
164
16
(949)

13

5

48

(189)

(277)

(2,306)

Cash flows from investing activities
Purchase of investment securities
Purchase of property, plant and equipment
Proceeds from sales of property, plant and equipment
Advances received on sale of property, plant andequipment
Purchase of intangible assets
Proceeds from sales of investment securities
Collection of loans receivable
Payments for guarantee deposits
Other, net
Net cash provided by (used in) investing activities＊Refer to the note “Basis of Presenting Consolidated Financial Statements”

20 ANNUAL REPORT 201521

Millions of yen
2014
2015
Cash flows from financing activities
Repayments of long-term loans payable
Repayments of lease obligations
Proceeds from disposal of treasury shares
Purchase of treasury shares

Thousands of
U.S.Dollars（＊）
2015

(400)
(24)
0
(1)

(400)
(25)
0
(10)

(3,328)
(209)
0
(85)

(252)

(340)

(2,830)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

(678)

(775)

(6,453)

－

(3)

(28)

144

1,379

11,480Cash and cash equivalents at beginning of period
Increase in cash and cash equivalents from newly
consolidated subsidiary
Cash and cash equivalents at end of period

12,132

12,277102,165

－

41

348

13,698113,994

Cash dividends paid

*1

＊Refer to the note “Basis of Presenting Consolidated Financial Statements”

12,277*1【Notes】(Basis of Presenting Consolidated Financial Statements)
The accompanying consolidated financial statements have been prepared from the accounts maintained by
NITTOC CONSTRUCTION CO., LTD. (the “Company”) and its consolidated subsidiaries in accordance withthe provisions set forth in the Financial Instruments and Exchange Law and its related accounting regulations,and in conformity with accounting principles and practices generally accepted in Japan, which are different incertain respects as to the application and disclosure requirements of International Financial Reporting Standards.
The consolidated financial statements are stated in Japanese yen, the currency of the country in which theCompany is incorporated and mainly operates. The translation of Japanese yen amounts into U.S. dollar
amounts is included solely for the convenience of readers outside Japan and has been made at the rate of¥120.17 to US$1.00, the approximate rate of exchange on March 31, 2015. Such translation should not be
construed as a representation that the Japanese yen amounts could be converted into U.S. dollars at that or any
other rate.
(Going-Concern Assumption)
Not applicable(Significant Items on Basis for Preparation of Consolidated Financial Statements)
1. Scope of Consolidation
Number of consolidated subsidiaries: 3
Midori Industries Co., Ltd.
Yamaguchi Earth Engineering Co., Ltd.
Shimane Earth Engineering Co., Ltd.
Note: The Company has included all of its subsidiaries in the scope of consolidation effective from the fiscal year
ended March 31, 2014, regardless of their importance. Although Shimane Earth Engineering Co., Ltd. was
excluded from the scope of consolidation for the previous consolidated fiscal year due to a contradiction
with other systems, it has been included in the scope of consolidation effective from the end of theconsolidated fiscal year under review as said contradiction was eliminated.
2. Application of the Equity Method
Not applicable
3. Fiscal Years, etc. of Consolidated Subsidiaries
The year-end date of the fiscal year of the consolidated subsidiaries is March 31, which is the same as theconsolidated balance sheet date.
4. Standards on Accounting Procedures(1) Valuation standard and valuation method for significant assets
1) Securities• Held-to-maturity debt securities
Amortized cost method (by the straight-line method)• Available-for-sale securities
Securities with market quotations:
Valued at fair market value as of the consolidated fiscal year-end date (All changes in valuationdifference are included directly in net assets. Cost of securities sold is determined by the moving-averagemethod).
Securities without market quotations:
Valued at cost based on the moving-average method.
2) Inventories• MerchandiseStated at cost using the first-in first-out method (The figures shown in the consolidated balance sheets
have been calculated by writing down the book value based on the decline in profitability.)• Real estate for saleStated at cost using the specific identification method (The figures shown in the consolidated balance
sheets have been calculated by writing down the book value based on the decline in profitability.)• Costs on uncompleted construction contracts

22 ANNUAL REPORT 2015

23

The prior service cost is amortized by the straight-line method over a certain period (10 years) within the
average remaining service period of employees at the time of recognition.
3) Adoption of the simplified method for small and medium-sized entities
For the calculation of net defined benefit liability and retirement benefit expenses, the consolidated
subsidiaries of the Company have adopted the simplified method, according to which the amount of payables
for voluntary retirement of all employees at the end of the period is treated as projected benefit obligation.
•

Stated at cost using the specific identification method
Raw materials and supplies
Stated at cost using the first-in first-out method (The figures shown in the consolidated balance sheets
have been calculated by writing down the book value based on the decline in profitability.)(2) Depreciation methods of major depreciable assets
1) Property, plant and equipment (excluding leased assets): The declining-balance method is applied.
However, the straight-line method is adopted for buildings (excluding facilities attached to buildings) acquiredon or after April 1, 1998, and for machinery equipment.
The useful lives and the residual value are based on standards in accordance with methods stipulated in the
Corporation Tax Act.
2) Intangible assets (excluding leased assets): The straight-line method is applied.
The useful lives are based on standards in accordance with methods stipulated in the Corporation Tax Act.
Computer software for internal use is amortized by the straight-line method over the estimated internal usefullife (five years).
3) Leased assets
The straight-line method, in which the lease period is utilized as the useful life assuming the residual value iszero, is adopted for the leased assets of finance lease transactions without transfer of ownership.
(3) Recognition standards for significant reserves
1) Allowance for doubtful accounts
The allowance for doubtful accounts is recorded at an amount of estimated uncollectible receivables based on
past bad debt experience for general receivables, and by individually considering the collectibility for certain
doubtful receivables including loans with potential default to prepare for possible loan losses including notes
and accounts receivable - trade and loans receivable.
2) Provision for warranties for completed construction
The provision for warranties for completed construction is recorded at an amount based on the estimatedcompensation amount regarding the net sales of completed construction contracts for the consolidated fiscal
year under review to prepare for expenses such as warranty against defects relative to completed construction
works.
3) Provision for loss on construction contracts
The provision for loss on construction contracts is recorded at an estimated loss amount regarding
construction works on hand at the end of the consolidated fiscal year under review for which loss is expected,
and for which the amount can be reasonably estimated, to prepare for possible losses from construction
contracts that the Group has received orders thereof.
4) Provision for bonuses
The provision for bonuses is recorded at an amount of possible disbursement corresponding to theconsolidated fiscal year under review based on the estimated amount to provide for bonuses to employees.
(4) Accounting procedure for retirement benefits
1) Method of allocating the projected retirement benefits to periods
In calculating the projected benefit obligation, the benefit formula basis is used to allocate the projected
retirement benefits to periods up to the end of the consolidated fiscal year under review.
2) Amortization method for actuarial gains/losses and prior service cost
Actuarial gains or losses are amortized for the pro-rata amount computed by the straight-line method over acertain period (10 years) within the average remaining service period of employees at the time of recognition,commencing from the consolidated fiscal year following the recognition.
The prior service cost is amortized by the straight-line method over a certain period (10 years) within the
average remaining service period of employees at the time of recognition.
3) Adoption of the simplified method for small and medium-sized entities
For the calculation of net defined benefit liability and retirement benefit expenses, the consolidated
subsidiaries of the Company have adopted the simplified method, according to which the amount of payables
for voluntary retirement of all employees at the end of the period is treated as projected benefit obligation.
(5) Recognition standards for significant revenues and expenses
Recognition standards for net sales of completed construction contracts and cost of sales of completed
construction contracts
1) Works for which the outcome of the construction activity is deemed certain with regard to the portion of
construction in progress by the end of the consolidated fiscal year under review
The percentage-of-completion method has been applied to such works (the degree of completion of

24 ANNUAL REPORT 2015

(5) Recognition standards for significant revenues and expenses
Recognition standards for net sales of completed construction contracts and cost of sales of completed
construction contracts
1) Works for which the outcome of the construction activity is deemed certain with regard to the portion of
construction in progress by the end of the consolidated fiscal year under review
The percentage-of-completion method has been applied to such works (the degree of completion of
construction is estimated by the cost-to-cost method).
2) Other works
The completed-contract method has been applied.
Net sales of completed construction contracts, to which the percentage-of-completion method was applied, were¥38,884 million ($323,579 thousand) for the consolidated fiscal year under review.
(6) Scope of cash and cash equivalents in the consolidated statements of cash flows
Cash and cash equivalents in the consolidated statements of cash flows comprise cash on hand, bank deposits
available for withdrawal on demand and readily convertible short-term investments with maturities of threemonths or less, which are exposed to minor risk of fluctuation in value.
(7) Other items of significance concerning the preparation of consolidated financial statements
1) Accounting procedure for consumption taxes and others
Transactions subject to consumption tax and local consumption tax are recorded at amounts exclusive of theconsumption taxes.
2) Application of consolidated tax return system
The consolidated tax return system is applied.
(Change in Accounting Policies)(Application of the Accounting Standards for Retirement Benefits)
The “Accounting Standard for Retirement Benefits” (ASBJ Statement No. 26, May 17, 2012; hereinafter the“Standard”) and the “Guidance on Accounting Standard for Retirement Benefits” (ASBJ Guidance No. 25, March
26, 2015; hereinafter the “Guidance”) have been applied effective from the fiscal year ended March 31, 2015,
with regard to the provisions set forth in the main clause of Paragraph 35 of the Standard and the main clause of
Paragraph 67 of the Guidance. Consequently, the Company reviewed the calculation method of projected benefit
obligations and service cost and has changed the method of allocating the projected benefit amounts to periods
from the straight-line attribution to the benefit formula basis. The decision method for the discount rate also has
been changed from the previous method, according to which the discount rate is determined based on the numberof service years similar to those within the employees’ average remaining service period, to a single-weighted
average discount rate, in which the projected payment period for retirement benefits and the amount for eachprojected payment period are reflected.
The application of the Standard complies with the transitional accounting treatment set forth in Paragraph 37 of
the Standard, and the effects of this change in calculation method of projected benefit obligations and service cost
are adjusted as retained earnings at the beginning of the consolidated fiscal year under review.
As a result, at the beginning of the consolidated fiscal year under review, the net defined benefit liability
decreased by ¥557 million ($4,638 thousand), whereas retained earnings increased by ¥358 million ($2,958
thousand). Meanwhile, operating income decreased by ¥37 million ($314 thousand), ordinary income and income
before income taxes and minority interests for the consolidated fiscal year under review each decreased by thesame amount.
The impact on per share information is stated below.
(Change in Presentation Method)(Consolidated Statements of Cash Flows)“Payments for guarantee deposits,” which were included in “Other, net” under “Cash flows from investing
activities” for the previous consolidated fiscal year, have been separately presented effective from thisconsolidated fiscal year due to increased importance in terms of amount. To reflect this change in presentation
method, the consolidated financial statements for the previous consolidated fiscal year have been reclassified.
As a result, ¥7 million ($63 thousand), which was presented as a component of “Other, net” under “Cash flows
from investing activities,” is reclassified as negative ¥6 million ($52 thousand) in “Payments for guarantee
deposits” and ¥13 million ($115 thousand) as a component of “Other, net.”

25

(Consolidated Balance Sheets)*1 Accumulated depreciation of property, plant and equipment
As of March 31
2014

2015

¥7,404 million

2015¥7,343 million$61,110 thousand*2 The amounts related to the nonconsolidated subsidiaries were as follows:
As of March 31
Investment
securities(shares)

2014

2015

2015

¥10 million¥－ million$－thousand

3 Contingent liabilities(1) The Company guarantees loans payable for the purchase of its properties for sale.
As of March 31
2014
2015
2015
9 properties¥26 million

9 properties¥21 million$179 thousand(2) The Company guarantees housing funds, the loans payable of its employees borrowed from banks, inaccordance with the Housing Loan Financing Rules.
As of March 31
2014
2015
2015
¥45 million¥33 million$278 thousand(3) Litigation-related
Fiscal year ended March 31, 2014 (As of March 31, 2014)
The Company received a filing of damage suit (claimed amount of ¥277 million) regarding directors’
retirement benefits as of September 5, 2013, from several former company officers. The case ispending in court at present.
The Company considers that said claim for damages by the former company officers has nofoundation, and legal advisors to the Company concur with the Company. Accordingly, theCompany intends to challenge the plaintiffs on this case.

*5 Presentation of inventories and provision for loss on construction contracts
Fiscal year ended March 31, 2014 (As of March 31, 2014)
Both the costs on uncompleted construction contracts and the provision for loss on construction
contracts, which are related to construction contracts that are expected to generate losses, arepresented without offsetting each other.
Of the costs on uncompleted construction contracts relating to construction contracts that are
expected to generate losses, the amount corresponding to the provision for loss on construction
contracts is ¥1 million.
Fiscal year ended March 31, 2015 (As of March 31, 2015)
Both the costs on uncompleted construction contracts and the provision for loss on construction
contracts, which are related to construction contracts that are expected to generate losses, arepresented without offsetting each other.
Of the costs on uncompleted construction contracts relating to construction contracts that are
expected to generate losses, the amount corresponding to the provision for loss on construction
contracts is ¥89 million ($743 thousand).
6 Commitment line agreements
The Company has entered into commitment line agreements with our four banks to facilitate
efficient fund procurement of working capital.
The unused balance of the borrowings relative to the commitment line agreements as of March
31 was as follows:
Thousands ofMillionsofyen
U.S.Dollars
As of March 31
2014
2015
2015
Total amount of the
2,200
2,200
18,307
commitment line
Balance of executed
－
－
－
loans
Unused balance
2,200
2,200
18,307

Fiscal year ended March 31, 2015 (As of March 31, 2015)
The Company received a filing of damage suit (claimed amount of ¥277 million ($2,308 thousand))regarding directors’ retirement benefits as of September 5, 2013, from several former company
officers. The case is pending in court at present.
The Company considers that said claim for damages by the former company officers has nofoundation, and legal advisors to the Company concur with the Company. Accordingly, theCompany intends to challenge the plaintiffs on this case.
*4 Reduction entry
The amount of reduction entry, which is subtracted from the acquisition prices of property, plant andequipment due to acceptance of a state subsidy, and the breakdown thereof were as follows:
As of March 31
2014
Other

26 ANNUAL REPORT 2015

2015
¥2 million

2015¥2 million$17 thousand

27

(Consolidated Statements of Income)*1 Provision for loss on construction contracts included in the cost of sales of completed construction
contracts
Fiscal year ended March 31
2014

2015
¥67 million

2015¥84 million$707 thousand*2 Major expense items of selling, general and administrative expenses and their amounts were as
follows:
Thousands of
U.S.Dollars
Fiscal year ended March 31
Millions of yen
2014
2015
2015
Employees’ salaries and
2,383
2,636
21,936
allowances
Provision for bonuses
185
220
1,838
Retirement benefit expenses
244
324
2,698
Provision of allowance for
(40)
30
254
doubtful accounts
Depreciation
71
69
577
*3 Research and development expenses included in general and administrative expenses
Fiscal year ended March 31
2014

2015
¥163 million

2015¥162 million$1,354 thousand*4 The breakdown of gain on sales of non-current assets was as follows:
Fiscal year ended March 31
2014

Machinery, vehicles, tools,
furniture and fixtures2015¥3 million¥32 million$270 thousand*5 The breakdown of loss on retirement of non-current assets was as follows:
Fiscal year ended March 31
Buildings and structures
Machinery, vehicles, tools,
furniture and fixtures
Total

28 ANNUAL REPORT 2015

2014

2

Thousands of
U.S.Dollars
2015
18

0

0

5

2

2

24

Millions of yen
1

2015*6 Impairment loss
For the fiscal year ended March 31, 2015, the Company reported impairment loss for thefollowing asset groups.
Impairment loss
Use
Idle assets
Assets planned
to be sold

Type

Location

Building, structuresand fixtures

Chuo-ku, Tokyo

198

1,648

Land

Chuo-ku, Tokyo

780

6,495

Millionsof yenThousands of
U.S.Dollars(Grouping method)
The Company has, in principle, grouped business-use assets by department/branch which are theminimum profit-reporting unit and grouped shared assets such as the head office by the entire business as
a profit-reporting unit. Meanwhile, the Company has separately grouped individual assets such as assets
planned to be sold and idle assets.
(Breakdown of impairment loss recognized)
Building and structures
Machinery, vehicles, tools,
furniture and fixtures
Land
Total

Millions of yen
197
0
780
978

Thousands of
U.S.Dollars
1,640
7
6,495
8,143

(Background)
As the Akashi-cho Suboffice Building became unused and idle, the Company examined the possibility ofutilizing said non-current assets, and then a resolution for disposing of and selling said assets was
adopted by the Board of Directors. The Company reported impairment loss for said non-current assets,
because the recoverable amount and substantial disposal value of said assets became lower than its bookvalue.
(Calculation method of recoverable amounts)
Recoverable amounts for assets planned to be sold are measured by using the net selling value. The net
selling value is determined based on the successful bidding price, etc., via competitive bidding.
Recoverable amounts for idle assets are evaluated by using the memorandum value by taking into
account their substantial disposal value.

29

(Consolidated Statements of Comprehensive Income)*1 Amounts of reclassification and the tax-effect equivalent in relation to “Other comprehensive income”
Thousands ofMillions of yen
U.S.Dollars
Fiscal year ended March 31
2014
2015
2015
Valuation difference on available-forsale securities
Accrued in the fiscal year
80
149
1,241
(8)
(72)
Amount of reclassification
－
80
140
1,169
Before tax-effect adjustment
28
(36)
(300)
Amount of tax-effect equivalent
Valuation difference on available51
104
868
for-sale securities
Remeasurements of defined benefit
plans, net of tax
Accrued in the fiscal year
Amount of reclassification
Before tax-effect adjustment
Amount of tax-effect equivalentRemeasurements of defined
benefit plans, net of tax
Total other comprehensive
income

－
－
－
－

(95)
(4)
(100)
26

(792)
(40)
(833)
218

－

(73)

(614)

51

30

253

(Consolidated statements of Changes in Net Assets)
Fiscal year ended March 31, 2014 (From April 1, 2013 to March 31, 2014)
1. Class and total number of issued shares and of treasury sharesFiscal year ended March 31,
2014

Number of shares atthe beginning

Increase in numberof shares

Decrease in numberof shares

Number of shares atthe endCommon shares

43,919,291－－

43,919,291

Total

43,919,291－－

43,919,291

Common shares

1,325,180

4,280

356

1,329,104

Total

1,325,180

4,280

356

1,329,104

Issued shares

Treasury shares

Notes:
1. The increase in number of treasury shares represents the increase from the purchase of less-than-oneunit shares.
2. The decrease in number of treasury shares represents the decrease due to sales of the Company’s own
shares in response to the request for additional purchase of less-than-one-unit shares by shareholders.
2. Dividends(1) Amount of dividends paid
Class of
Total
Source of
Resolution
sharesdividends dividends
AnnualShareholders’Common¥255 Retained
Meeting onsharesmillion earnings
June 27, 2013

Dividend
per share

Record date

¥6.00 March 31, 2013

Effective dateJune 28, 2013

(2) Dividends for which the record date is during the consolidated fiscal year under review but for which
the effective date is after the end of the consolidated fiscal year under review
Class of
Total
Source ofDividend
Resolution
Record date
Effective datesharesdividends dividends
per share
AnnualShareholders’Common¥340 Retained¥8.00 March 31, 2014 June 30, 2014
Meeting onsharesmillion earnings
June 27, 201430 ANNUAL REPORT 201531

Fiscal year ended March 31, 2015 (From April 1, 2014 to March 31, 2015)
1. Class and total number of issued shares and of treasury sharesFiscal year ended March 31,
2015

Number of shares atthe beginning

Increase in numberof shares

Decrease in numberof shares

Number of shares atthe endCommon shares

43,919,291－－

43,919,291

Total

43,919,291－－

43,919,291

Common shares

1,329,104

19,881137

1,348,848

Total

1,329,104

19,881137

1,348,848

Issued shares

Treasury shares

Notes:
1. The increase in number of treasury shares represents the increase from the purchase of less-than-oneunit shares and the purchase from shareholders whose address could not be determined.
2. The decrease in number of treasury shares represents the decrease due to sales of the Company’s own
shares in response to the request for additional purchase of less-than-one-unit shares by shareholders.
2. Dividends(1) Amount of dividends paid
Resolution

Class ofsharesTotal dividends

AnnualShareholders’Meeting on
June 27, 2014

Commonshares¥340 million Retained($2,835 thousand) earnings

Source ofdividends

Dividend
per share

Record date

Effective date

¥8.00 March 31, 2014 June 30, 2014

(2) Dividends for which the record date is during the consolidated fiscal year under review but for which
the effective date is after the end of the consolidated fiscal year under review
Class ofsharesResolution
AnnualShareholders’Meeting on
June 25, 2015

Total dividends

Source ofdividends

Dividend
per share

Common¥383 million Retained
shares($3,188 thousand) earnings

Record date

Effective date

¥9.00 March 31, 2015 June 26, 2015

(Consolidated Statements of Cash Flows)*1 A reconciliation of the balance of cash and cash equivalents in the consolidated statements of cash
flows to cash and deposits included in the consolidated balance sheets

Fiscal year ended March 31
Cash and deposits
Cash and cash equivalents

32 ANNUAL REPORT 2015

Thousands of
U.S.Dollars

Millions of yen
2014

2015

12,277
12,277

13,698
13,698

2015(Lease Transactions)(Lessee)Finance lease transactions that do not transfer ownership
1. Details of leased assets(1) Property, plant and equipment
Mainly consist of machinery and equipment.
(2) Intangible assets
Software
2. Depreciation method of leased assets
As described in the “(Significant Items on Basis for Preparation of Consolidated Financial Statements)
4. Standards on Accounting Procedures (2) Depreciation methods of major depreciable assets.”(Financial Instruments)
Fiscal year ended March 31, 2014 (From April 1, 2013 to March 31, 2014)
1. Status of Financial Instruments(1) Policies on financial instruments
The Group procures working capital, which is necessary to pursue business purposes, in the form ofborrowings from banks and invests temporary surplus funds in short-term deposits, etc. The Group utilizes
derivatives within the limit of actual demand and not for speculative purposes. In the consolidated fiscal year
under review, no derivative transactions were utilized.
(2) Description of financial instruments and related risks
Notes receivable, accounts receivable from completed construction contracts and other, which are tradereceivables, are exposed to the credit risk of the respective counterparties. Investment securities are mainly
stocks of companies with which the Company holds business relationships, and are exposed to market pricefluctuation risk.
Notes payable, accounts payable for construction contracts and other, which are trade payables, generally
entail the concentrated due date for payments and are exposed to liquidity risk.
The loans payable as working capital are exposed to market price fluctuation risk (interest rate risk).
(3) Risk management system for financial instruments
1) Management of credit risk (default risk of the counterparties)
The Group regularly monitors notes receivable, accounts receivable from completed construction contracts
and other regarding main counterparties at the relevant departments/sections in accordance with the Credit
Exposure Management Rules and the Credit Management Manual. In addition to the management of credit
balances by counterparty, the Group works to early grasp and reduce recovery concerns due to theaggravation of financial positions at the counterparties.
2) Management of market risk (market price fluctuation risk)
The Group regularly checks the current market value of shares included in the category of investment
securities and makes efforts to comprehend the financial positions of the issuers (counterparties) andcontinuously reviews the holding status of such investment securities by taking into account market
conditions and the relationship with the respective counterparties.
The Group strives to restrict the interest rate risk for the borrowings by appropriately and timely managing
the balance of borrowings. In the consolidated fiscal year under review, no derivative transactions (interestrate swaps) were utilized.
3) Management of liquidity risk (the risk of non-repayment on the due date) relating to fund procurement
At the Group, the Accounting Department prepares and renews the cash-flow plan based on reports from therespective departments/sections. The department also manages liquidity risk with measures such as themaintenance of liquidity on hand and entering into commitment line agreements with our banks.

113,994
113,99433

2. Market Values of Financial Instruments
The carrying value in the consolidated balance sheets, the market value and the difference thereof as of March
31, 2014, were as follows.
Financial instruments for which it is deemed extremely difficult to measure the market value are not included in
the table below. (Refer to Note 2.)(Millions of yen)
Carrying value
in the consolidated
Market value
Difference
balance sheets(1) Cash and deposits(2) Notes receivable, accounts
receivable from completed
construction contracts andother12,277

12,277－

16,631

16,631

－

587

587

－

29,49629,496－

14,634

14,634

－

400

400

－

(3) Long-term loans payable

1,200

1,200

Total liabilities

16,234－(3) Investment securities
Available-for-sale securities
Total assets(1) Notes payable, accounts
payable for construction
contracts and other(2) Short-term loans payable

Derivative transactions

Millions of yen
Shares in subsidiaries and associates (unlisted stocks)

10

Available-for-sale securities (unlisted stocks)

110

The above securities are not included in “(3) Investment securities” because they have no market
prices and it is deemed extremely difficult to measure their market values.
3. Redemption schedules for monetary receivables and securities with maturity dates after the
consolidated balance sheet date (March 31, 2014)(Millions of yen)Over one year Over five years
Withinand within five and within 10
Over 10 years
one year
years
years
12,277－－－

16,631－－－－

Notes receivable,accounts receivable fromcompleted construction
contracts and other

16,234－

Investment securities－－

Available-for-salesecurities withmaturity dates

－

－

－

－

28,908－－－

Liabilities(1) Notes payable, accounts payable for construction contracts and otherAs these instruments are settled within a short term and their market values and book values are
similar, their book values are assumed as their market values.
(2) Short-term loans payable and (3) Long-term loans payable
The book values of these instruments are assumed as their market values because these loans
payable with variable interest rates sufficiently reflect the market interest rate within a short period
and the credit standing of the Company does not greatly differ after the execution of such loan
agreements.

34 ANNUAL REPORT 2015

Carrying value
in the consolidated balance sheets

Classification

Cash and deposits

Notes:
1. Calculation method of the market value of financial instruments, as well as securities and derivativetransactions
Assets(1) Cash and deposits and (2) Notes receivable, accounts receivable from completed construction
contracts and otherAs these instruments are settled within a short term and their market values and book values are
similar, their book values are assumed as their market values.
(3) Investment securities
The market value of investment securities is based on the prices listed at stock exchanges.
For details of securities by holding purpose, please refer to the notes titled “Securities.”

Derivative transactions
The Group conducts no derivative transactions.

2. Financial instruments for which it is deemed extremely difficult to measure the market value

Total

4. The repayment schedules for short-term and long-term loans payable are shown in the “Schedules ofLoans Payable,” a consolidated supplementary statement.
Fiscal year ended March 31, 2015 (From April 1, 2014 to March 31, 2015)
1. Status of Financial Instruments(1) Policies on financial instruments
The Group procures working capital, which is necessary to pursue business purposes, in the form ofborrowings from banks and invests temporary surplus funds in short-term deposits, etc. The Grouputilizes derivatives within the limit of actual demand and not for speculative purposes. In the
consolidated fiscal year under review, no derivative transactions were utilized.
(2) Description of financial instruments and related risks
Notes receivable, accounts receivable from completed construction contracts and other, which aretrade receivables, are exposed to the credit risk of the respective counterparties. Investment securities
are mainly stocks of companies with which the Company holds business relationships, and are
exposed to market price fluctuation risk.
Notes payable, accounts payable for construction contracts and other, which are trade payables,
generally entail the concentrated due date for payments and are exposed to liquidity risk.
The loans payable as working capital are exposed to market price fluctuation risk (interest rate risk).
(3) Risk management system for financial instruments
1) Management of credit risk (default risk of the counterparties)
The Group regularly monitors notes receivable, accounts receivable from completed construction
contracts and other regarding main counterparties at the relevant departments/sections in accordancewith the Credit Exposure Management Rules and the Credit Management Manual. In addition to the
management of credit balances by counterparty, the Group works to early grasp and reduce recovery
concerns due to the aggravation of financial positions at the counterparties.

352) Management of market risk (market price fluctuation risk)
The Group regularly checks the current market value of shares included in the category ofinvestment securities and makes efforts to comprehend the financial positions of the issuers(counterparties) and continuously reviews the holding status of such investment securities by taking
into account market conditions and the relationship with the respective counterparties.
The Group strives to restrict the interest rate risk for the borrowings by appropriately and timely
managing the balance of borrowings. In the consolidated fiscal year under review, no derivativetransactions (interest-rate swaps) were utilized.
3) Management of liquidity risk (the risk of non-repayment on the due date) relating to fundprocurement
At the Group, the Accounting Department prepares and renews the cash-flow plan based on thereports from the respective departments/sections. The department also manages liquidity risk withmeasures such as the maintenance of liquidity on hand and entering into commitment line
agreements with our banks.
2. Market Values of Financial Instruments
The carrying value in the consolidated balance sheets, the market value and the difference thereof as ofMarch 31, 2015, were as follows.
Financial instruments for which it is deemed extremely difficult to measure the market value are notincluded in the table below. (Refer to Note 2.)(Millions of yen)
Carrying value
in the consolidated
Market value
Difference
balance sheets(1) Cash and deposits
13,698
13,698－(2) Notes receivable, accounts
receivable from completed
16,702
16,702－construction contracts andother(3) Investment securities
Available-for-sale securities

720

720

－

Total assets

31,121

31,121－

12,175

12,175

－

400

400

－

800

800

－

Total liabilities

13,375

13,375－Derivative transactions

－

－

－

(1) Notes payable, accounts
payable for construction
contracts and other(2) Short-term loans payable(3) Long-term loans payable

Carrying value
in the consolidatedbalance sheets(1) Cash and deposits(2) Notes receivable, accounts
receivable from completed
construction contracts andother(Thousands of U.S.Dollars)Market value

Difference

113,994

113,994－

138,988

138,988－(3) Investment securities
Available-for-sale securities

5,998

5,998

－

Total assets

258,981258,981－

101,321

101,321

－

3,328

3,328

－

6,657

6,657

－

Total liabilities

111,306

111,306－

Derivative transactions

－

－

－

(1) Notes payable, accounts
payable for construction
contracts and other(2) Short-term loans payable(3) Long-term loans payable

Notes:
1. Calculation method of the market value of financial instruments, as well as securities and derivativetransactions
Assets(1) Cash and deposits and (2) Notes receivable, accounts receivable from completed construction
contracts and otherAs these instruments are settled within a short term and their market values and book values are
similar, their book values are assumed as their market values.
(3) Investment securities
The market value of investment securities is based on the prices listed at stock exchanges.
For details of securities by holding purpose, please refer to the notes titled “Securities.”
Liabilities(1) Notes payable, accounts payable for construction contracts and otherAs these instruments are settled within a short term and their market values and book values are
similar, their book values are assumed as their market values.
(2) Short-term loans payable and (3) Long-term loans payable
The book values of these instruments are assumed as their market values because these loans
payable with variable interest rates sufficiently reflect the market interest rate within a short period
and the credit standing of the Company does not greatly differ after the execution of such loan
agreements.
Derivative transactions
The Group conducts no derivative transactions.
2. Financial instruments for which it is deemed extremely difficult to measure the market value
Classification

Carrying value in the consolidated balance sheets

Available-for-sale securities¥110 million$921 thousand(unlisted stocks)
The above securities are not included in “(3) Investment securities” because they have no market
prices and it is deemed extremely difficult to measure their market values.
3. Redemption Schedules for monetary receivables and securities with maturity dates after the
consolidated balance sheet date (March 31, 2015)36 ANNUAL REPORT 201537

Withinone year
Cash and deposits
Notes receivable,accounts receivable fromcompleted construction
contracts and other

13,698Over one year
and within five
years

Over five years
and within 10
years

－

－

(Millions of yen)Over 10 years
－

Total

1. Held-to-maturity debt securities (As of March 31, 2014)
Not applicable
2. Available-for-sale securities (As of March 31, 2014)

16,702－－－

Investment securities
Available-for-salesecurities withmaturity dates(Securities)
Fiscal year ended March 31, 2014 (As of March 31, 2014)

－

－

－

－

30,400－－－(1) Securities with carrying
value in the consolidatedbalance sheets exceedingacquisition cost

Carrying value in the
consolidated balance
sheetsShares(Millions of yen)
Acquisition cost

Difference

587

310

277

National government
bonds, local
government bonds, etc.

－

－

－

Corporate bonds

－

－

－

Other

－

－

－

－

－

－

587

310

277

－

－

－

National government
bonds, local
government bonds, etc.

－

－

－

Corporate bonds

－

－

－

Other

－

－

－

－

－

－

Subtotal

－

－

－

Total

587

310

277

Bonds

Withinone year
Cash and deposits
Notes receivable,accounts receivable fromcompleted construction
contracts and other

113,994

Over one year
and within fiveyears－

(Thousands of U.S.Dollars)Over five years
and within 10
Over 10 years
years
－

－

Other
138,988－－－

Investment securities
Available-for-salesecurities withmaturity dates
Total

－

－

－

－

252,982－－－

4. The repayment schedules for short-term and long-term loans payable and lease obligations are shownin the “Schedules of Loans Payable,” a consolidated supplementary statement.

Subtotal(2) Securities with carrying
value in the consolidatedbalance sheets notexceeding acquisition
cost
Shares
Bonds

Other

Note: Shares for which it is deemed extremely difficult to measure the market value

38 ANNUAL REPORT 2015

Classification

Carrying value
in the consolidated balance sheets
Millions of yen

Shares in subsidiaries and associates (unlisted stocks)

10

Available-for-sale securities (unlisted stocks)

110

39

3. Available-for-sale securities sold during the consolidated fiscal year under review (From April 1, 2013
to March 31, 2014)
Not applicable
Fiscal year ended March 31, 2015 (As of March 31, 2015)(1) Securities with carrying
value in the consolidatedbalance sheets exceedingacquisition cost

1. Held-to-maturity debt securities (As of March 31, 2015)
Not applicable

Shares

2. Available-for-sale securities (As of March 31, 2015)(1) Securities with carrying
value in the consolidatedbalance sheets exceedingacquisition cost

Carrying value in the
consolidated balance
sheetsShares(Millions of yen)
Acquisition cost

720

Difference

302

417

National government
bonds, local
government bonds, etc.

－

－

－

Corporate bonds

－

－

－

Other

－

－

－

－

－

－

5,996

2,519

3,476

2

2

(0)

National government
bonds, local
government bonds, etc.

－

－

－

Corporate bonds

－

－

－

Other

－

－

－

－

－

－

Subtotal

2

2

(0)

Total

5,998

2,522

3,476

Bonds

Other
(2) Securities with carrying
value in the consolidatedbalance sheets notexceeding acquisition
cost

－

－

－

Corporate bonds

－

－

－

Other

－

－

－

Shares

－

－

－

Bonds

720

302

417

Shares

0

0

0

Other

Bonds
National government
bonds, local
government bonds, etc.

－

－

－

Corporate bonds

－

－

－

Other

－

－

－

－

－

－

Subtotal

0

0

0

Total

720

303

417

Other

Note: Shares for which it is deemed extremely difficult to measure the market value
Classification

Carrying value in the consolidated balance sheets
Millions of yen

Available-for-sale securities(unlisted stocks)

40 ANNUAL REPORT 2015

Thousands of U.S.Dollars
110

921

Difference

3,476

National government
bonds, local
government bonds, etc.

(2) Securities with carrying
value in the consolidatedbalance sheets notexceeding acquisition
cost

Acquisition cost

2,519

Subtotal

Subtotal(Thousands of U.S.Dollars)

5,996

Bonds

Other

Carrying value in the
consolidated balance
sheets

3. Available-for-sale securities sold during the consolidated fiscal year under review (From April 1, 2014
to March 31, 2015)(Millions of yen)Class
SharesSales amount

Total gains on sale

Total losses on sale

19

9

－

National government
bonds, local
government bonds, etc.

－

－

－

Corporate bonds

－

－

－

Other

－

－

－

－

－

－

19

9

－

Bonds

Other
Total

41

(Thousands of U.S.Dollars)Class
SharesSales amount

Total gains on sale
166

Total losses on sale
78

－

Bonds
National government
bonds, local
government bonds, etc.

－

－

－

Corporate bonds

－

－

－

Other

－

－

－

－

－

－

166

78

－

Other
Total

(Derivative Transactions)Fiscal year ended March 31, 2014 (From April 1, 2013 to March 31, 2014)
1. Derivatives for which hedge accounting is not applied
Not applicable as no derivative transactions are utilized.
2. Derivatives for which hedge accounting is applied
Not applicable as no derivative transactions are utilized.
Fiscal year ended March 31, 2015 (From April 1, 2014 to March 31, 2015)
1. Derivatives for which hedge accounting is not applied
Not applicable as no derivative transactions are utilized.
2. Derivatives for which hedge accounting is applied
Not applicable as no derivative transactions are utilized.
(Retirement Benefits)
1. Outline of adopted employee retirement benefit plans
The Company and its consolidated subsidiaries have adopted unfunded retirement benefit plans to provide forretirement benefits for their employees. Half of the retirement benefit plans are defined benefit plans and theremaining portion are defined contribution plans.
The defined benefit plans are lump-sum severance payment plans to provide retirement benefits by means of apoint scheme based on service period.
In the defined contribution plans, the contribution is clearly sectionalized by individual and the pension benefit
amount is determined based on the total of the contributions and the return on plan assets thereof.
In addition to the above, the Company and its consolidated subsidiaries are affiliated with the multiemployer
plans of the Employees’ Pension Fund. As the rational computation of plan assets cannot be ensured for themultiemployer pension plans, accounting is processed in a similar manner as that for the defined contributionplans.
At the consolidated subsidiaries, net defined benefit liability and retirement benefit expenses are calculated by
the simplified method. They are included in the following relevant items because of their immateriality in the
consolidated financial statements.

2. Defined benefit plans(1) Reconciliation of the beginning/ending balance of projected benefit obligations
Fiscal year ended March 31
Beginning balance of projected
benefit obligations
Cumulative effects ofchanges in accounting
policies
Restated balance
Service cost
Interest costAccrued amount of actuarial
differences
Accrued amount of priorservice cost
Retirement benefits paid
Ending balance of projected
benefit obligations

2014

2015

Thousands of
U.S.Dollars
2015

4,167

4,241

35,299－(557)(4,638)

4,167
186
41

3,684
230
36

30,660
1,914
306

25

123

1,027

－

(28)

(234)

(179)

(215)

(1,794)

4,241

3,831

31,879(2) Reconciliation of the beginning/ending balance of plan assets
Fiscal year ended March 31, 2014 (From April 1, 2013 to March 31, 2014)
Not applicable
Fiscal year ended March 31, 2015 (From April 1, 2014 to March 31, 2015)
Not applicable(3) Reconciliation of the ending balance of projected benefit obligations and plan assets, and the net defined
benefit liability and the net defined benefit asset in the consolidated balance sheets
As of March 31
Projected benefit obligations
under unfunded plans
Net carrying value in the
consolidated balance sheets ofrelevant liabilities and assets
Net defined benefit liability
Net carrying value in the
consolidated balance sheets ofrelevant liabilities and assets

2014

Millions of yen

Thousands of
U.S.Dollars
2015

2015

4,241

3,831

31,879

4,241

3,831

31,879

4,241

3,831

31,879

4,241

3,831

31,879(4) Retirement benefit expenses and the breakdown of the amounts thereof
Fiscal year ended March 31
Service cost
Interest cost
Amortization of actuarial
differences
Amortization of prior service
cost
Retirement benefit expenses
relative to the defined benefit
plans

42 ANNUAL REPORT 2015

Millions of yen

Thousands of
U.S.Dollars

Millions of yen
2014

2015

2015

186
41

228
36

1,902
306

(16)

2

19

(5)

(7)

(60)

205

260

2,168

43

(5) Remeasurements of defined benefit plans, net of tax
The breakdown of items (before deducting tax-effect amounts) reported under remeasurements of defined
benefit plans, net of tax, is as follows:
Thousands ofMillions of yen
U.S.Dollars
Fiscal year ended March 31
2014
2015
2015
Prior service cost
－
(7)
(60)
Actuarial differences
－
2
19
Total
(4)
(40)
－
(6) Remeasurements of defined benefit plans (accumulated)
The breakdown of items (before deducting tax-effect amounts) reported under remeasurements of defined
benefit plans (accumulated) is as follows:
Thousands ofMillions of yen
U.S.Dollars
As of March 31
2014
2015
2015
Unrecognized prior service cost
37
58
486
Unrecognized actuarial
(219)
(340)
(2,833)differences
Total
(181)
(282)
(2,346)(2) Ratio of the Group’s contribution to the multiemployer plans relative to the contributions to the overall
retirement benefit plans
Fiscal year ended March 31, 2014: 12.77%(As of March 31, 2013)
Fiscal year ended March 31, 2015: 12.78%(As of March 31, 2014)(3) Supplementary explanation
The major factors of the net amount in Item (1) above were the balance of the prior service liability(¥5,559 million for the fiscal year ended March 31, 2014, and ¥5,156 million ($42,905 thousand) for
the fiscal year ended March 31, 2015) and the general reserve (¥1,423 million ($11,841 thousand) for
the fiscal year ended March 31, 2015), based on the pension financing calculation.
The amortization method for the prior service liability under the multiemployer plans is the principal
and interest equal amortization with a 20-year amortization period. The Group amortized the special
contribution (¥103 million for the fiscal year ended March 31, 2014, and ¥107 million ($892
thousand) for the fiscal year ended March 31, 2015), which may be appropriated for saidamortization, in the consolidated financial statements.
The ratios in Item (2) above do not agree with the Group’s actual ratios of contributions.
(Stock Options)Not applicable(7) Matters regarding plan assets
Fiscal year ended March 31, 2014 (From April 1, 2013 to March 31, 2014)
Not applicable
Fiscal year ended March 31, 2015 (From April 1, 2014 to March 31, 2015)
Not applicable(8) Matters regarding the basis for actuarial calculations
Major basis for actuarial calculations (presented in weighted average figures)
As of March 31
2014
Discount rate

1.00%

2015
0.69%

3. Defined contribution plans
The amount to be contributed by the Company and its consolidated subsidiaries under the defined
contribution plans was ¥160 million for the fiscal year ended March 31, 2014, and ¥158 million ($1,319
thousand) for the fiscal year ended March 31, 2015.
4. Multiemployer plans
The amount to be contributed under the multiemployer plans of the Japan Geotechnical Consultants
Employees’ Pension Fund, of which the accounting is processed in the same manner as that for the defined
contribution plans, was ¥312 million for the fiscal year ended March 31, 2014, and ¥349 million ($2,911
thousand) for the fiscal year ended March 31, 2015.
(1) Most recent plan assets reserved under the multiemployer plans
As of March 31
Plan assets
Total of the actuarial liability
based on the pension financing
calculation and the minimum
liability reserves (Note)
Net amount2014
65,443

2015
69,469Thousands of
U.S.Dollars
2015
578,089

71,002

73,202609,153(5,559)(3,733)(31,064)

Millions of yen

Note: This item corresponds to the “Amount of the benefit obligations based on pension financing
calculation” in the fiscal year ended March 31, 2014.

44 ANNUAL REPORT 2015

45

(Tax-Effect Accounting)
1. Breakdown of significant components that caused deferred tax assets and liabilities

2. The breakdown of items causing the difference between the effective statutory tax rate and theeffective income tax rate after the adoption of tax-effect accounting
Fiscal year ended March 31

As of March 31
Deferred tax assets
Real estate for saleAccrued enterprise tax
Provision for bonuses
Allowance for doubtful accounts
Provision for warranties forcompleted construction
Provision for loss on construction
contracts
Non-current assets (Impairment
loss)
Defined contribution pension
benefits payable
Net defined benefit liability
Unrealized gains
Other
Subtotal of deferred tax assets
Valuation reserve
Total of deferred tax assets
Deferred tax liabilities
Valuation difference on availablefor-sale securities
Total of deferred tax liabilities
Net deferred tax assets

Millions of yen
2014
2015

Thousands of
U.S.Dollars
2015

5
52
206
6
6

4
131
207
75
25

40
1,095
1,723
627
213

24

29

247

16

338

2,817

88

41

347

1,511
24
99
2,043
(66)
1,976

1,238
45
131
2,270
(85)
2,184

10,303378
1,097
18,891(709)
18,181

(98)

(134)

(1,122)

(98)
1,878

(134)
2,049

(1,122)
17,058

Note: Net deferred tax assets for the fiscal year ended March 31, 2014 and for the fiscal year ended
March 31, 2015, are included in the following account items in the consolidated balance
sheets.

As of March 31
Current assets—Deferred tax assets
Non-current assets—Deferred tax assets
Non-current liabilities—Deferred tax liabilities

Millions of yen
2014
2015
349
591
1,626
1,593
(98)
(134)

Thousands of
U.S.Dollars
2015
4,922
13,259(1,122)

Effective statutory tax rate
(Reconciliation)
Non-deductible expenses such as entertainment
expenses
Per capita inhabitant tax
Exclusion from revenues such as dividend
incomeValuation reserve
Special deduction of income tax
Reduction of deferred tax assets at the balance
sheet date caused by change in income tax rate
Other
Effective income tax rate after the adoption oftax-effect accounting

2014
38.0

2015
(%)

35.6

0.6

0.6

3.6

3.8

(0.1)

(0.1)

(1.5)
－
1.1

0.2
(2.1)
6.4

1.0

(0.5)

42.7

43.9

(%)

3. Revision to the amounts of deferred tax assets/liabilities due to the revision of the income tax rate
Following the promulgation on March 31, 2015 of the “Act on Partial Revision of the Income Tax Act,etc.” (Act No. 9, 2015), and the “Act on Partial Revision of the Local Tax Act, etc.” (Act No. 2, 2015),
the effective statutory tax rate, which was used to measure deferred tax assets and deferred tax
liabilities for the consolidated fiscal year under review, has been changed from the previous 35.6% to33.1% for temporary differences expected to be eliminated in the consolidated fiscal year beginningon April 1, 2015, and to 32.3% for temporary differences expected to be eliminated in the
consolidated fiscal year beginning on or after April 1, 2016.
As a result of this change in the tax rate, deferred tax assets (the amount after deducting the amount ofdeferred tax liabilities) decreased by ¥185 million ($1,541 thousand), whereas income taxes—
deferred increased by ¥189 million ($1,578 thousand), valuation difference on available-for-salesecurities increased by ¥13 million ($116 thousand) and remeasurements of defined benefit plansincreased by negative ¥9 million ($78 thousand) for the consolidated fiscal year under review fromthe corresponding figures with the previous calculation method.
(Asset Retirement Obligation)
End of fiscal year ended March 31, 2014 (As of March 31, 2014)
This information is omitted due to their immateriality.
End of fiscal year ended March 31, 2015 (As of March 31, 2015)
This information is omitted due to their immateriality.
(Segment Information, etc.)【Segment Information】
Fiscal year ended March 31, 2014 (From April 1, 2013 to March 31, 2014)
The reportable segments of the Group are the components of the Company and its consolidated
subsidiaries, for which separate financial information is available, and which are subject to regularreviews and evaluation by the Board of Directors in deciding the allocation of management resources
and in assessing business performance.
The Group’s operations consist of the construction business as well as several other business activities
such as sales of merchandise and materials, and insurance agency. As these businesses are insignificant
in terms of information for disclosure and the sole reportable segment of the Group is the“Construction business,” segment information for these businesses is omitted.
Fiscal year ended March 31, 2015 (From April 1, 2014 to March 31, 2015)
The reportable segments of the Group are the components of the Company and its consolidated
subsidiaries, for which separate financial information is available, and which are subject to regularreviews and evaluation by the Board of Directors in deciding the allocation of management resources
and in assessing business performance.

46 ANNUAL REPORT 201547

【Information on Amortized Amount and Unamortized Balance of Goodwill by Reportable Segment】
Fiscal year ended March 31, 2014 (From April 1, 2013 to March 31, 2014)
Not applicable
Fiscal year ended March 31, 2015 (From April 1, 2014 to March 31, 2015)
Not applicable
The Group’s operations consist of the construction business as well as several other business activities
such as sales of merchandise and materials, and insurance agency. As these businesses are insignificant
in terms of information for disclosure and the sole reportable segment of the Group is the“Construction business,” segment information for these businesses is omitted.
【Related Information】
Fiscal year ended March 31, 2014 (From April 1, 2013 to March 31, 2014)
1. Information by product and service
This information is omitted as net sales to outside customers in the classification of sole
product/service exceed 90% of the net sales on the consolidated statements of income.
2. Information by geographic region(1) Net sales
This information is omitted as net sales to outside customers in Japan exceed 90% of the net
sales on the consolidated statements of income.

【Information on Gain on Bargain Purchase by Reportable Segment】
Fiscal year ended March 31, 2014 (From April 1, 2013 to March 31, 2014)
Not applicable
Fiscal year ended March 31, 2015 (From April 1, 2014 to March 31, 2015)
Not applicable【Related Party Information】
Fiscal year ended March 31, 2014 (From April 1, 2013 to March 31, 2014)
Not applicable
Fiscal year ended March 31, 2015 (From April 1, 2014 to March 31, 2015)
Not applicable(2) Property, plant and equipment
This information is omitted as the amount of property, plant and equipment located in Japanexceeds 90% of the amount of property, plant and equipment on the consolidated balance sheets.
3. Information by major customer
This information is omitted as there are no specific outside customers to whom net sales account for
10% or more of the net sales on the consolidated statements of income.
Fiscal year ended March 31, 2015 (From April 1, 2014 to March 31, 2015)
1. Information by product and service
This information is omitted as net sales to outside customers in the classification of sole
product/service exceed 90% of the net sales on the consolidated statements of income.
2. Information by geographic region(1) Net sales
This information is omitted as net sales to outside customers in Japan exceed 90% of the net
sales on the consolidated statements of income.
(2) Property, plant and equipment
This information is omitted as the amount of property, plant and equipment located in Japanexceeds 90% of the amount of property, plant and equipment on the consolidated balance sheets.
3. Information by major customer
This information is omitted as there are no specific outside customers to whom net sales account for
10% or more of the net sales on the consolidated statements of income.
【Information on Impairment Loss of Non-Current Assets by Reportable Segment】
Fiscal year ended March 31, 2014 (From April 1, 2013 to March 31, 2014)
Not applicable
Fiscal year ended March 31, 2015 (From April 1, 2014 to March 31, 2015)
The information is omitted as the reportable segment is solely the construction business.
【Information on Amortized Amount and Unamortized Balance of Goodwill by Reportable Segment】
Fiscal year ended March 31, 2014 (From April 1, 2013 to March 31, 2014)
Not applicable
Fiscal year ended March 31, 2015 (From April 1, 2014 to March 31, 2015)
Not applicable【Information on Gain on Bargain Purchase by Reportable Segment】
Fiscal year ended March 31, 2014 (From April 1, 2013 to March 31, 2014)
Not applicable

48 ANNUAL REPORT 201549

(Per-Share Information)
Fiscal year ended March 31

20145)【Consolidated Supplementary Statements】【Schedules of Bonds Payable】
Not applicable2015

Net assets per share¥384.37¥425.56($3.54)

Net income per share¥39.06¥39.08($0.33)

Diluted net income per share

Diluted net income per shareis not disclosed as nopotential shares exist.

Diluted net income per share is notdisclosed as no potential shares exist.

Notes:
1. The basis for calculation of “net income per share” and “diluted net income per share” is as follows:

Fiscal year ended March 31

2014Millions of yen

Thousands of
U.S.Dollars
2015

2015

Net income per share
Net income
Amounts not attributable tocommon shareholders
Net income attributable tocommon shares
Average numberof common(Thousands
shares during theof shares)
fiscal year

1,663

1,664

－

－

1,663

1,664

42,592

13,848

13,84842,582

2. As stated in “Change in accounting policies,” the Company applied the Standard and the Guidance forretirement benefits and followed the transitional treatment provided for in Paragraph 37 of the Standard.
This resulted in an increase of ¥8.43 ($0.07) in net assets per share for the fiscal year ended March 31, 2015.
The impact of this increase on net income per share is immaterial.
(Significant Subsequent Events)
Not applicable【Schedules of Loans Payable】

Classification

Beginning balance of the
fiscal year ended
March 31, 2015

Ending balance of the
fiscal year ended
March 31, 2015

Millionsof yenThousands of
U.S.Dollars

Millions Thousands of
U.S.Dollarsof yen

－

－

－

－

－

－

400

3,328

400

3,328

1.80

－

Short-term loans payable

Averageinterest rate(%)

Repayment
deadline

Current portion of longterm loans payable
Current portion of leaseobligations
Long-term loans payable(excluding the current
portion of long-term loans
payable)Lease obligations(excluding the current
portion of leaseobligations)

21

183

20

169

－

－

1,200

9,985

800

6,657

1.80

2016–2018

31

261

34

289

－

2016–2020

Other interest-bearing debt

－

－

－

－

－

－

Total

1,653

13,7591,255

10,444－－

Notes:
1. The “Average interest rate” represents the weighted average rate for the balance of loans payable at the
fiscal year-end.
2. The “Average interest rate” for lease obligations is not stated because the amount of lease obligations
before subtracting the amount equivalent to interest, which is included in the total lease payment, isreported on the consolidated balance sheets.
3. The repayment schedules within five years after the consolidated balance sheet date for long-termloans payable (excluding the current portion of long-term loans payable) are as follows:
Over one year and Over two years Over three years Over four years
Classification
within two years and within three and within fourand within five
years
years
years
Long-term loans payable
400
400
－
－
(Millions of yen)Classification
Long-term loans payable(Thousands of U.S.Dollars)Over one year and Over two years
within two years and within three
years
3,328

3,328

Over three years
and within four
years－

Over four years
and within fiveyears－

4. The repayment schedules within five years after the consolidated balance sheet date for leaseobligations (excluding the current portion of lease obligations) are as follows:
Over one year and Over two years Over three years Over four years
Classification
within two years and within three and within fourand within five
years
years
years
Lease obligations
19
7
5
3(Millions of yen)

50 ANNUAL REPORT 201551

Classification
Lease obligations(Thousands of U.S.Dollars)Over one year and Over two years
within two years and within three
years
158

62

Over three years
and within four
years

Over four years
and within five
years

42

【Schedules of Asset Retirement Obligation】or【Detail of Asset Retirement Obligation】
Not applicable25(2)【Other】
Quarterly data for the fiscal year ended March 31, 2015
Six months
Nine months
Fiscal year ended
Three months(From April 1, 2014 (From April 1, 2014 March 31, 2015
Cumulative periods(From April 1, 2014
to September 30,
to December 31, (From April 1, 2014
to June 30, 2014)
2014)
2014)
to March 31, 2015)
Net sales (Millions of yen)
Income (loss) before
income taxes and minority
interests (Millions of yen)
Net income (loss)(Millions of yen)
Net income (loss) per share(Yen)

Accounting periods
Quarterly net income (loss)
per share (Yen)

52 ANNUAL REPORT 2015

10,79423,98741,31060,703

(7)

610

443

2,965

(60)

285

190

1,664

(1.42)

6.70

4.48

39.08

Second quarter
First quarter(From July 1, 2014
(From April 1, 2014
to September 30,
to June 30, 2014)
2014)

Third quarter(From October 1,
2014 to December
31, 2014)

Fourth quarter(From January 1,
2015 to March 31,
2015)(2.22)

34.61(1.42)

8.12

53

Corporate Profile(Current as of March 31, 2015)

CORPORATE OVERVIEW

In 1938, the construction of Uryuu Dai-ichi Dam for a huge water

Company Name

NITTOC CONSTRUCTION CO., LTD.

Head Office

14-14, 8-Chome, Ginza, Chuo-ku, Tokyo
104-0061 Japan

Established

17 December 1947

gravity type concrete structure 45.5 meters high and in order toPaid-in Capital

6,052 million Yen

lead the project to a successful completion, an extraordinary

Number of Employees

1,174

amount of energy was poured into improving existing techniques

President

Tamotsu NAKAMORIand technologies for the disposal of the breccia-conglomerate at

Business Line

Civil Engineering Works
Slope Protection, Landslide Protection
Works, Revegetation Works
Ground Improvement Methods, Grouting,
Piling, Sewage
Maintenance and Renovation
Construction Consulting, Otherthe site of the foundation. A variety of innovative technologies ac-

Sales Offices

Asahikawa / Hakodate / Doto / Aomori /Morioka / Sanriku / Akita / Yamagata /Fukushima / Gunma / Utsunomiya / Mito /Chiba / Saitama / Yokohama / Nagano /Sado / Joetsu / Kanazawa / Fukui / Toyama /Gifu / Mie / Shizuoka / Keiji / Kobe / Nara /Wakayama / Takamatsu / Matsuyama /Kochi / Tottori / Matsue / Okayama /Yamaguchi / Nagasaki / Saga / Oita /Kumamoto / Miyazaki / Kagoshima /Okinawa

STAFFING (as of 31 March 2015)
Technical Staff

898

Administrative Staff

276

Professional Engineer

47

Registered 1st and 2nd Class Civil Engineer

746

Registered 1st and 2nd Class Architect

11

Registered Surveyor and Assistant-Surveyor

278

reservoir with a reservoir capacity of 240 million cubic meters commenced at the foot of Mt. Taisetsu in Hokkaido. The dam was acumulated to date at Nittoc originated through this project.
1947

Company established in Hokkaido by Takuichi MATSUSHITA

1953

Renamed Yachiyo Chika Kogyo

1957

Headquarters relocated to Tokyo (Minato-ku)

1959

Renamed Nippon Tokushu Doboku Kogyo

1961

Headquarters relocated to Tokyo (Chuo-ku)

1962

Participated in Mendoza Electric Power Development Project inArgentina

1963Completed Kurobe Dai-yon Dam Project

1964

Established representative office in Hong Kong
(Made into a local subsidiary in the following year)

1967

Concluded business tie-up providing technical guidance in dam
grouting and cooperated with local construction company inTaipei (Taiwan)

1971

Participated in the 12th Antarctic expedition project inAntarctica (Continued to work on a glacier investigation projectin Antarctica, the North Pole and Himalayas until 1983)

1972

Established Nittoc Construction Co., Ltd.
Participated in Parana Hydraulic Power Generation
Development Project (Brazil)

1980

Participated in Agoyan Hydraulic Power Generation
Development Project (Ecuador)

Total 1,174

SUBSUDIARIES
Midori Industries Co.,Ltd
3-10-6, Higashi-Nihonbashi,Chuo-ku, Tokyo 103-0004 Japan
Shimane Earth Engineering Co.,Ltd124-1, Higashi-Asahi-Cho, Matsue-Shi, Shimane 690-0001 Japan
Yamaguchi Earth Engineering Co.,Ltd
2-3-13, Hirano,Yamaguchi-Shi,Yamaguchi,753-0015 Japan

MANAGEMENT MEMBERS

54 ANNUAL REPORT 2015

CORPORATE HISTORY

1985 Shares listed on 1st section of Tokyo Stock Exchange
Concluded business tie-up providing technical vegetation andslope protection with local construction company in Taipei(Taiwan)
1988

Established a local corporation to exploit mineral resource
development in Queensland (Australia)

1989

Participated in Marsyangdi Hydroelectric Power Project (Nepal)

2003

Received ISO9001 certification in Japan

President and Representative Director

Tamotsu Nakamori

Directors

Norihisa Nagai

Directors

Yasunobu Okumiya

2005

Suspended international business activities

Directors

Akira Sakoda

2012

Directors

Sumiteru Anda

Directors

Hiroshi Yamada

Established international section under company Headquarters
and recommenced international business activities
Established representative office in Jakarta (Indonesia)

Outside Directors

Satoshi Mizukawa

2013

Outside Directors

Iwao Aso

Reorganized international section(Later formed into International Department)

Standing Corporate Auditors

Manabu Yodoya

Standing Corporate Auditors

Yukiharu Sakumoto

Corporate Auditors

Katsuaki Takiguchi

55