Annual Report 2002 Taisei Corporation
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TAISEI CORPORATION ANNUAL REPORT TAISEI CORPORATION 2002 1-25-1, Nishi-Shinjuku, Shinjuku-ku, ANNUAL REPORT Tokyo 163-0606, Japan Phone: +81-3-3348-1111 Fax: +81-3-3345-0481 http://www.taisei.co.jp 2002 PRINTED ON RECYCLED PAPER PRINTED IN JAPAN 0 2 1 0・4 0 0 0・S・N Profile Financial Highlights TAISEI CORPORATION and Consolidated Subsidiaries Years ended March 31, 2001 and 2002 Supporting Modern Society and Environmental Protection Through Leading-Edge Technologies Thousands of Millions of Yen U.S. Dollars* (except per share figures) (except per share figures) Over the past 128 years since its establishment, Taisei Corporation has undertaken many notable projects in Japan and 2001 2002 2002 Change (%) overseas. Our corporate roots coincided with Japan’s development as a modern nation and we have continuously met the Contract backlog at beginning of the year ¥1,976,256 ¥1,830,912 $13,766,256 (7.4)% demands of a changing era and people’s aspirations for the future through sound construction operations. New orders received during the year 1,605,048 1,659,277 12,475,767 3.4 As the world enters the second century of modern urban construction, there is a strong need to preserve historic Net sales 1,750,392 1,673,834 12,585,218 (4.4) scenery, protect the environment and create attractive public and private spaces. Taisei Corporation is responding with even Contract backlog at end of the year ¥1,830,912 ¥1,816,355 $13,656,805 (0.8)% more advanced technologies through research and development. With a capital position among the strongest in the industry, Net income (loss) ¥ 8,382 ¥ (30,997) $ (233,060) ー % we are redoubling efforts to produce world-class, leading-edge technologies. Operations extend internationally, including the Per share (in yen and dollars) 8.69 (32.13) (0.242) ー construction of dams and other environmental and infrastructure projects in developing nations. Cash dividends applicable to the year 4,825 4,824 36,271 0.0 Per share (in yen and dollars) 5.00 5.00 0.038 0.0 Shareholders’ equity 230,265 177,931 1,337,826 (22.7) Per share (in yen and dollars) 238.67 184.43 1.387 (22.7) Total assets 2,189,350 1,966,084 14,782,586 (10.2) * U.S. dollar amounts above and elsewhere in this Annual Report are translated from yen, for convenience only, at the rate of US$1 = ¥133, the approximate exchange rate at March 31, 2002. � Sales Composition Construction Real Estate Other Contents Message from the President 2 Financial Section Year in Review 4 Six-Year Summary 38 Business Review Financial Review 39 88.9% 5.7% 5.4% Building Construction 6 Consolidated Balance Sheets 42 Civil Engineering 8 Consolidated Statements of Operations 44 International Operations 10 Consolidated Statements of Shareholders’ Equity 45 Real Estate Development 12 Consolidated Statements of Cash Flows 46 Engineering 14 Notes to Consolidated Financial Statements 47 Ecology 16 Report of Independent Public Accountants 60 Housing 18 Director and Corporate Auditors/Executive Officers 61 Technological Strengths 20 Organization 62 Environmental Activities 25 Corporate Data 63 Our Accomplishments 26 Corporate Citizenship 34 Corporate History 36 TAISEI CORPORATION ANNUAL REPORT 2002 01 Message from the President Management Philosophy We reported an extraordinary loss arising from a revision of We will start to expand orders by strengthening our asset holdings, as we reduced the scope or withdrew from marketing activities in high-growth fields. In the field of urban Taisei Corporation upholds its management philosophy of some of our businesses as part of a reorganization of Group revitalization, we will utilize our human resources, expertise “creating a vibrant environment for citizens,” and seeks to operations, which resulted in a net loss of ¥31 billion. and track record to increase orders for large-scale cultivate a harmonious relationship between humankind and development projects and urban infrastructure. In the building nature as it contributes to the formulation of important social Outlook renewal field, our marketing division and construction division capital, including public and social infrastructures. will combine forces to make an organized effort at winning Guided by a corporate vision which identifies “Customer Business conditions for the construction industry in fiscal orders, and in the field of environment and engineering, we Satisfaction as the starting point for creating new values 2003 are expected to remain severe, lacking any signs of a will actively offer proposals that utilize our technology. through technology and expertise,” the Taisei Corporation recovery in private-sector capital investment and public Second, we will work towards improving profit levels by Group will fulfill its social mission through its construction and works spending by the government. further strengthening combined purchasing, centralized construction-related businesses. These businesses offer In the face of immense competition and a firm information and rationalization of construction work, and by exceptional quality and services at reasonable costs and commitment to achieve a healthier and sounder promoting a reduction of fixed costs. Our� third task lies in providing total solutions in response to customer needs. management structure, the Taisei Corporation Group has reinforcing our financial structure by raising the liquidity of been pursuing its New Management Plan since fiscal asset holdings to reduce interest-bearing debt. Finally, we will Results 2002. (started April 1, 2001) Under this Plan, the Company enhance our group management to continue implementing a is aiming to attain its target of ¥1.7 trillion in new orders reorganization of our group businesses with the aim of In fiscal 2002, the construction industry faced even harsher received, ¥1.64 trillion in sales and ¥50 billion in recurring improving the efficiency of group management. conditions in winning orders, as declines in corporate capital income, and to reduce interest-bearing debt to ¥590 billion The Taisei Corporation Group is committed to mobilizing investment caused a sharp drop in private-sector non-housing by the end of fiscal 2004, the final year of the plan. During the entire resources of the group in its effort to further investment and government investment in public works fiscal 2002, the first year of the plan, the Group restructured reform its management structure and improve profit levels. projects continued to wane due to strict budgetary restraints. redundant businesses, liquidated inefficient assets and We look forward to the continuous support and Under these circumstances, consolidated volume of orders (for reorganized unprofitable businesses, and significantly cooperation of our shareholders. the fisical year, ended March 31, 2002) rose 3.4% from the reduced interest-bearing debt. previous year to ¥1.6592 trillion, while consolidated group sales fell In fiscal 2003, half way through the New Management 4.4% to ¥1.6738 trillion. The construction segment accounted for Plan, we are targeting ¥1.65 trillion in orders, ¥1.64 trillion in 89% of total sales, with real estate development and other sales, ¥42 billion in recurring income and ¥18 billion in net businesses representing 11%. Operating income decreased 16.8% income. To this end, the Company will place priority on the Hayama Kanji to ¥55.5 billion and recurring income fell 15.6% to ¥46.9 billion. following measures. President and Chief Executive Officer 02 TAISEI CORPORATION ANNUAL REPORT 2002 TAISEI CORPORATION ANNUAL REPORT 2002 03 Year in Review Taisei Corporation’s operations are broadly divided into two segments: construction and real estate. Major Projects Completed During FY2002 including the Omiya Kanezuka Area-A Redevelopment Project The construction segment comprises of building construction and civil engineering. The Company is also actively (construction began in March 2001) and the Nihonbashi Hama-Cho Project Client engaged in international operations. 3-Chome West Area Redevelopment Project. In recent years, the Construction of Pre-Processing Plant Japan Nuclear Fuel Limited During fiscal year 2002, ended March 31, performance in the construction segment suffered severely, mainly due to Company has been awarded two local government contracts, and its Building Construction of Sapporo Sapporo City a large decline in private sector investment and intensifying price competition. Similarly, the real estate segment Dome construction works are currently underway for 2004 opening. Those saw sales decrease compared with the previous year due to the effects of the economic recession. contracts are Sunport Takamatsu Symbol Center (tentative name) Building Construction of Toyota Toyota City Stadium and Akita Civic Plaza Center (tentative name). In both projects the New Construction of TAYIH LANDIS Cathay Life Insurance Co., Ltd. Company is recognized for its integrated capabilities in real estate Major new orders received during the term included the Purulia TAINAN HOTEL in Taiwan development, and is playing a leading role in all aspects of the projects. Construction Pumped Storage Power Plant in India in the civil engineering Second Phase of Ground Kansai International Airport Land Legislation was enacted in July 1999 regarding Private Financing Improvement Work for Airport Development Co., Ltd. segment and the building of Shinnyo-en new social education Island Landfill (Part II) Initiative (PFI) projects, a new financing method for public sector facility in Taiwan in the construction segment. projects that target the private sector. The Company, together with Domestic Market With regard to the future, Southeast Asian economies are now Major New Orders Received During FY2002 the NTT Group, submitted the winning proposal on the Disaster on a path toward recovery, following the stagnation that resulted Prevention Center Project, funded by Fujisawa City in Kanagawa In fiscal 2002, new orders were sought under increasingly harsh from the currency crisis of 1997. As a result, the Company expects Project Client Prefecture, southwest of Tokyo, for which construction work began conditions, as declines in corporate capital investment led to a to be awarded further projects in this region.