balance sheet - nttwem.co.jp · balance sheet (as of march 31 ... use straight-line method in...

Balance Sheet(As of March 31, 2012)

(Unit: Thousand yen)

Current Assets Current Liabilities

Cash and deposit 37,387 261,000

427,770 Accounts payable - others 187,514

308,910 Accrued expenses 92,697

1,092,712 Lease obligations 3,795

13,083 Income taxes payable 73,871

Raw materials and supplies 403,145 Advances received 5,875

45,938Provision for loss on constructioncontracts 51,016

7,457 Other current liabilities 25,076

67,348 Total current liabilities 700,848

354,234

Consumption taxes receivable 21,824

2,383

2,782,196

Fixed assets Fixed liabilities

Tangible fixed assets Lease obligations 5,156

Buildings 296,445 Reserve for retirement allowance 194,795

676,657 Provision for directors'retirement benefit 8,598

225,033 Other fixed liabilities 585

Land 201,449 Total fixed liabilities 209,135

Lease assets 5,392

Construction in progress 350,727

1,755,705

Intangible assets

Software 29,311

2,623

Total intangible assets 31,935 Shareholders' equity

Share capital 1,400,000

Investment and other assets Earned surplus

298 Earned reserve 350,000

Shares in affiliates 106 Other earned surplus 2,057,425

100,000 Retained earnings brought forward 2,057,425

Security deposit and bond 477 Total earned surplus 2,407,425

Deferred tax asset 73,102 Total shareholders' equity 3,807,425

Other investment 6,508

Allowance for bad loan -32,920

Total investment and other assets 147,572

1,935,213

4,717,410

Other current assets

Total current assets

Advance money

Deferred tax asset

Money deposited

Accounts payable on construction

Assets Liabilities

Accounts receivable-trade

Accounts due

Costs on uncompletedconstruction contracts

Prepaid expense

Accounts receivable from completedconstruction contracts and other

3,807,425

909,984Total LiabilitiesNet Assets

Total net assetsTotal fixed assets

Total liabilities and net assets

Long-term loan to affiliates

Total Assets 4,717,410

Telephone subscription right

Investment account securities

Machinery, equipment and vehicles

Tools, furniture and fixtures

Total tangible fixed assets


Sales figures2,743,3143,695,464 6,438,778

Cost of sales2,956,6991,970,812 4,927,512

Gross marginGross loss on completed work 213,385

1,724,651 1,511,266

1,094,926

416,339

79510,3303,170 14,295

1,3517,4133,781 12,546

418,088

85,507 85,507

25,189 25,189

478,406

211,687

10,003

Current net profit 256,716

Selling and general administrativeexpenses

Corporate tax, resident tax,and business tax

Current net earningsbefore tax

Insurance reimbursement

Exchange loss

Ordinary profit

Other non-expenses

Non-operating expenses

Income taxes-deferred

Loss on disposal of fixed assets

Gross gain on maintenance

Non-operating profitInterest revenue

Operating profit

Earnings from insurance benefit

Profit-and-loss StatementFrom April 1, 2011To March 31, 2012

Cost of completed work

Sales from maintenanceConstruction revenue

Cost of sales from maintenance

Other non-operating profit

Extraordinary loss

Extraordinary profit

Interest cost

Statement of Shareholders' equity


Capital stock

Earned surplus

Other earnedsurplus

Retained earningsbrought forward

1,400,000 350,000 1,860,709 2,210,709 3,610,709 3,610,709

Dividends of surplus -60,000 -60,000 -60,000 -60,000

Current net earnings 256,716 256,716 256,716 256,716

196,716 196,716 196,716 196,716

1,400,000 350,000 2,057,425 2,407,425 3,807,425 3,807,425

From April 1, 2011 To March 31, 2012

CapitalEarned reserve Total earned

surplus

Total net assetsTotal

shareholders'equity

Opening balance ofthis fiscal year

Changed of itemsduring the period

Total changes of itemsduring the period

Balance at end of currentyear

Notes to important accounting policy

1. Evaluation standards and method of assets

(1) Evaluation standards and method of securities

① Shares of Affiliated Company Cost approach by moving-average method

② Other securities Securities with no current price Cost approach by moving-average method

(2) Evaluation standards and method of derivatives trading

Market value method

(3) Evaluation standards and method of inventory assets

① Costs of construction contracts in process Cost approach by individual method

② Materials and supplies Heavy oil for ships: Cost approach by moving-average methodOthers: Cost approach by first-in first-out method(Use write-down method to calculate amounts in B/S due to downturn profitability)

2. Method of depreciation of fixed assets

(1) Tangible fixed assets (except for lease assets) Use fixed-rate method. Use straight-line method to depreciate attached facilities of building and ships.

(2) Intangible fixed assets (except for lease assets) Use straight-line method in accordance with internal available period (5 years) to depreciate internal software.

(3) Lease assets

Tangible lease assets Use method of multiplying amount equivalent of depreciation cost, which is calculated by fixed-rate method (durable years as lease period and 10% of acquisition value as residual value), by ten-ninths to calculate lease asset pertaining to finance lease trade with no transfer of ownership.

3. Criteria of recording allowance

(1) Allowance for bad debt Prepare for bad-debt loss, allocate estimated amount of unrecoverable loan for general loan, which is calculated by ratio of loan-loss and for specific loan, such as bankrupt assets, which is calculated in consideration of collectability of the loan.

(2) Allowance for retirement benefits for employees Calculate and record the employee retirement benefit based on estimated amount of retirement benefit obligations at the end of third business term and pension asset to prepare for employee retirement benefit.Calculate and record past service cost with straight-line method (multiplying length of the employee's service by average service year). Actuarial difference will be recorded next business term.

(3) Provision for directors' retirement benefits Preparing for payment of retirement benefit for directors, necessary payment is allocated based on internal rules.

(4) Provision for loss on construction contracts Preparing for future loss on order received, allowance for loss for the order, which can expect loss at the end of the term and can estimate its loss, is allocated in the next business term and after.

4. Criteria to record earnings and expenses

Criteria to record amount of completed work and cost of completed work

Projects which can be expected solid achievement by the end of FY2011 are applied to percentage of completion basis. Other projects are applied to completed contract basis. Progress of projects to be applied to percentage of completion basis estimated by cost-to-cost method.

5. Other important matters to prepare for financial documents

(1) Criteria to convert foreign-currency-dominated assets and liabilities to the ones with yen basis

Convert foreign-currency-dominated assets and liabilities to yen basis assets and liabilities with exchange rate as of the last date of the business term. Difference is recorded as exchange profit and loss.

(2) Accounting treatment of consumption tax

Tax excluded figure.

Additional information

Apply accounting criteria to accounting change and error Accounting changes and error in the past which are processed in the beginning of FY2011 and after are applied to Accounting standard for Accounting Changes and Error Corrections and "Guideline of application to Accounting standard for Accounting Changes and Error Corrections".

Notes to Non-consolidated Financial Statements

Notes to B/S Sheet

1. Accumulated depreciation 2,373,243 thousand yen

2. Monetary claim and monetary obligations

Short-term monetary claim 866 thousand yenShort-term monetary obligations 3,003 thousand yen

Notes to P/L statement

1. Volume of transaction between NTT-WEM and its affiliate company

Sales volume 818,263 thousand yen

Selling and administrative expenses 168,326 thousand yen

Interest earned 168 thousand yen

Volume of transaction of non-business transaction 59 thousand yen

2. Amount of completed work after application of percentage of completion basis 707,403 thousand yen

Notes to Statement of Changes in Shareholders' Equity

1. Issued stock of this year

Common stock 12,000 Shares

2. Dividend of surplus in the business term

(1) Resolution of the regular meeting of the shareholders on June 16, 2011

・Dividend of common stockTotal dividend 60,000 thousand yenDividend per a stock 5,000 yenRecord dateDate of entry in to force

(2) Items to be submitted to the regular shareholders' meeting on June 14, 2012.

・Items on dividend of common stockTotal dividend 60,000 thousand yenDividend resource Earned surplusDividend amount per a stock 5,000 yenRecord dateDate of entry in to force

Notes to tax effect accounting

Major cause of deferred tax asset is employees' retirement benefit, accrued bonus, and accrued business tax.Recorded deferred tax asset after deducting ￥20,607 thousand, amount equivalent to valuation reserve.Major cause of difference between normal effective statutory tax rate and burden rate of corporate tax after applying tax effect accounting areitems that are excluded from deductive expenses, inhabitant tax on per capita basis, and acquisition amount of deferred tax asset.

(Additional information)"Law to revise Income Tax Act partially to establish tax system responding to structural change of economic society" issued on 2nd Dec., 2011 and "Special measures pursuant to secure financial resources to take measures to recover from the Great East Japan Earthquake" changed corporate tax rate after 1st April, 2012. These two laws lower normal effective statutory tax rate, and deferred tax asset decreases by ￥14,604 thousand and income taxes-deferredincreases by ￥14,604 thousand.

Notes to fixed assets which are used by lease

NTT-WEM uses ship by operating lease agreement as well as lease asset recorded in the B/S.

Notes to financial products1 . Status of the financial products

(1) Policy for financial productsNTT-WEM limits method of fund management to short-term deposit and raises fund from NTT group companies. Use derivatives only to avoid exchange risk, not to use speculative transaction.

(2) Contents of financial products and its risk, and risk management structureNotes and accounts receivable-trade are at the credit risk of customers. NTT-WEM manages due date and remaining value for every customer, at the same time, grasps the situation of major customer's credit in accordance with internal rules. Short-term loan to affiliated company is finance loan to operating fund for the affiliated company. Most of accounts payable-trade and accounts payable-other, operating payables, are due date within a year. NTT-WEM cares out and manages derivative transaction in accordance with the internal rules that stipulate authority to transact. And NTT-WEM only transacts high-ranking financial institution to reduce credit risk when carrying out derivative transaction. NTT-WEM manages operating receivables and borrowed money, which are at liquidity risk, by making monthly cash management plan.

31-Mar-1117-Jun-11

31-Mar-1215-Jun-12

2 . Current price of financial productsBalance sheet amount as of 31st March, 2012, current price, and its difference are as follows. The following chart does not contain items which are difficult to figure out current price.

(Unit: Thousand yen)Amount recorded in B/S Current price Difference

(1) Cash and Deposit 37,387 37,387 -

427,770 427,770 -

(3) Accounts receivable-trade 308,910 308,910 -(4) Accounts due 1,092,712 1,092,712 -(5) Advances 7,457 7,457 -(6) Deposits paid 354,234 354,234 -

67,079 67,079 -

(8) Other investment, etc. 6,508 4,208 2,300 Golf Membership 6,500 4,200 2,300Total Assets 2,302,057 2,299,757 2,300(1) Accounts payable on construction 261,000 261,000 -(2) Accounts payable - other 187,514 187,514 -(3) Income taxes payable 73,871 73,871 -(4) Advance receipt 5,875 5,875 -(5) Lease obligations (current) 3,795 4,198 -403(6) Lease obligation (fixed) 5,156 5,392 -236Total Liabilities 537,211 537,850 -639

(Note 1) How to calculate current price of financial productsAssets

(1) Cash and Deposit, (2) Accounts receivable from completed construction contracts and others, (3) Accounts receivable-trade, (4) Accounts due,(5) Advances, and (6) Deposits paid

These are figured out by their book value because they are cleared up short-term and current price is almost equal to the book value. (7) Long-term loan to affiliate company (after deduction of bad-debt reserve)

Calculate long-term loan to affiliated company by current value (discount total principal and interest with assumed interest rate when borrowing new money.

(8) Other investment, etc.Golf Membership, which is figured out by current price, out of other investment is indicated based on market information.

Liabilities(1) Account payable on construction, (2) Accounts payable-other, (3) Accrued income tax, and (4) Advance receipt

Record with book value.(5) Lease obligation (current) and (6) Lease obligation (fixed)

Current price of lease obligation is indicated by current value.

(Note 2) Financial products which are difficult to figure out current price.(Unit: Thousand yen)

Category Amount recorded in B/SUnlisted stocks 298Stock of subsidiary 106Deposit and Bond 477The above items do not indicate current price because they have no market price, difficulty in estimating future cash flow, and are difficult to figure out current price.

(Note 3) Amount scheduled to be redeem of finance obligation after closing date(Unit: Thousand yen)

Category Within a year Exceeding 1 year andwithin 5 years

Cash and Deposit 37,387

427,770

Accounts receivable-trade 308,910Accounts due 1,092,712

67,079

Total 1,866,779 67,079

(Note 4) Amount scheduled to be refunded of lease assets(Unit: Thousand yen)

Within a year Exceeding 1 year andwithin 5 years

Lease obligation 3,795 5,156

(2) Accounts receivable from completedconstruction contracts and other

(7)Long-term loan to Affiliate (after deduction of provision for bad debt)

Accounts receivable from completedconstruction contracts

Long-term loan to affiliate company (after deduction of bad-debt reserve)

Notes to transaction between NTT-WEM and related companies

1. Parent company and main shareholder company

816,157

157,799

Global Marine Systems Limited Rental ship for maintenancework of submarine cable

Charter contract（*1） 392,384 -

(Note) 1 Consumption tax is not included in transaction amount above. Term end balance is included consumption tax. 2 Trade conditions and its policy, etc. （*1）Considering market price, decided as the same condition as common condition.

2. Fellow subsidiary companies, etc.

NIPPON TELEGRAPH AND TELEPHONEEAST CORPORATION

Construction andmaintenance oftelecom facility of NTTEAST

Installation andmaintenance of submarinecable(*1)

813,022 Accounts receivable-tradeAccrued revenue forcompleted works

49,455

103,950

2,839,118 50,323

NTT FACILITIES, INC. 391,175 193,807

Borrowing fund Deposit of surplus（*2）(*4) 654,721 Deposit paid 354,234

Borrowing fund (*4) 33,649

Interest received bydeposit of surplus（*3）

681 Interest accrued 65

Interest cost by borrowingfund （*3）

77

3,458,860 Accounts due 1,070,944

Accounts payable-other 50,331

(Note) 1 Consumption tax is not included in transaction amount above. Term end balance is included consumption tax. 2 Trade conditions and its policy, etc. （*1）Considering market price, decided as the same condition as common condition. （*2）We deposit surplus. （*3）Interest for deposit of surplus and borrowing fund are determined reasonably considering for market interest rate. (*4) Transaction amount shows average balance of the business term. 3. Subsidiary company, etc. showing above are the ones of Nippon Telecom and Telephone Corporation which is our ultimate parent corporation.

3. Affiliate companies

Rental of ship for cablemaintenance

Lending fund（*1）－ Long-term loan to associated companies 100,000

Collecting fund 20,000

Managerial agencybusiness

2,106 Accounts receivable 553

Interest revenue withlending fund（*1）

168 Interest accrued 49

(Note) 1 Consumption tax is not included in transaction amount showing above. Term end balance is included consumption tax. 2 Trade conditions and its policy, etc. （*1）Interest of fund lending is decided reasonably considering market interest rate. Bonds are not accepted.

Notification on information per share

1. Net asset amount per share 317,285.49 yen2. Current net profit per share 21,393.00 yen

Subsidiary ofFellow company

NIPPON TELEGRAPH AND TELEPHONEWEST CORPORATION

Mainshareholder(company)

25.00%Direct

- Construction andmaintenance oftelecom facility of NTTWEST

Attribute Term end balance(thousand yen)


-

Contents of dealing Transaction amount(thousand yen)Ratio of voting right Actual relationName of company


- Construction andmaintenance oftelecom facility of NTTFACILITIES


NTT FINANCE CORPORATION -

Fund settlement of NTTgroup trade

Attribute Name of company Ratio of voting right Actual relation Contents of dealing

Fund settlement ofNTT group trade

Transaction amount(thousand yen) Subject Term end balance

(thousand yen)

Subsidiarycompany

NTT-WORLD ENGINEERINGMARINE PANAMA CORPORATION

100.00%Direct

Attribute Name of company Ratio of voting right Term end balance(thousand yen)

Parent company NTT Communications Corporation 75.00%Direct

Construction andmaintenance of telecomfacility of NTTCommunications


Rent of land and building

Account receivable-tradeAccounts duePrepaid expensesAccounts payableAccounts payable - Other

17428612

3,001

Actual relation Contents of dealing


Account receivable-trade

Account receivable-trade

Subject

Subject

Transaction amount(thousand yen)

Installation andmaintenance ofelectric generation(*1）

balance sheet - nttwem.co.jp · balance sheet (as of march 31 ... use straight-line method in...

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