Annual Report 2014 - 乃村工藝社 NOMURA · 06 NOMURA Co. td Annual Report 2014 NOMURA Co. td...

Code : 9716

Annual Report 2014Year ended February 28, 2014

010_0680901372606.indd 2 2014/06/25 18:51:58

01NOMURA Co., Ltd. Annual Report 2014

Basic Information

To Our Stakeholders

Review of O

perationsESG Inform

ationFinancial Section/

Corporate Information

Annual Report 2014 Contents

Basic Information

History of NOMURA 02

Business Model 04

NOMURA’s Strengths 06

Market Trends 08

Ten-Year Financial Summary 10

To Our Stakeholders

Message form the President and CEO 12

New Medium-Term Management Plan for Fiscal 2014–2016 14

Review of Operations

Review of Operations by Market Segment 16

Selected Projects 18

ESG Information

Corporate Governance 20

Corporate Social Responsibility (CSR) 21

Financial Section/Corporate Information

Management’s Discussion and Analysis 22

Business and Other Risks 25

Consolidated Financial Statements 26

Organizational Layout 31

Corporate Data 32

Stock Information 33

Editing PolicyThe Annual Report 2014 includes both financial information, such as management results and growth strategies, and social/environmental information, to enable our

shareholders, investors and a wide range of other readers to deepen their understanding of NOMURA through an integrated presentation of important information.

Photographs, charts and tables have been used to illustrate the Company’s operations in a visual manner. Our website provides more comprehensive information.

Forward-Looking StatementsThis Annual Report 2014 contains forward-looking statements regarding the future results and performance of NOMURA. These forward-looking statements are based on

information available at the time this report was prepared. Please be advised that actual results could differ materially from those anticipated by the forward-looking

statements due to potential risks and uncertainties.

Management Philosophy

Brand Statement

We contribute to richer human environments by creating

new value and putting people first.

Putting People FirstNOMURA creates comfortable life environments to match the diverse value of human consumers.

NOMURA also provides worthwhile, people-centric workplaces for our employees to realize their

full potential.

Values Offered by NOMURA

NOMURA Provides Delight and Emotion to CustomersNOMURA provides delight and emotion by creating highly attractive and inviting spaces in line with consumer views, and contributes to its clients’ business success and their customers’ enjoyment.

Creating New Value NOMURA is realizing the best in customer attraction and space creation by pursuing new functionality

and possibilities for interaction between people, people and things, and people and information.

Our AimWhat NOMURA offers is the culture of life itself: i.e., improvement of the human environment.

Through our efforts in this area, NOMURA will be the leader of the environment creation industry.

Prosperity means both business success for our clients and fulfillment for people who gather at client properties.

NOMURA will continue to be the best partner for our clients, taking on the challenge of creating these prosperity.

Corporate websitehttp://www.nomurakougei.co.jp/english

Investor Relations websitehttp://www.nomurakougei.co.jp/english/ir

02 03NOMURA Co., Ltd. Annual Report 2014 NOMURA Co., Ltd. Annual Report 2014

Basic Information

To Our Stakeholders

Review of O

perationsESG Inform



History of NOMURA

delighted people at the time, have expanded today into a variety of genres. At the heart of NOMURA’s

development lies a spirit of challenge, an insistence on quality, and a conceptual framework for pursuing

customer satisfaction.

NOMURA can trace its roots back to the Taisho Period (1912–1926). Following the Company’s establishment

in 1892, founder Taisuke Nomura created a large-scale mechanism for displaying chrysanthemum dolls at

Tokyo’s national sumo hall. The bold imagination and ambition of this pioneering display, which amazed and

For More than 120 Years: An Enduring Spirit of Challenge

Basic Information


Basic Information

To Our Stakeholders

Review of O

perationsESG Inform



Commercial facilities have evolved from small general stores and

department stores into shopping centers and outlet malls. Museums have

changed from academic exhibitions into places for interactive learning.

Recreation grounds have turned into theme parks. As time goes by,

NOMURA has continued to lead this evolution amid the constant

change in market displays.

A Colorful and Sophisticated World of Displays

NOMURA is the only company that offers clients a comprehensive range of high-grade

services, such as research and consulting on clients’ space-related strategy, planning,

design and layout, manufacturing and construction, and operation management.

Our mission calls for contributing to our clients’ business success by optimizing their

ability to attract customers, and providing “delight and emotion” to consumers

(the end-users).

NOMURA’s Work Style Brings Individualities Together

Specialty Store, Food and Beverage Store,

Department Store, Merchandise Store,

Shopping Center

Museum, Cultural Facility,

Theme Park,Aquarium

Public PR Facility, Showroom,

Conference Event

Exhibitions,Cultural Event,

Hotel,Office

Market Segments

Design and Layout

Proposal of the design and layout based on the client’s business

Manufacturing and Construction

Production of goods for exhibition, and construction of facilities

Operation Management

Support to attract customers, and vitalization and maintenance for facilities and events

Business Model

Basic Information

Research and Planning

A range of research and analysis based on client issues and requirements, and formulation of the concept and operation plan

For more than 120 years, discerning creators have joined

together with creation and manufacturing specialists to

respond to an incredibly wide range of client needs and create

visitor-attracting spaces that overflow with prosperity. The

spirit of providing end-user customers that visit these spaces

with the maximum “delight and emotion” is inherited

unchanged from the foundation of NOMURA.

NOMURA’s main business covers design, layout and

construction of interiors and displays for facilities and events,

centered on attracting customers.

Our business now includes the operation and maintenance

of facilities and events, which has increased, as well as the

development of restaurant and product retail operations in

spaces that attract visitors.

A Professional Space Producer of Customer Attraction

KOBE ANPANMAN CHILDREN'S MUSEUM & MALL


Basic Information

To Our Stakeholders

Review of O

perationsESG Inform



NOMURA works on 7,416 projects a year for 1,770 clients.

Our market range has expanded to cover neighborhood

restaurants, department stores, showrooms, museums, hotels

and bridal facilities. To meet the rising expectations and

requirements for displays and produced spaces that appeal

to people’s five senses, NOMURA continues to evolve as a

creative entity, designing visitor-attracting facilities that

respond accurately and speedily to changing times and

market needs.

The Ability to Challenge

Basic Information

Ceremony for the NOMURA FUTURE AWARD

1 Award ceremony at “Design For Asia Awards 2013”

2 W Guangzhou Hotel Bar Lounge “W Guangzhou FEI”

3 RIHGA ROYAL GRAN OKINAWA DINING & BAR Aiju

4 NOMURA received an award at “NEST AWARD 2013”

Photos:

NOMURA by the Numbers As of February 28, 2014

The NOMURA Group includes 10 specialized

subsidiaries and more than 500 partner

companies nationwide. This far-reaching

influence, unique in Japan, gives NOMURA a

comprehensive power to handle game-changing,

large-scale projects from the planning phase to

operation management of the premises. In

apparel-related industries, from world-renowned

brands to fast fashion brands, all our clients are

major companies in their business categories. Our

partnerships with these high-quality companies

have proven undeniably to be one of our

strengths. NOMURA also enjoys a very high

level of trust from clients, as demonstrated by the

fact that 84.7% of the Company’s sales during the

fiscal year came from repeat clients.

NOMURA has up to 340 creative and original planners and

designers as well as 300 product directors, who continuously

pursue perfection in terms of high quality and safety

standards. Our outstanding creative team is No. 1 in the

display industry, setting itself apart from all others in the

business.

Recent successes include our A.N.D.’s winning of the Silver

Award for “W Guangzhou FEI” at the “Design For Asia

Awards 2013,” the most prestigious and influential design

award in Asia.

In addition, we set up the NOMURA FUTURE AWARD

for our own staff, to provide them with an opportunity to

cultivate and freely share ideas for our future. This is a

chance for each and every employee to participate in shaping

the Company’s future actively and enthusiastically by

proposing their own insightful business visions.

Comprehensive PowerCreative Capabilities

NOMURA’s Strengths

1 2

43


Basic Information

To Our Stakeholders

Review of O

perationsESG Inform



The Asian Market and Its Growth Potential

Thus far, our activities in the Asian market are centered mainly on China and two local

subsidiaries: NOMURA (BEIJING) Co., Ltd. and NOMURA DESIGN &

ENGINEERING SINGAPORE PTE. LTD. During the period of the previous medium-

term management plan between 2011 and 2013, our overseas sales rose from ¥2.5 billion to

¥3.3 billion. We also won the Silver Award at “Design For Asia Awards 2013” and

established the “NOMURA brand” in the Asian market. In recent years, we have won

orders for grand designs for large-scale commercial facilities as well as expanded our

relationships with major Chinese developers. With the expectation that overseas demand

will continue to grow during the phase of the new medium-term management plan, we

have set our goal for overseas sales for the fiscal year ending February 2017 at ¥7 billion.

In 2012 the size of the display industry was estimated at

¥1.2 trillion, of which approximately ¥600 billion was

shared by the top 30 companies. (See the figure at

right.) Following the collapse of Lehman Brothers, the

industry began to show a mild recovery and in 2013 its

size was estimated at approximately ¥1.3 trillion.

The market share of NOMURA among the top 30

companies in the display industry is firmly established,

growing from 11.5% in the fiscal year ended February

2003 to 13.1% in the fiscal year ended February 2006,

and to 16.2% in the fiscal year ended February 2014.

Since the Company has at its disposal a

comprehensive power enabling it to handle all aspects

of a project, from planning to operation management,

we believe we enjoy a competitive advantage over

other display companies.

16.2%

8.6%

5.9%

5.2%

4.5%

Total Sales ofthe Top 30 in 2012

¥623.8 billion

Market Trends

Basic Information

Market Share of the Top 30 in the Display Industry

Domestic Display Market (Billions of yen)

2011 20122009 20102008

765.2614.4 667.4 659.0

45.7

45.3 49.1 49.4

718.0

49.0

444.6

1,255.5

394.6

1,054.3

396.0 408.1433.0

1,112.5 1,116.51,200.0

Note: The above figures were calculated by NOMURA. Note: The above figures were calculated by NOMURA.

■ Commercial and Other Facilities　■ Exhibition Facilities　■ Sales Promotion

NOMURA Company A Company B Company C Company D OthersThe Leading Company in the Display Industry, with a Comprehensive Power

The major news in September 2013 was the award to The

Tokyo 2020 Olympic and Paralympic Games, which is

expected to attract numerous visitors to Japan. In the near

future, aside from stadiums, construction of the necessary

infrastructure will begin centered on Daiba, Tokyo, where our

headquarters are located. This is undoubtedly an important

opportunity for the display industry to shine a spotlight on

Japan for all the world to see. As the leading company in the

display industry, NOMURA fully intends to participate in

creating a “stage to welcome the world.”

The Tokyo 2020 Olympic and Paralympic Games: It boosts the Display Market


Basic Information

To Our Stakeholders

Review of O

perationsESG Inform



Fiscal Years Ended February 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2014

Financial Indicators (Millions of yen) (Thousands of U.S. dollars)

Net Sales ¥ 73,442 ¥ 79,178 ¥ 82,072 ¥ 108,902 ¥ 87,248 ¥ 80,436 ¥ 90,105 ¥ 87,464 ¥ 101,316 ¥ 98,410 $ 965,382 Gross Profit 12,283 13,497 13,932 16,843 12,743 11,455 12,072 11,957 13,733 15,960 156,573Selling, General and Administrative (SG&A) Expenses 10,256 10,785 10,693 12,694 12,176 10,610 10,952 10,741 11,521 11,646 114,254Operating Income 2,027 2,712 3,239 4,149 567 845 1,120 1,215 2,212 4,313 42,319 Ordinary Income 2,145 2,860 3,389 4,350 820 1,282 1,288 1,325 2,383 4,381 42,987Net Income 1,049 1,398 4,301 1,239 175 407 403 604 1,242 1,845 18,099

Total Assets 49,089 48,642 63,580 59,076 49,897 53,011 52,861 54,344 58,340 59,477 583,451Trade Notes and Accounts Receivable 18,227 13,831 16,075 17,370 16,885 20,319 19,609 20,850 14,354 16,327 160,163Inventories 8,772 10,431 19,032 14,881 5,025 6,107 6,927 8,277 8,098 8,652 84,873Net Assets 21,305 23,093 28,992 28,294 25,073 24,907 24,679 24,883 26,044 27,459 269,374

Capital Investment 92 3,819 1,971 4,179 274 271 134 369 324 327 3,208Depreciation and Amortization 530 455 362 484 882 861 819 797 890 839 8,240Free Cash Flow 1,145 (3,370) 6,666 (3,041) (2,189) (1,297) 1,959 (1,451) 12,400 (1,314) (12,890)

Financial Data (%)

Gross Profit to Net Sales 16.7% 17.0% 17.0% 15.5% 14.6% 14.2% 13.4% 13.7% 13.6% 16.2% —

Operating Income to Net Sales 2.8 3.4 3.9 3.8 0.7 1.1 1.2 1.4 2.2 4.4 —

Ordinary Income to Net Sales 2.9 3.6 4.1 4.0 0.9 1.6 1.4 1.5 2.4 4.5 —

Net Income to Net Sales 1.4 1.8 5.2 1.1 0.2 0.5 0.4 0.7 1.2 1.9 —

Selling, General and Administrative Expenses to Net Sales 13.9 13.6 13.1 11.7 14.0 13.2 12.2 12.3 11.4 11.8 —

Return on Assets (ROA) 4.5 5.9 6.0 7.1 1.5 2.5 2.4 2.5 4.2 7.4 —

Return on Equity (ROE) 5.1 6.3 17.3 4.7 0.7 1.6 1.6 2.4 4.9 6.9 —

Equity Ratio 43.4 47.5 41.7 44.8 50.1 46.9 46.6 45.8 44.6 46.2 —

Trade Receivables Turnover (Times) 4.0 4.9 5.5 6.5 5.1 4.3 4.5 4.3 5.8 6.4 —

Inventory Turnover (Times) 9.9 8.2 5.6 6.4 8.8 14.4 13.8 11.5 12.4 11.8 —

Dividend Payout Ratio 43.9 42.4 15.8 73.5 356.0 111.0 111.6 73.9 44.9 48.4 —

Per Share Data (Yen)

Net Income per Share ¥ 36.41 ¥ 23.59 ¥ 75.73 ¥ 21.78 ¥ 3.09 ¥ 7.21 ¥ 7.17 ¥ 10.82 ¥ 22.25 ¥ 33.09 —

Net Assets per Share 749.51 405.68 466.62 465.49 442.79 439.71 440.83 445.62 466.45 493.59 —

Cash Dividends per Share Applicable to the Fiscal Year 16 10 12 16 11 8 8 8 10 16 —

Employee Data

Number of Employees 1,114 1,099 1,333 1,400 1,396 1,418 1,413 1,401 1,385 1,425 —

Net Sales per Employee (Thousands of yen) ¥ 65,927 ¥ 72,045 ¥ 61,570 ¥ 77,787 ¥ 62,499 ¥ 56,725 ¥ 63,768 ¥ 62,429 ¥ 73,152 ¥ 69,060 —

Net Income per Employee (Thousands of yen) 942 1,272 3,226 885 125 287 285 431 897 1,294 —

Ten-Year Financial Summary

Notes: 1. Return on Assets (%) = (Ordinary Income / Average Total Assets) ×100, Return on Equity (%) = Net Income / Average Equity ×100, Trade Receivables Turnover (Times) = Net Sales / Average Trade Receivables,Inventory Turnover (Times) = Net Sales / Average Inventories, Dividend Payout Ratio (%) = (Cash Dividends per Share Applicable to the Year / Net Income per Share) ×100, Fiscal 2012 was a 12.5-month reporting period, owing to a change in the fiscal year-end.

2. U.S. dollar amounts represent translations of yen, for convenience only, at ¥101.94=US$1.

Operating Income

Analysis of Selected Financial Indices

2013

2014

4,313

2,212

+2,226

–124

Increase in gross profit due to an improvement of 2.6%

in the cost-of-sales ratio

Increase in SG&A expenses due mainly to the reserve for employee bonuses

(Millions of yen)

Cash Dividends per Share

20142013201220112010

8 8 810

16

The dividend for the year is decided based on the

amount of consolidated ordinary income for the year,

after taking into consideration the need to enhance the

Company’s management base, future business

expansion and other factors. We decided to pay a

dividend for the year of ¥14 per share, plus a special

dividend of ¥2, up ¥6 from the previous fiscal year, due

to record-high consolidated ordinary income.

The gross profit margin improved 2.6 percentage points

from the previous fiscal year, mainly reflecting factors

such as a significant drop in unprofitable projects

achieved through stricter examination of orders and

tighter cost management, including the concentration

of orders among core business partners. These factors

were partly offset by an increase in SG&A expenses due

mainly to the reserve for employee bonuses. As a result,

operating income increased ¥2,101 million to ¥4,313

million, from ¥2,212 million a year earlier.

(Yen)

400

300

200

0

100

20142013201220112010200920082007200620052004

(%)

NOMURA’s Stock Price and Nikkei Stock Average ■ Nikkei Stock Average (closing) ■ NOMURA Note: The index is set to 100 for February 2004.

Basic Information

13NOMURA Co., Ltd. Annual Report 2014

Basic Information

To Our Stakeholders

Review of O

perationsESG Inform



NOMURA Co., Ltd. Annual Report 201412

Message from the President and CEO

Masaru WatanabePresident and CEO

To Our Stakeholders

In the medium-term management plan for fiscal 2011–2013 from March 1, 2012 to February 28, 2014,

our management slogan was “NOMURA: Being Our Clients’ Top Choice.” In terms of business results,

we achieved our targets and realized the highest operating income and ordinary income for the first

time in the past six years. However, several issues came into focus as the entire NOMURA Group

implemented its business strategies based on the previous medium-term plans such as “thorough

implementation of account services,” “strengthening of the space creation and vitalization business,”

and “acceleration of our transformation into an international company.”

Looking Back on Our Previous Medium-Term Management Plan, “NOMURA Challenge 201–1.2.3”

Looking Ahead toward the New Medium-Term Management Plan for Fiscal 2014–2016

Grasping the issues described above, we set up our development direction from a client perspective.

According to our research on client satisfaction, our clients expect more comprehensive business

support from NOMURA. We are asked to truly stand by our clients and both propose and execute

space strategies for their business activities.

The next few pages will provide you with the management policy, strategic categories and business

plans included in our new medium-term management plan for fiscal 2014–2016 based on “NOMURA

Long-Term Vision N22.”

We promoted understanding of NOMURA Group business on a wide range of solutions through the “This is NOMURA! Movement.” (This is an event where the Group’s major products and services are introduced and shared throughout the Company.)

We set up a project team for each account.

Our research on client satisfaction found that our clients expressed a high level of trust and expectation toward us, but they lacked sufficient knowledge of our businesses and the services.

The number of unprofitable projects dropped significantly (fiscal 2011 > fiscal 2012 > fiscal 2013).

We began creating a supply chain (integrated order system) out of our partnership company system.

We expanded the museum operation/management business.

Although the space vitalization business expanded, we did not reach our sales target.

We received orders from top global luxury brands to launch their business in China, and began supplying sales promotional items.

We received multiple awards including the Grand Award and the Gold Award at the “Design For Asia Awards.”

We established relationships with major developers in China.

Although our overseas business expanded, we did not reach our sales target.

Fiscal 2011

Thorough implementation of account services

“Together with Our Customers”

Fiscal 2011–2012

Strengthening of the space creation and vitalization

business

“Creation,then Leverage”

Fiscal 2011–2013

Acceleration of our transformation into an international company

“Achieving World-Class Standards”

Successes ( ) and Issues ( ) during the Previous Medium-Term Management Plan, “NOMURA Challenge 201–1.2.3”


Basic Information

To Our Stakeholders

Review of O

perationsESG Inform



New Medium-Term Management Plan for Fiscal 2014–2016

As we celebrated our 120th anniversary in 2012, “NOMURA Long-Term Vision N22” was introduced

as our roadmap for achieving goals between Fiscal 2013 and 2022. The slogan “Prosperity Partner,”

defined for NOMURA in 2022, expresses our desire to become the “world’s best space professional

firm” by bringing our clients delight and emotion and developing spaces that contribute to a

thriving society.

The Management Policy of New Medium-Term Management Plan for Fiscal 2014–2016

Three Strategic Categories for Fiscal 2014–2016

2016“Reaching the Summit in Japan and Asia”

During fiscal 2016, the last year of the

plan, we will set ourselves apart from our

competitors as No. 1 in Japan, as we target

the achievement of twice their sales/

profit. In Asia, our position as a unique,

“one-of-a-kind” company will be

firmly established.

2014“Changing the Very Nature of Competition”

During fiscal 2014, the first year of the

new medium-term management plan, the

NOMURA Group will reinforce its

business and services provided by each

group company and expand the range of

linked business and services to offer

distinctively unique values unmatched

by competitors.

2015“Changing the Very Nature of Human Resources”

During fiscal 2015, we will promote our

human resources education with an

emphasis on practice, as well as the

NOMURA Group’s shared knowledge

and skills, to nurture professional human

resources for each function.

Plan for Consolidated Results in Fiscal 2014–2016

The medium-term plan, which spans a three-year period, serves as the first step toward achievement of

“NOMURA Long-Term Vision N22.” It is also our foundation for contributing to our clients’ business

success as their Prosperity Partner. The underlying management theme for the new medium-term

management plan 2014–2016 is “superior value chain.” We will strive to strengthen all our products

and services, expand the value that the entire Group offers to its clients, provide early solutions to a

wide range of issues, and steadily reinforce our medium- and long-term human resources

development/systems. In addition, on our path to becoming a global corporation, we will cement our

unshakable position over our competitors in Japan and firmly establish the high-quality NOMURA

brand in Asia.

Our New Medium-Term Management Plan within “NOMURA Long-Term Vision N22”

As our clients’ Prosperity Partner, besides creating spaces, NOMURA will serve as a supporting

system (partner) for its clients, sharing their objectives for their spaces and strategically developing

and vitalizing their spaces to optimize their business success (prosperity).

For NOMURA, “prosperity” is not limited to clients but is also meant to include a sustainable and

enjoyable sense of well-being for all stakeholders such as end-consumers, the social environment, our

employees, our partner companies and our shareholders.

To achieve this, everyone at NOMURA is given an opportunity to propose new ideas/solutions as

creative individuals while collaborating with numerous knowledgeable professionals in a range of

fields, to provide solutions to a spectrum of challenges our clients may face.

The NOMURA Group strives to be the only partner our clients need.

Prosperity Partner Declaration:Bringing Delight and Emotion to the World

“NOMURA Long-Term Vision N22”

Our targets for fiscal 2014 are ¥103,000 million in net sales and ¥4,700 million in

operating income, while the targets for the plan’s final year, fiscal 2016, are ¥120,000

million in net sales and ¥6,000 million in operating income. Enhancing our

comprehensive power by executing the three strategic categories described above and

the related 11 business strategies will translate into solutions for our clients’ issues. This

in turn will boost the NOMURA Group’s added value and generate profits

indispensable to continuing our business. In this way, NOMURA will change the very

nature of competition and human resources, while seeking to achieve a higher level of

business based on unique and fresh creativity and a strong, customer-oriented

corporate philosophy.

Develop Professional Human Resources and Share the “NOMURA WAY”

1. Develop human resources and promote the strengthening of

knowledge management

Increase Individual Values and Raise the Level of Cooperation within the Group1. Promote cross-selling*1 and boost the level of cooperation within the Group

2. Promote JOB management*2

3. Improve quality/speed/ability to modify prices and strengthen the supply chain

4. Develop and strengthen products/services centered on the space vitalization business

5. Strengthen the Group headquarters and increase its efficiency / Firmly establish

the overseas business promotion structure

No. 1 in Japan, One-of-a-Kind in Asia1. Expand the range of products the NOMURA Group offers to its clients

2. Strategically promote activities to build our client base

3. Create and offer new value to strengthen our value chain

4. Promote and perform strategy-related tasks for our clients

5. Expand our overseas business

Strategyfor Human Resources and Corporate Culture

Strategyfor Systems and

Frameworks

Strategyfor Markets and Business Lines

To Our Stakeholders

*1 Cross-selling: Proposing and selling business/services related to the needs of our clients’ customers.*2 JOB management: Our unique method of process management related to business promotion.

20172015

103,000120,000

6,0004,700

■ Net sales (Millions of yen)Operating income (Millions of yen)

“Superior Value Chain”NOMURA Long-Term Vision

An environment where the current industry-leading functions and the future No. 1 functions can either work independently or be linked as part of a chain, as needed.


Basic Information

To Our Stakeholders

Review of O

perationsESG Inform



MATSUYA GINZA (Renovation)

Leisure FacilitiesTheme Parks, Hotels and Resorts, Amusement Facilities, Entertainment Facilities, Zoos, Aquariums, etc.

Department and Merchandise Stores

MuseumsMuseums, Cultural Facilities, Art Museums, etc.

Specialty StoresSpecialty Stores, Food and Beverage Stores, Service Industry Stores, etc.

As a result of interior

production of projects

including specialty stores for

communication equipment,

import apparel brand shops,

restaurants and finance

branches, net sales decreased

3.6% to ¥42,017 million.

As a result of exhibition

production of large-scale

cultural facilities, and

operation and management

of these facilities on contract

under the Designated

Manager System*, net

sales decreased 6.0% to

¥6,994 million.

Reflecting renovation

projects of department

stores in the Kinki and the

Tokyo metropolitan regions,

net sales declined 14.4% to

¥6,265 million.

Reflecting renovation

projects of hotels,

amusement facilities and

aquariums, net sales

increased 25.1% to

¥7,889 million.

As a result of production and

renovation of large-scale

shopping centers, and

renewal projects of the

commercial facilities in the

service areas of the

expressways, net sales fell

15.1% to ¥6,835 million.

As a result of production

of a range of events organized

by both the government and

private companies, net

sales decreased 50.7% to

¥417 million.

Reflecting the setup of the

exhibition booths for the

Tokyo Motor Show and

showrooms for energy and

housing companies, net

sales increased 16.7% to

¥17,820 million.

Reflecting production of

medical facilities and bridal

facilities, and restoration of

the “Miracle Pine”

(preservation project), net

sales declined 18.7% to

¥10,171 million.

¥42,017million

(Net sales composition 42.7%)

¥6,994million


¥6,265million


¥7,889million


¥6,835million


¥417million


¥17,820million


¥10,171million


Public Relations and Sales PromotionCorporate PR Facilities, Showrooms, Sales Promotion, CI, etc.

Expositions and Creative EventsExpositions, Trade Fairs, Cultural Events, etc.

Shopping Centers OthersOffices, Bridal Facilities, Signs, Monuments, etc.

Net

Sal

esOp

erat

ing

Resu

ltsN

et S

ales

Orde

rs/B

ackl

og o

f Ord

ers

201420132012

34,2

24 43,5

67

42,0

17

201420132012

37,1

55 44,1

65

43,1

34

7,67

8

8,27

5

9,39

1

201420132012

8,98

1

7,43

9

6,99

4

201420132012

6,23

5

6,33

0

8,77

3

3,65

4

2,54

6 4,32

5

201420132012

6,22

1 7,32

1

6,26

5

201420132012

6,13

3 7,55

9

6,78

7

739

978

1,50

0

201420132012

3,45

9

6,30

7 7,88

9

201420132012

4,41

0

8,98

3

6,47

5

1,99

0 4,66

7

3,25

3

201420132012

8,74

0

8,05

4

6,83

5

201420132012

459

846

417

201420132012

686

822

215

374

350

148

201420132012

15,0

85

15,2

65 17,8

20

201420132012

15,2

89

16,7

10

17,3

20

3,53

9

4,98

4

4,48

4

201420132012

10,2

91 12,5

13

10,1

71

201420132012

11,1

16

8,47

5

8,63

1

4,83

0

3,25

0

4,30

6

*The scheme enables private companies or other organizations to act comprehensively for the management and operation of public facilities that were limited to local governments and affiliated organizations. It took effect from September 2003.

Note: The above net sales of the real estate business and the restaurant and product retail business are included in the others segment. The balance of orders and backlog of orders are recorded excluding the real estate business and the restaurant and product retail business. Net sales by business segment: display business (¥95,815 million)/real estate business (¥490 million)/restaurant and product retail business (¥2,105 million).

201420132012

6,92

3

9,01

3

5,06

1

3,43

6

4,39

5

2,62

1

OrdersBacklog of Orders

Review of Operations by Market Segment For the year ended February 28, 2014

TOKYU HANDS Yokohama Store Hanyu Rest Area “ONIHEI EDO DOKORO” TOKYO GAME SHOW 2013, SEGA BOOTH Oceanic Culture Museum in Ocean Expo Park HILTON FUKUOKA SEA HAWK The International Food Expo UTAGE 2013 IN OSAKA THE GRAND ORIENTAL MINATOMIRAI








Net Sales

Operating ResultsN

et SalesOrders/Backlog of Orders

Review of O

perations


Basic Information

To Our Stakeholders

Review of O

perationsESG Inform



Selected Projects

One of the best-known lifestyle brands in the United States, Tommy

Bahama offers a range of beach-resort-themed apparel. As its flagship

shop in Asia, its first store opened in Tokyo’s Ginza district with a

design concept of “Coastal Beach House.” The result suggests a

tranquil, modern beach house situated on a broad expanse of sand.

Working in collaboration with the client, the Company was involved in

all parts of the project: from the concept proposal, design and layout up

to the final construction phase.

The Tokyo Motor Show is one of the most closely

followed display events in Japan. NOMURA

handled the booth design and construction for

LEXUS, a global luxury brand. The booth was

created based on a global concept, while taking into

account the characteristics of the display vehicles

and the construction conditions to illustrate their

unique values. The sense of sophistication and

modern beauty associated with the brand were

clearly displayed, aided by a stunningly rich texture

and a bold sense of drama.

KOBE ANPANMAN CHILDREN'S MUSEUM & MALL

was created around a nationally celebrated character,

Anpanman, as a participation-based display facility

(museum) and a theme-based commercial facility

(shopping mall). It opened its doors in Yokohama in 2007

and welcomed one million paying visitors during its first

year. The facility later opened in Nagoya and Sendai, and

the fourth facility (Kobe) opened in 2013 as the first of its

kind in western Japan. Making optimal use of its rich past

experience, NOMURA handled the commercial planning,

design administration, architectural design/monitoring,

environmental works, display works, video/sound facility

works, and design and construction for company stores

and tenants.

Tommy Bahama GINZA The 43rd Tokyo Motor Show 2013 LEXUS BOOTH

MARK IS Minatomirai KOBE ANPANMAN CHILDREN'S MUSEUM & MALL

Specialty Stores Public Relations and Sales Promotion

Shopping Centers Leisure Facilities

Review of O

perations

General Public Days November 23 to December 1, 2013

Clients DENTSU INC. DENTSU TEC INC.

URL http://www.lexus-int.com/jp/motorshow/2013-tokyo.html

Opening Day April 19, 2013

Clients Kobe Anpanman Museum & Mall Limited Liability Partnership

URL http://www.kobe-anpanman.jp

Opening Day April 13, 2013

Clients Tommy Bahama Group, Inc.

URL http://www.tommybahama.com

“MARK IS Minatomirai” opened in front of the

Yokohama Museum of Art. This project was built

around the idea of creating a “3D city park” within a

city. NOMURA participated in the project starting

from the architectural planning phase, and created

an environment where one could sense the nature

outside from within the building. We succeeded in

creating a comfortable space that enables visitors to

have an extended stay while increasing the feel of an

excursion. In addition, the installation of original

and unique furniture, together with accessible and

relatable artwork, provides a cheerful atmosphere

for visitors.

Opening DayJune 21, 2013

ClientsMM Development TMK Mitsubishi Jisho Retail Property Management Co., Ltd.

URLhttp://www.mec-markis.jp/mm


Basic Information

To Our Stakeholders

Review of O

perationsESG Inform



Corporate Governance Corporate Social Responsibility (CSR)

To ensure efficiency and transparency in our management, full-

fledged corporate governance has been made an important

management task.

In keeping with this thinking, an executive officer system has been

introduced that aims at faster decision making and clearer

managerial responsibility.

We have also adopted a corporate auditor system with a Board of

Auditors that consists of two internal and two external auditors.

These auditors take part in the Board of Directors and hold periodic

meetings of the Board of Auditors to provide oversight for our

directors as they perform their duties.

In addition, we have enriched our auditing functions with a

Corporate Auditors Office, which consists of three persons

responsible for internal auditing. This office conducts oversight of

business divisions based on an internal auditing plan and in

cooperation with the Board of Auditors.

We are working to ensure trustworthy financial reporting by

defining the Company’s basic policy on an internal controls system,

conducting our business correctly and efficiently, and properly

operating and evaluating a system for internal control with respect to

financial reporting as set forth in the Financial Instruments and

Exchange Act.

As outlined in the NOMURA Group’s “Policies for Quality, Environment and Safety,” we accept quality assurance, environmental

conservation, and health and safety as part of our corporate mission.

Viewing these important elements as an essential pillar of our business activities, we have been achieving steady progress on

these topics.

Deforestation caused by illegal logging is a serious environmental problem in the world today. The loss of forests leads to global

warming, reduced biodiversity, and other major environmental problems. Furthermore, the timber produced by illegal logging floods the

market, lowering the price of timber and putting pressure on what was initially a sustainable forest management system. To conserve our

forests, we believe that it is crucial to push for the use of Fair Wood*1 (legal and sustainable timber). As the Company’s business activities

consume a large quantity of timber and wood products, using Fair Wood is part of our social responsibility toward the environment.

The CSV Committee*2 has prepared the “NOMURA MANNER OF DESIGN” based on the NOMURA Group’s “Policies for Quality,

Environment and Safety,” so that all employees can provide added value through daily business activities to our customers from the

standpoint of environmental conservation. As part of this project, we announced the “NOMURA Timber Procurement Guideline,”

including the “Declaration of Support for the Fair Wood Campaign.”

Fair Wood ProcurementTimber procurement can be classified into one of the following

categories: “environmental safety confirmed,” “environmental

safety unconfirmed,” and “extremely high risk.” We will ensure

the legality and sustainability of the timber we procure and work

methodically to improve current conditions to eliminate

“extremely high risk” timber from our procurement.

Activities Associated with the “Declaration of Support for the Fair Wood Campaign”We will provide information on the “NOMURA Timber Procurement Guideline” to our employees

as well as our clients, to familiarize them with the concept. We will try our best to develop the

alternatives to replace the timber deemed “extremely high risk” and publicize this issue. We will

research the origins of the timber marked as “environmental safety confirmed” and establish a

support system to further facilitate the procurement of Fair Wood for both employees and clients.

We are committed to:

1. Complying with all relevant laws and regulations and other societal requirements

2. Further improving quality standards in order to provide customers with satisfaction and peace of mind

3. Proposing environmentally friendly projects and designs to prevent environmental pollution

4. Separating and recovering industrial waste materials and making ongoing efforts to recycle resources

5. Ensuring the safety and health of all involved in our operations, and realizing a comfortable workplace environment

6. Providing health and safety education and preventing accidents in advance

The NOMURA Group’s Policies for Quality, Environmental and Safety

In keeping with our management philosophy, we recognize that assuring quality,

preserving the environment, and maintaining safety and health are our corporate duty.

Seeing these as important pillars of our business endeavors,

we have constructed and continue to refine an integrated management system

encompassing quality, the environment, and safety and health.

President and CEO Masaru WatanabeExecutive Vice President Shuji EnomotoSenior Managing Director Yoshinobu TominagaManaging Director Takeshi MasudaDirectors Masahiro Nakagawa

Kiyoshi YoshimotoStanding Auditor Koichi TakemuraAuditor Junji IwataExternal Auditors Hiroyasu Watanabe

Hikoyuki MiwaSenior Executive Officer Kazushige KuzumiManaging Executive Officers Kiyotaka Okumoto

Tadashi OwadaExecutive Officers Yuki Doi

Makoto KanehiraMasanori SatoKenji OkamotoAkihiko YamazakiKenji TomibayashiShinji SakaiKatsuhiko YoshidaHironobu Takeda

Basic Approach

Board of Directors

The Board of Directors, which comprises six directors, deliberates

and decides important business matters, and supervises the execution

of business undertaken by directors.

Board of Auditors

The Board of Auditors, which comprises four directors including two

outside directors, investigates the status of operations and assets of

the Company and its subsidiaries according to the annual audit plan,

and exchanges information among the auditors in response to timely

reports from the independent auditors and the Corporate

Auditors Office.

Management Committee

The Management Committee meets twice a month to deliberate and

examine management matters and basic policy related to the

medium- and long-term vision.

Executive Board Committee

The Company has adopted the executive officer system and holds the

Executive Board Committee meeting once a month to deliberate and

examine matters related to the execution of business of the

operational departments and Group companies.

The standing auditor attends each meeting of the Management

Committee and Executive Board Committee to collect information

for audit and provides opinions as necessary. Matters relating to the

appointment and remuneration of standing auditors are determined

by deliberation of the Board of Directors.

Overview of Corporate Governance Structures

Corporate Governance Structures and ExecutivesAs of May 22, 2014

We will vigorously promote the use of Fair Wood timber:

1. Domestic timber and regional timber(a shorter travel distance between the consumer and the logging site)

2. Timber bearing a trusted forestry certification (FSC, PEFC, SGEC, etc.)

3. Wood building material whose raw material is derived from scrap wood (recycled or reused)

We will ensure that these types of timber are not used

1. Timber from endangered species of trees

2. Timber whose legality (logging, production and transaction) cannot be determined

3. Timber whose country of origin or tree species cannot be determined

Declaration of Support for the Fair Wood Campaign: The “NOMURA Timber Procurement Guideline”

ESG Information

Appointment/dismissal



Reporting

Reporting

ReportingInstruction

Instruction Consultation/reporting

Consultation/reporting

Consultation/reporting

Instruction

Reporting

Audit

Audit

Audit

Audit

Liaison

LiaisonLiaison


Appointment/supervision

Genera l Meet ing of Shareholders

Outside experts Legal advisers

Executiveofficers

Presidentand CEO

Board of AuditorsAuditors

Risk Management Committee

Head Office divisions (Corporate Department)

Corporate Auditors Office(Internal auditing)

Superior

Group employees

Board of DirectorsDirectors

Independent auditors

Internal control functions

*1 Fair Wood: Jointly proposed by the Global Environmental Forum and FoE Japan, an international environmental nongovernmental organization (NGO), it refers to

timber and wood products whose production takes into account the forest environment of the logging site and its effect on the local communities.

*2 The CSV (Creating Shared Value) Committee is an organization that promotes company-wide efforts to achieve social contributions in the Company’s daily business activities.


Basic Information

To Our Stakeholders

Review of O

perationsESG Inform



Quarterly Summary Statements of Income (Consolidated) Millions of yen

Period Ended May 2013 Aug 2013 Nov 2013 Feb 2014Net Sales ¥ 25,983 ¥ 22,044 ¥ 23,319 ¥ 27,063 Gross Profit 4,254 3,421 3,901 4,382 Selling, General and Administrative Expenses 2,574 2,826 2,849 3,395 Operating Income 1,679 595 1,051 986 Ordinary Income 1,735 540 1,092 1,014 Net Income 1,031 52 727 33 Gross Profit to Net Sales (%) 16.4 15.5 16.7 16.2Operating Income to Net Sales (%) 6.5 2.7 4.5 3.6Ordinary Income to Net Sales (%) 6.7 2.4 4.7 3.7

Quarterly Balance Sheets Summary (Consolidated) Millions of yen

Period Ended May 2013 Aug 2013 Nov 2013 Feb 2014Total Assets ¥ 57,617 ¥ 51,623 ¥ 54,133 ¥ 59,477 Current Assets 34,275 29,839 32,161 37,488Fixed Assets 23,342 21,783 21,972 21,989 Current Liabilities 24,837 18,928 20,841 26,443 Long-Term Liabilities 5,932 5,882 5,798 5,573Net Assets 26,848 26,812 27,493 27,459

20142013201220112010

80,4

36 90,1

05

87,4

64 101,

316

98,4

10

2014201320122011

53,0

11

52,8

61

54,3

44

58,3

40

59,4

77

2010

Net Sales(Millions of yen)

Total Assets(Millions of yen)

20142013201220112010

845

1,12

0

1,21

5

2,21

2

4,31

3

1.1 1.2 1.42.2 4.44.4

20142013201220112010

24,9

07

24,6

79

24,8

83

26,0

44

27,4

59

Operating Income/Operating Income to Net Sales(Millions of yen) (%)

Net Assets(Millions of yen)

20142013201220112010

407

403 60

4

1,24

2

1,84

51.2

0.7

0.40.5

1.91.9

bonuses, although expenses such as fixed costs remained almost

unchanged from the previous fiscal year.

Operating Income and Ordinary Income

Operating income increased ¥2,101 million, or 95.0%, to ¥4,313

million, and ordinary income grew ¥1,998 million, or 83.8%, to ¥4,381

million. Due to a decrease in unprofitable projects achieved through

a stricter examination of orders, thorough cost control, and lower

fixed costs, operating income and ordinary income rose significantly,

reaching record highs.

Net Income

Net income was up ¥602 million from the previous fiscal year to

¥1,845 million, a 48.5% increase. The Group recorded extraordinary

income of ¥183 million from a gain on the sale of investment

securities. Extraordinary losses of ¥1,493 million were due mainly to

a loss on impairment of fixed assets of subsidiaries and business

structure improvement expenses accompanying the transfer of

a subsidiary.

Operating Results by Business Segments

Display Business

Net sales of display business decreased ¥3,043 million, or 3.1%

from the previous fiscal year, to ¥95,815 million, while operating

income jumped ¥2,011 million, or 100.2%, to ¥4,017 million. Net

sales of display operations decreased slightly compared to the

previous fiscal year, when the Company changed its fiscal year-

end. However, sales were strong in the public relations and sales

promotion market, expanding ¥2,554 million, or 16.7%, to ¥17,820

million as a result of production and renovation projects of

booths for the 43rd Tokyo Motor Show 2013 and the TOKYO

GAME SHOW 2013 and showrooms for major electronics

manufacturers, gas manufacturers, and housing-related

companies. Sales were also strong in the leisure facilities market,

rising ¥1,581 million, or 25.1%, to ¥7,889 million as a result of

renovation projects for large-scale amusement facilities and

urban hotels, and construction projects for bathing facilities.

Operating income increased much more than in previous fiscal

years, reflecting selective order receipt focused on profitability.

Real Estate Business

Net sales of real estate business increased ¥16 million, or 3.4%

from the previous fiscal year, to ¥490 million. Operating income

rose ¥36 million, or 32.2%, to ¥149 million, due mainly to

an increase in revenues.

Restaurant and Product Retail Business

As a result of operations of specialty stores including the Edo-

Tokyo Museum Shop (in Tokyo’s Sumida Ward) and restaurants

such as the Frame Cafe (in Tokyo’s Minato Ward), net sales

increased ¥122 million, or 6.2% from the previous fiscal year, to

¥2,105 million, and operating income rose ¥12 million, or 6.2%, to

¥205 million.

Assets, Liabilities and Net Assets

Total Assets

Total assets at the year-end amounted to ¥59,477 million,

increased ¥1,136 million, or 1.9%, year-on-year.

Current assets increased ¥2,263 million, or 6.4% from the

previous fiscal year-end, to ¥37,488 million. This result was due

principally to an increase in trade notes and accounts receivable

accompanying sales of large-scale projects at the fiscal year-end

and an increase in inventories on the back of a rise in the order

backlog. These factors were partly offset by a decrease in cash

and time deposits due in part to the payment of dividends

and taxes.

Fixed assets decreased ¥1,126 million, or 4.9%, to ¥21,989

million. This was principally due to a decrease in sales of idle

assets including an employee dormitory and an impairment of

the commercial building of a subsidiary.

Management’s Discussion and Analysis For the year ended February 28, 2014

Net Sales and Profits

Net Sales

Net sales for the fiscal year ended February 28, 2014 were ¥98,410

million, a decrease of ¥2,905 million, or 2.9%, from the previous fiscal

year. The slight decline in net sales was attributable to the stricter

examination of orders in the commercial facilities market and the

comparison with the previous fiscal year, a 12.5-month reporting

period owing to a change in the fiscal year-end. These factors were

partly offset by increased sales in the public relations and sales

promotion market, where we undertook a number of projects for

large-scale showrooms and exhibitions, and in the leisure facilities

market, where we enjoyed increased demand by amusement facilities

and urban hotels.

Gross Profit

Gross profit rose ¥2,226 million, or 16.2% from the previous fiscal

year, to ¥15,960 million. The significant increase in gross profit was

mainly due to sales activities targeting profitability and a

concentration of orders among core business partners despite lower

sales. The gross profit margin rose 2.6 percentage points from the

previous fiscal year, to a high of 16.2%.

Selling, General and Administrative (SG&A) Expenses

SG&A expenses increased ¥124 million, or 1.1%, to ¥11,646 million.

This slight increase was due mainly to a reserve for employee

20142013201220112010

4.9

2.42.5

7.47.4

4.2

2.41.61.6

6.96.9

2.5

Return on Assets (ROA)

Return on Equity (ROE)

Financial Section/Corporate Inform

ation

Net Income/Net Income to Net Sales(Millions of yen) (%)

Return on Assets (ROA)*/Return on Equity (ROE)(%)

*ROA = (Ordinary Income / Average Total Assets) ×100


Basic Information

To Our Stakeholders

Review of O

perationsESG Inform



20142013201220112010

44.645.846.646.9 46.246.2

Equity Ratio(%)

20142013201220112010

7.21

7.17 10

.82

22.2

5

33.0

9

Net Income per Share (EPS)(Yen)

20142013201220112010

439.

71

440.

83

445.

62

466.

45

493.

59

Net Assets per Share (BPS)(Yen)

Outlined below are the major risks faced by the NOMURA Group in its business activities that have been identified as having the

potential to significantly impact the decisions of investors. The forward-looking statements outlined below are based on judgments by the

Company as of the date of the production of this report.

Economic Fluctuations

The Group maintains a stable business base by securing orders

from a wide range of clients, rather than depending on a few

specific business partners. Fluctuations in the economy can,

however, have an impact on performance; for example, further

curbs in capital investment or advertising expenses, or the

postponement or cancellation of planned projects.

Legal Regulations

The Group is subject to various legal regulations in the course of

its business activities, such as the Construction Business Act and

the Architect Act. In the future, if any of these laws and

regulations are revised or abolished or if it is found that a legal

transgression has occurred for some reason, this could hinder

business operations and have an impact on performance.

Quality Control, Environmental Conservation, Health and Safety

The Group has consolidated and operated its various

management systems on quality, environment, and health

and safety.

Regarding quality control, the Group’s chief engineers and

managing engineers in charge of on-site technical supervision

maintain technical and other standards through rigid quality and

process control. In the event that any quality defects occur in

produced items, performance could be impacted due to the loss

of social credibility, claims of liability for damages, and so on.

As for environmental conservation, when disposing of surplus

materials from display work such as the refitting of stores or

dismantling of exhibitions, the Group complies with regulations

such as laws on industrial waste management and conducts rigid

control of waste disposal subcontractors to ensure that they treat

waste properly. If any illegal waste disposal by subcontractors

took place, there would be a loss of social credibility for not only

the subcontractor but also the Group, which could have an

adverse effect on orders received.

With regard to health and safety, the Group conducts

appropriate control to prevent accidents at manufacturing and

construction sites, such as eliminating dangers and harmful

factors. If an accident took place, however, it would result in a

loss of credibility, which could have an impact on orders received.

Risks Related to the Great East Japan Earthquake

In the wake of the accident at the Fukushima No. 1 Nuclear

Power Station caused by the Great East Japan Earthquake of

March 11, 2011, if a power supply shortage is caused by a delay in

the restart of nuclear power stations or a spread of radioactive

pollution due to the accident, then the Group’s business

operations could be affected. Examples would include the

postponement or cancellation of client branch openings or event

planning, a reduction in the scale of orders received, or a steep

rise in material prices.

Quarterly Summary Statements of Cash Flows (Consolidated) Millions of yen

Period Ended May 2013 Aug 2013 Nov 2013 Feb 2014Net Cash Provided by (Used in) Operating Activities ¥ 546 ¥ (2,090) ¥ (2,709) ¥ (747)Net Cash Provided by (Used in) Investing Activities (94) (84) (195) (566)Net Cash Provided by (Used in) Financing Activities (491) (631) (844) (691)Net Increase (Decrease) in Cash and Cash Equivalents (6) (2,777) (3,714) (1,958)Cash and Cash Equivalents at End of Year 11,033 8,262 7,325 9,081

Business and Other Risks


ation

Cash Flows

Cash Flows from Operating Activities

Net cash used in operating activities totaled ¥747 million, due mainly

to an increase in trade notes and accounts receivable accompanying

the concentration of sales of large-scale projects at the fiscal year-

end, an increase in trade receivables, which rose reflecting a

12.5-month reporting period for the previous fiscal year, and an

increase in income taxes accompanying higher profits. Cash outflows

were partly offset by an increase in income before income taxes. By

comparison, operating activities provided net cash of ¥11,774 million

in the previous fiscal year due to solid progress in recovering trade

receivables of large-scale projects, but used net cash in the fiscal year

under review.

Cash Flows from Investing Activities

Net cash used in investing activities totaled ¥566 million. Although

cash inflows were generated by sales of property and equipment and

investment securities, these were offset by outflows for the

acquisition of property and equipment associated with IT promotion

and expenditures including computer software replacement. This

contrasted with the previous year, which recorded net cash of ¥625

million provided by deposits accompanying the sale of investment

properties, and proceeds from redemption of trust beneficiary rights.

Cash Flows from Financing Activities

Net cash used in financing activities totaled ¥691 million, due mainly

to payment of dividends and acquisition of treasury stock. In the

previous fiscal year, financing activities used net cash of ¥1,811

million due to repayment of short-term borrowings. However, in the

fiscal year under review, net cash used in financing activities

decreased ¥1,119 million.

Liabilities

Total liabilities at the year-end amounted to ¥32,017 million,

declining ¥278 million, or 0.9%, year on year.

Current liabilities decreased ¥24 million, or 0.1%, from the

previous fiscal year-end, to ¥26,443 million. The major components of

this decline were a decrease in trade notes and accounts payable due

to a drop in purchases at the year-end and a decrease in the provision

for loss on construction contracts accompanying a decline in

unprofitable projects achieved through the stricter examination of

orders. These factors were partly offset by an increase in income

taxes payable reflecting higher profit and an increase in business

structure improvement expenses associated with the transfer

of a subsidiary.

Long-term liabilities decreased ¥254 million, or 4.4%, from the

previous fiscal year-end, to ¥5,573 million. This reflected principally a

decrease in retirement benefits for employees and a decline in

deferred tax liabilities related to the sale of subsidiary land holdings.

Net Assets　Total net assets at the year-end amounted to ¥27,459 million, climbing

¥1,415 million, or 5.4%, year on year. The increase was mainly due to

factors such a rise in retained earnings resulting from higher net

income and an increase in net unrealized holding gains on securities

owing to recovery in market prices of investment securities. These

items were partly offset by payment of dividends and the purchase of

treasury stock.


Basic Information

To Our Stakeholders

Review of O

perationsESG Inform



Consolidated Balance Sheets Millions of yenThousands of U.S. dollars

(Note)

As of February 28 2014 2013 2014

Millions of yenThousands of U.S. dollars

(Note)

As of February 28 2014 2013 2014

ASSETS

Current assets:

Cash and time deposits ¥ 9,181 ¥ 11,040 $ 90,073

Trade notes and accounts receivable 16,327 14,354 160,163

Marketable securities — 41 —

Inventories 8,652 8,098 84,873

Deferred tax assets 1,508 1,087 14,793

Other current assets 1,848 648 18,138

Allowance for doubtful accounts (29) (44) (294)

Total current assets 37,488 35,224 367,746

Fixed assets:

Property and equipment:

Buildings and structures 12,252 12,548 120,188

Machinery and vehicles 173 173 1,707

Tools, furniture and fixtures 1,321 1,200 12,958

Land 9,757 10,056 95,723

Lease assets 242 323 2,384

Construction in progress 10 120 108

Less accumulated depreciation (6,921) (6,707) (67,893)

Net property and equipment 16,837 17,716 165,175

Intangible fixed assets 874 614 8,574

Investments and other assets:

Investment securities 2,763 2,597 27,114

Deferred tax assets 233 140 2,295

Other 1,636 2,370 16,049

Allowance for doubtful accounts (357) (322) (3,502)

Total investments and other assets 4,277 4,784 41,956

Total fixed assets 21,989 23,115 215,705

Total assets ¥ 59,477 ¥ 58,340 $ 583,451

LIABILITIES

Current liabilities:

Trade notes and accounts payable ¥ 16,584 ¥ 17,482 $ 162,703

Short-term borrowings 208 — 2,040

Lease obligations 137 136 1,344

Income taxes payable 1,307 993 12,831

Advances received 3,620 3,591 35,511

Reserve for employees’ bonuses 813 1,320 7,975

Provision for construction indemnification 85 105 834

Provision for loss on construction contracts 86 488 844

Provision for environmental measures — 100 —

Provision for business structure improvement 895 — 8,780

Other current liabilities 2,705 2,248 26,546

Total current liabilities 26,443 26,468 259,408

Long-term liabilities:

Lease obligations 218 237 2,148

Retirement benefits for employees 3,764 3,931 36,933

Retirement benefits for directors and corporate auditors 83 313 814

Deferred tax liabilities 744 831 7,298

Deferred tax liabilities for land revaluation reserve 267 267 2,619

Other 495 245 4,857

Total long-term liabilities 5,573 5,827 54,669

Total liabilities 32,017 32,296 314,077

NET ASSETS

Shareholders’ equity:

Common stock 6,497 6,497 63,743

Capital surplus 6,861 6,861 67,304

Retained earnings 14,326 13,236 140,544

Treasury stock (1,091) (914) (10,702)

Total shareholders’ equity 26,594 25,680 260,889

Accumulated other comprehensive income:

Net unrealized holding gains on securities 234 55 2,305

Land revaluation reserve, net of taxes 482 286 4,728

Foreign currency translation adjustments 148 22 1,452

Total accumulated other comprehensive income 865 363 8,485

Total net assets 27,459 26,044 269,374

Total liabilities and net assets ¥ 59,477 ¥ 58,340 $ 583,451

Consolidated Financial Statements


ation

Note: U.S. dollar amounts represent translations of yen, for convenience only, at ¥101.94=US$1.


Basic Information

To Our Stakeholders

Review of O

perationsESG Inform



Consolidated Statements of Income Millions of yenThousands of U.S. dollars

(Note)

Years Ended February 28 2014 2013 2014

Net sales ¥ 98,410 ¥ 101,316 $ 965,382

Cost of sales 82,450 87,582 808,809

Gross profit 15,960 13,733 156,573

Selling, general and administrative expenses 11,646 11,521 114,254

Operating income 4,313 2,212 42,319

Non-operating income:

Interest received 11 13 118

Dividends received 25 19 245

Purchase discount 73 78 726

Miscellaneous income 74 81 737

Total non-operating income 185 192 1,826

Non-operating expenses:

Interest expenses 1 9 20

Administrative expenses of real estate for investment 1 9 10

Provision of allowance for doubtful accounts for affiliated companies 90 — 883

Loss on disposal of inventories 17 — 167

Miscellaneous expenses 7 2 78

Total non-operating expenses 117 21 1,158

Ordinary income 4,381 2,383 42,987

Extraordinary income:

Gain on sale of fixed assets — 0 —

Gain on sale of investment securities 183 — 1,795

Gain on redemption of golf club memberships — 1 —

Total extraordinary income 183 1 1,795

Extraordinary losses:

Loss on disposal of fixed assets 24 18 235

Loss on impairment of fixed assets 510 65 5,003

Loss on devaluation of shares of affiliated companies 5 — 59

Loss on sale of investment securities — 0 —

Loss on devaluation of investment securities 17 19 177

Valuation loss on golf club membership rights — 8 —

Provision for retirement benefits for directors and corporate auditors — 95 —

Business structure improvement expenses 901 — 8,848

Loss on closing of stores 34 — 334

Total extraordinary losses 1,493 205 14,656

Income before income taxes 3,071 2,179 30,126

Income taxes:

Current income taxes 1,915 1,110 18,786

Deferred income taxes (689) (173) (6,759)

Total income taxes 1,225 937 12,027

Net income ¥ 1,845 ¥ 1,242 $ 18,099

Other comprehensive income:

Net unrealized holding gain on securities 179 322 1,756

Foreign currency translation adjustments 126 44 1,236

Total other comprehensive income 305 366 2,992

Comprehensive income ¥ 2,150 ¥ 1,608 $ 21,091

Comprehensive income attributable to:

Shareholders of the parent ¥ 2,150 ¥ 1,608 $ 21,091

Consolidated Statements of Changes in Net Assets Millions of yen

Shareholders’ equity Total shareholders’equityCommon stock Capital surplus Retained earnings Treasury stock

Balance at March 1, 2013 6,497 6,861 13,236 (914) 25,680Gain on disposal of treasury stock 0 0Cash dividends paid (558) (558)Net income 1,845 1,845Acquisition of treasury stock (176) (176)Disposal of treasury stock 0 0Reversal of revaluation reserve for land (196) (196)Other amounts of changes

Total changes during the year — 0 1,090 (176) 914Balance at February 28, 2014 6,497 6,861 14,326 (1,091) 26,594

Accumulated other comprehensive incomeTotal accumulated

other comprehensive income

Total net assetsNet unrealized holding gains on

securities

Land revaluation reserve, net of

taxes

Foreign currency translation

adjustments

Balance at March 1, 2013 55 286 22 363 26,044Gain on disposal of treasury stock 0Cash dividends paid (558)Net income 1,845Acquisition of treasury stock (176)Disposal of treasury stock 0Reversal of revaluation reserve for land (196)Other amounts of changes 179 196 126 501 501Total changes during the year 179 196 126 501 1,415

Balance at February 28, 2014 234 482 148 865 27,459


ation

Thousands of U.S. dollars (Note)

Shareholders’ equity Total shareholders’equityCommon stock Capital surplus Retained earnings Treasury stock

Balance at March 1, 2013 63,743 67,304 129,842 (8,976) 251,913 Gain on disposal of treasury stock 0 0Cash dividends paid (5,474) (5,474) Net income 18,099 18,099 Acquisition of treasury stock (1,726) (1,726)Disposal of treasury stock 0 0Reversal of revaluation reserve for land (1,923) (1,923)Other amounts of changes

Total changes during the year — 0 10,702 (1,726) 8,976 Balance at February 28, 2014 63,743 67,304 140,544 (10,702) 260,889

Accumulated other comprehensive incomeTotal accumulated

other comprehensive income

Total net assetsNet unrealized holding gains on

securities

Land revaluation reserve, net of

taxes

Foreign currency translation

adjustments

Balance at March 1, 2013 549 2,806 216 3,571 255,484 Gain on disposal of treasury stock 0Cash dividends paid (5,474)Net income 18,099 Acquisition of treasury stock (1,726)Disposal of treasury stock 0Reversal of revaluation reserve for land (1,923) Other amounts of changes 1,756 1,922 1,236 4,914 4,914 Total changes during the year 1,756 1,922 1,236 4,914 13,890

Balance at February 28, 2014 2,305 4,728 1,452 8,485 269,374



Basic Information

To Our Stakeholders

Review of O

perationsESG Inform



Consolidated Statements of Cash Flows Millions of yenThousands of U.S. dollars

(Note)

Years Ended February 28 2014 2013 2014

Cash flows from operating activities:

Income before income taxes ¥ 3,071 ¥ 2,179 $ 30,126

Depreciation 839 890 8,240

Loss on impairment of fixed assets 510 65 5,003

Decrease in allowance for doubtful accounts (70) (133) (696)(Decrease) increase in reserve for employee bonuses (508) 385 (4,993)Decrease in retirement benefits for employees (117) (291) (1,148)Increase in reserve for retirement benefits for directors 30 132 304(Decrease) increase in other reserves (527) 166 (5,170)Interest and dividend income (37) (32) (363)Interest expense 1 9 20

Business structure improvement expenses 901 — 8,848

Loss on closing of stores 34 — 334

(Gain) loss on sales of investment securities (183) 0 (1,795)Gain on devaluation of compound financial instruments (12) (11) (128)Loss on devaluation of investment securities 17 19 177Loss on devaluation of shares of affiliated companies 5 — 59Valuation loss on golf club membership rights — 8 —

(Increase) decrease in trade receivables (1,822) 6,629 (17,883)(Increase) decrease in inventories (548) 182 (5,386)(Decrease) increase in trade payables (809) 1,382 (7,936)Increase in advances received 25 1,211 255Decrease in prepayments 101 224 991Other, net (84) (641) (835)Subtotal 818 12,377 8,024

Cash received for interest and dividends 37 32 363

Cash paid for interest (2) (10) (20)Cash paid for income taxes (1,601) (624) (15,705)Net cash (used in) provided by operating activities (747) 11,774 (7,338)

Cash flows from investing activities:

Payment for purchases of property and equipment (434) (121) ( 4,267)Proceeds from sales of property and equipment 123 11 1,207Payments for purchases of investment securities (177) (127) (1,736)Proceeds from sales of securities 433 0 4,257Proceeds from redemption of trust beneficiary right — 299 —

Deposits income with real estate for investment transfer contract — 690 —

Disbursement of loans (0) (0) (10)Collection of loans 18 33 186Other, net (529) (158) (5,189)Net cash (used in) provided by investing activities (566) 625 (5,552)

Cash flows from financing activities:

Dividends paid (558) (443) (5,484)Net increase (decrease) in short-term borrowings 190 (1,228) 1,874Payment for acquisition of treasury stock (176) (1) (1,736)Proceeds from sales of treasury stock 0 — 0

Other, net (147) (137) (1,442)Net cash used in financing activities (691) (1,811) (6,788)

Effect of exchange rate changes on cash and cash equivalents 48 39 471Net (decrease) increase in cash and cash equivalents (1,958) 10,628 (19,207)Cash and cash equivalents at beginning of year 11,040 411 108,299Cash and cash equivalents at end of year ¥ 9,081 ¥ 11,040 $ 89,092

Board of Auditors

Board ofDirectors

Presidentand CEO

GeneralMeeting ofShareholders

CorporateAuditSection

CorporateSecretarialSection

Account SupervisingGroup

CreativeSupervisingGroup

ProductSupervisingGroup

ManagementDivision for Quality,Environment, and Safety

First-Class Registered Architect Office

CorporatePlanning Division

Human ResourceDivision

General AffairsDivision

AccountingDivision

BusinessAdministrativeDivision

Public Relationsand InvestorRelations Division

Osaka AdministrativeDivision

Account Division 1

Account Division 1

Construction Division

Design Division

Account Division 4

Account Division 3

Account Division 3

Public Division

Design Division

Construction Division

Account Division 2

Account Division 2

Business Development Division

Project Development Division 1

Project Development Division 2

Sales Division 1

Sales Division 2

Sales Division 1

Sales Division 2

Project Management Division

Project Development Division

Creative Direction Division

Planning and Design Division 1




Construction Management Division 1




Construction Planning Division

Hokkaido Branch Office

Tohoku Branch Office

Chubu Branch Office

Chugoku/Shikoku Branch Office

Kyushu Branch Office

Workplace Business Promotion Division

Sales Division 1

Sales Division 2

Sales Division 1

Sales Division 2

Sales Division 1

Sales Division 2

Sales Division 3

Official Public Relations Development Division

Culture and Environment Division

International Expo Preparation Office





Planning Direction Division

Construction Accounting Division 1

Construction Planning Division

Construction Accounting Division 2




Group Strategy Division

Tokyo Olympics Development Center

Project Development Division

Planning and Development Division

Operational Administration Division

Operational Administration Division

Hong Kong Branch Office

Townbox Business Promotion Division

Public Private Partnership Division

BusinessSupervisingOffice

CorporateDepartment

CommercialFacilitiesDepartment

CreativeCommunicationDepartment

GroupBusinessDepartment

BusinessDevelopmentDepartment

Overseas Development

BusinessStrategyDivision

BusinessStrategyDivision

Organizational Layout As of March 1, 2014


ation



Basic Information

To Our Stakeholders

Review of O

perationsESG Inform



Corporate Data Stock Information As of February 28, 2014

Name

NOMURA Co., Ltd.

Established

March 15, 1892

Incorporated

December 9, 1942

Common Stock

¥6,497 million

Head Office

2-3-4 Daiba, Minato-ku, Tokyo 135-8622, JapanPhone +81-3-5962-1171

Osaka Office

1-11-26 Higashi-Kagaya, Suminoe-ku, Osaka 559-0012, JapanPhone +81-6-6686-3331

Domestic Branches

Hokkaido (Sapporo), Tohoku (Sendai), Chubu (Nagoya), Okayama (Okayama), Chugoku/Shikoku (Hiroshima), Kyushu (Fukuoka), Okinawa (Naha)

Overseas Branches

Beijing, Shanghai, Hong Kong, Singapore, Milan, New York

Number of Employees (As of February 28, 2014)

Consolidated 1,425, Non-consolidated 857

Consolidated Subsidiaries

NOMURA PRODUCTS Co., Ltd.Engineering planning, design, construction management, engineering construction and

maintenance work for aspects of space creation including construction, facilities, interiors,

displays and signs

TESCO Co., Ltd.Shop construction and maintenance centered on restaurants

NOMURA DUO Co., Ltd.Planning, layout, design, production, construction, and operation support for displays

NOMURA TECHNO Co., Ltd.Design, production, maintenance, and operation support for exhibition equipment, video,

graphics, information systems, etc.

NOMURA DEVELOPMENT Co., Ltd.Development and operation of restaurants and retail stores; planning, production, and

sales of original products

Institute of Cultural Environments Co., Ltd.Research, study, and operation consulting regarding museums and other cultural facilities

C’s·three Co., Ltd.Integrated business services, temporary staffing, facility operation

NODE Co., Ltd.Planning, design, and layout of commercial facilities

NOMURA (BEIJING) Co., Ltd. Display design and construction: Design for various exhibitions and events, architectural

decoration design and construction, design, manufacturing and procurement of furniture

and fixtures, provision of technical consulting and services, etc.

NOMURA DESIGN & ENGINEERING SINGAPORE PTE. LTD.Design and construction of interiors for commercial facilities, design and construction for

exhibition facilities and events

Note: The Company transferred all shares of NOMURA Retail Asset Management Co., Ltd. on March 31, 2014.

Fiscal Year Begins on March 1st, ends on the last day of February

General Meeting of Shareholders

May of each year

Share Unit 100 shares

Transfer Agent Sumitomo Mitsui Trust Bank, Limited

Stock Exchange Listing The First Section of the Tokyo Stock Exchange

Securities Code 9716

Authorized Shares 238,170,000 shares

Shares Issued and Outstanding

59,948,294 shares

Number of Shareholders 4,416

Okayama

Hiroshima

Fukuoka

Naha

Sendai

Tokyo

Nagoya

Osaka

Beijing

Shanghai

Hong Kong

New York

Singapore

Composition of Shareholders

Stock Price Range

Stock Price Indices

Breakdown by Size of Holding

Number of Shareholders Shares Held

Less than 100 shares 459 1,862

100 shares or more 1,022 340,883

1,000 shares or more 2,456 5,663,296

10,000 shares or more 358 7,206,812

50,000 shares or more 52 3,355,792

100,000 shares or more 46 8,889,463

500,000 shares or more 23 34,490,186

Breakdown by Type of Shareholder

Number of Shareholders Share Held

Foreign Investors 114 5,537,559

Securities Companies 37 1,178,431

Financial Institutions 32 11,501,940

Other Corporations 172 13,949,026

Individuals and Others 4,061 27,781,338

Sapporo

20142013201220112010

0.480.72 0.64

0.93

1.59

20142013201220112010

3.8

2.5 2.82.3 2.0

20142013201220112010

28.98

44.20

26.3519.42

23.70

12.02% 57.53%14.83%

0.57%9.45%

0.00% 5.60%

19.18% 46.34%23.27%

1.97%

9.24%

(Times)Price Earning Ratio (PER)


ation

Global Branches

14/213/212/211/2

(¥)1,000

750

250

500

0

Milan

Major Shareholders

Name of Shareholder Number of SharesPercentage of Total Issued Shares (%)

1 NOMURA Y.K. 5,234,000 8.73

2 ARITA Y.K. 5,141,500 8.57

3 Japan Trustee Services Bank, Ltd. (Trust Account) 2,423,700 4.04

4 NOMURA Kougei Employee Shareholder Association 2,316,130 3.86

5 Youko Nomura 1,658,000 2.76

6 Sumitomo Mitsui Banking Corporation 1,376,920 2.29

7 The Master Trust Bank of Japan, Ltd. (Trust Account) 1,277,000 2.13

8 Mutual Prosperity Association of NOMURA Co., Ltd. 1,061,100 1.77

9 The Dai-ichi Life Insurance Company, Limited 916,000 1.52

10 Nippon Life Insurance Company 907,850 1.51

Note: The Company holds 4,315 thousand shares (7.20%) of treasury stock.

(%)Dividend Yield

(Times)Price Book-Value Ratio (PBR)

This report uses Forest Stewardship Council®(FSC)-certified paper.

2-3-4 Daiba, Minato-ku, Tokyo 135-8622 JapanPhone +81-3-5962-1171

http://www.nomurakougei.co.jp

010_0680901372606.indd 1 2014/06/25 18:51:58

Annual Report 2014 - 乃村工藝社 NOMURA · 06 NOMURA Co. td Annual Report 2014 NOMURA Co. td...

Documents

Transcript of Annual Report 2014 - 乃村工藝社 NOMURA · 06 NOMURA Co. td Annual Report 2014 NOMURA Co. td...