Annual Report 2023
Fiscal year ended March 31, 2023

4-2-28 Kudan-kita, Chiyoda-ku, Tokyo, 102-0073, Japan
Tel: +81-(0)3-3265-4685 Fax: +81-(0)3-3265-4698
https://www.wave-nakano.co.jp
SINGAPORE
1 Coleman St., #10-03/04/05 The Adelphi, 179803, Singapore
Tel: +65-6333-4933
Fax: +65-6338-8568

MALAYSIA
Block B, 15-4-2, Megan Salak Park Jalan 1/125E, Taman Desa Petaling, Kuala Lumpur 57100, Malaysia
Tel: +60-3-9059-6977
Fax: +60-3-9059-6277

INDONESIA
Tamara Center 14th Floor Jl. Jend. Sudirman KAV. 24, Jakarta 12920, Indonesia
Tel: +62-21-5203674
Fax: +62-21-5203670

THAILAND
2170 Bangkok Tower, 17th Floor New Petchburi Road, Bangkapi, Huaykwang, Bangkok 10310 Thailand
Tel: +66-2-308-0500
Fax: +66-2-308-0497

VIETNAM
Unit 1411-1412, 14th Floor, Daeha Business Center, 360 Kim Ma Street, Ngoc Khanh Ward, Ba Dinh District, Hanoi, Vietnam
Tel: +84-243-724-7552
Fax: +84-243-724-7553

CORPORATE PROFILECONTENTS

Company Outline (As of March 31, 2023)

FINANCIAL HIGHLIGHTS

1

REPORT OF INDEPENDENT AUDITORS

2

CONSOLIDATED BALANCE SHEETS

7

CONSOLIDATED STATEMENTS OF INCOME

9CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME 10
CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS

11

CONSOLIDATED STATEMENTS OF CASH FLOWS

12NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

13

SUPPLEMENTAL INFORMATION38NONCONSOLIDATED BALANCE SHEETS

38

NONCONSOLIDATED STATEMENTS OF INCOME

40

CORPORATE PROFILE

41

Company Name
Headquarters
Foundation
Established
Capitalization
Employees
Stock Listing
Primary Business

NAKANO CORPORATION
4-2-28 Kudan-kita, Chiyoda-ku, Tokyo 102-0073, Japan
February 8, 1933
December 19, 1942
¥5,061,678,686
1,315(Group)Tokyo Stock Exchange, Standard Market
Domestic Construction Business
International Construction Business
Real Estate Business

Board of Directors / Audit & Supervisory Board Members (As of September 8, 2023)
President
Executive Vice President
Directors
Outside Directors
Standing Corporate Auditors
Corporate Auditors

Takashi Iizuka
Yoshinobu Oshima
Yorinobu Kato
Noboru Ogoyama
Moriyasu Kawamura
Mitsuharu Kotaka
Koichiro Nakano
Kohei Yamaya

Hiroyuki Tanada
Makoto Fukuda
Tetsuo Sato
Hideaki Sekizawa

Main Affiliated Financial Institutions
MUFG Bank, Ltd.
Mizuho Bank, Ltd.
The Bank of Yokohama, Ltd.

The Shoko Chukin Bank, Ltd.
The Yamanashi Chuo Bank, Ltd.
The 77 Bank, Ltd.

Major Shareholders
Oshima Scholarship Foundation
Yoshikazu Oshima
MB Service Co., Ltd.

Kanto Kogyo Co., Ltd.
Marine Dream Co., Ltd.
MUFG Bank, Ltd.

Domestic Offices
Headquarters
Tohoku Regional OfficeOsaka Regional Office
Taito Branch Office
Kita Tohoku Branch Office
Higashi Kanto Branch Office
Sales Offices (Mie, Kita Kyushu)

Tokyo Main Office
Nagoya Regional Office
Kyushu Regional Office
Hokkaido Branch Office
Kita Kanto Branch Office
Yokohama Branch OfficeInternational Offices
Nakano Singapore (Pte.) Ltd. (Singapore)
PT. Indonakano (Indonesia)
Nakano Vietnam Co., Ltd. (Vietnam)

Cautionary remarks regarding forward looking statements
This Annual Report includes forward-looking statements that represent Nakano Corporation’s assumptions and expectations inlight of currently available information. These statements reflect industry trends, client’s situations and other factors, and involverisks and uncertainties which may cause actual performance results to differ from those discussed in the forward looking
statements in accordance with changes in the domestic and international business environment.
For further information contact:
Nakano Corporation International Operations Headquarters
4-2-28 Kudan-kita, Chiyoda-ku, Tokyo, 102-0073, Japan
Tel: +81-(0)3-3265-4685 Fax: +81-(0)3-3265-4698
https://www.wave-nakano.co.jp

Nakano Construction Sdn. Bhd. (Malaysia)
Thai Nakano Co., Ltd. (Thailand)

Industry Affiliations
Japan Federation of Construction Contractors
The Associated General Contractors of Tokyo
General Contractors Association of Osaka

National General Contractors Association of Japan
Japan Association of Representative General Contractors

ANNUAL REPORT 2023

41

FINANCIAL HIGHLIGHTS

NAKANO CORPORATION and its subsidiaries
Years ended March 31, 2019 through 2023
2019

2020

2021

2022

2023

2023

Millionsof yenThousands of
U.S. dollars

Contract awards¥125,022¥115,633¥100,060¥99,807¥121,538$910,192

Net sales

117,152

116,838

115,994

96,470114,459

857,178

Operating income (loss)

5,476

3,779

1,555

(840)

2,859

21,410Ordinary income (loss)

5,954

4,070

1,750

(627)

3,134

23,470

Profit (loss) attributable to owners of parent

3,990

2,781

335

(1,594)

1,914

14,333Comprehensive income

4,023

1,350

2,170

(920)

2,602

19,486

Total net assets

34,35235,221

36,90935,576

37,839283,374

Total assets

84,45081,217

84,23582,19079,673596,667

Net cash provided by (used in) operating activities

2,864(6,797)(4,549)11,515

2,170

16,251

Net cash provided by (used in) investing activities

2,544

(555)

94

(2,684)(256)(1,917)

Net cash provided by (used in) financing activities
Cash and cash equivalents at end of period(931)(1,821)

4,057(5,739)(776)(5,811)

31,60021,612

21,87425,632

27,426205,392

Yen

U.S. dollars

Per share of common stock( in yen and U.S. dollars )Net assets¥961.56¥992.34¥1,038.71¥1,001.72¥1,063.68$7.97

Net income (loss)

116.09

80.93

9.77

(46.39)

55.72

0.42

Cash dividends applicable to the year

14.00

14.00

12.00

10.00

13.00

0.10

1,390

1,361

1,336

1,278

1,315

Number of employees

Note: The rate of ¥133.53=US$1.00, the foreign exchange rate on March 31, 2023, has been used for translation.

140,000

140,000

120,000

120,000

100,000

100,000

80,00060,00040,00080,00060,00040,00020,00020,000002019 2020 2021 2022 2023
Domestic

International

Profit (loss) attributableto owners of parent

Millions of yen

Net Sales

Millions of yen

Millions of yen

Contract Awards

2019 2020 2021 2022 2023
Domestic

4,500
4,000
3,500
3,000
2,500
2,000
1,500
1,000
500
0
–500
–1,000–1,500–2,0002019 2020 2021 2022 2023

International

ANNUAL REPORT 2023

1

REPORT OF INDEPENDENT AUDITORS

2

NAKANO CORPORATIONANNUAL REPORT 2023

3

4

NAKANO CORPORATIONANNUAL REPORT 2023

5

6

NAKANO CORPORATIONCONSOLIDATED BALANCE SHEETSNAKANO CORPORATION and its subsidiaries
As of March 31, 2022 and 2023

Millions of yen

Thousands of
U.S. dollars(Note 2)

2022

2023

2023

¥ 27,047¥27,902$208,956

Notes receivable, accounts receivable from completed
construction contracts and other (Notes 4, 9 and 14)

26,99022,182

166,119

Costs on uncompleted construction contracts (Note 4)

1,038

1,219

9,129

Costs on real estate business

48

45

337

Real estate for sale and development projects in progress

—

7

52

Raw materials and supplies

4

4

29

Accounts receivable - other

1,058

2,426

18,168

Other

2,045

696

5,212

AssetsCurrent assets:
Cash and deposits (Notes 4, 7 and 9)

Allowance for doubtful accounts
Total current assets

(185)

(164)

(1,228)58,04854,320406,799

10,803

11,18983,793

Non-current assets:
Property, plant and equipment (Notes 4 and 13)
Buildings and structures
Machinery, vehicles, tools, furniture and fixtures (Note 8)

1,640

2,277

17,052

Land

11,597

11,72287,785Construction in progress
Accumulated depreciation
Total property, plant and equipment

1

9

67

(5,669)(6,507)(48,730)

18,372

18,691

139,976

—

461

3,452

1,050

1,170

8,762

93

85

636

1,143

1,717

12,858Intangible assets
Goodwill
Leasehold right
Other
Total intangible assets
Investments and other assets
Investment securities (Notes 4, 9 and 10)

3,323

3,649

27,327Long-term loans receivable

12

6

44

Net defined benefit asset (Note 11)

806

729

5,459

Deferred tax assets

—

12

89

Other

495

563

4,216

Allowance for doubtful accounts

(12)

(17)

(127)

Total investments and other assets

4,625

4,944

37,025

Total non-current assets

24,141

25,352

189,859¥ 82,190¥79,673$596,667

Total assets
The accompanying notes are an integral part of these financial statements.

ANNUAL REPORT 2023

7

Millions of yen

Thousands of
U.S. dollars(Note 2)

2022

2023

2023

Liabilities
Current liabilities:
Notes payable, accounts payable for construction contracts
and other (Note 9)¥ 31,672¥24,661$184,685

Short-term loans payable (Notes 4, 9 and 18)

480

618

4,628

Current portion of bonds (Notes 9 and 17)

500

—

—

Income taxes payable

426

508

3,804

6,284

10,92881,839Provision for warranties for completed construction

289

317

2,373

Provision for loss on construction contracts (Note 4)

1,992

987

7,391

Advances received on uncompleted construction contracts(Notes 4 and 14)

Provision for bonuses

547

565

4,231

2,610

1,108

8,297

44,80339,694297,266

Long-term loans payable (Notes 4, 9 and 18)

200

353

2,643

Deferred tax liabilities (Note 12)

652

677

5,070

Provision for retirement benefits for directors

—

45

337

Net defined benefit liability (Note 11)

231

257

1,924

Other (Note 18)

725

805

6,028

Other (Note 18)
Total current liabilities
Non-current liabilities:

Total non-current liabilities
Total liabilities

1,809

2,139

16,01846,613

41,834313,292

5,061$ 37,901

Net assets
Shareholders’ equity:
Common stock
Authorized: 154,792,300 shares
Issued:34,498,097 shares¥5,061¥

Capital surplus

1,400

1,400

10,484Retained earnings

26,63028,201

211,195

(35)

(35)

(262)

33,057

34,627259,320

Valuation difference on available-for-sale securities

879

901

6,747

Foreign currency translation adjustment

(10)

633

4,740

Remeasurements of defined benefit plans (Note 11)

500

392

2,935

Total accumulated other comprehensive income

1,369

1,927

14,431

1,149

1,283

9,608

Less: Treasury stock, at cost
130,262 shares in 2022 and 131,075 shares in 2023
Total shareholders’ equity
Accumulated other comprehensive income:Non-controlling interests:
Total net assets
Total liabilities and net assets
The accompanying notes are an integral part of these financial statements.

8

NAKANO CORPORATION

35,576

37,839283,374¥82,190¥ 79,673$ 596,667

CONSOLIDATED STATEMENTS OF INCOME
NAKANO CORPORATION and its subsidiaries
For the years ended March 31, 2022 and 2023

Net sales:
Net sales of completed construction contracts
Sales on real estate business (Note 13)
Sales on other businessTotal net sales (Notes 5 and 14)
Cost of sales:
Cost of sales of completed construction contracts (Note 5)
Cost of sales on real estate business (Note 13)
Cost of sales on other businessTotal cost of sales
Gross profit:
Gross profit on completed construction contracts
Gross profit - real estate business
Gross profit - other businessTotal gross profit
Selling, general and administrative expenses (Note 5)
Operating income(loss)
Non-operating income:Interest income
Dividend income
Foreign exchange gains
Other
Total non-operating income
Non-operating expenses:
Interest expenses
Other
Total non-operating expenses
Ordinary income(loss)
Extraordinary income:Gain on sales of non-current assets (Note 5)
Gain on sales of memberships (Note 5)
Subsidy income (Note 5)
Other
Total extraordinary income
Extraordinary losses:
Impairment loss (Note 5)
Research expenses (Note 5)
Losses due to COVID-19 (Note 5)
Other (Note 5)
Total extraordinary losses
Profit (loss) before income taxes
Income taxes:
Income taxes - current
Income taxes - deferred (Note 12)
Total income taxes
Profit (loss)
Profit (loss) attributable to non-controlling interests
Profit (loss) attributable to owners of parent

Millions of yen

Thousands of
U.S. dollars(Note 2)

2022

2023

2023

¥95,233
1,142
94
96,470¥ 113,155
1,200
103
114,459$ 847,412
8,986
771
857,178

90,952476
51
91,481

104,759678
83
105,521784,535
5,077
621
790,241

4,281
665
42
4,989
5,830
(840)

8,395
522
20
8,938
6,079
2,859

62,8693,909
149
66,93645,525
21,410

63
47
115
17
243

158
55
68
9
291

1,183
411
509
67
2,179

28
2
30
(627)

14
1
16
3,134

104
7
119
23,470

8
—
56
—
65

6
15
8
0
30

44
112
59
0
224

111
—
95
30
237
(799)

171
53
—
16
241
2,923

1,280
396
—
119
1,804
21,890872
23896(1,695)(101)¥(1,594)

893
58
951
1,972
57
¥1,914

6,687
434
7,121
14,768426$14,333

The accompanying notes are an integral part of these financial statements.

ANNUAL REPORT 2023

9

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
NAKANO CORPORATION and its subsidiaries
For the years ended March 31, 2022 and 2023

Profit(loss)

Millions of yen

Thousands of
U.S. dollars(Note 2)

2022

2023

2023

¥(1,695)¥1,972$14,768

(82)
781
76
775

21
717
(108)
630

157
5,369
(808)
4,718

Other comprehensive income:
Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Total other comprehensive income (Note 6)
Comprehensive income

¥

(920)

¥2,602$19,486

Comprehensive income attributable to:Comprehensive income attributable to owners of parent
Comprehensive income attributable to non-controlling interests

¥

(859)
(60)

¥2,472130$18,512
973

The accompanying notes are an integral part of these financial statements.

10

NAKANO CORPORATIONCONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETSNAKANO CORPORATION and its subsidiaries
For the years ended March 31, 2022 and 2023
Millions of yen
Accumulated other comprehensive income

Shareholders’ Equity

Commonstock

Balance as at March 31, 2021

CapitalsurplusRetainedearnings

Valuation
Total
difference
accumulated
Foreign
Nonothercurrency Remeasurements
Total on available-for-sale translationof defined comprehensive controlling
Treasury shareholders’interests
securities adjustment
incomeequitybenefit plansstock¥5,061 ¥1,400 ¥28,637 ¥(34) ¥35,064

Total net
assets¥962 ¥(750) ¥424 ¥635 ¥1,210 ¥36,909

Changes of items during
periodDividends from surplus(412)

Profit attributable to owners ofparent(1,594)Purchase of treasury stock

(0)

(412)

(412)

(1,594)(1,594)(0)(0)

Net changes of items otherthan shareholders’ equity
Total changes of items during
periodBalance as at March 31, 2022——

(2,006)(0)(2,007)¥5,061 ¥1,400 ¥26,630 ¥(35) ¥33,057

(82)

740

76

734

(60)

674

(82)

740

76

734

(60)

(1,332)¥879 ¥(10) ¥500 ¥1,369 ¥1,149 ¥35,576

Changes of items during
periodDividends from surplus(343)

Profit attributable to owners ofparent

1,914

Purchase of treasury stock

(0)

(343)

(343)

1,914

1,914

(0)

(0)

Net changes of items otherthan shareholders’ equity
Total changes of items during
periodBalance as at March 31, 2023

21
—

—

1,571

(0)

¥ 5,061 ¥ 1,400 ¥ 28,201 ¥

1,570(35) ¥ 34,627

¥

644

(108)

557

133

691

21

644

(108)

557

133

2,262

901 ¥

633 ¥

392 ¥ 1,927 ¥ 1,283 ¥ 37,839

Thousands of U.S. dollars (Note 2)
Shareholders’ Equity

Commonstock

Balance as at March 31, 2022

CapitalsurplusRetainedearnings

Accumulated other comprehensive income

Valuation
Total
difference
accumulated
Foreign
Nonothercurrency Remeasurements
Total on available-for-sale translationof defined comprehensive controlling
Treasury shareholders’interests
securities adjustment
incomeequitybenefit plansstock$37,901 $10,484 $199,430 $(262) $247,562

Total net
assets$6,582 $(74) $3,744 $10,252 $8,604 $266,427

Changes of items during
periodDividends from surplus(2,568)

Profit attributable to owners ofparent14,333Purchase of treasury stock(0)(2,568)(2,568)14,333

14,333(0)(0)

Net changes of items otherthan shareholders’ equity
Total changes of items during
periodBalance as at March 31, 2023——

11,765$ 37,901 $ 10,484 $211,195 $

(0)

11,757

157

4,822

(808)

4,171

996

5,174

157

4,822

(808)

4,171

996

16,940(262) $259,320 $ 6,747 $ 4,740 $ 2,935 $ 14,431 $ 9,608 $283,374

The accompanying notes are an integral part of these financial statements.

ANNUAL REPORT 2023

11

CONSOLIDATED STATEMENTS OF CASH FLOWSNAKANO CORPORATION and its subsidiaries
For the years ended March 31, 2022 and 2023

Cash flows from operating activities:
Profit(loss) before income taxes
Adjustments for:
Depreciation and amortization
Impairment loss
Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in net defined benefit liability
Decrease (increase) in net defined benefit asset
Increase (decrease) in provision for loss on construction
contracts
Interest and dividend income
Interest expenses
Subsidy income
Decrease (increase) in notes and accounts receivable - trade
Decrease (increase) in costs on uncompleted construction
contracts
Increase (decrease) in notes and accounts payable - trade
Increase (decrease) in advances received on uncompleted
construction contracts
Decrease/increase in consumption taxes receivable/payable
Other, net
SubtotalInterest and dividend income received
Interest expenses paid
Income taxes paid
Subsidy income received
Net cash provided by (used in) operating activities
Cash flows from investing activities:
Payments into time deposits
Proceeds from withdrawal of time deposits
Purchase of property, plant and equipment
Purchase of intangible assets
Purchase of shares of subsidiaries resulting in change in scope of
consolidation
Other, net
Net cash provided by (used in) investing activities
Cash flows from financing activities:
Net increase (decrease) in short-term loans payable
Proceeds from long-term loans payable
Repayments of long-term loans payable
Redemption of bonds
Cash dividends paid
Other, net
Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period (Note 7)
The accompanying notes are an integral part of these financial statements.

12

NAKANO CORPORATION

Millions of yen

Thousands of
U.S. dollars(Note 2)

2022

2023

2023

¥(799)¥ 2,923$ 21,890

458
111
87
(8)
57

483
171
(25)
13
(79)

3,617
1,280
(187)
97
(591)

1,802
(110)
28
(56)
8,541

(1,184)
(213)
14
(8)
5,720

(8,866)(1,595)104(59)
42,836

91
147

(76)
(7,807)(569)(58,466)

398
1,837
17
12,604108(22)(1,272)
97
11,515

4,416(1,913)
394
2,826
201
(16)
(853)
11
2,170

33,071(14,326)
2,950
21,163
1,505(119)(6,388)82
16,251(2,113)
1,289(1,598)
(43)

(823)
1,856
(321)
(32)

(6,163)
13,899(2,403)
(239)

—
(219)
(2,684)

(958)
22
(256)

(7,174)164(1,917)(4,900)
—
(310)
—
(412)
(117)
(5,739)666
3,757
21,874¥25,632

200
300
(210)
(500)
(344)
(222)
(776)
657
1,794
25,632¥27,426

1,497
2,246
(1,572)(3,744)(2,576)(1,662)(5,811)
4,920
13,435
191,956$ 205,392

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NAKANO CORPORATION and its subsidiaries

1.	Basis of Presenting
Consolidated
Financial
Statements

The consolidated financial statements presented herein of NAKANO CORPORATION (the“Company”) and its consolidated subsidiaries (together, the “Group”) are prepared in accordancewith the provisions set forth in the Japanese Financial Instruments and Exchange Law and its
related accounting regulations, and in conformity with accounting principles generally accepted inJapan (“Japanese GAAP”), which are different in certain respects as to application and disclosure
requirements of International Financial Reporting Standards.
In preparing these consolidated financial statements, certain reclassifications andrearrangements have been made to the consolidated financial statements issued domestically inorder to present them in a form which is more familiar to readers outside Japan. In addition, certain
reclassifications have been made to the 2022 financial statements to conform to the classifications
used in 2023.

2.	U.S. Dollar Amounts The accounts of consolidated financial statements presented herein are expressed in Japanese

yen by rounding down to the nearest million. The U.S. dollar amounts shown in the accompanying
consolidated financial statements and notes thereto have been translated from Japanese yen into
U.S. dollars on the basis of ¥133.53 to U.S.$1, the rate of exchange prevailing at March 31, 2023,
and have been then rounded down to the nearest thousand. These U.S. dollar amounts are notintended to imply that the Japanese yen amounts have been or could be converted, realized or
settled in U.S. dollars at this or any other rate.

3.	Summary of
Significant
Accounting Policies

a. Consolidation
1) Scope of Consolidation
The Company had 15 subsidiaries as of March 31, 2023. The consolidated financial statements forthe year ended March 31, 2023 include the accounts of the Company and all subsidiaries. Note
that, for the current fiscal year, 6 of the domestic subsidiaries are consolidated only on the balance
sheet. The Company had 5 affiliates as of March 31, 2023. As of March 31, 2023, the equity
method was not applied to 2 affiliates, as it was not significant in terms of retained earnings andnet income of the consolidated financial statements.
2) Financial Statements of Subsidiaries
The financial year-end of 6 domestic subsidiaries is July 31.
Consolidation of these subsidiaries are therefore performed by using the provisional financial
statements prepared as of March 31. The other subsidiaries’ financial year-end is March 31.
b. Securities
Securities are classified and accounted for as follows:
Available-for-sale securities
Other than equity securities etc. without market prices are reported at fair value, withunrealized gains and losses, net of applicable taxes, reported in a separate component of net
assets, while the cost of securities sold is computed using the moving-average method.
Equity securities etc. without market prices are stated at cost determined by the movingaverage method. For other than temporary declines in fair value, securities are written down to net
realizable value.
c. Inventories
Costs on uncompleted construction contracts are stated at cost determined by the specificidentification method.
Costs on real estate business, Real estate for sale and development projects in progress and
Raw materials and supplies are stated at cost determined by the specific identification method for
Costs on real estate business and Real estate for sale and development projects in progress andby the last purchase price method for Raw material and supplies, while the net book value of theseinventories in the balance sheet is written down if the net realizable value declines.
d. Property, Plant and Equipment (excluding lease assets)
Property, plant and equipment are stated at cost. Depreciation of Property, plant and equipment of
the Company and its domestic consolidated subsidiaries is computed by the declining-balancemethod. Buildings (excluding Building fixtures) acquired on or after April 1, 1998 and Building
fixtures and Structures acquired on or after April 1, 2016 are depreciated using the straight-line
method. Useful lives and residual values of the assets are determined based on the regulations of
the Corporation Tax Act.
Foreign consolidated subsidiaries use primarily the straight-line method.
ANNUAL REPORT 2023

13

e. Intangible Assets (excluding lease assets) and Goodwill
Intangible assets are amortized by the straight-line method. Useful lives of the assets are
determined based on the regulations of the Corporation Tax Act.
Software for internal use is amortized over a period of the internal available years (5 years)
using the straight-line method.
Goodwill is amortized over 5 years using the straight-line method.
f.Lease Assets
Depreciation of Lease assets under finance leases that do not transfer ownership of the Lease
assets to the lessee is calculated by the straight-line method over the lease term of the Lease
assets with no residual value.
Some foreign consolidated subsidiaries prepare financial statements pursuant to theInternational Financial Reporting Standards. These subsidiaries have applied International
Financial Reporting Standard 16 Leases (hereinafter referred to as “IFRS 16”). As a result, lessees
recognize all leases as assets and liabilities on the balance sheet, in principle. Depreciation of
Right-of-use assets recognized as assets is calculated by the straight-line method. Leasetransactions based on IFRS 16 are classified under “1. Finance lease transactions” in “8. Lease
Transactions.”
g. Allowance for Doubtful Accounts
The allowance for doubtful accounts provided by the Company and its domestic consolidated
subsidiaries is stated in amounts considered to be appropriate based on each company’s pastcredit loss experience and an evaluation of potential losses in the receivables and others
outstanding.
Foreign consolidated subsidiaries provide for such possible losses based on the estimateduncollectible amounts of the specific accounts.
h. Provision for Warranties for Completed Construction
The provision for warranties for completed construction is provided by the Company to cover
expenses for defects claimed concerning completed work based on the estimated amount ofcompensation to be paid in the future for the work completed during the fiscal year which is
calculated by using the results in the past fiscal years.
i. Provision for Loss on Construction Contracts
The provision for loss on construction contracts is provided by the Group with respect toconstruction projects for which eventual losses are reasonably estimated.
j. Provision for Bonuses
The provision for bonuses provided by the Company and its domestic consolidated subsidiaries is
accrued at the year end to which such bonuses are attributable.
k. Provision for Retirement Benefits for Directors
The provision for retirement benefits for directors is provided by certain domestic subsidiaries at
the amount to be paid according to their companies’ regulations if they had retired at the current
consolidated fiscal year-end, in order to prepare for the payment of retirement benefits for
directors.
l. Accounting for Retirement Benefits
In computing projected benefit obligations, the estimated amounts of retirement benefit obligations
are attributed to periods on a benefit formula basis.
Actuarial differences are amortized commencing in the following year after the differences are
incurred by the straight-line method over a period (11 years) which is shorter than the averageremaining years of service of the employees when incurred.
In determining Net defined benefit liability and Retirement benefit expenses, certain
consolidated subsidiaries adopt a short-cut method where the amount required for voluntarytermination of employees at the fiscal year-end is regarded as projected benefit obligations.

14

NAKANO CORPORATION

m. Revenue and Cost of Construction Contracts
The Group is primarily engaged in the general construction business, undertaking the construction
and design of buildings and other structures. The principal obligation of the Group is to constructand design buildings and other structures based on the specifications of contracts with customers,
and delivery to customers in exchange for contract consideration.
The Group recognizes revenue over time as performance obligations to transfer the goods orservices to the customer are satisfied because control of the goods or services is primarilytransferred to customers over time.
The measurement of progress toward satisfying performance obligations is based on thepercentage of the cost of construction incurred until the end of each reporting period, against the
total expected cost of construction. If, at an early stage of the contract, the degree of progress
toward satisfying the performance obligation cannot be reasonably estimated, but it is probablethat the costs to be incurred will be recovered, revenue is recognized on a cost recovery basis.
For construction contracts with a very short period between the transaction commencement date
and the point in time when the performance obligation is expected to be fully satisfied, analternative treatment is applied, whereby revenue is not recognized over time, but is recognizedwhen the performance obligation is fully satisfied.
n. Cash and Cash Equivalents in the Consolidated Statements of Cash Flows
In preparing the consolidated statements of cash flows, Cash and cash equivalents include cashon hand, readily-available deposits and short-term highly liquid investments with maturities within 3months at the time of acquisition that are exposed to insignificant risk of changes in value.
o. Significant Accounting Estimates“Revenue recognized in construction contracts”i) Amount recorded in the consolidated financial statements
Millions of yen
For the year ended March 31

Net sales of completed construction contracts

Thousands of
U.S. dollars

2022

2023

2023

¥ 90,594¥108,803$814,820

ii) Information on significant accounting estimates for identified items
Net sales of completed construction contracts are recorded by recognizing revenue over time,
primarily as the performance obligation to transfer goods or services to the customer is satisfied.
The measurement of progress toward satisfying performance obligations is based on thepercentage of the cost of construction incurred until the end of each reporting period, against the
total expected cost of construction. If estimated total cost or cost incurred should significantly
exceed original estimations due to a substantial rise in labor and equipment costs, or otherreasons, then this may have a significant impact on construction revenue recognized over time
under the Revenue Recognition Standard in the consolidated financial statements of the following
fiscal year.
p. Changes in Accounting Policies(Application of Implementation Guidance on Accounting Standard for Fair Value Measurement)
The Company has applied the Implementation Guidance on Accounting Standard for Fair Value
Measurement (revised ASBJ Guidance No. 31, June 17, 2021; hereinafter “the Guidance”) fromthe beginning of the current fiscal year, and in accordance with the transitional treatment set forthin Paragraph 27-2 of the Guidance, has decided to prospectively apply new accounting policies
as defined by the Guidance. There is no impact on the consolidated financial statements.
In accordance with Paragraph 27-3 of the Guidance, the investment trusts for the fiscal
year ended March 31, 2022 are not included in “Breakdown, etc., if the fair value of financial
instruments for each level” in the notes to “9. Financial Instruments”.

ANNUAL REPORT 2023

15

4.	Notes toConsolidated
Balance Sheets

1. The amounts of receivables and contract assets in “Notes receivable, accounts receivable fromcompleted construction contracts and other” arising from contracts with customers were as
follows:
As of March 31

Notes receivable

Millions of yen

Thousands of
U.S. dollars

2023

2023

2022

¥56

Electronically recorded monetary claims - operating

¥

2,862

219

$ 1,640

2,715

20,332

Accounts receivable from completed construction
contracts and other

9,193

8,107

60,712Contract Assets

14,878

11,14083,426

2. The assets pledged as collateral and collateralized liabilities were as follows:
Millions of yen
As of March 31

Cash and deposits

2022

¥52

Thousands of
U.S. dollars

2023

¥

50

2023

$

374

Electronically recorded monetary claims - operating

200

200

1,497

Buildings

540

516

3,864

5,697

5,697

42,664Land
Investment securities

302

296

2,216

Total

¥6,792¥

6,760$ 50,625

Short-term loans payable

¥170

¥

348

$ 2,606

Long-term loans payable
Total

—
¥170

¥

202

1,512

550

$ 4,118

Investment securities of ¥302 million as of March 31, 2022 include ¥4 million of stocks ofsubsidiaries and affiliates pledged as collateral based on loan agreements concluded between
the Company’s affiliates and financial institutions.
Investment securities of ¥296 million ($2,216 thousand) as of March 31, 2023 include ¥4 million($29 thousand) of stocks of subsidiaries and affiliates pledged as collateral based on loan
agreements concluded between the Company’s affiliates and financial institutions.
3. The Group was contingently liable for the following:
As of March 31

Guarantees to financial institutions, etc. to ensure
the completion of construction contracts ofNakano Singapore (Pte.) Ltd. and its subsidiaries

Thousands of
U.S. dollars

2023

2023

3,130

$ 23,440

15

112

3,146

$ 23,560

2022¥4,061

Debt guarantee for borrowing of the affiliatedcompany

Total

Millions of yen¥—¥4,061¥

4. “Costs on uncompleted construction contracts” which are estimated to recognize losses and“Provision for loss on construction contracts” are to be recorded on a gross basis without
offsetting, if any.
5. Investment in unconsolidated subsidiaries and affiliates were as follows:
Millions of yen
As of March 31

Investment securities (Equity securities)

16

NAKANO CORPORATION¥

Thousands of
U.S. dollars

2022

2023

2023

4

¥168

$1,258

6. T he amount of Contract liabilities in “Advances received on uncompleted construction
contracts” was as follows:
As of March 31

Advances received on uncompleted construction
contracts

5.	Notes toConsolidated
Statements ofIncomeMillions of yen

Thousands of
U.S. dollars

2022

2023

2023

¥ 6,284¥10,928$81,839

1. Revenue from Contracts with Customers
Net sales do not separately present revenue arising from contracts with customers and otherrevenue. The amount of revenue from contracts with customers is presented in “14. Revenue
Recognition 1. Information breakdown on revenue arising from contracts with customers”.
2. Provision for loss on construction contracts included in “Cost of sales of completed construction
contracts” was as follows:
Millions of yen
For the year ended March 31

Provision for loss on construction contracts

Thousands of
U.S. dollars

2022

2023

2023

¥1,847

¥41

$307

3. The major components of “Selling, general and administrative expenses” were as follows:
Millions of yen
For the year ended March 31

Employees’ salaries and allowances

Thousands of
U.S. dollars

2022

2023

2023

¥2,686¥2,792$20,909

Provision for bonuses

233

235

1,759

Retirement benefit expenses

143

85

636

Provision of allowance for doubtful accounts

87

(20)

(149)

Depreciation

180

202

1,512

4. Research and development costs included in Selling, general and administrative expenses
were as follows:
Millions of yen
For the year ended March 31

Research and development costs

Thousands of
U.S. dollars

2022

2023

2023

¥103

¥115

$861

Millions of yen

Thousands of
U.S. dollars

2022

2023

2023

5. “Gain on sales of non-current assets” consisted of the following:
For the year ended March 31

Vehicles

¥8

¥6

$44

Other

0

—

—

Total

¥8

¥6

$44

6. “Gain on sales of memberships”
Gain on sales of memberships is the income generated from the sale of the golf membership.

ANNUAL REPORT 2023

17

7. “Subsidy Income”
In the fiscal year ended March 31, 2022 and 2023, the Company has recorded subsidies paidby the governments of Singapore, Malaysia and Thailand to companies suffering the impact of
COVID-19 under their respective schemes to support employment.
Company NameCountry

Millions of yen

Thousands of
U.S. dollars

2022

2023

2023

Nakano Singapore (PTE.) LTD.

Singapore

¥47

¥8

$59

Nakano Construction SDN.BHD.

Malaysia

5——

Thai Nakano CO.,LTD.

Thailand

Total

4

—

—

¥56

¥8

$59

8. In the fiscal year ended March 31, 2022 and 2023, the Group recognized Impairment losses on
the following asset groups:
Millions of yen
Company NameCountry

UseType

NakanoSingapore Operating Buildings
Singapore (Pte.)
assets Machinery
Ltd.
Tools, furniture and fixtures
Total
NakanoMalaysia
Construction Sdn.
Bhd.

Thai Nakano
Co.,Ltd.

ThailandOperating Buildings
assets Tools, furniture and fixtures

Thousands of
U.S. dollars

2022

2023

2023

¥23

¥98

$733

37

69

516

29

0

0

90

167

1,250

2

—

—

15

—

—

Others

1

—

—

Total

19

—

—

1

2

14

0

0

0

Operating Tools, furniture and fixtures
assets Machinery
Others

—

0

0

Total

1

3

22

¥111

¥171

$1,280

Total

The Group categorizes its construction business by each respective revenue unit, and its realestate leasing business and other businesses by individual assets, as the smallest cash flowgenerating units.
The book value of business assets held by a consolidated subsidiary, which are grouped intobusiness assets for the construction business, was reduced to the recoverable amount as the said
consolidated subsidiary continuously incurred negative earnings from operating activities, and thatamount of reduction was recognized as Impairment loss under extraordinary losses.
The recoverable amount of such assets was measured based on the value in use, and theconsolidated subsidiary whose operating activities continuously generated negative earnings wasevaluated to have a recoverable amount of zero as its future cash flow is not expected.
9. “Research expenses”
Research expenses are the expenses recorded relating to the inappropriate accounting
treatment in prior years that was discovered at the Company’s consolidated subsidiaries.
10. “Losses due to COVID-19”
Millions of yen

18

NAKANO CORPORATION

Company NameCountry

Nakano Construction SDN.BHD.

Malaysia

Thousands of
U.S. dollars

2022

2023

2023

¥95

¥—

$—

11. “Head office relocation expenses” consisted of the following:
Millions of yen
For the year ended March 31

2022

2023

2023

¥7

¥—

$—

Loss on retirement of leasehold improvements

5

—

—

Other

8

—

—

Total

¥21

¥—

$—

Restoration cost

6.	Notes toConsolidated
Statements ofComprehensive
IncomeThousands of
U.S. dollars

Reclassification adjustments and tax effects related to Other comprehensive income were as
follows:
For the year ended March 31

Millions of yen

Thousands of
U.S. dollars

2022

2023

2023

¥(118)

¥32

$239

—

—

—

Valuation difference on available-for-sale securities
Amount arising during the year
Reclassification adjustments
Total before tax effect

(118)

32

239

Tax effect

36

(10)

(74)

Valuation difference on available-for-sale securities

(82)

21

157

Amount arising during the year

781

717

5,369

Reclassification adjustments

—

—

—

Total before tax effect

781

717

5,369

Tax effect

—

—

—

Foreign currency translation adjustments

781

717

5,369

27

(106)

(793)

Foreign currency translation adjustments

Remeasurements of defined benefit plans
Amount arising during the year

82

(50)

(374)

Total before tax effect

110

(156)

(1,168)Tax effect

(33)

47

351

Remeasurements of defined benefit plans

76

(108)

(808)

¥775

¥630

$4,718

Reclassification adjustments

Total other comprehensive income

7.	Notes toConsolidated
Statements of Cash
Flows

The reconciliation between “Cash and cash equivalents” reported in the consolidated statementsof cash flows and “Cash and deposits” reported in the consolidated balance sheets was asfollows:
As of March 31

Cash and deposits per consolidated balance sheets
Less: Time deposits maturing over 3 months
Cash and cash equivalents per consolidated statementsof cash flows

Millions of yen

Thousands of
U.S. dollars

2022

2023

2023

¥27,047¥27,902$208,956(1,415)(475)(3,557)¥25,632¥27,426$205,392

ANNUAL REPORT 2023

19

8.	Lease Transactions

1. Finance lease transactions(As lessee)
Finance lease contracts that do not transfer ownership of the lease assets to the lessee1) Contents of lease assets
Property, plant and equipment
Fixtures such as computers and vehicles.
In addition, “Right of use assets” of foreign consolidated subsidiaries mainly comprise offices andvehicles.
2) Depreciation of lease assets
As described in “NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 3. Summary of Significant
Accounting Policies f. Lease Assets”.
2. Operating lease transactions
Future minimum lease payments under non-cancelable operating lease contracts as of March 31,
2022 and 2023 were as follows:
As of March 31

Millions of yen

Thousands of
U.S. dollars

2022

2023

2023

¥21

¥21

$157

(As lessee)
Due in 1 year
Due after 1 year
Total

79

57

426

¥100

¥79

$591

¥62

¥62

$464

124

62

464

¥186

¥124

$928

(As lessor)
Due in 1 year
Due after 1 year
Total

9.	Financial
Instruments

1. Overview
1) Policy for financial instruments
The Group raises operating funds primarily through bank loans and bond issues. Temporary fundsurpluses are managed principally through short-term deposits with little risk. Under the policy of
the Group, the Group uses derivatives only for the purpose of reducing foreign exchange
fluctuation risks associated with foreign currency denominated transactions and interest rate
fluctuation risks associated with loans payable, and not for speculative purposes.
2) Types of financial instruments, risk and risk management
The Group controls risks by type of financial instruments in accordance with the risk management
policy.
Regarding credit risk associated with Notes receivable and Accounts receivable fromcompleted construction contracts, the Group identifies major customers’ credit status bymonitoring the payment terms and credit balances by each customer.
Regarding Investment securities, principally consisting of equity securities, the Group regularly
identifies the quoted market price of the listed securities to manage the risks arising from market
value fluctuations.
The Group manages liquidity risk associated with loans payable by appropriately planning forfund raising based on monthly cash flow projections.
Regarding derivative transactions, the Group executes and controls the transactions based on
the internal control rules which define the transaction authority and limits and enter into contracts
with only the high credit rating financial institutions to reduce credit risk.
3) Supplementary explanation on fair value of financial instruments
The fair value of financial instruments is determined based on the market price or reasonableestimated amount if there is no market price. Certain assumptions are used for calculation of suchfair value, and accordingly, the result of such calculation may vary, if different assumptions are
used.

20

NAKANO CORPORATION2. Fair value of financial instruments
The carrying amount, fair value and difference of the financial instruments as of March 31, 2022
and 2023 were as follows:
Millions of yen
As of March 31, 2022

Carrying amount

Fair value¥26,990(173)¥26,817¥26,817

2,117¥28,934

2,117—

Assets total¥28,934¥—Long-term loans payable (Note 4)

¥410

¥409

¥(0)

Liabilities total

¥410

¥409

¥(0)

(1) Notes receivable, accounts receivable fromcompleted construction contracts and other
Allowance for doubtful accounts (Note 2)(2) Investment securities (Note 3)
Available-for-sale securities

Difference¥—

1. Cash and deposits, Notes payable, accounts payable for construction contracts and other,
Short-term loans payable, and Current portion of bonds are omitted because they are cash,
and their fair value approximates their book value due to their short maturities. Long-termloans receivable are omitted as they are immaterial.
2. A llowance for doubtful accounts individually recorded for Notes receivable, accounts
receivable from completed construction contracts and other is deducted.
3. Equity securities etc. without market prices are not included. The carrying amounts of suchfinancial instruments in the consolidated balance sheets are as follows:
As of March 31, 2022

Unlisted equity securities

Millions of yen¥1,206

4. Current portion of long-term loans payable is included.
Millions of yen
As of March 31, 2023

(1) Notes receivable, accounts receivable fromcompleted construction contracts and other
Allowance for doubtful accounts (Note 2)(2) Investment securities (Note 3)
Available-for-sale securities
Equity securities
Corporate bonds
OthersCarrying amount

Fair value

Difference¥22,182(144)¥22,038¥22,038

¥—

2,144

2,144

95
19

95
19

—
—
—

Assets total¥24,297¥24,297¥—Long-term loans payable (Note 4)
Liabilities total

¥501
¥501

¥501
¥501

¥(0)
¥(0)

ANNUAL REPORT 2023

21

Thousands of U.S. dollars
As of March 31, 2023

Carrying amount

Fair value

Difference$166,119(1,078)$165,041$165,041$—

16,056

16,056

711
142

711
142

—
—
—

Assets total$181,950$181,950$—Long-term loans payable (Note 4)
Liabilities total$3,751$3,751$3,751$3,751

$(0)
$(0)

(1) Notes receivable, accounts receivable fromcompleted construction contracts and other
Allowance for doubtful accounts (Note 2)(2) Investment securities (Note 3)
Available-for-sale securities
Equity securities
Corporate bonds
Others1. Cash and deposits, Notes payable, accounts payable for construction contracts and other,and Short-term loans payable are omitted because they are cash, and their fair value
approximates their book value due to their short maturities. Long-term loans receivable areomitted as they are immaterial.
2. A llowance for doubtful accounts individually recorded for Notes receivable, accounts
receivable from completed construction contracts and other is deducted.
3. Equity securities etc. without market prices are not included. The carrying amounts of suchfinancial instruments in the consolidated balance sheets are as follows:
As of March 31, 2023

Millions of yen

Thousands of
U.S. dollars¥1,390$10,409

Unlisted equity securities
4. Current portion of long-term loans payable is included.

(Notes): 1. Redemption schedule for monetary assets and securities with contractual maturities
after balance sheet date was as follows:
Millions of yen
Due after
Due after
1 year through 5 years through5 years
10 years

As of March 31, 2022

Due in 1 year
or less

Due after
10 years

Cash and deposits¥27,047

¥—

¥—

¥—

26,990———Notes receivable, accounts
receivable from completed
construction contracts and other
Investment securities
Available-for-sale securities with
contractual maturities
Total

22

NAKANO CORPORATION

—

6

—

—

¥54,038

¥6

¥—

¥—

Millions of yen

As of March 31, 2023

Due in 1 year
or less

Due after
1 year through5 years

Cash and deposits¥27,902

¥—

¥—

¥—

22,182

—

—

—

—

—

—

95

—

13

9

4

¥50,085

¥13

¥9

¥99

Notes receivable, accounts
receivable from completed
construction contracts and other
Investment securities
Available-for-sale securities with
contractual maturities (Corporate bonds)
Available-for-sale securities with
contractual maturities (Others)
Total

Due after
5 years through10 years

Due after
10 yearsThousands of U.S. dollars
Due after
Due after
1 year through 5 years through5 years
10 years

As of March 31, 2023

Due in 1 year
or less

Due after
10 years

Cash and deposits$208,956

$—

$—

$—

166,119

—

—

—

—

—

—

711

Notes receivable, accounts
receivable from completed
construction contracts and other
Investment securities:
Available-for-sale securities with
contractual maturities (Corporate bonds)
Available-for-sale securities with
contractual maturities (Others)
Total

—

97

67

29

$375,084

$97

$67

$741

2.	Repayment schedule of Short-term loans payable, Long-term loans payable and Bonds payable
after balance sheet date was as follows:
Millions of yen
Due after
1 yearthrough
2 years

Due after
2 years
through
3 years

Due after
3 years
through
4 years

Due after
4 years
through
5 years

Due after
5 years

As of March 31, 2022

Due in 1
year or less

Short-term loans payable¥480 ¥— ¥— ¥— ¥— ¥—Long-term loans payable

—

50

50

50

50

—

Bonds payable

500

—

—

—

—

—

Total

¥980 ¥50 ¥50 ¥50 ¥50 ¥—Millions of yen
Due after
1 yearthrough
2 years

Due after
2 years
through
3 years

Due after
3 years
through
4 years

Due after
4 years
through
5 years

Due after
5 years

As of March 31, 2023

Due in 1
year or less

Short-term loans payable¥470 ¥— ¥— ¥— ¥— ¥—Long-term loans payable
Total

148

149

154

50

—

—

¥618 ¥149 ¥154 ¥50 ¥— ¥—

ANNUAL REPORT 2023

23

Thousands of U.S. dollars
Due after
1 yearthrough
2 years

Due after
3 years
through
4 years

Due after
2 years
through
3 years

Due after
4 years
through
5 years

Due after
5 years

As of March 31, 2023

Due in 1
year or less

Short-term loans payable$3,519 $— $— $— $— $—Long-term loans payable
Total

1,108

1,115

1,153

374

—

—

$4,628 $1,115 $1,153 $374 $— $—

3.	Breakdown, etc., if the fair value of financial instruments for each level
The fair value of financial instruments is classified into the following three levels based on theobservability and materiality of the inputs used to determine fair value.
Level 1 fair value: Fair value calculated from the market prices for assets or liabilities, whereby
such fair value calculation is formed in active markets from among the inputs
associated with the calculation of observable fair value.
Level 2 fair value: Fair value calculated using inputs related to the fair value other than with
Level 1 inputs from among the inputs associated with the calculation ofobservable fair value.
Level 3 fair value: Fair value calculated using inputs associated with fair value that cannot be
observed.
1) Financial instruments that deem carrying value as fair value
Millions of yen
Fair Value
As of March 31, 2022

Level 1

Level 2

Level 3

Total

Investment securities
Available-for-sale securities
Equity securities¥2,111 ¥— ¥— ¥2,111

Assets Total¥2,111 ¥— ¥— ¥2,111(Note): The fair value of investment trusts is not included in the above. The carrying amount of the investment trust is¥6 million.
Millions of yen
Fair Value
As of March 31, 2023

Level 1

Level 2

Level 3

Total

Investment securities
Available-for-sale securities
Equity securities
Corporate bonds
Others¥2,144 ¥— ¥— ¥2,144
95
—
95
—
19
—
19
—

Assets Total¥2,144 ¥114 ¥— ¥2,259
Thousands of U.S. dollars
Fair Value

As of March 31, 2023

24

NAKANO CORPORATION

Level 1

Level 2

Level 3

Total

Investment securities
Available-for-sale securities
Equity securities
Corporate bonds
Others$16,056 $— $— $16,056
711
—
711
—
142
—
142
—

Assets Total$16,056 $853 $— $16,917

2) Financial instruments that do not deem carrying value as fair value
Millions of yen
Fair Value
As of March 31, 2022

Notes receivable, accounts receivable fromcompleted construction contracts and other

Level 1

Level 2

Level 3Total

¥— ¥26,817 ¥— ¥26,817

Assets Total¥— ¥26,817 ¥— ¥26,817

Long-term loans payable¥— ¥409 ¥— ¥409

Liabilities Total¥— ¥409 ¥— ¥409
Millions of yen
Fair Value

As of March 31, 2023

Notes receivable, accounts receivable fromcompleted construction contracts and other

Level 1

Level 2

Level 3Total

¥— ¥22,038 ¥— ¥22,038

Assets Total¥— ¥22,038 ¥— ¥22,038

Long-term loans payable¥— ¥501 ¥— ¥501

Liabilities Total¥— ¥501 ¥— ¥501
Thousands of U.S. dollars
Fair Value

As of March 31, 2023

Notes receivable, accounts receivable fromcompleted construction contracts and other

Level 1

Level 2

Level 3Total

$— $165,041 $— $165,041

Assets Total$— $165,041 $— $165,041

Long-term loans payable$— $3,751 $— $3,751

Liabilities Total$— $3,751 $— $3,751(Notes): Explanation of valuation techniques used in the calculation of fair value and inputs related to the calculation offair value
Investment securities
Listed securities and corporate bonds are valued using quoted prices. listed securities are traded in active
markets, and as such their fair value is classified as Level 1 fair value. The fair value of corporate bonds andothers are classified as Level 2 fair value because they are not traded frequently in the market and notconsidered to have quoted prices in active markets.
Notes receivable, accounts receivable from completed construction contracts and other
The fair value of these items is calculated using the discounted cash flow method based on the period until
the receivables amount is collected as well as an interest rate adjusted to reflect credit risk, for each
receivable classified by a certain period; classified as Level 2 fair value.
Long-term loans payable (including current portion of long-term loans payable)
The fair value of Long-term loans payable is calculated based on the discounted cash flow method using thetotal amount of principal and interest, and the interest rate that would be applicable to similar new loan;classified as Level 2 fair value.

ANNUAL REPORT 2023

25

10. Securities

1. Investment securities as of March 31, 2022 and 2023 consisted of the following:Thousands of
U.S. dollars

Millions of yen
As of March 31

Available-for-sale securities with market value

2022

2023

2023

¥2,117¥2,259$16,917

2.	The carrying amount and fair value of held-to-maturity debt securities as of March 31, 2022 and2023 were as follows:
Not applicable
3.	The carrying amount (fair value) and acquisition cost of available-for-sale securities as of March
31, 2022 and 2023 were as follows:
Millions of yen
As of March 31, 2022

Carrying amount

Acquisition cost

Difference¥1,969¥659¥1,3106

1

4¥1,975¥661¥1,314

Equity securities

¥142

¥174

¥(32)

Subtotal

¥142

¥174

¥(32)¥2,117¥835¥1,281

Carrying amount

Acquisition cost

Difference¥2,007¥659¥1,3475

1

3¥2,012¥661¥1,351

¥137

¥174

¥(37)

95

100

(4)

1) Securities with carrying amount exceedingacquisition cost
Equity securities
Other
Subtotal2) Securities with acquisition cost exceeding
carrying amount

Total

Millions of yen
As of March 31, 2023

1) Securities with carrying amount exceedingacquisition cost
Equity securities
Other
Subtotal2) Securities with acquisition cost exceeding
carrying amount
Equity securities
Bonds
Other
Subtotal
Total

26

NAKANO CORPORATION

13

14

(0)

¥246

¥289

¥(42)¥2,259¥950¥1,308

Thousands of U.S. dollars
As of March 31, 2023

1) Securities with carrying amount exceedingacquisition cost
Equity securities

Carrying amount

Acquisition cost

Difference$15,030$4,935$10,095

37

7

30

$15,067$4,950$10,117$1,025$1,303$(278)

711

748

(37)

Other
Subtotal2) Securities with acquisition cost exceeding
carrying amount
Equity securities
Bonds
Other
Subtotal
Total

97

104

(7)

$1,842$2,164$(322)$16,917$7,114$9,803(Note)	“Unlisted equity securities etc.” in an amount of ¥1,206 million as of March 31, 2022 and ¥1,390 million($10,409 thousand) as of March 31, 2023 were not included in available-for-sale securities in the above table,
since there is no market price.

4.	Available-for-sale securities which were sold during the years ended March 31, 2022 and 2023
were as follows:	For the year ended March 31, 2022:
	There were no available-for-sale securities which were sold.
	For the year ended March 31, 2023:
	There were no available-for-sale securities which were sold.
5.	Securities on which impairment loss was recognized during the years ended March 31, 2022
and 2023 were as follows:	For the year ended March 31, 2022:
	There were no securities on which impairment loss was recognized.
	For the year ended March 31, 2023:
	There were no securities on which impairment loss was recognized.
	If the fair value of available-for-sale securities with fair value declines by 30% to 50% of theacquisition cost, the Company judges the recoverability, considering the current status of theissuing companies and the fair value trends, and recognizes impairment loss, unless therecovery is reasonably expected.

ANNUAL REPORT 2023

27

11.	Retirement
Benefits

1. Outline of the Company’s retirement benefit plans
The Company has defined benefit plans that consist of a defined benefit corporate pension plan
and a lump-sum retirement benefit plan and also defined contribution pension plans. Certain
consolidated subsidiaries have unfunded defined benefit plans and lump-sum benefit plans.
Furthermore, the Group may pay additional retirement benefits upon the retirement of certain
employees.
With respect to lump-sum benefit plans adopted by certain consolidated subsidiaries, net
defined benefit liability and retirement benefit expenses are calculated by the short-cut method.
2. Defined Benefit Plans
1)	The changes in projected benefit obligations for the years ended March 31, 2022 and 2023 wereas follows (excluding the plans to which a short-cut method was applied):
Millions of yen
For the year ended March 31

Thousands of
U.S. dollars

2022

2023

2023

¥3,927¥3,816$28,577

Service cost

253

239

1,789

Interest cost

14

18

134

Beginning balance of projected benefit obligations

Actuarial differences

(33)

(45)

(337)

Retirement benefits paid

(355)

(264)

(1,977)

9

(5)

(37)

¥3,816¥3,759$28,150

Other
Ending balance of projected benefit obligations2)	The changes in plan assets for the years ended March 31, 2022 and 2023 were as follows(excluding the plans to which a short-cut method was applied):
Millions of yen

Thousands of
U.S. dollars

2022

2023

2023

Beginning balance of plan assets¥4,586¥4,519$33,842

Expected return of plan assets

91

90

674

3

(160)

(1,198)

185

178

1,333

For the year ended March 31

Actuarial differences
Contribution from the employer
Retirement benefits paid
Ending balance of plan assets

(347)

(254)

(1,902)¥4,519¥4,373$32,7493)	The changes in Net defined benefit liability of the plans to which the short-cut method wasapplied for the years ended March 31, 2022 and 2023 were as follows:
Millions of yen
For the year ended March 31

Beginning balance of net defined benefit liability

28

NAKANO CORPORATION

Thousands of
U.S. dollars

2022

2023

2023

¥132

¥127

$951

Retirement benefit expenses

19

28

209

Retirement benefits paid

(24)

(18)

(134)

Increase in value due to the acquisition of
newly consolidated subsidiaries

—

3

22

Ending balance of net defined benefit liability

¥127

¥141

$1,0554)	Reconciliation between the ending balances of projected benefit obligations and plan assets andNet defined benefit liability and Net defined benefit asset recorded in the consolidated balance
sheet as of March 31, 2022 and 2023 was as follows:
Millions of yen

Thousands of
U.S. dollars

2022

2023

2023

¥3,712¥3,643$27,282(4,519)(4,373)(32,749)¥(806)¥(729)$(5,459)

231

257

1,924

Net liability recorded in the consolidated balancesheet¥(575)¥(472)$(3,534)

Net defined benefit liability

¥231

¥257

$1,924

Net defined benefit asset

(806)

(729)

(5,459)¥(575)¥(472)$(3,534)

As of March 31

Funded projected benefit obligations
Plan assets
Net
Unfunded projected benefit obligations

Net liability recorded in the consolidated balance
sheet(Note) Above amounts include plans to which the short-cut method is applied.

5)	The components of Retirement benefit expenses for the years ended March 31, 2022 and 2023
were as follows:
Millions of yen
For the year ended March 31

Service costThousands of
U.S. dollars

2022

2023

2023

¥253

¥239

$1,789

Interest cost

14

18

134

Expected return of plan assets

(91)

(90)

(674)

Amortization of actuarial differences

73

(41)

(307)

Retirement benefit expenses computed byshort-cut method

19

28

209

Other

9

(5)

(37)

¥279

¥149

$1,115Retirement benefit expenses on defined benefit
plans6)	The component of “Remeasurements of defined benefit plans” under “Other comprehensive
income” (before adjusting for tax effects) for the years ended March 31, 2022 and 2023 was asfollows:
Millions of yen
For the year ended March 31

Actuarial differences

Thousands of
U.S. dollars

2022

2023

2023

¥110

¥(156)$(1,168)

7)	The component of “Remeasurements of defined benefit plans” under “Accumulated othercomprehensive income” (before adjusting for tax effects) as of March 31, 2022 and 2023 was asfollows:
As of March 31

Unrecognized actuarial differences

Millions of yen

Thousands of
U.S. dollars

2022

2023

2023

¥721

¥565

$4,231

ANNUAL REPORT 2023

29

8) Plan assets
a. Components of plan assets
Plan assets as of March 31, 2022 and 2023 consisted of the following:
As of March 31

2022

2023

Bonds

57%

50%

Equity securities

34

41

Insurance assets (general account)

8

8

Other

1

1

Total

100

100

b.	Method of determining the long-term expected rate of return on plan assets
	The long-term expected rate of return on plan assets is determined considering allocation ofplan assets which are expected currently and in the future and the long-term rates of return
which are expected currently and in the future from the various components of the plan
assets.
9)	Actuarial assumptions used for the years ended March 31, 2022 and 2023 were set forth asfollows:
For the year ended March 31

2022

2023

Discount rate

0.3%

0.5%

Long-term expected rate of return on plan assets

2.0

2.0

3. Defined Contribution Plans
The amount of the required contribution to the defined contribution plans of the Company for theyears ended March 31, 2022 and 2023 was as follows:
For the year ended March 31

Required contribution to the defined contribution
plans

30

NAKANO CORPORATION

Millions of yen

Thousands of
U.S. dollars

2022

2023

2023

¥68

¥66

$494

12.	Deferred Tax
Accounting

1.	The significant components of Deferred tax assets and liabilities as of March 31, 2022 and 2023
were as follows:
Millions of yen

Thousands of
U.S. dollars

2022

2023

2023

Tax loss carryforwards¥908¥1,021$7,646

Provision for bonuses

167

199

1,490

As of March 31

Deferred tax assets:

Net defined benefit liability

29

32

239

Allowance for doubtful accounts

45

39

292

Loss on valuation of real estate for sale

287

287

2,149

Provision for loss on construction contracts

365

173

1,295

Accounts payable for construction contracts
Impairment loss

149

327

2,448

1,371

1,371

10,267

Other

358

424

3,175

Subtotal

3,684

3,877

29,034

Less: Valuation allowance (Note)(3,308)(3,484)(26,091)

¥375

¥392

$2,935¥(401)¥(410)$(3,070)

subsidiaries

(363)

(396)

(2,965)Net defined benefit asset

(247)

(223)

(1,670)

Deferred tax assets
Deferred tax liabilities:
Valuation difference on available-for-salesecurities
Undistributed earnings of foreign consolidated

(15)

(26)

(194)

Deferred tax liabilities

Other¥(1,027)¥(1,057)$(7,915)

Net deferred tax liabilities¥(652)¥(664)$(4,972)(Note) Valuation allowance increased by ¥176 million ($1,318 thousand). The major reason for this increase were theadditional recognition of Valuation allowance of ¥177 million ($1,325 thousand) and ¥112 million ($838
thousand) associated with Accounts payable for construction contracts and Tax loss carryforwards,
respectively, and that the Valuation allowance for Provision for loss on construction contracts decreased by¥199 million ($1,490 thousand).

2.	Reconciliation between the normal effective statutory tax rates and the actual effective tax rates
reflected in the consolidated statements of income as of March 31, 2022 and 2023 was as follows:
As of March 31

2022

2023

Normal effective statutory tax rate

—

30.6%

Expenses not deductible income tax purposes—

0.8

Undistributed earnings of foreign consolidated subsidiaries—

1.1

Inhabitant per capita taxes—

1.1

Valuation allowance

—

(0.5)

Other

—

(0.6)

Actual effective tax rate

—

32.5

(Note) Figures as of March 31, 2022 are not presented, as a Loss before income taxes was recorded.

ANNUAL REPORT 2023

31

13.	Investment andRental Properties

1.	The Company and certain consolidated subsidiaries own office buildings, commercial facilities
and residual units for lease in Tokyo and other areas. Rental income from these real estate
properties for lease for the years ended March 31, 2022 and 2023 were ¥650 million and ¥503
million ($3,766 thousand), respectively. Rental income and related costs were included in “Sales
on real estate business” and “Cost of sales on real estate business”, respectively, in theaccompanying consolidated statements of income for the years ended March 31, 2022 and2023.
2.	The carrying amounts, changes in such balances during the year and fair values of suchproperties were as follows:
As of March 31

Carrying amounts(Note 1):

Beginning balance
Increase (decrease) (Note 2)
Ending balance

Fair value (Note 3)

Millions of yen

Thousands of
U.S. dollars

2022

2023

2023

¥11,741¥13,451$100,733

1,710

(0)

(0)

¥13,451¥13,450$100,726¥18,927¥19,557$146,461(Notes): 1. The carrying amount is presented after deducting Accumulated depreciation from the acquisition cost.
2.	Increase during the year ended March 31, 2022 primarily represents the acquisition of real estate of ¥1,869
million and due to the change in holding purpose from internal use to investment of ¥87 million, anddecrease is primarily due to the change in holding purpose from investment to internal use of ¥56 million,
and Depreciation of ¥196 million.
	Increase during the year ended March 31, 2023 primarily represents the acquisition of real estate of ¥30
million ($224 thousand) and due to the change in holding purpose from internal use to investment of ¥185
million ($1,385 thousand), and decrease is primarily due to Depreciation of ¥220 million ($1,647 thousand).
3.	The fair values of major properties are determined based on the real estate appraisal value by independent
real estate appraisers and the fair values of other properties are determined based on the value inaccordance with “Japanese Real Estate Appraisal Standard” or based on reasonable internal appraisal.

14.	Revenue

1. Information breakdown on revenue arising from contracts with customers
Millions of yen

Recognition

Reportable segments
Construction
For the year ended March 31, 2022

Goods or services transferred ata point in time
Goods or services transferred overtime
Revenue from Contracts with
Customers

Southeast
Japan
Asia

Total

Real estateSoutheast
Japan
Asia

Other
(Note)

Total

Total

¥4,639 ¥— ¥4,639 ¥— ¥— ¥— ¥94 ¥4,734
65,83724,75690,594————90,59470,47724,756

95,233

—

—

—

94

95,328Other Revenue¥— ¥— ¥— ¥1,139 ¥2 ¥1,142 ¥— ¥1,142

Sales to External Customers¥70,477 ¥24,756 ¥95,233 ¥1,139 ¥2 ¥1,142 ¥94 ¥96,470(Note): “Other” is a business segment not included in the reportable segments, which consists of solar power
generation business and insurance agent business.
Millions of yen
Reportable segments
Construction
For the year ended March 31, 2023

Goods or services transferred ata point in time
Goods or services transferred overtime
Revenue from Contracts with
Customers

32

NAKANO CORPORATIONSoutheast
Japan
Asia

Total

Real estateSoutheast
Japan
Asia

Other
(Note)

Total

Total

¥4,352 ¥— ¥4,352 ¥0 ¥— ¥0 ¥103 ¥4,456

70,34538,457

108,803

10

—

10

—

108,81374,69838,457113,155

10

—

10

103

113,269

Other Revenue¥— ¥— ¥— ¥1,187 ¥2 ¥1,190 ¥— ¥1,190

Sales to External Customers¥74,698 ¥38,457 ¥113,155 ¥1,198 ¥2 ¥1,200 ¥103 ¥114,459

Thousands of U.S. dollars
Reportable segments
Construction
Southeast
Japan
Asia

For the year ended March 31, 2023

Goods or services transferred ata point in time

Total

Real estateSoutheast
Japan
Asia

Other
(Note)

Total

Total

$32,591 $— $32,591 $0 $— $0 $771 $33,370

Goods or services transferred overtime

526,810

288,002814,820

74

—

74

—

814,895

Revenue from Contracts with
Customers

559,409

288,002

847,412

74

—

74

771

848,266

Other Revenue$— $— $— $8,889 $14 $8,911 $— $8,911

Sales to External Customers$559,409 $288,002 $847,412 $8,971 $14 $8,986 $771 $857,178(Note): “Other” is a business segment not included in the reportable segments, which consists of renewable energy
business (solar power generation business and wind power generation business) and insurance agent
business.

2. Basis for understanding the revenue
It is as described in “NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 3. Summary of
Significant Accounting Policies m. Revenue and Cost of Construction Contracts”.
3. Information pertaining to the relationship between the satisfaction of performance obligations
based on contracts with customers and cash flows from such contracts, and on the amount andtiming of revenue expected to be recognized, in the following fiscal year or later, from contracts
with customers that existed at the end of the fiscal year ended March 31, 2022 and 2023
1)	Balance of Contract assets and Contract Liabilities, etc.
Millions of yen

Thousands of
U.S. dollars

2022

2023

2023

Receivables from a contract with customers(beginning balance)¥12,609¥12,112$90,706

Receivables from a contract with customers(ending balance)

12,112

11,042

82,693Contract assets (beginning balance)

23,285

14,878111,420

Contract assets (ending balance)

14,878

11,14083,426

Contract liabilities (beginning balance)

5,866

6,284

47,060Contract liabilities (ending balance)

6,284

10,92881,839As of March 31

Contract assets consist primarily of unbilled Accounts receivable from completed construction
contracts related to revenue recognized on the basis of progress measurement under construction
contracts, etc. Contract assets are reclassified to receivables arising from contracts withcustomers at the point when the Company and its consolidated subsidiaries’ rights to theconsideration become unconditional. Contract liabilities consist mainly of Advances received on
uncompleted construction contracts from customers on construction contracts, etc. Contract
liabilities are reversed upon revenue recognition.
The decrease of ¥8,407 million in Contract assets in the fiscal year ended March 31, 2022 wasmainly due to the increase from satisfaction of performance obligations and a decrease from thereceipt of consideration in accordance with contract terms. The increase of ¥417 million inContract liabilities in the fiscal year ended March 31, 2022 was mainly from an increase due toAdvances received on uncompleted construction contracts and a decrease due to the fulfillmentof performance obligations.
The decrease of ¥3,738 million ($27,993 thousand) in Contract assets in the fiscal year ended
March 31, 2023 was mainly due to the increase from satisfaction of performance obligations and adecrease from the receipt of consideration in accordance with contract terms. The increase of¥4,643 million ($34,771 thousand) in Contract liabilities in the fiscal year ended March 31, 2023
was mainly from an increase due to Advances received on uncompleted construction contracts
and a decrease due to the fulfillment of performance obligations.
The revenue recognized for performance obligations that have been satisfied (or partiallysatisfied) in prior periods is immaterial.
ANNUAL REPORT 2023

33

2) Transaction price allocated to remaining performance obligations
The total transaction price allocated to the remaining performance obligations at the end of the
fiscal year ended March 31, 2022 and 2023 were ¥104,064 million and ¥112,453 million ($842,155
thousand), respectively. The remaining performance obligation relates primarily to construction
contracts, and as of March 31, 2023, the Company expects to recognize revenue over a period of
up to 3 years as construction progresses.

15.	Segment
Information

1.	Description of reportable segments
The Group’s reportable segments are those for which separate financial information is available
and regular evaluation by the Board of Directors is being performed in order to decide how
resources are allocated among the Group.
The Group is active in the construction business and the real estate business in Japan andforeign countries.
Therefore, the Group consists of regional segments which are based on each business.
Reportable segments of the construction business are “Japan” and “Southeast Asia (Singapore,
Malaysia, Indonesia, Thailand and Vietnam)”, and those of the real estate business are “Japan”
and “Southeast Asia (Malaysia)”.
2.	Methods of measurement for the amounts of sales, income (loss), assets and other items foreach reportable segment
The accounting policies of each reportable segment are consistent to those disclosed in “3.
Summary of Significant Accounting Policies”.
3.	Information on sales, income (loss), assets and other items for each reportable segment was asfollows:
Millions of yen
Reportable segments
Construction
For the year ended
March 31, 2022

Southeast
Japan
Asia

Total

Real estateSoutheast
Japan
Asia

Other
(Note 1)

Total

Adjustments Consolidated(Note 2)
(Note 3)Total

Net sales:
Customers
Inter-segment
Total¥70,477 ¥24,756 ¥95,233 ¥1,139 ¥2 ¥1,142¥94 ¥96,470 ¥— ¥96,470

13

—

13

7

—

7

—

21

(21)

—

70,491

24,756

95,247

1,146

2

1,149

94

96,491(21)

96,470

Segment income (loss)

2,582(4,004)(1,422)

550

0

551

31

(839)

(1)

(840)

Segment assets

31,384

21,85353,237

14,49577

14,572296

68,107

14,082

82,190

Other items:
Depreciation¥108 ¥122 ¥231 ¥198 ¥1 ¥199¥28 ¥458 ¥— ¥458

Impairment loss

—

111

111

—

—

—

—

111

—

111

Increase in property,
plant and equipment
and intangible assets

993

135

1,129

1,822

3

1,825

5

2,960

—

2,960

(Notes): 1.	‌“Other” is a business segment not included in the reportable segments, which consists of solar power
generation business and insurance agent business.
2.	An adjustment of “Segment assets” in an amount of ¥14,082 million was corporate assets which were notallocated to each reportable segment and consisted of surplus fund (Cash and deposits) and long-term
investment fund (Investment securities) of the Company.
3.	Segment income (loss) is adjusted with Operating loss in the accompanying consolidated statements ofincome.

34

NAKANO CORPORATIONMillions of yen
Reportable segments
Construction
For the year ended
March 31, 2023

Southeast
Japan
Asia

Total

Real estateSoutheast
Japan
Asia

Other
(Note 1)

Total

Adjustments Consolidated(Note 2)
(Note 3)Total

Net sales:
Customers
Inter-segment
Total¥74,698 ¥38,457 ¥113,155 ¥1,198 ¥2 ¥1,200 ¥103 ¥114,459 ¥— ¥114,459
0

—

0

8

—

8

—

9

(9)

—

74,69838,457113,155

1,206

2

1,209

103

114,468(9)

114,459

Segment income(loss)

2,035

402

2,438

411

(0)

411

10

2,861

(1)

2,859

Segment assets

26,051

20,783

46,834

14,32178

14,400489

61,723

17,94979,673

Other items:
Depreciation¥151 ¥76 ¥228 ¥222 ¥1 ¥224 ¥30 ¥483 ¥— ¥483

Impairment loss

—

171

171

—

—

—

—

171

—

171

Investments in equity
method subsidiaries

139

—

139

—

—

—

—

139

—

139

Increase in property,
plant and equipment
and intangible assets

56

267

323

56

—

56

214

595

—

595

Thousands of U.S. dollars
Reportable segments
Construction
For the year ended
March 31, 2023

Southeast
Japan
Asia

Total

Real estateSoutheast
Japan
Asia

Other
(Note 1)

Total

Adjustments Consolidated(Note 2)
(Note 3)Total

Net sales:
Customers
Inter-segment
Total$559,409 $288,002 $847,412 $8,971 $14 $8,986 $771 $857,178 $— $857,178
0

—

0

59

—

59

—

67

(67)

—

559,409

288,002

847,412

9,031

14

9,054

771

857,245(67)

857,178

Segment income(loss)

15,2403,010

18,258

3,077

(0)

3,077

74

21,425(7)

21,410

Segment assets

195,094

155,642

350,737

107,249584

107,840

3,662

462,240

134,419596,667

Other items:
Depreciation$1,130 $569 $1,707 $1,662 $7 $1,677 $224 $3,617 $— $3,617

Impairment loss

—

1,280

1,280

—

—

—

—

1,280

—

1,280

Investments in equity
method subsidiaries

1,040

—

1,040

—

—

—

—

1,040

—

1,040

Increase in property,
plant and equipment
and intangible assets

419

1,999

2,418

419

—

419

1,602

4,455

—

4,455

(Notes): 1.	“Other” is a business segment not included in the reportable segments, which consists of renewableenergy business (solar power generation business and wind power generation business) and insurance
agent business.
2.	An adjustment of “Segment assets” in an amount of ¥17,949 million ($134,419 thousand) was corporate
assets which were not allocated to each reportable segment and consisted of surplus fund (Cash anddeposits) and long-term investment fund (Investment securities) of the Company.
3.	Segment income (loss) is adjusted with Operating income in the accompanying consolidated statements ofincome.
4.	“Increase in property, plant and equipment and intangible assets” does not include the amount of increase
due to new consolidation.

ANNUAL REPORT 2023

35

16.	Per ShareInformation

Basic net income per share is computed based on the weighted average number of shares ofcommon stock outstanding during the year. Diluted net income per share was not presented forthe years ended March 31, 2022 and 2023 since the Company had no potentially dilutive shares
outstanding as of the balance sheet dates.
Net assets per share is computed based on the number of shares of common stock
outstanding as of the balance sheet dates.
Net assets and net income per share for the years ended March 31, 2022 and 2023 were as
follows:
Yen

U.S. dollars

For the year ended March 31

2022

2023

2023

Net assets per share¥1,001.72¥1,063.68$7.97(46.39)

55.72

0.42

Millions of yen

Thousands of
U.S. dollars

Basic net income (loss) per share(Notes): 1. Net assets per share was calculated based on the following information:

As of March 31

2022

2023

2023

¥35,576¥37,839$283,374(1,149)(1,283)(9,608)

Net assets attributable to common stock¥34,427¥36,555$273,758

Number of shares of common stock usedin computing net assets per share(in thousand shares)

34,36734,36734,367

Millions of yen

Thousands of
U.S. dollars

2022

2023

2023

¥(1,594)¥1,914$ 14,333———¥(1,594)¥1,914$ 14,333

34,36834,36734,367

Total net assets
Deductions from total net assets:
Non-controlling interests

2. Net income per share was calculated based on the following information:

For the year ended March 31

Profit (loss) attributable to owners ofparentAmount not attributable to common stock
shareholders
Profit (loss) attributable to common stockof owners of parent
Average number of shares of common
stock during the year (in thousand shares)

17. Bonds Payable

Bonds payable as of March 31, 2022 and 2023 consisted of the following:
Millions of yen

Issuer and Issue type

Thousands of
U.S. dollars

2023

2023

Interest
rate(%)

Mar.10, 2020 ¥500 ¥—

$—

0.34

Issue date

2022

Collateral

Maturity

None

Mar.10, 2023

(Nakano Corporation)
9thunsecured bond

36

NAKANO CORPORATION

18.	Loans Payable and Short-term loans payable, Long-term loans payable and other debts as of March 31, 2022 andOther Debts

2023 were as follows:

Millions of yen

As of March 31

Thousands of
U.S. dollars

2022

2023

2023

Averageinterest rate(%)

Maturity

Short-term loans payable

¥270

¥470

$3,519

0.87—

Current portion of
long-term loans payable

210

148

1,108

0.86

—

Current portion of leaseobligations

119

129

966

—

—

Long-term loans payable
excluding current portion

200

353

2,643

0.88

Aug. 25, 2024Feb. 25, 2027

Lease obligations
excluding current portion

37

50

374

—

Apr. 16, 2024Jun. 21, 2027

¥836

¥1,151$8,619

—

—

Total

(Notes):1.	“Average interest rate” represents the weighted average interest rate on loans payable outstanding as of
the balance sheet date. “Average interest rate” of Lease obligations is not shown since interest equivalentamounts included in the aggregated lease premiums are allocated to each fiscal year using the straightline method.
2. The following was a summary of annual maturities of loans payable and lease obligations subsequent toMarch 31, 2023:
Millions of yen

Thousands of U.S. dollars

Years ending March 31

Long-termloans payableLease
obligations

Long-termloans payableLease
obligations

2024

¥148

¥129

$1,108

$966

2025

149

44

1,115

329

2026

154

4

1,153

29

2027

50

0

374

0

2028

—

0

—

0

2029 and thereafter

—

—

—

—

¥501

¥179

$3,751$1,340

Total

19.	Dividends

At the Annual General Meeting of Shareholders held on June 29, 2022, it was resolved to distributethe year-end cash dividends of ¥10 per share of common stock of the Company.
The aggregate amount of such cash dividends was ¥343 million.
At the Annual General Meeting of Shareholders held on June 29, 2023, it was resolved to
distribute the year-end cash dividends of ¥13 ($0.10) per share of common stock of the Company.
The aggregate amount of such cash dividends was ¥446 million ($3,340 thousand).

20.	Subsequent

Not applicable.

Events

ANNUAL REPORT 2023

37

SUPPLEMENTAL INFORMATIONNONCONSOLIDATED BALANCE SHEETSNAKANO CORPORATIONAs of March 31, 2022 and 2023

AssetsCurrent assets:
Cash and deposits
Notes receivable - trade
Electronically recorded monetary claims - operating
Accounts receivable from completed construction contracts
Costs on uncompleted construction contracts
Costs on real estate business
Raw materials and supplies
Short-term loans receivable from subsidiaries and affiliates
Consumption taxes receivable
Accounts receivable - other
Other
Allowance for doubtful accounts
Total current assets
Non-current assets:
Property, plant and equipment
Buildings
Accumulated depreciation
Buildings, net
Structures
Accumulated depreciation
Structures, net
Machinery and equipment
Accumulated depreciation
Machinery and equipment, net
VehiclesAccumulated depreciation
Vehicles, net
Tools, furniture and fixtures
Accumulated depreciation
Tools, furniture and fixtures, net
Land
Lease assets
Accumulated depreciation
Lease assets, net
Construction in progress
Total property, plant and equipment
Intangible assets
Total intangible assets
Investments and other assets
Investment securities
Stocks of subsidiaries and affiliates
Long-term loans receivable from subsidiaries and affiliates
Insurance funds
Prepaid pension cost
Deferred tax assets
Other
Allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Total assets
38

NAKANO CORPORATION

Millions of yen

Thousands of
U.S. dollars

2022

2023

2023

¥18,712
56
2,862
13,875
758
43
4
20
—
384
646
(22)
37,342¥14,898
196
2,711
12,414
1,021
43
3
20
389
1,328
454
(14)
33,466$111,570
1,467
20,302
92,967
7,646
322
22
149
2,913
9,945
3,399
(104)
250,625

9,900(3,915)
5,985
176
(139)
37
582
(369)
213
11
(11)
0
387
(279)
108
11,241
147
(97)
49
1
17,636

9,972(4,165)
5,807
182
(145)
37
774
(402)
371
11
(11)
0
398
(318)
79
11,241
147
(133)
13
—
17,551

74,679(31,191)
43,4881,362(1,085)277
5,796(3,010)
2,778
82
(82)
0
2,980
(2,381)
591
84,183
1,100
(996)
97
—
131,438

197

195

1,460

2,026
2,429
45
31
85
19
420
(12)
5,045
22,879¥60,222

2,047
4,436
20
31
164
—
381
(17)
7,062
24,810¥58,277

15,32933,220
149
232
1,228
—
2,853
(127)
52,886
185,800$436,433

Liabilities
Current liabilities:
Notes payable – trade
Electronically recorded obligations - operating
Accounts payable for construction contracts
Short-term loans payable
Current portion of bonds
Lease obligations
Income taxes payable
Accrued consumption taxes
Advances received on uncompleted construction contracts
Provision for warranties for completed construction
Provision for loss on construction contracts
Provision for bonuses
Other
Total current liabilities
Non-current liabilities:
Long-term loans payable
Lease obligations
Deferred tax liabilities
Provision for retirement benefits
Long-term deposits received
Other
Total non-current liabilities
Total liabilities
Net assets
Shareholders’ equity:
Common stock
Authorized: 154,792,300 shares
34,498,097 shares
Issued:Capital surplus
Legal capital surplus
Total capital surplus
Retained earnings
Other retained earnings
Retained earnings brought forward
Total retained earnings
Less: Treasury stock, at cost
130,262 shares in 2022 and 131,075 shares in 2023
Total shareholders’ equity
Valuation and translation adjustments:
Valuation difference on available-for-sale securities
Total valuation and translation adjustments
Total net assets
Total liabilities and net assets

Millions of yen

Thousands of
U.S. dollars

2022

2023

2023

¥942
6,703
13,996
480
500
38
423
1,527
6,071
289
14
543
810
32,341

¥647
6,305
9,584
618
—
14
345
—
9,907
315
41
540
616
28,935$4,845
47,217
71,774
4,628
—
104
2,583
—
74,193
2,359
307
4,044
4,613
216,692

200
15
—
38
540
115
909
33,250

352
1
11
38
549
126
1,078
30,013

2,636
7
82
284
4,111
943
8,073
224,765¥5,061¥5,061$37,901

1,400
1,400

1,400
1,400

10,484
10,484

19,82019,82021,09821,098158,001
158,001(35)
26,247(35)
27,524(262)
206,125724
724
26,971738
738
28,2635,526
5,526
211,660¥60,222¥58,277$436,433
ANNUAL REPORT 2023

39

NONCONSOLIDATED STATEMENTS OF INCOME
NAKANO CORPORATION
For the years ended March 31, 2022 and 2023

Millions of yen

Thousands of
U.S. dollars

2022

2023

2023

¥70,491¥74,698$559,409

1,086

1,136

8,507

70

74

554

71,64875,909568,478

63,69568,254

511,151

510

720

5,392

Net sales:
Net sales of completed construction contracts
Sales on real estate business
Sales on other businessTotal net sales
Cost of sales:
Cost of sales of completed construction contracts
Cost of sales on real estate business
Cost of sales on other businessTotal cost of sales

36

62

464

64,242

69,036

517,007

6,796

6,444

48,258

576

416

3,115

Gross profit:
Gross profit on completed construction contracts
Gross profit - real estate business
Gross profit - other businessTotal gross profit
Selling, general and administrative expenses
Operating income

34

11

82

7,406

6,872

51,464

4,458

4,575

34,261

2,948

2,297

17,2021

429

Non-operating income:Interest income
Dividend income

44

52

389

Foreign exchange gains

114

107

801

Other

16

5

37

176

170

1,273

Interest expenses

22

5

37

Interest expenses on bonds

1

1

7

Total non-operating income
Non-operating expenses:

Other

0

0

0

24

7

52

3,100

2,460

18,422Gain on sales of memberships

—

15

112

Total extraordinary income

—

15

112

Loss on litigation

8

6

44

Head office relocation expenses

21

—

—

Research expenses

—

53

396

Other

0

5

37

Total non-operating expenses
Ordinary income
Extraordinary income:Extraordinary losses:

Total extraordinary losses
Profit before income taxes

30

65

486

3,069

2,409

18,040

944

763

5,714

Income taxes:
Income taxes - current
Income taxes - deferred

51

25

187

Total income taxes

995

788

5,901

¥2,073¥1,621$12,139

Profit40

NAKANO CORPORATIONCORPORATE PROFILECONTENTS

Company Outline (As of March 31, 2023)

FINANCIAL HIGHLIGHTS

1

REPORT OF INDEPENDENT AUDITORS

2

CONSOLIDATED BALANCE SHEETS

7

CONSOLIDATED STATEMENTS OF INCOME

9CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME 10
CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS

11

CONSOLIDATED STATEMENTS OF CASH FLOWS

12NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

13

SUPPLEMENTAL INFORMATION38NONCONSOLIDATED BALANCE SHEETS

38

NONCONSOLIDATED STATEMENTS OF INCOME

40

CORPORATE PROFILE

41

Company Name
Headquarters
Foundation
Established
Capitalization
Employees
Stock Listing
Primary Business

NAKANO CORPORATION
4-2-28 Kudan-kita, Chiyoda-ku, Tokyo 102-0073, Japan
February 8, 1933
December 19, 1942
¥5,061,678,686
1,315(Group)Tokyo Stock Exchange, Standard Market
Domestic Construction Business
International Construction Business
Real Estate Business

Board of Directors / Audit & Supervisory Board Members (As of September 8, 2023)
President
Executive Vice President
Directors
Outside Directors
Standing Corporate Auditors
Corporate Auditors

Takashi Iizuka
Yoshinobu Oshima
Yorinobu Kato
Noboru Ogoyama
Moriyasu Kawamura
Mitsuharu Kotaka
Koichiro Nakano
Kohei Yamaya

Hiroyuki Tanada
Makoto Fukuda
Tetsuo Sato
Hideaki Sekizawa

Main Affiliated Financial Institutions
MUFG Bank, Ltd.
Mizuho Bank, Ltd.
The Bank of Yokohama, Ltd.

The Shoko Chukin Bank, Ltd.
The Yamanashi Chuo Bank, Ltd.
The 77 Bank, Ltd.

Major Shareholders
Oshima Scholarship Foundation
Yoshikazu Oshima
MB Service Co., Ltd.

Kanto Kogyo Co., Ltd.
Marine Dream Co., Ltd.
MUFG Bank, Ltd.

Domestic Offices
Headquarters
Tohoku Regional OfficeOsaka Regional Office
Taito Branch Office
Kita Tohoku Branch Office
Higashi Kanto Branch Office
Sales Offices (Mie, Kita Kyushu)

Tokyo Main Office
Nagoya Regional Office
Kyushu Regional Office
Hokkaido Branch Office
Kita Kanto Branch Office
Yokohama Branch OfficeInternational Offices
Nakano Singapore (Pte.) Ltd. (Singapore)
PT. Indonakano (Indonesia)
Nakano Vietnam Co., Ltd. (Vietnam)

Cautionary remarks regarding forward looking statements
This Annual Report includes forward-looking statements that represent Nakano Corporation’s assumptions and expectations inlight of currently available information. These statements reflect industry trends, client’s situations and other factors, and involverisks and uncertainties which may cause actual performance results to differ from those discussed in the forward looking
statements in accordance with changes in the domestic and international business environment.
For further information contact:
Nakano Corporation International Operations Headquarters
4-2-28 Kudan-kita, Chiyoda-ku, Tokyo, 102-0073, Japan
Tel: +81-(0)3-3265-4685 Fax: +81-(0)3-3265-4698
https://www.wave-nakano.co.jp

Nakano Construction Sdn. Bhd. (Malaysia)
Thai Nakano Co., Ltd. (Thailand)

Industry Affiliations
Japan Federation of Construction Contractors
The Associated General Contractors of Tokyo
General Contractors Association of Osaka

National General Contractors Association of Japan
Japan Association of Representative General Contractors

ANNUAL REPORT 2023

41

Annual Report 2023
Fiscal year ended March 31, 2023

4-2-28 Kudan-kita, Chiyoda-ku, Tokyo, 102-0073, Japan
Tel: +81-(0)3-3265-4685 Fax: +81-(0)3-3265-4698
https://www.wave-nakano.co.jp
SINGAPORE
1 Coleman St., #10-03/04/05 The Adelphi, 179803, Singapore
Tel: +65-6333-4933
Fax: +65-6338-8568

MALAYSIA
Block B, 15-4-2, Megan Salak Park Jalan 1/125E, Taman Desa Petaling, Kuala Lumpur 57100, Malaysia
Tel: +60-3-9059-6977
Fax: +60-3-9059-6277

INDONESIA
Tamara Center 14th Floor Jl. Jend. Sudirman KAV. 24, Jakarta 12920, Indonesia
Tel: +62-21-5203674
Fax: +62-21-5203670

THAILAND
2170 Bangkok Tower, 17th Floor New Petchburi Road, Bangkapi, Huaykwang, Bangkok 10310 Thailand
Tel: +66-2-308-0500
Fax: +66-2-308-0497

VIETNAM
Unit 1411-1412, 14th Floor, Daeha Business Center, 360 Kim Ma Street, Ngoc Khanh Ward, Ba Dinh District, Hanoi, Vietnam
Tel: +84-243-724-7552
Fax: +84-243-724-7553