All Nippon Airways Trading Co., Ltd.
Financial Statements 2016

Non-consolidated Balance Sheet
All Nippon Airways Trading Co., Ltd.
As of March 31, 2016
Millions of yen
ASSETS2016

Current assets:
Cash on hand and in banks (Note 9)¥1,711

Notes and accounts receivable - trade (Notes 3, 9 and 10)

13,305

Lease investment assets (Note 10)

7,799

Inventories

2,864

Short-term loans receivable (Notes 3, 9 and 10)

5,264

Deferred tax assets (Note 7)

303

Other current assets (Notes 3 and 10)

2,505

Allowance for doubtful accounts(12)
33,742

Property, plant and equipment (Note 4):
Land

277

Buildings and leasehold improvements

439

Machinery, equipment and vehicles

287

Construction in progress

47

Leased assets

0

Rental assets

324
1,377

Investments and other assets:
Investment securities (Note 9)3,214

Investment securities of related parties

4,860

Long-term loans receivable (Notes 3 and 10)

1,357

Lease and guarantee deposits

538

Intangible assets

773

Other assets

173

Allowance for doubtful accounts(411)
10,505

Total assets¥45,625¥45,449

See notes to non-consolidated financial statements.

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Millions of yen
LIABILITIES AND NET ASSETS

2016

Current liabilities:
Notes and accounts payable (Notes 3, 9 and 10)¥15,162

Short-term loans payable (Notes 3, 9 and 10)

4,073

Current portion of long-term debt (Note 9)400

Current portion of lease obligations

902

Advances received (Notes 3 and 10)

1,136

Unearned revenue

502

Accrued operating expenses

112

Accrued income taxes

163

Other current liabilities

698
23,153Long-term liabilities:
Long-term debt, less current portion (Note 9)

2,060

Lease obligations, less current portion

6,016

Accrued employees' retirement benefits299

Long-term deposits payable

383

Officers retirement reserve

74

Deferred tax liabilities

295

Other long-term liabilities (Note 3)

204
9,334

Net assets (Notes 5 and 8)
Shareholders' equity:

11,833

Common stock:
Authorized---2,880,000 shares at March 31, 2016
Issued---654,724 shares at March 31, 2016

1,000

Retained earnings:

10,833

Legal reserve

250

Retained earnings

10,583

Accumulated other comprehensive income:

1,304

Net unrealized holding gain (loss) on securities

1,315

Deferred gain (loss) on hedging instruments(11)
13,137

Total liabilities and net assets¥45,625

See notes to non-consolidated financial statements.

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Non-consolidated Statement of Income
All Nippon Airways Trading Co., Ltd.
Year ended March 31, 2016

Millions of yen
2016

Net sales (Notes 3 and 10)¥79,061

Cost of sales (Notes 3 and 10)

70,182Gross profit

8,879

Selling, general and administrative expenses

7,356

Operating income

1,523

Non-operating income (expenses) (Note 3):
Foreign exchange gains (Note 6)

11

Interest and dividend income764

Reversal of allowance for doubtful accounts

4Interest expenses(40)Other - net

16

Ordinary income

2,279

Extraordinary income and (losses):Gain on transfer of benefit obligation relating to employees’ pension fund131

Other(3)

Income before income taxes

2,407

Income taxes (Note 7):
Current

617

Deferred107
724

Net income (Note 8)¥1,682

See notes to non-consolidated financial statements.

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Non-consolidated Statement of Changes in Net Assets
All Nippon Airways Trading Co., Ltd.
Year ended March 31, 2016

Millions of yen
Shareholders’ equityCommonstock
Balance at April 1, 2015

¥1,000Retained earnings

Accumulated other comprehensive income
Total
accumulated
othercomprehensive
income¥2,656¥4¥2,661

Total net
assetsRetained earnings¥250¥10,072¥11,322(1,172)(1,172)(1,172)

1,682

1,682

1,682

Net income
Net changes of items other thanshareholders’ equity during theyear

Balance at March 31, 2016

Deferred gain
(loss) on
hedging
instruments

Legal reserve

Cash dividends paid

Total changes during the year

Net unrealized
holding gain(loss) on
securities

Total
shareholders’equity¥13,984(1,341)(16)(1,357)(1,357)

--

(510)

(510)

(1,341)(16)(1,357)(847)¥1,000¥250¥10,583¥11,833¥1,315¥(11)¥1,304¥13,137

See notes to non-consolidated financial statements.

4Notes to Non-consolidated Financial Statements
All Nippon Airways Trading Co., Ltd.
Year ended March 31, 2016

1.

BASIS OF PRESENTATION
The accompanying non-consolidated financial statements of All Nippon Airways Trading Co., Ltd. (the“Company”) are prepared on the basis of accounting principles generally accepted in Japan, which are different incertain respects as to application and disclosure requirements of International Financial Reporting Standards.
In addition, the notes to non-consolidated financial statements include information which is not required underaccounting principles generally accepted in Japan but is presented herein as additional information. In preparing
the accompanying financial statements, certain reclassifications have been made in the financial statements
issued domestically in order to present them in a form which is more familiar to readers outside Japan.
As permitted by the regulations under the Corporation Law of Japan (the “Law”), amounts less than one million
yen have been omitted. As a result, the totals shown in the accompanying non-consolidated financial statements
for fiscal 2016 do not necessarily agree with the sum of the individual amounts.

2.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(a) Foreign currency translation
In accordance with the accounting standard for foreign currency translation, foreign currency payables andreceivables at March 31, 2016 are principally translated at the rate of exchange in effect at the balance sheet
date, except payables and receivables hedged by qualified forward foreign exchange contracts.

(b) Marketable securities and investment securities
The accounting standard for financial instruments requires that securities be classified into three categories;
trading, held-to-maturity or other securities. Under the standard, trading securities are carried at fair value andheld-to-maturity securities are carried at amortized cost. Marketable securities classified as other securities arecarried at fair value with changes in unrealized holding gains or losses, net of the applicable income taxes,
included directly in net assets. Non-marketable securities classified as other securities are carried at cost. Costof securities sold is determined by the moving average method.

(c) Inventories
Inventories are principally stated at cost determined by the moving average method. In cases where profitability
has declined, the book value is reduced accordingly.

(d) Property, plant and equipment (and depreciation)
Property, plant and equipment are stated at cost less accumulated depreciation.
Depreciation of property, plant and equipment, except for rental assets, is calculated based on estimated useful
lives by the following methods:

5Buildings acquired on or after April 1, 1998 ---- Straight-line method
Others ---- Declining-balance method

The Company principally applies the following useful lives:
Buildings and leasehold improvements

3 – 60 years

Structures

10 – 20 years

Vehicles6 years2 – 20 years

Machinery and equipment

Depreciation of rental assets is calculated by straight-line method over the lease period.

(e) Intangible assets and amortization
Intangible assets are amortized by the straight-line method. Cost of software purchased for internal use isamortized by the straight-line method over five years, the estimated useful life of purchased software.

(f)Allowance for doubtful accounts
A general provision is made for doubtful receivables based on past experience. Provisions are also madeagainst specific receivables as and when required based on estimates of the collectability of receivables.

(g) Retirement benefits
The retirement benefit plan of the Company covers substantially all employees other than directors. Under theterms of this plan, eligible employees are entitled, upon mandatory retirement or earlier voluntary severance, tolump-sum payments or annuity payments based on their compensation at the time of leaving and years ofservice with the Company. The Company has trustee employees’ pension funds to provide coverage for thepart of the lump-sum benefits or annuity payments. In accordance with the accounting standard for retirement
benefits, accrued employees’ retirement benefits at the balance sheet date are provided mainly at an amountcalculated based on the retirement benefit obligation and the fair market value of the pension plan assets at thebalance sheet date, as adjusted for unrecognized net retirement benefit obligation at transition, unrecognizedactuarial gains or losses and unrecognized prior service cost. The retirement benefit obligation is attributed toeach period by the straight-line method over the estimated service years of eligible employees.
Actuarial gains and losses are amortized in the year following the year in which the gains or losses arerecognized by the straight-line method over periods which are approximately equal to the average remaining
service years of employees. Prior service cost is being amortized as incurred by the straight-line method overperiods which are approximately equal to the average remaining service years of employees.

Additional information
Return of substituted portion of employee pension fundOn October 1, 2014, the Japanese Minister of Health, Labour and Welfare exempted the Company for future

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payments of the substituted portion of the pension fund, in accordance with the enactment of the Defined
Benefit Corporation Pension Law, and the Company refunded ¥1,438 million (Retirement benefit minimumreserve) on December 21, 2015. As a result, the Company recognized an extraordinary gain of ¥942 million in
fiscal 2015 and ¥131 million in fiscal 2016 on the return of the substituted portion of the employee pension fundbased on Section 46 of “Guidance on Accounting Standard for Retirement Benefits (Accounting Standards
Board of Japan (ASBJ) Guidance No.25 of March 26, 2015).”(h) Officers retirement reserve
The Company records a reserve for retirement benefits for directors and corporate auditors based on theamount payable at the balance sheet date based on the internal regulations.

(i)Leased assets and depreciation
Finance lease transactions under which ownership is not transferred are recognized as normal sales
transactions.

(j)Derivatives
The Company uses derivatives, such as forward foreign exchange contracts and interest rate swaps to limit its
exposure to fluctuations in foreign exchange rates and interest rates. The Company does not use derivatives
for trading purposes. In principle, deferral hedge accounting is adopted for derivatives that qualify as hedges.
Interest rate swaps that qualify for hedge accounting are not measured at fair value, but the differential paid or
received under the swap agreements is recognized and included in interest expenses or income.

(k) Consumption taxes
Transactions subject to consumption taxes are recorded at amounts exclusive of consumption taxes.

(l)Deferred tax accounting
Deferred income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities
are recognized for the future tax consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their tax bases and operating losses and tax credits
carried forward. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply totaxable income in the years in which the temporary differences are expected to be recovered or settled. Theeffect on deferred tax assets and liabilities of a change in tax rates is recognized in income or othercomprehensive income in the period the revised tax regulation is promulgated (See Note 7).

(m) Net income per share
The computation of net income per share is based on the weighted average number of shares outstanding
during each year.

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(n) Consolidated tax payment system
The Company has applied the consolidated taxation system with ANA HOLDINGS INC. as the parent company.

(o) Changes in accounting policies(Application of accounting standards for business combinations)
Effective from the fiscal year ended March 31, 2016, the Company has applied “Accounting Standard forBusiness Combinations” (ASBJ Statement No.21, revised September 13, 2013, hereinafter, “BusinessCombinations Accounting Standard”), the “Accounting Standard for Business Divestitures” (ASBJ Statement
No.7, revised September 13, 2013, hereinafter, “Business Divestitures Accounting Standard”) and other related
standards. The purpose of applying these standards was to adopt a method in which acquisition-related costs
are treated as expenses in the fiscal year in which they are incurred. In addition, for business combinations
carried out from the beginning of the fiscal year ended March 31, 2016, the Company adopted a method inwhich the reallocation of acquisition costs, as determined after finalization of provisional accounting treatment,is reflected in the financial statements for the period in which the business combination occurs.
The Company applied these standards in accordance with the transitional treatment specified in Section
58-2(4) of the Business Combinations Accounting Standard, and Section 57-4(4) of the Business Divestitures
Accounting Standard. The Company began applying them effective from the beginning of the fiscal year ended
March 31, 2016.
The application of these standards had no effect on the non-consolidated financial statements for the fiscal year
ended March 31, 2016.

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3.

TRANSACTIONS WITH PARENT COMPANY, SUBSIDIARIES AND AFFILIATES
Information on transactions with the parent company, subsidiaries and affiliates for the year ended March 31, 2016
was as follows:
Millions of yen
2016
Balances:
Notes and accounts receivable - trade¥2,810

Short-term loans receivable

2,491

Other current assets

2,748

Long-term loans receivable914

Notes and accounts payable

974
8

Short-term loans payable

4,333

Other current liabilities

8Long-term debt

1,820

Other long-term liabilities

203

Transactions:Sales

17,092

Purchases

3,508Transactions other than operating transactions

4.

717

PROPERTY, PLANT AND EQUIPMENT
The following table sets forth the acquisition costs and related accumulated depreciation of certain property, plantand equipment at March 31, 2016:
Millions of yen2016
Land¥277

Buildings and leasehold improvements1,213

Machinery, equipment and vehicles

1,077

Construction in progress

47

Leased assets

1Rental assets

1,927
4,544

Less accumulated depreciation(3,166)¥1,377

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5.

INCOME TAXESThe Company is subject to a number of taxes on income (corporation tax, inhabitants taxes and enterprise tax),
which, in aggregate, resulted in a normal statutory tax rate of approximately 33.06% for the year ended March 31,
2016. The tax effects of temporary differences that give rise to a significant portion of the deferred tax assets andliabilities at March 31, 2016 are as follows:
Millions of yen
2016
Deferred tax assets:
Provision for doubtful receivables¥119

Accrued employees' retirement benefits and pension expense

91

Valuation loss on marketable and investment securities

330

Accrued expenses

34

Other

360
936

Valuation allowance

(450)
485

Deferred tax liabilities:
Unrealized holding gain on securities(477)

Other(0)(477)

Net deferred tax assets¥7Note:Amendments to Japanese tax regulations were enacted into law on March 29, 2016. Consequently, the statutory incometax rate used to measure deferred income tax was amended from 33.1% to 30.9% (for the fiscal year beginning April 1,2016) and to 30.6% (from the fiscal year beginning April 1, 2017).

6.

AMOUNTS PER SHAREAmounts per share as of and for the year ended March 31, 2016 are as follows:Yen
2016
Net income¥2,570.50

Net assets

20,065.02

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7.

RELATED PARTY TRANSACTIONSThe Company has related party transactions with ANA HOLDINGS INC., the parent company, and subsidiaries andaffiliated companies. The corresponding balances at March 31, 2016 and the amounts of these transactions for theyear then ended are summarized as follows:

Millions of yen
Related parties

Balances

ANA HOLDINGS INC.

Current portion of long-term loans payable¥260

Long-term loans payable, less current portion
Accounts payable for consolidated tax payment

1,820
308

Short-term loans receivable

4,954

ANA Foods Co., Ltd.

2016

820

Other current assets (Advances)

74

Notes and accounts receivable - trade
Short-term loans receivable258

Long-term loans receivable

759
210

ANA Trading Corp., U.S.A.

Notes and accounts payable

ANA FESTA Co., Ltd.

Notes and accounts receivable - trade2,629Short-term loans payable

2,267

Notes and accounts payable

177

Short-term loans payable

600

ANA Trading Duty Free Co., Ltd.

Short-term loans payable

Fujisey Co., Ltd.

Short-term loans payable

550
500

International Cargo Service Co., Ltd.

Millions of yen
Related parties

Transactions

ANA HOLDINGS INC.

Borrowings

2016

Liability for consolidated tax payment

4,954

Loan of funds
ANA Foods Co., Ltd.

Other current assets (Advances)

Interest income

13

Dividend income

281
697

Sales of goods
Purchase of products and goods

15,446

Sales of goods

2,267
2

Borrowings
Interest expenses56

Dividend income
International Cargo Service Co., Ltd.

Sales of products and goods and services

11

Dividend income

Fujisey Co., Ltd.

1,360
600

Borrowings

ANA Trading Duty Free Co., Ltd.

1,071
64

Dividend income
ANA FESTA Co., Ltd.

820
1,017

Loan of funds

ANA Trading Corp., U.S.A.

¥2,080308

Borrowings

550

Dividend income

197
500

Borrowings

44

Dividend income

11The Company has related party transactions with other subsidiaries of ANA HOLDINGS INC. The correspondingbalances at March 31, 2016 and the amounts of these transactions for the year then ended are summarized asfollows:
Millions of yen
Related parties

Balances

2016

All Nippon Airways Co., Ltd.

Notes and accounts receivable - trade¥3,428Other current assets (Advances)

201

Notes and accounts payable

500

Advances received

1,098

Lease investment assets

1,496

panda Flight Academy Inc.

Lease investment assets

1,480

Winglet Co., Ltd.

Short-term loans receivable

2,753
Millions of yen

Related parties

Transactions

All Nippon Airways Co., Ltd.

Sales of products and goods and services

2016

Purchase of products and advertising media,¥23,246

mileage points

5,736

panda Flight Academy Inc.

Leasing of flight simulators

1,480

Winglet Co., Ltd.

Deposit held in ANA group cash management fund

2,753

Note:
1.

Business transactions with related parties are carried out on an arm’s-length basis similar to third-party transactions.

2.

Consumption taxes are not included in the amounts of these transactions.

3.

Since Winglet Co., Ltd. was merged into ANA HOLDINGS INC. on December 1, 2015, information on thecorresponding transaction amount relates to the period during which it was a related party. Also, for theyear-end balance, the outstanding balance reflects the amount at the time it was no longer a related party.

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All Nippon Airways Trading Group(As of March 31, 2016)

Parent:・ANA HOLDINGS INC.

Subsidiaries:
・ANA Foods Co., Ltd.
・ANA Trading Corp., U.S.A.
・ANA Trading Duty Free Co., Ltd.
・ANA FESTA Co., Ltd.
・HIT Co., Ltd.
・International Cargo Service Co., Ltd.
・a-sweets house inc.
・Musashinomori Country Club Co., Ltd.
・Fujisey Co., Ltd.
・ANA-Kuroko Strategic Solutions Co., Ltd

Affiliates:
・panda Flight Academy Inc.
・A2 Care Co., Ltd.
・GLOBAL RETAIL PARTNERS PTE. LTD.

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