Consolidated
Consolidated Balance Sheet������������������������������������������������������������ 1

Non-Consolidated

Consolidated Statement of Income�������������������������������������������������� 3

Non-Consolidated Five-Year Summary������������������������������������������� 30

Consolidated Statement of Comprehensive Income������������������������� 4

Non-Consolidated Balance Sheet�������������������������������������������������� 31

Consolidated Statement of Changes in Net Assets�������������������������� 5

Non-Consolidated Statement of Income���������������������������������������� 33

Consolidated Statement of Cash Flows������������������������������������������� 6

Non-Consolidated Statement of Changes in Net Assets���������������� 34

Notes to Consolidated Financial Statements������������������������������������ 7

Notes to Non-Consolidated Financial Statements�������������������������� 35

Independent Auditor’s Report�������������������������������������������������������� 24

Independent Auditor’s Report��������������������������������������������������������� 44

Financial Report 2023

Consolidated Balance Sheet
Nishimatsu Construction Co., Ltd. and Consolidated Subsidiaries
March 31, 2022 and 2023
Millions of yen

Thousands of U.S. dollars

2023

2022

Millions of yen

2023

2022

2023

Short-term debt (Notes 10 and 18)������������������������������������������������

¥ 43,039¥ 59,239$  443,638

Current portion of bonds payable (Note 18)������������������������������������

10,00015,000112,334

Commercial papers (Note 18)��������������������������������������������������������

20,000——   Notes (Note 18)��������������������������������������������������������������������������

18,27823,950179,358   Accounts (Note 18)���������������������������������������������������������������������

42,25549,877

373,526

Advances received on uncompleted contracts�������������������������������

14,802

17,237129,084

AssetsLiabilities and Net assets

Current assets:

Current liabilities:

Cash and time deposits (Notes 2 and 18)���������������������������������������

¥ 47,122¥ 53,727$  402,356

Notes and accounts receivable, trade:   Notes (Notes 14 and 18)������������������������������������������������������������

7,023

7,046

52,767   Accounts (Note 18)���������������������������������������������������������������������

176,441

183,461

1,373,929   Allowance for doubtful accounts (Note 2)�����������������������������������

(20)

(20)

(151)

Marketable securities���������������������������������������������������������������������

—

1

10

Inventories�������������������������������������������������������������������������������������

15,27022,009164,823

Advance paid���������������������������������������������������������������������������������

10,993

12,412

92,953

Other current assets����������������������������������������������������������������������

5,463

12,10990,688   Total current assets��������������������������������������������������������������������

262,292

290,745

2,177,375

Thousands of U.S. dollars

2023

Notes and accounts payable, trade:

Provision for warranties for completed construction (Notes 2 and 3)

7,923

1,658

12,416

Provision for bonuses (Note 2)�������������������������������������������������������

3,731

2,859

21,410

Provision for loss on construction contracts (Note 2)����������������������

2,820

7,920

59,313

Accrued income taxes�������������������������������������������������������������������

5,879

1,906

14,271

Provision for loss on real estate business and other (Note 2)����������

38

34

255

Asset retirement obligations (Note 20)��������������������������������������������

28

—

—

Deposits received��������������������������������������������������������������������������

45,88364,421

482,449

Lease obligations (Note 5)��������������������������������������������������������������

32

28

212

Other current liabilities (Note 5)�������������������������������������������������������

2,956

3,542

26,531   Total current liabilities������������������������������������������������������������������

217,664

247,671

1,854,797

Long-term liabilities:
Property and equipment (Notes 2 and 14):

Bonds payable (Notes 10 and 18)��������������������������������������������������

87,00091,000681,495

Land����������������������������������������������������������������������������������������������

95,721

100,727754,343

Long-term debt (Notes 10 and 18)�������������������������������������������������

—

3,157

23,643

Buildings����������������������������������������������������������������������������������������

97,27888,575663,332

Deferred tax liabilities (Notes 2 and 12)�������������������������������������������

293

306

2,289

Machinery and equipment��������������������������������������������������������������

10,175

10,13075,865

Provision for share awards for directors (and other officers) (Note 2)

54

107

800

6,510

6,741

50,481
5,676

Accumulated depreciation��������������������������������������������������������������

(41,042)(36,062)(270,073)

Retirement benefit liability���������������������������������������������������������������

   Total property and equipment�����������������������������������������������������

162,132

163,370

1,223,467

Asset retirement obligations (Note 20)��������������������������������������������

734

758

Lease obligations (Notes 5 and 18)������������������������������������������������

1,014

986

7,387

Other long-term liabilities (Note 5)���������������������������������������������������

6,628

6,749

50,550   Total long-term liabilities��������������������������������������������������������������

102,233

109,804

822,321  Total liabilities�����������������������������������������������������������������������������

319,897

357,475

2,677,118

23,514

23,514

176,093

Net assets:
Common stock :Authorized-160,000,000 shares
Issued and outstanding-55,591,502 shares�����������������������������������

Investments and other assets:

Capital surplus�������������������������������������������������������������������������������

20,795

20,793

155,716

Retained earnings��������������������������������������������������������������������������

158,486

157,327

1,178,213

Treasury stock, at cost�������������������������������������������������������������������

(57,335)(57,338)(429,404)

Valuation difference on available-for-sale securities������������������������

6,389

4,467

33,456

19,262

Deferred gains or losses on hedges�����������������������������������������������

—

9

69

7,437

55,696Equity adjustment from foreign currency translation������������������������

327

1,637

12,256

7,834

12,704

95,141Remeasurements of defined benefit plans��������������������������������������

(847)(1,567)(11,731)

Allowance for doubtful accounts (Note 2)���������������������������������������

(76)

(71)

(528)

Non-controlling interests����������������������������������������������������������������

6,387

7,307

54,719   Total investments and other assets���������������������������������������������

53,18959,509445,663   Total net assets��������������������������������������������������������������������������

157,716

156,149

1,169,387  Total assets��������������������������������������������������������������������������������

¥477,613¥513,624$3,846,505

Total liabilities and net assets���������������������������������������������������������

¥477,613¥513,624$3,846,505

Investment securities (Notes 2, 9, 14 and 18)���������������������������������

34,66835,031

262,343

Investments in subsidiaries and affiliates (Note 14)�������������������������

817

838

6,272

Long-term loans receivable (Note 5)�����������������������������������������������

1,048

998

7,477

Retirement benefit asset (Note 5)���������������������������������������������������

2,802

2,572

Deferred tax assets������������������������������������������������������������������������

6,096

Others (Note 5)������������������������������������������������������������������������������

The accompanying notes are an integral part of this statement.

1

NISHIMATSU CONSTRUCTION CO., LTD.

Financial Report 2023

The accompanying notes are an integral part of this statement.

NISHIMATSU CONSTRUCTION CO., LTD.

Financial Report 2023

2

Consolidated Statement of Income

Consolidated Statement of Comprehensive Income

Nishimatsu Construction Co., Ltd. and Consolidated Subsidiaries
March 31, 2022 and 2023

Nishimatsu Construction Co., Ltd. and Consolidated Subsidiaries
March 31, 2022 and 2023
Millions of yen

Thousands of U.S. dollars

2023

2022

Millions of yen

2023

Profit������������������������������������������������������������������������������������������������

Completed construction contract���������������������������������������������������
Real estate business and other������������������������������������������������������

¥304,392¥304,194

2023

2022

Net sales (Note 2):

Thousands of U.S. dollars

2023¥15,094¥9,754$73,048

Valuation difference on available-for-sale securities (Note 16)���������

(4,238)(1,922)(14,394)

Deferred gains and losses on hedges��������������������������������������������

—

18

136

$2,279,580

19,56035,365

264,847

323,754339,757

2,544,427

Cost of sales (Notes 2 and 15):
Cost of completed construction contract���������������������������������������

267,730

284,120

2,127,767

Cost of real estate business and other�������������������������������������������

12,251

21,917

164,133

279,981306,037

2,291,900

Other comprehensive income:Equity adjustment from foreign currency translation (Note 16)��������

639

2,062

15,446

Remeasurements of defined benefit plans (Note 16)�����������������������

(341)

(719)

(5,386)(3,940)(561)(4,198)¥11,154¥9,193$68,850

Gross profit������������������������������������������������������������������������������������

43,77333,720252,527

Comprehensive income�����������������������������������������������������������������

Selling, general and administrative expenses (Note 15)��������������

20,233

21,104

158,048

Comprehensive income attributable to:

Income from operations�����������������������������������������������������������������

23,54012,616

94,479Comprehensive income attributable to owners of parent�������������������

¥11,148¥8,326$62,354

Comprehensive income attributable to non-controlling interests���������

6

867

6,496

Other income (expenses):
Interest and dividend income���������������������������������������������������������

693

653

4,893

Foreign currency exchange gain�����������������������������������������������������

424

195

1,458

Gain on investments in silent partnerships��������������������������������������

134

155

1,164

Reversal of allowance for doubtful accounts����������������������������������

149

5

38

Compensation for delay�����������������������������������������������������������������

499

—

—

Interest expenses���������������������������������������������������������������������������

(578)

(707)

(5,296)

Financing expenses�����������������������������������������������������������������������

(790)

(109)

(817)

Advisory Expenses�������������������������������������������������������������������������

(632)

—

—

Gain on sales of investment securities��������������������������������������������

2,107

707

5,297

Gains on sales of non-current assets���������������������������������������������

1,273

238

1,779

Provision for warranties for completed construction�����������������������

(2,998)——Loss on valuation of investment securities��������������������������������������

(21)

(311)

(2,329)Loss on valuation of golf club membership (Note 5)�����������������������

(37)

(74)

(555)

Loss on retirement of non-current assets (Note 5)��������������������������

(24)

(24)

(177)

Loss on sales of non-current assets�����������������������������������������������

(73)

(8)

(63)

Impairment losses��������������������������������������������������������������������������

(952)

—

—

Other - net (Note 5)������������������������������������������������������������������������

(18)

260

1,947

(844)

980

7,339

22,696

13,596

101,818

Current������������������������������������������������������������������������������������������

8,269

4,185

31,344

Deferred�����������������������������������������������������������������������������������������

(667)

(343)

(2,574)

7,602

3,842

28,770

Profit������������������������������������������������������������������������������������������������

15,094

9,754

73,048Loss attributable to non-controlling interests�����������������������������

(9)

106

793

Profit attributable to owners of parent�����������������������������������������

¥ 15,103¥  9,648$   72,255

Profit before income taxes������������������������������������������������������������

The accompanying notes are an integral part of this statement.

Income taxes (Notes 2 and 12):

Yen

U.S. dollars

Per share of common stock
Net income (loss)���������������������������������������������������������������������������

¥ 312.34¥ 244.43$    1.831

Cash dividends applicable to the year��������������������������������������������

221.00221.00

1.655

The accompanying notes are an integral part of this statement.

3

NISHIMATSU CONSTRUCTION CO., LTD.

Financial Report 2023

NISHIMATSU CONSTRUCTION CO., LTD.

Financial Report 2023

4

Consolidated Statement of Changes in Net Assets

Consolidated Statement of Cash Flows

Nishimatsu Construction Co., Ltd. and Consolidated Subsidiaries
March 31, 2022 and 2023

Nishimatsu Construction Co., Ltd. and Consolidated Subsidiaries
March 31, 2022 and 2023
Millions of yen

EquityValuation
Remeasurements
Deferred gains
Treasury stock, difference on
adjustment from
Non-controllingof definedor losses onavailable-forforeign currency
at costinterests
hedgesbenefit planssale securities
translation

Commonstock

CapitalsurplusRetainedearnings¥23,514¥20,780¥154,041

Balance at April 1, 2021��������������

Millions of yen¥ (2,177)¥10,627¥0¥ (296)¥  (507)¥1,555Total
net assets¥207,537

Dividends declared (Note 17)������

(10,666)(10,666)

Profit attributable to owners ofparent�������������������������������������

15,103

15,103

Change of scope of
consolidation��������������������������

7

7

Purchase of treasury shares��������

(55,158)(55,158)

Change in ownership interest ofparent�������������������������������������
due to transactions with noncontrolling interests�����������������

15

15

Net changes of items other thanshareholder’s equity���������������

(4,238)

Balance at April 1, 2022��������������

¥23,514¥20,795¥158,486¥(57,335)¥ 6,389

¥0

623

(340)

4,832

877

¥  327¥  (847)¥6,387¥157,716

Dividends declared (Note 17)������

(10,758)(10,758)

Profit attributable to owners ofparent�������������������������������������

9,648

9,648

Change of scope of
consolidation��������������������������

(49)

(49)

Purchase of treasury shares��������
Disposal of treasury shares���������

0due to transactions with noncontrolling interests�����������������

(2)

(5)

(5)

2

2
(2)

Net changes of items other thanshareholder’s equity���������������
Balance at March 31, 2023���������

¥23,514¥20,793¥157,327¥(57,338)(1,922)

9

1,310

(720)

920

(403)

¥ 4,467¥9¥1,637¥(1,567)¥7,307¥156,149

Thousands of U.S. dollars

Commonstock

Capitalsurplus$176,093$155,736 $1,186,893

Balance at April 1, 2022��������������

Retainedearnings

Dividends declared (Note 17)������
Profit attributable to owners ofparent�������������������������������������

7,834

Change of scope of
consolidation��������������������������
0due to transactions with noncontrolling interests�����������������

(20)$(429,383)$176,093$ 2,447$ (6,346)$47,835 $1,181,125

72,25572,255

(367)

(367)

$155,716 $1,178,213

The accompanying notes are an integral part of this statement.

$ 0(80,568)

(38)

(38)

17

17
(20)

Net changes of items other thanshareholder’s equity���������������
Balance at March 31, 2023���������

$ 47,850

Total
net assets(80,568)

Purchase of treasury shares��������
Disposal of treasury shares���������

EquityValuation
Remeasurements
Deferred gains
Treasury stock, difference on
adjustment from
Non-controllingof definedor losses onavailable-forforeign currency
at costinterests
hedgesbenefit planssale securities
translation$(429,404)(14,394)

69

9,809

(5,385)$ 33,456$69$12,256$(11,731)

6,884(3,017)$54,719 $1,169,387

Thousands of U.S. dollars

2022

2023

2023

¥22,696¥13,596$101,818

3,729
4
952
(149)
1,332
10

3,967
8
—
(5)
5,100
(4)

29,70760—(34)
38,194(30)(1,893)(2,162)(693)
578(1,200)(2,107)21
19,707
2,531
4,211(6,265)
(591)
(653)
707
(229)
(707)
311
(6,957)
10,627
13,129(46,920)(4,428)(4,893)
5,296(1,716)(5,297)2,329(52,102)
79,58898,325(3,906)
11,570(3,856)
51,375693(563)(10,262)
41,243

2,396
18,537(10,168)
42,799654(700)(8,006)34,747

17,943
138,824(76,145)
320,519
4,889(5,243)(59,954)260,221

(200)
5,441
(29,834)
3,121(3,852)
1,625(26,043)570(28,849)
12,170(195,036)
4,270

(62)
(454)
347
195
(1,086)(22,532)

—
(282)
720
—
(189)
(27,451)—(2,115)
5,397—(1,415)(205,578)

Cash flows from financing activities:   Net increase (decrease) in short-term loans��������������������������������
   Net increase (decrease) in commercial paper������������������������������
   Proceeds from long-term borrowings�����������������������������������������
   Proceeds from issuance of bonds����������������������������������������������
   Redemption of bonds�����������������������������������������������������������������
   Proceeds from share issuance to non-controlling shareholders���   Net decrease (increase) in treasury stock, at cost�����������������������
   Cash dividends paid�������������������������������������������������������������������
   Dividends paid to non-controlling interests���������������������������������
  Others����������������������������������������������������������������������������������������
    Net cash provided by (used in) financing activities����������

8,000
—
—
37,000—4,800(55,158)(10,652)(37)(28)(16,075)

16,200(20,000)
3,157
19,000(10,000)51(3)(10,728)(5)(37)(2,365)

121,321(149,779)
23,643
142,290(74,890)383(22)(80,342)(38)(280)(17,714)

Effect of exchange rate changes on cash and cash equivalents�����
Net increase (decrease) of cash and cash equivalents��������������

915
3,551

1,314
6,245

9,842
46,771

Cash and cash equivalents at beginning of year (Note 2)����������������
Increase (decrease) in cash and cash equivalents resulting fromchange in scope of consolidation�����������������������������������������������

43,57547,122352,893

(4)

360

2,692

Cash and cash equivalents at end of year (Note 2)����������������������

¥47,122¥53,727$402,356

Cash flows from operating activities:
Profit before income taxes����������������������������������������������������������������
Adjustment for:   Depreciation and amortization����������������������������������������������������
   Amortization of goodwill�������������������������������������������������������������
   Loss on impairment��������������������������������������������������������������������
  Increase (decrease) in allowance for doubtful accounts����������������
  Increase (decrease) in provision for loss on construction contracts  Increase (decrease) in provision for real estate business and other
Increase (decrease) in provision for warranties for completed
construction����������������������������������������������������������������������������
  Increase (decrease) in accrued retirement benefit�������������������������
   Interest and dividend income������������������������������������������������������
  Interest expenses�����������������������������������������������������������������������
   Loss (gain) on sales of property and equipment��������������������������
   Loss (gain) on sales of investment securities�������������������������������
   Loss (gain) on valuation of investment securities�������������������������
   Decrease (increase) in trade receivables�������������������������������������
   Decrease (increase) in inventories�����������������������������������������������
   Increase (decrease) in notes and accounts payable��������������������
Increase (decrease) in advances received on uncompleted
contracts��������������������������������������������������������������������������������
   Increase (decrease) in deposits received�������������������������������������
  Others����������������������������������������������������������������������������������������
   Sub-total���������������������������������������������������������������������������������
   Interest and dividend received����������������������������������������������������
  Interest paid�������������������������������������������������������������������������������
   Income taxes paid����������������������������������������������������������������������
    Net cash provided by (used in) operating activities���������Cash flows from investing activities:   Payment for purchases of marketable and investment securities   Proceeds from sale of marketable and investment securities������
   Acquisition of property and equipment���������������������������������������
   Proceeds from sale of property and equipment��������������������������
Purchase of shares of subsidiaries resulting in change in scopeof consolidation����������������������������������������������������������������������
   Payments of loans receivable�����������������������������������������������������
   Proceeds from collection of loans�����������������������������������������������
   Net decrease (increase) in time deposits�������������������������������������
  Others����������������������������������������������������������������������������������������
    Net cash provided by (used in) investing activities����������

The accompanying notes are an integral part of this statement.

5

NISHIMATSU CONSTRUCTION CO., LTD.

Financial Report 2023

NISHIMATSU CONSTRUCTION CO., LTD.

Financial Report 2023

6

Notes to Consolidated Financial Statements

1. Basis of presenting consolidated financial statements(a) Nishimatsu Construction Co., Ltd. (the “Company”) maintains its
accounting records and prepares its financial statements in accordancewith the provisions set forth in the Japanese Corporation Law and in
conformity with generally accepted accounting principles and practices inJapan.
The accompanying consolidated financial statements of the Company
and its consolidated subsidiaries are a translation of the audited
consolidated financial statements filed with the Financial Services Agency
as required by the Financial Instruments and Exchange Law.
In preparing the consolidated financial statements for the purpose ofinclusion in this Corporate Report, certain reclassifications andrearrangements have been made to the consolidated financial statements
issued domestically in Japan in order to present these statements in a form
which is more familiar to readers of these statements outside Japan.
(b) Scope of consolidation
The Company, its seventeen subsidiaries (of which fifteen are included in
the scope of consolidation), constitute the Nishimatsu Construction Group(the “Group”).
Nishimatsu Hotel Management Co., Ltd. has been included in the scopeof consolidation as they are more quantitative materiality.
Sanyo Onoda Green Energy Co., Ltd., Nishimatsu Real Estate &Development (USA) Inc., and Nishimatsu Real Estate & Development(Thailand) Co., Ltd. which was established in the consolidated fiscal year
ended March 31, 2023, have been included in the scope of consolidation.
Major consolidated subsidiaries are Nishimatsu Jisho Co., Ltd and Thai
Nishimatsu Construction Co., Ltd.
Major non-consolidated subsidiaries are Shimashizu Corporation Co.,
Ltd, and Shin Urayasu Ekimae PFI. The non-consolidated subsidiaries havebeen excluded from the scope of consolidations as they are small in scale
and the total amounts of the non-consolidated subsidiaries’ assets, net
sales, equity in net income/loss, and equity in retained earnings do nothave material impact on the consolidated financial statements.
(c) Application of the equity method
The Company does not apply the equity method on investments in nonconsolidated subsidiaries and affiliated companies.
Major non-consolidated subsidiaries are Shimashizu Corporation, ShinUrayasu Ekimae PFI, and non-consolidated affiliates are Hamamatsu Chuo
Nishi Building K.K. and Masunagagumi Co., Ltd.
These non-consolidated subsidiaries and affiliates are excluded from theapplication of the equity method, as each company has minimal impact on
net income/loss, retained earnings and other accounts and thesecompanies on the whole do not have materiality.
(d) Fiscal year end of consolidated subsidiaries
The fiscal year end of our consolidated subsidiaries, Thai Nishimatsu
Construction Co., Ltd., Lao Nishimatsu Construction Co., Ltd., Nishimatsu
Vietnam Co., Ltd., Nishimatsu Real Estate & Development (Asia) Pte. Ltd.,
Hanoi PH investment Pte. Ltd., Sangenjaya Ichigou Co., Ltd., Bangkok
Sathorn Hotel Management Co., Ltd., Nishimatsu Hotel Management Co.,
Ltd., Nishimatsu Real Estate & Development (USA) Inc., and Nishimatsu
Real Estate & Development (Thailand) Co., Ltd. is December 31.
Financial statements of these subsidiaries as of December 31 areincluded in the consolidated financial statements. However, significant
transactions that occurred in the period between January 1 and March 31,
the balance sheet date of the Group, have been reflected in the preparationof the consolidated financial statements.

2. Summary of significant accounting policies(a) Cash and cash equivalents
Cash and cash equivalents include cash on hand, deposits placed withbanks on demand, and highly liquid investments with insignificant risk ofchanges in value, with maturities of three months or less when purchased.
Cash and cash equivalent balance of ¥53,727 million ($402,356
thousand) is in the balance sheet as of March 31, 2023.
(b) Standard and methods of assessment of significant assets
Investments in securities:
Held-to-maturity securities are either amortized or accumulated to facevalue.
Other securities with quoted market prices are carried at market value.
The difference between the acquisition costs and the carrying value ofother securities, including unrealized gains and losses, is recognized as acomponent of net assets and is reflected as “Unrealized gain on availablefor-sale securities held for sale.”
The cost of other securities sold is computed by the moving averagemethod.
Other securities without quoted market prices are stated at cost basedon the moving average method.
Derivatives:
Mark-to-market method
Inventories:
Inventories other than materials and supplies are stated at the accumulated
construction cost for each project, which does not include selling, generaland administrative expenses.
Materials and supplies are stated at cost determined by the moving
average method.
Regarding real estate held for sale, cost of uncompleted real estatedevelopment projects and materials and supplies, when deterioration in

7

NISHIMATSU CONSTRUCTION CO., LTD.

Financial Report 2023

profitability is recognized, their book values on balance sheets aredevaluated.
(c) Depreciation and amortization
Property, plant and equipment (excluding lease assets):
Property and equipment, including significant renewals and additions, arecarried at cost.
The cost of property and equipment retired or otherwise disposed of andaccumulated depreciation in respect thereof are eliminated from the related
accounts, and the resulting gain or loss is reflected in income.
Maintenance and repairs, including minor renewals and improvements,
are charged to income as incurred.
Depreciation is computed generally by the declining balance method at
rates based on the useful lives, which is determined under standards that
conform to the methods provided for in the Corporation Tax Act.
The straight-line method is applied to buildings acquired after April 1,
1998 and buildings and accompanying facilities and structures acquired
after April 1, 2016.
Intangible assets (excluding lease assets):
Intangible assets are carried at cost.
Useful lives of assets are determined based on standards that conformto the methods provided for in the Corporation Tax Act. Software forinternal use is amortized using the straight-line method based on an internal
estimate of its useful life (five years).
Lease assets:
Lease assets associated with finance leases that do not transfer ownershipare accounted for based on the straight-line method with the term of leaseas the useful life and the residual value as zero.

(d) Accrued retirement benefits
Accrued retirement benefits are calculated based on an estimate of the
projected retirement benefit obligation and the pension fund assets.
Assets in the Company’s defined benefit corporate pension plan arerecorded as Others under Investments and other assets as in case of theplan assets exceeded the retirement benefit obligations.
Actuarial gains and losses are amortized on the straight-line method over
10 years beginning immediately with the following year.
(e) Recognition of sales and related costs
In the construction business, which is the main business of the Group, we
provide customers with the design and construction of buildings, etc.
based on construction contracts. The main payment terms for ourtransactions are the payment terms agreed with the customer by contract,
and the contract does not include any significant financial components.
(1) The method of recognizing revenue over time (former the percentage ofcompletion method)
Regarding construction contracts in the construction business, we judge
that performance obligations will be satisfied over time, mainly for long-term
construction contracts, and we recognize revenue based on the progressof fulfillment of performance obligations. The method of estimating the
progress related to the fulfillment of performance obligations is calculatedby the ratio of the costs already incurred to the total estimated construction
cost (i.e., the input method).
(2) Revenue recognition by other methods
Cost recovery method: Regarding works for which the progress rate related
to the fulfillment of performance obligations cannot be reasonably
estimated, we recognize the same amount of revenue as the costs
incurred.
Completed contract method: Regarding works that are reasonably
expected to have a very small contract amount and a very short period, we
recognize revenue when the performance obligations are fully satisfied.
(f) Income taxes
Deferred income taxes are recognized applying the asset and liability
method.
Under this method, deferred tax assets and liabilities are determinedbased on the difference between the financial reporting and the tax basis of
the assets and liabilities, and are measured using enacted tax rates andlaws that will be in effect when the differences are expected to reverse.
(g) Foreign currency transactions
All short-term and long-term monetary receivables and payables
denominated in foreign currencies are translated into Japanese yen at theexchange rates at the balance sheet date.
The foreign exchange gains and losses from translation are recognized in
the consolidated statement of income to the extent that they are nothedged by foreign exchange derivatives.
(h) Hedge accounting
Interest rate swaps are utilized to avoid interest volatility risk on debt.
The interest rate swaps which qualify for hedge accounting and meet
specific matching criteria are not remeasured at market value but the net

amount to be paid or received under the interest rate swap contracts arerecognized and included in interest expense and income as incurred.
Forward foreign exchange contracts utilized as a hedging instrument
against risk arising from exchange rate fluctuations which meet the required
criteria are accounted for by the allocation method. In the allocation
method, assets and liabilities subject to foreign forward contract aretranslated by the contracted rate of exchange.
(i) Allowance for doubtful accounts
The Group provides for possible losses due to collectability of notes,
accounts, loans receivable and others based on the Groups’ past credit
loss experience and management’s estimate.
(j) Provision for warranties for completed construction
Provision for losses which are expected to occur in the future related to
defects of completed work is provided based on the estimated amountcalculated using an actual percentage of related losses during a certain
past period and the estimate future warranty expense amount for the
specific properties.
(k) Provision for share awards for directors (and other officers)
Preparing for issuing of Company’s shares under the performance-based
compensation for directors and executive officers, the estimated number ofshares to be paid according to the points allocated to the officers can bereasonably estimated.
(l) Provision for bonuses for directors (and other officers)
The estimated amount of cash payment by the performance-based
compensation for directors and executive officers can be reasonably
estimated.
(m) Provision for bonuses
Provision for bonuses is based on the estimated value of the bonus to be
paid to employees.
(n) Provision for loss on construction contracts
Provision for loss on construction contracts is provided with respect toconstruction projects for which the losses can be reasonably estimated.
(o) Provision for loss on real estate business
Provision for losses which are expected to occur in the future related to realestate businesses is provided when the loss can be reasonably estimated.
(p) O ther accounting policies on preparing consolidated financial
statements
Accounting principles and procedures adopted when requirements under
the relating accounting standards are not clearly defined.
In the construction business, joint venture accounting process is mainly
recognized assets, liabilities, profit and expenses by member’s investment
ratio.
(q) Goodwill amortization method and period
It is amortized by the straight-line method for 10 years.

3. Important accounting estimates(a) E stimation for the method of recognizing revenue over time
(former the percentage of completion method)
FY2021
Sales from the method of recognizing revenue over time (former thepercentage of completion method) are ¥298,026 million ($2,435,050
thousand).
Provision for loss on construction contracts are ¥2,820 million ($23,041
thousand).
FY2022
Sales from the method of recognizing revenue over time (former thepercentage of completion method) are ¥298,114 million ($2,232,560
thousand).
Provision for loss on construction contracts are ¥7,920 million ($59,313
thousand).
In applying the method of recognizing revenue over time (former thepercentage of completion method), the amount of completed construction
work is recorded based on the progress rate calculated by the ratio of thecosts already incurred to the total estimated construction cost (i.e., theinput method). We make the best estimate for the total construction

NISHIMATSU CONSTRUCTION CO., LTD.

Financial Report 20238

revenue, total construction cost, and construction progress on thesettlement date for each individual construction contract based on all theinformation available on the settlement date.
In calculating the total construction revenue, in case there is an
unconfirmed additional and design change construction fee, the amountestimated based on the status of discussions with the ordering party is
adjusted from the contracted amount. In addition, in calculating the total
construction cost, the construction cost that will occur after the settlement
date is estimated on the assumptions of outsourcing costs, material costs,
etc., considering the negotiation with the partner companies as well as theconditions of each individual construction contract.
As a result of these estimates, for works that are expected to incur
losses after the settlement date, the estimated amount is recorded as aprovision for loss on construction contracts.
Therefore, changes in estimation assumptions including these various
conditions may have a significant impact on the consolidated financial
statements for the next consolidated fiscal year.
(b) Provision for warranties for completed construction
FY2021
Provision for warranties for completed construction are ¥7,923 million($64,737 thousand).

FY2022
Provision for warranties for completed construction are ¥1,658 million($12,416 thousand).
For covering the cost of repairing defects related to completed
construction, the Group has recorded the amount calculated based on theactual compensation rate over a certain period in the past and theestimated cost of future repairs, etc. for specific properties. In thecalculation based on the actual volume rate, it is assumed that the cost of
defect repair will be incurred in the future, which is the same as the ratio of
the amount of completed construction work for the past 3 years to theamount of cost of defect repair, etc. In the calculation by estimation, theestimated cost of repairs, etc. is recorded for each property when it isexpected that defects will occur in the future for a specific property and theamount can be reasonably estimated.
We make the best estimates for these provisions based on all theinformation available at this moment, but due to changes in theassumptions of the estimates such as price fluctuations of outsourcing
costs and material costs may have a significant impact on the consolidated
financial statements for the next consolidated fiscal year.

4. Changes in accounting policy
The Implementation Guidance on Accounting Standard for Fair Value
Measurement (ASBJ Guidance No. 31, Jun 27, 2021; “Implementation
Guidance on Accounting Standard” hereinafter) has been applied since thebeginning of the fiscal year ended March 31, 2023. In accordance with theprovisional handling described in Paragraph 27-2 of Implementation
Guidance on Accounting Standard, the new accounting policies set forth in
Implementation Guidance on Accounting Standard and related standards

have been applied to future accounts. This change has little effect on
consolidated financial statements for the fiscal year ended March 31, 2023.
In the notes on investment trusts in the items related to the breakdown of
the fair value of financial instruments in the Notes on Financial Instruments
is not disclosed, in accordance with the transitional treatment stipulated inparagraph 27-3 of the “Implementation Guidance on Accounting Standard.”

Due to the addition of this BBT, the Company purchased thecorresponding shares by depositing cash with Custody Bank of Japan, Ltd.
(Trust E account), a sub-trustee of Mizuho Trust & Banking Co., Ltd., thetrustee.

of the BBT account. As a result, the Company’s own shares held by thetrust are recorded as treasury shares in shareholders’ equity at their carrying
amount. Disposals of treasury shares are recognized when the shares areissued to the Directors and other beneficiaries thorough the trust.
At the end of the previous fiscal year under review, the book value andnumber of treasury shares remaining in the trust were ¥762 million and
225,000 shares, respectively. At the end of the fiscal year under review, thebook value and number of the Company’s shares remaining in the trust
were ¥760 million and 225,000 shares, respectively.

(b) Company shares remaining in trust
In accordance with the Practical Solution on Transactions of Delivering theCompany’s Own Stock to Employees etc. through Trusts (ASBJ PITF No.
30, March 26, 2015), the total amount method is applied to the processing

7. Significant subsequent events(Issue of unsecured bonds)
The Company has issued unsecured bonds (Sustainability-Linked Bond) with a payment date of July 27,2023, under the following conditions. This issuance isbased on a comprehensive resolution of the board meeting held on June 27, 2023, which determined the total amount to be offered, etc.
1. The total amount of issued corporate bonds
20 billion yen
2. Issued price
100 yen for every 100 yen offered
3. Interest rate
0.600% per year
4. Payment dateJuly 27, 2023
5. Redemption deadline
July 27, 2028
6. Use of funds
Bond redemption and capital investment funds
7. Financial covenants“Collateral provision restriction clause” is attached.

8. United States dollar amounts
The United States dollar amounts presented in the accompanying
consolidated financial statements are included solely for convenience andare stated, as a matter of arithmetical computation only, at the rate of¥133.53 = US$1, which was the exchange rate prevailing as of March 31,
2023

These conversions should not be construed as representations that theJapanese yen amounts actually represent, or have been or could be
converted into, United States dollars at that rate.

9. Investment in securities
5. Changes in presentations

As of March 31, 2022 and 2023, securities with quoted market prices were summarized as follows:(a) Notes to consolidated statement of Balance Sheets“Long-term loans receivable” and “Retirement benefit asset” which waslisted in “Others” under “Investments and other assets” and “Leaseobligations” which was listed in “Other current liabilities” under “Current
liabilities” and “Lease obligations” which was listed in “Others” under“Long-term liabilities” in the previous fiscal year, are separately listed fromthe fiscal year ended March 31, 2023, for the understanding of users ofconsolidated financial statements.
The consolidated financial statements of the previous fiscal year havebeen reclassified to reflect this change in presentation.
As a result, ¥11,684 million of presented in “Others” in the consolidatedbalance sheet of the previous fiscal year has been reclassified as ¥1,048
million of “Long-term loans receivable,” ¥2,802 million of “Retirement
benefit asset” and ¥7,834 million of “Others.”
And ¥2,988 million of presented in “Other current liabilities” under “Current
liabilities” in the consolidated balance sheets of the previous fiscal year has
been reclassified as ¥32 million of “Lease obligations” and ¥2,956 million of“Other current liabilities”. ¥7,642 million of presented in “Other long-term

liabilities” under “Long-term liabilities” in the consolidated balance sheets ofthe previous fiscal year has been reclassified as ¥1,014 million of “Leaseobligations” and ¥6,628 million of “Other long-term liabilities.”(b) Notes to consolidated statement of Income“Loss on valuation of investment securities” and “Loss on valuation of golfclub membership” which was listed in “Other-net” under “Other income(expenses)” in the previous fiscal year, is separately listed from the fiscal
year ended March 31, 2023, because of more quantitative materiality.
The consolidated financial statements of the previous fiscal year havebeen reclassified to reflect this change in presentation.
As a result, ¥(10) million of presented in “Infectious disease related costs”
and ¥(66) million of presented in “Other-net” under “Other income(expenses)” in the consolidated statements of income of the previous fiscal
year have been reclassified as ¥21 million of “Loss on valuation of
investment securities,” ¥37 million of “Loss on valuation of golf clubmembership” and ¥(18) million of “Other-net.”Thousands of U.S. dollars

2023

Acquisition
cost

Fair value

Debt securities����������������������������������������������������������������������������������������

¥—¥—Sub-total��������������������������������������������������������������������������������������

——Debt securities����������������������������������������������������������������������������������������

1

Sub-total��������������������������������������������������������������������������������������

1

Total���������������������������������������������������������������������������������������������

¥ 1

Unrealized
gains (losses)

2023

Acquisition
cost

Fair value

¥—

¥—

¥—

—

—

—

1

(0)

1

1

(0)

1

¥ 1

¥ (0)

¥ 1

Unrealized
gains (losses)

Acquisition
cost

Fair value

¥—

$—

$—

$—

—

—

—

—

1

(0)

9

9

(0)

1

(0)

9

9

(0)

¥ 1

¥ (0)

$ 9

$ 9

$ (0)

Unrealized
gains (losses)

Held-to-maturity securities whose market values exceed in the balance
sheet:

Held-to-maturity securities whose market values do not exceed in thebalance sheet:

Other securities with quoted market prices
Millions of yen

Thousands of U.S. dollars

2023

2023

Acquisition
cost

Fair value

Unrealized
gains (losses)

Acquisition
cost

Fair value

Unrealized
gains (losses)

Acquisition
cost

Fair value

Unrealized
gains (losses)¥16,468¥25,569¥9,101¥15,830¥22,507¥6,677$118,550$168,555$50,005

—

—

—

300

426

126

2,247

3,191

944

16,46825,569

9,101

16,13022,933

6,803

120,797

171,746

50,949(2,774)

Other securities whose market values recorded in the balance sheet
exceed their acquisition costs:

Transactions involving issue of Company stock to Directors and others via
trust(a) Transaction overview
Pursuant to the resolution of the 84 Regular General Meeting of
Shareholders held on June 29, 2021, the Company adopts a “Board
Benefit Trust (BBT),” which provides Company’s ordinary shares and money

NISHIMATSU CONSTRUCTION CO., LTD.

Millions of yen

2022

2022

6. Additional information

9

Held-to-maturity securities with quoted market prices

Financial Report 2023

equivalent to the market value of the Company’s ordinary shares as part ofremuneration, as a share-based remuneration linked to businessperformance for the directors (excluding members of the Audit Committee
and other outside directors) and executive officers of the Company(hereinafter, the eligible persons are collectively referred to as the “Directors,
etc. of the Company”).

Equity securities
OthersSub-total��������������������������������������������������������������������������������������
Other securities whose market values recorded in the balance sheet do
not exceed their acquisition costs:

2,002

1,486

(515)

2,002

1,632

(370)

14,99012,216Sub-total��������������������������������������������������������������������������������������

2,002

1,486

(515)

2,002

1,632

(370)

14,99012,216(2,774)

Total���������������������������������������������������������������������������������������������

¥18,470¥27,055¥8,586¥18,132¥24,565¥6,433$135,787$183,962$48,175

Equity securities

NISHIMATSU CONSTRUCTION CO., LTD.

Financial Report 2023

10

Available-for-sale securities sold during the fiscal year ended March 31, 2022 and 2023
Millions of yen

2023

2022
Proceeds
Equity securities��������������������������������������������������������������������������������

¥2,906

Total gain on Total loss on
sales
sales

¥2,107¥—

Proceeds¥1,357(c) R econcilation of retirement benefit obligation and plan assets
and net liability for retirement benefit in the Consolidated
Balance Sheet

Thousands of U.S. dollars

2023

Total gain on Total loss on
sales
sales

¥707

¥—

Proceeds

Total gain on Total loss on
sales
sales

$10,164$5,297

The Group recognizes an important loss on securities with market prices in cases where the market price at the end of the fiscal year falls 50% or morecompared to the book value and is considered to be irrecoverable. An impairment loss is also recognized for any item considered to be irrecoverable when themarket price at the end of the fiscal year falls 30% or more and less than 50% compared to the book price and any of the following applies.
· Market price has continued to drop at a rate of 30% or more over the past year.
· The issuing company of the respective stock is in an excess debt status as of the latest fiscal year.
· The issuing company of the respective stock has posted loss attributable to owners of parent for the last two consecutive years and expects to post loss
attributable to owners of parent also in the following fiscal year.
For securities without market prices, the Group recognizes an impairment loss for the value needed in consideration of its recoverability in cases where thesubstantial value falls 50% or more compared to the book value.

10. Short-term and long-term debt

11. Retirement benefits and pension plan(a) The weighted average interest rates on short-term debt outstanding asof March 31, 2023 was approximately 0.335 per cent.
(b) Long-term debt comprised the following:

Information on the projected benefit obligation under the retirement benefit
and pension plan were as follows:

Thousands of
U.S. dollars

Millions of yen
IssuerType

Date of
issue

2023

2022

2023

The 7thunsecured Jul 24,
Japanese 2015
Yen bonds

0.180 per centNishimatsu
UnsecuredConstruction
Japanese Yen bondCo., Ltddue Sep 20, 2024

The 8thunsecured Sep 20,
Japanese 2019
Yen bonds

0.180 per centNishimatsu
UnsecuredConstruction
Japanese Yen bondCo., Ltddue Jul 20, 2023

The 9thunsecured Jul 20,
Japanese 2020
Yen bonds

15,00015,000112,3340.330 per centNishimatsu
UnsecuredConstruction
Japanese Yen bondCo., Ltddue Jul 18, 2025

The 10th
unsecured Jul 20,
Japanese 2020
Yen bonds

15,00015,000112,3340.420 per centNishimatsu
UnsecuredConstruction
Japanese Yen bondCo., Ltd
due Mar 1, 2027

The 11th
unsecured Mar 1,
Japanese 2022
Yen bonds

0.600 per centNishimatsu
UnsecuredConstruction
Japanese Yen bondCo., Ltd
due Mar 1, 2029

The 12th
unsecured Mar 1,
Japanese 2022
Yen bonds

0.580 per centNishimatsu
UnsecuredConstruction
Japanese Yen bondCo., Ltddue Jul 14, 2027

The 13th
unsecured Jul 14,
Japanese 2022
Yen bonds¥10,000

20,00019,000¥—$20,000—149,779

19,000142,290

Retirement benefit obligation as of April 1, 2021���������������

¥26,524

Service cost�������������������������������������������������������������������

1,284Interest cost�������������������������������������������������������������������

182

Actuarial gain or loss������������������������������������������������������

74

Retirement benefits paid������������������������������������������������

(1,139)Others���������������������������������������������������������������������������

—Retirement benefit obligation as of March 31, 2022����������

¥26,925

Method of attributing the retirement benefit obligation to periods of service:
Simplified method(b) Reconcilation of plan assets

Funded retirement benefit obligation���������������������������������

¥26,722

Plan assets�����������������������������������������������������������������������

(23,217)

Unfunded retirement benefit obligation�����������������������������

203

Net liability for retirement benefit in the Consolidated
Balance Sheet���������������������������������������������������������������

3,708

Net defined benefit liability������������������������������������������������

6,510

Retirement benefit asset���������������������������������������������������

(2,802)Net liability for retirement benefit in the Consolidated
Balance Sheet���������������������������������������������������������������

¥ 3,708(d) C omponents of net periodic pension cost for the year ended
March 31, 2022

18,00018,000134,802

Plan assets as of April 1, 2021�����������������������������������������

¥21,144

Expected return on plan assets��������������������������������������

508

Actuarial gain or loss������������������������������������������������������

(408)

—

19,000142,290

Contribution by the Company����������������������������������������

2,782

97,000106,000

793,829

Retirement benefits paid������������������������������������������������

(809)

Plan assets as of March 31, 2022�������������������������������������

¥23,217—

15,000112,334¥97,000¥106,000$793,829

Millions of yen

Thousands of
U.S. dollars

2023��������������������������������������������������������������������������������

¥ 19$  1442024��������������������������������������������������������������������������������

¥ 14$  1012025��������������������������������������������������������������������������������

¥953$7,1402026 and thereafter����������������������������������������������������������

¥  0$    2Financial Report 2023

0.7%

Service cost���������������������������������������������������������������������

Except pension trust������������������������������������������������������

2.5%

Expected return on pension trust�����������������������������������

0.0%(i) Defined contribution
Amount payable for defined contribution of the Company and consolidated
subsidiary was ¥207 million.
FY2022 (April 1, 2022 to March 31, 2023)(a) Retirement benefit obligation
Recognition of retirement benefit obligation:
Millions of yen

Thousands of
U.S. dollars

2023

2023

Retirement benefit obligation as of April 1, 2022���������������

¥26,925$201,642

Service cost�������������������������������������������������������������������

1,321

9,891

Millions of yen

Interest cost�������������������������������������������������������������������

185

1,386

2022

Actuarial gain or loss������������������������������������������������������

63

476

Retirement benefits paid������������������������������������������������

(1,280)(9,589)¥1,284

Interest cost���������������������������������������������������������������������

182

Others���������������������������������������������������������������������������

16

119

Expected return on plan assets����������������������������������������

(508)

Retirement benefit obligation as of March 31, 2023����������

¥27,230$203,925

Amortization of actuarial gain or loss���������������������������������

(7)

Total���������������������������������������������������������������������������������

¥  951Service cost includes the retirement benefit obligation applying thesimplified method are included in “service cost.”(e) Remeasurements of defined benefit plans
Details of items (before income tax excluded) of remeasurements of defined
benefit plans were as follows:
Millions of yen

2022
Actuarial gain or loss��������������������������������������������������������

¥(491)

Total���������������������������������������������������������������������������������

¥(491)(f) Cumulative remeasurements of defined benefit plans
Details of items (before income tax excluded) of cumulative
remeasurements of defined benefit plans were as follows:
Millions of yen

Method of attributing the retirement benefit obligation to periods of service:
Simplified method(b) Reconcilation of plan assets
Millions of yen
Plan assets as of April 1, 2022�����������������������������������������

2023

2023

¥23,217$173,874

560

4,198

Actuarial gain or loss������������������������������������������������������

(1,000)(7,492)Contribution by the Company����������������������������������������

1,176

8,809

Retirement benefits paid������������������������������������������������

(892)(6,683)

Plan assets as of March 31, 2023�������������������������������������

¥23,061$172,706(c) R econciliation of retirement benefit obligation and plan assets
and net liability for retirement benefit in the Consolidated
Balance Sheet
Millions of yen

Unrecognized actuarial gain or loss�����������������������������������

¥1,221

Total���������������������������������������������������������������������������������

¥1,221(g) Pension assets
Details of plan assets
Ratio of each major category for plan assets was as follows:
2022
Bonds������������������������������������������������������������������������������

65%

Securities�������������������������������������������������������������������������

4%

General accounts�������������������������������������������������������������

23%

Others������������������������������������������������������������������������������

8%

Total���������������������������������������������������������������������������������

100%

Thousands of
U.S. dollars

Expected return on plan assets��������������������������������������

2022

Millions of yen

2022

The aggregate annual maturities of lease on March 31, 2023 were as follows:

NISHIMATSU CONSTRUCTION CO., LTD.

2022

2022

Less: Portion due within 1 year

11

FY2021 (April 1, 2021 to March 31, 2022)(a) Retirement benefit obligation
Recognition of retirement benefit obligation:
Millions of yen

0.810 per centNishimatsu
UnsecuredConstruction
Japanese Yen bondCo., Ltddue Jul 22, 2022

Millions of yen

3,505

FY2022 (April 1, 2022 to March 31, 2023)
As of March 31, 2023, an impairment loss of ¥311 million is recognized for securities (other securities of unlisted stocks)

2022
Discount rate��������������������������������������������������������������������
Expected return on plan assets$—

Loss on valuation of investment securities
FY2021 (April 1, 2021 to March 31, 2022)
As of March 31, 2022, an impairment loss of ¥21 million is recognized for securities (other securities of unlisted stocks)(h) Assumptions for actuarial calculations

Thousands of
U.S. dollars

2023

2023

Funded retirement benefit obligation���������������������������������

¥ 27,009$ 202,274

Plan assets�����������������������������������������������������������������������

(23,061)(172,706)

3,948

29,568

Unfunded retirement benefit obligation�����������������������������

221

1,651

Net liability for retirement benefit in the Consolidated
Balance Sheet���������������������������������������������������������������

4,169

31,219Net defined benefit liability������������������������������������������������

6,741

50,481Retirement benefits paid���������������������������������������������������

(2,572)(19,262)

Net liability for retirement benefit in the Consolidated
Balance Sheet���������������������������������������������������������������

¥ 4,169$ 31,219

Retirement benefits trust established for corporate pension plans accounts
for 17% of total plan assets.
Method for long-term expected return on plan assets
Long-term expected return on plan assets is determined by current andfuture distribution of plan assets and long-term expected return consists ofpension assets.

NISHIMATSU CONSTRUCTION CO., LTD.

Financial Report 2023

12

12. Income taxes(d) Components of net periodic pension cost for the year ended
March 31, 2023
Millions of yen

Thousands of
U.S. dollars

2023

2023

Service cost���������������������������������������������������������������������

¥1,321$ 9,891

Interest cost���������������������������������������������������������������������

185

1,387

Expected return on plan assets����������������������������������������

(561)(4,198)

Amortization of actuarial gain or loss���������������������������������

28

207

Total���������������������������������������������������������������������������������

¥  973$ 7,287

Service cost includes the retirement benefit obligation applying thesimplified method are included in “service cost.”(e) Remeasurements of defined benefit plans
Details of items (before income tax excluded) of remeasurements of defined
benefit plans were as follows:

Composition of deferred tax assets and liabilities(a) D eferred tax assets and liabilities at March 31, 2022 and 2023 are
as follows:
Thousands of
U.S. dollars

Millions of yen

2023

2022

2023

Deferred tax assets:(3.6)%(1.4)%

Provision for warranties for completed
construction����������������������������������������������������

3,573

2,172

16,262

Effective tax rate���������������������������������������������������������������

33.5%

28.3%

Carryforwards����������������������������������������������������

758

943

7,060

Provision for bonuses����������������������������������������

1,124

866

6,490

2,804

3,398

25,452

15,073112,883

Actuarial gain or loss��������������������������������������������������������

¥(1,036)$(7,760)

Total���������������������������������������������������������������������������������

¥(1,036)$(7,760)

Valuation allowance for net operating loss
carryforwards (*1)��������������������������������������������

(720)

(915)

(6,850)

Valuation allowance for the sum of deductible
temporary differences�������������������������������������

(4,191)(3,891)(29,141)

Valuation allowance�����������������������������������������

(4,911)(4,806)(35,991)

Gross deferred tax assets�������������������������������

¥ 9,554¥10,267$76,892

Deferred tax liabilities:
Unrealized gain on available-for-sale securities�����

(2,633)(1,970)(14,751)

Millions of yen

Thousands of
U.S. dollars

Reserve for reduction entry of replaced property��

(480)

(478)

(3,582)

2023

2023

Others���������������������������������������������������������������

(638)

(688)

(5,153)Gross deferred tax liabilities�����������������������������

¥(3,751)¥ (3,136)$(23,486)

Net deferred tax assets (liabilities)��������������������

¥ 5,803¥ 7,131$ 53,406(*1) The amounts of net operating loss carryforwards and corresponding deferred tax assets by
due period.

Previous fiscal year (As of March 31, 2022)
Millions of yen

2023

Total���������������������������������������������������������������������������������

100%

Retirement benefits trust established for corporate pension plans accounts
for 16% of total plan assets.
Method for long-term expected return on plan assets
Long-term expected return on plan assets is determined by current andfuture distribution of plan assets and long-term expected return consists ofpension assets.

Within1 year2023
0.7%

Expected return on plan assets
Except pension trust������������������������������������������������������

2.5%

Expected return on pension trust�����������������������������������

2.0%

Over
2 years
within3 yearsOver
3 years
within4 yearsOver
4 years
within5 yearsOver
5 years

2. D
 epreciation method for lease assetsi) Method	Same method as depreciation method applied toself-owned fixed assets

¥ 16

¥ 324

¥ 86

¥ 108

¥ 224

¥ 758

—

(16)

(324)

(86)

(90)

(204)

(720)

Deferred tax assets������

—

—

0

—

19

19

38

(a) The net operating loss carryforwards represent the amounts after being multiplied by thestatutory tax rate.

Current fiscal year (As of March 31, 2023)
Millions of yen

Within1 yearOver
2 years
within3 yearsOver
3 years
within4 yearsOver
4 years
within5 yearsOver
5 years

Total

Net operating loss
carryforwards (a)�������

¥8

¥ 324

¥ 80

¥ 61

¥ 83

¥ 387

¥ 943

Valuation allowance�����

(8)

(313)

(80)

(61)

(83)

(370)

(915)

Deferred tax assets������

—

11

—

—

—

17

28

(a) The net operating loss carryforwards represent the amounts after being multiplied by thestatutory tax rate.
Thousands of U.S. dollars(i) Defined contribution
Amount payable for defined contribution of the Company and consolidated
subsidiary was ¥216 million.

2023
Over
2 years
within3 yearsOver
3 years
within4 yearsOver
4 years
within5 years

Net operating loss
carryforwards (a)�������

$ 63 $ 2,422

$ 602

$ 457

$ 619 $ 2,897 $ 7,060

Valuation allowance�����

(63)(2,342)

(602)

(457)

(619)

(2,767)(6,850)

Deferred tax assets������

—

80

—

—

—

130

210

Within1 yearOver
5 years

2022

2023

2023
$23,643

Secured liabilities:
Long-term debt����������������������������������������������������

¥—¥3,157

Total������������������������������������������������������������������

¥—¥3,157

Pledged assets for loans on subsidiaries andaffiliates:$23,643
Thousands of
U.S. dollars

2023

2022

2023

Building and structures�����������������������������������������

¥255

¥245

Land���������������������������������������������������������������������

37

37

275

Investment securities��������������������������������������������

128

138

1,032

Total������������������������������������������������������������������

¥420

¥420

$3,146$1,839(e) L oan guarantee:
The Company provides guarantee for employees’ housing loans from banks.
Thousands of
U.S. dollars

2023

2023

¥2

$12

Thousands of
U.S. dollars

2023

2022

2022

2023

2023

¥7,023¥7,046$52,767

Accounts receivable from completed construction
contracts�����������������������������������������������������������

53,91951,553

386,078

Contract assets����������������������������������������������������

121,675

131,177

982,381

Total������������������������������������������������������������������

¥182,617¥189,776$1,421,226(b) C ontract liabilities in advances received on uncompleted contracts as ofMarch 31, 2023 were as follows:
Millions of yen

2022

2023

2023

¥16,965$127,049(c) Investments in non-consolidated subsidiaries and affiliates as of March
31, 2022 and 2023 were as follows:

2022
¥817

2023
¥838

¥95

¥83

$622

Total������������������������������������������������������������������

¥95

¥83

$622

(f) Due to have ready working capital efficiently, the Company and its
subsidiaries conclude rental commitment contracts:

Thousands of
U.S. dollars

2023

Thousands of
U.S. dollars

Millions of yen

2022

2023

2023

Total amount of loan commitment�������������������������

¥20,000¥20,000$149,779

Loans outstanding������������������������������������������������

10,000——(g) T he Company transfers property and equipment to assets for sale ofestate included in inventories due to purpose of possession:
A portion of the assets transferred in the current fiscal year were sold, andthe amount of ¥6,305 million was recorded in cost of real estate businessand other:

Thousands of
U.S. dollars¥14,5632023

MHC Nishimatsu Property (Thailand) Co.,Ltd��������

Thousands of
U.S. dollars

Notes�������������������������������������������������������������������

Investment securities��������������������������������������������

Thousands of
U.S. dollars

Millions of yen

Millions of yen

Total$76,215

Debt guarantees are provided for debt obligations from financial institutions
etc. of affiliated companies.

Millions of yen

Over
1 year
within2 years$76,215¥10,177¥4

2. D
 epreciation method for lease assetsi) Method
Straight-line methodii) Term
Lease termiii) Residual value
Zero

Contract liabilities��������������������������������������������������

¥10,177

¥—

2022

2023
Over
1 year
within2 years¥—

Millions of yen(a) C ontract assets in notes and accounts receivable as of 2023 were as
follows:¥—

2023

Millions of yen

Finance lease transactions that do not transfer ownership
1. L
 eased assets consist of the following types of assets
Tangible assets
Mainly vehicles for the Company.

14. Notes to Consolidated Balance sheets

Valuation allowance�����

2023

2022

Millions of yen

Finance lease transactions that transfer ownership
1. L
 eased assets consist of the following types of assets
Tangible assets
Mainly accomodations for the hotel project of subsidiary company.

Total

Net operating loss
carryforwards (a)�������(h) Assumptions for actuarial calculations
Discount rate��������������������������������������������������������������������

Over
1 year
within2 years

Thousands of
U.S. dollars

Millions of yen

13. Lease transactions

2022

57%

12%

(0.9)%

2.0%

14,465

Others������������������������������������������������������������������������������

0.2%(0.8)%

Subtotal deferred tax assets����������������������������

7%

Valuation allowance����������������������������������������������������������
Others������������������������������������������������������������������������������

Others���������������������������������������������������������������

24%

Total������������������������������������������������������������������

Tax credit��������������������������������������������������������������������������

2023

General accounts�������������������������������������������������������������

Land���������������������������������������������������������������������

1.1%

17,761

2023

Securities�������������������������������������������������������������������������

(0.3)%

0.6%

18,150

1,439

Bonds������������������������������������������������������������������������������

(0.3)%

Inhabitant taxes on per capita levy������������������������������������

2,372

Millions of yen(g) Pension assets
Details of plan assets
Ratio of each major category for plan assets was as follows:

Permanent non-taxable items�������������������������������������������

2,424

1,897

$16,904

Pledged assets:

863

192

¥2,257

2.8%

2,582

253

Total���������������������������������������������������������������������������������

1.2%

Impairment loss of long-lived assets������������������

154$16,904

Permanent non-deductible items��������������������������������������

Provision for allowance for loss on construction
projects�����������������������������������������������������������

253¥2,257

30.6%(Adjustment)$ 18,372

Valuation loss on investment securities��������������

Unrecognized actuarial gain or loss�����������������������������������

2023

30.6%

¥ 2,453

Loss on valuation of real estate��������������������������(d) C ollateral assets and secured liabilities:
Pledged assets for construction contracts, loans on subsidiaries, affiliates
and other obligations as of March 31, 2022 and 2023 were as follows:

2022
Statutory tax rate��������������������������������������������������������������

¥ 2,354

Retirement benefit liability�����������������������������������

Thousands of
U.S. dollars(f) Cumulative remeasurements of defined benefit plans
Details of items (before income tax excluded) of cumulative
remeasurements of defined benefit plans were as follows:(b) R econciliation between the statutory tax rate and the effective
tax rate was as follows:

Thousands of
U.S. dollars

Millions of yen
Building and structures�����������������������������������������

2022

2023

2023

¥  606¥ 6,877$ 51,499

Land���������������������������������������������������������������������

2,924

9,785

73,279Total������������������������������������������������������������������

¥3,530¥16,662$124,778(h) T he amounts of reduction entry that was conducted in the current fiscal
year are as follows:
Thousands of
U.S. dollars

Millions of yen$6,272

2023

2022

2023

Building and structures�����������������������������������������

¥20

¥—

Construction in progress��������������������������������������

—

0

$—
1

Total������������������������������������������������������������������

¥20

¥ 0

$ 1

(a) The net operating loss carryforwards represent the amounts after being multiplied by thestatutory tax rate.

13

NISHIMATSU CONSTRUCTION CO., LTD.

Financial Report 2023

NISHIMATSU CONSTRUCTION CO., LTD.

Financial Report 2023

14

15. Notes to Consolidated Statements of income(a) Revenue from Contracts with Customers
Revenues from contracts with customers and other revenues are not listed
separately.
With customers the amount of revenue from the contract is listed in the
consolidated financial statements Note 21.Revenue recognition, information
about disaggregation of revenue from the contract with the customer.
(b) Provision for loss on construction contracts included in the cost ofcompleted construction contracts were as follows:
Thousands of
U.S. dollars

Millions of yen

2022

2023

2023

¥2,020¥6,680$50,026

Group and by property for individual assets for rent.
The book value of the following real estate for rent was reduced to therecoverable amount due to the decision to withdraw from the business, thedecline in profitablity, and the inability to recover the investment amount.
The difference between the book value and the recoverable amount wasposted as loss on impairment (¥952 million).

Thousands of
U.S. dollars

2022

2023

2023

Employees’ salary and allowances������������������������

¥9,915¥10,487$78,357

Retirement benefit expenses���������������������������������

455

469

3,514

Provision for bonuses�������������������������������������������

439

4

33

55,592——Millions of yen

Number of shares decreased�����������������������������������������

—

—

2022

Number of shares at the end of year������������������������������

55,59255,592Type of asset

Ichihara-shi, Chiba

For business

Building, Structures¥925

Saitama-shi, Saitama

For business

Building¥27

In addition, the recoverable value of the rental property was estimated basedon the memorandum value since cash flows are not expected in the future.
FY2022 (April 1, 2022 to March 31, 2023)
Not applicable.

16. Notes to Consolidated Comprehensive income
Other comprehensive income for the year ended March 31, 2022 and 2023
was as follows:
1. R eclassification adjustments of each component of other comprehensive
income (loss) were as follows:
Thousands of
U.S. dollars

Millions of yen

2023

2022

Thousands of
U.S. dollars

Millions of yen

2022

2023

2023

¥1,748¥2,038$15,263

2023

Thousands of
U.S. dollars

2023

2022

Amount arising during the year��������������������������

¥(4,104)¥(1,465)$(10,971)

Reclassification adjustments������������������������������

(2,104)(1,120)(8,390)

Buildings and structures���������������������������������������

¥  372¥ —Land���������������������������������������������������������������������

896

—

—

Machinery�������������������������������������������������������������

5

27

198

Other��������������������������������������������������������������������

—

211

1,581

Total������������������������������������������������������������������

¥1,273¥238$—$1,779(f) Loss on sales of fixed assets were as follows:
Thousands of
U.S. dollars

Millions of yen

2023

2022

2023

Buildings and structures���������������������������������������

¥—

¥1

$11

Land���������������������������������������������������������������������

70

7

52

Machinery�������������������������������������������������������������

3

0

0

Total������������������������������������������������������������������

¥ 73

¥8

$63

(g) Loss on retirement of non-current assets was as follows:
Thousands of
U.S. dollars

Millions of yen

2023

2022

—

23

170

639

2,062

15,446Equity adjustment from foreign currencytranslation
Amount arising during the year��������������������������

2023

2023

Amount arising during the year��������������������������

(483)(1,064)(7,968)

Reclassification adjustments������������������������������

(8)

28

207

Amount before income tax effect�����������������������

(6,060)(1,536)(11,506)

Income tax effect��������������������������������������������������

2,120

975

7,307

Total������������������������������������������������������������������

¥(3,940)¥  (561)$ (4,199)

2. T ax effects for each component of other comprehensive income (loss)
were as follows:
Thousands of
U.S. dollars

Millions of yen

Amount before income tax effect�����������������������

—0

Number of shares at the end of year������������������������������

16,118

16,119a) FY2021 (April 1, 2021 to March 31, 2022)
1. T he number of treasury shares of common stock at the end of theconsolidated FY 2021 includes 226 thousand shares held by “Board
Benefit Trust (BBT)”(c) Dividends
FY2021 (April 1, 2021 to March 31, 2022)
1. Dividends paid

Resolution

Class of shares

Ordinary general meeting ofshareholders on June 29, 2021

Common stock

Board meeting on October 29,
2021

Total dividend¥5,744

Common stock¥4,923

Resolution

Class of shares

Source of dividend

Ordinary general meeting ofshareholders on June 29, 2022

Common stock

Retained earnings

663

4,967

¥(1,922)$(14,394)¥$     170

Deferred gains or losses on hedges—¥     23

Income tax effect�����������������������������������������������

—

(5)

(34)

Amount after adjustment of income tax effect�������

—¥     18$     136

Machinery�������������������������������������������������������������

18

5

39

Fixtures����������������������������������������������������������������

1

3

22

Amount before income tax effect�����������������������

¥   639¥ 2,062$ 15,446

Other��������������������������������������������������������������������

2

15

112

Income tax effect�����������������������������������������������

—

—

—

Total������������������������������������������������������������������

¥24

¥24

$177

Amount after adjustment of income tax effect�������

¥   639¥ 2,062

Amount before income tax effect�����������������������

¥  (491)

Income tax effect�����������������������������������������������

150

Amount after adjustment of income tax effect�������

Thousands of
U.S. dollars

Total dividend¥5,201Millions of yen
Resolution

Class of shares

Common stock

Board meeting on October 27,
2022

1,970

$40,224

U.S. dollars

Dividend per share

¥105
¥ 90

Record date

Effective date

$0.858March 31, 2021

June 30, 2021

$0.735September 30,
2021

December 2,
2021$42,492

Yen

Record date

Effective date

March 31, 2022

June 30, 2022

U.S. dollars

Dividend per share¥131$1.070

FY2022 (April 1, 2022 to March 31, 2023)
1. Dividends paid$(19,361)¥(4,238)$46,928

Yen

Total amount of dividends determined by Ordinary general meeting of shareholders on June 29, 2022 includes dividends of ¥29 million on shares held by “Board
Benefit Trust (BBT).”¥(2,585)

Amount after adjustment of income tax effect�������

Thousands of
U.S. dollars

2. D ividend whose record date falls during the fiscal year and whose effective date falls in the following fiscal year¥(6,208)$  4

Financial Report 2023

1

Number of shares decreased�����������������������������������������

Ordinary general meeting ofshareholders on June 29, 2022

¥ 1

NISHIMATSU CONSTRUCTION CO., LTD.

15,2272023

Thousands of
U.S. dollars

Total dividend¥5,201

Common stock¥5,558$38,947$41,622

Yen

U.S. dollars

Dividend per share

¥131
¥140

$0.981March 31, 2022

June 30, 2022

$1.048September 30,
2022

December 2,
2022

Total amount of dividends determined by Ordinary general meeting of shareholders on June 29, 2022 includes dividends of ¥29 million on shares held by “Board
Benefit Trust (BBT).”
Total amount of dividends determined by Board of meeting on October 27, 2022 includes dividends of ¥32 million on shares held by “Board Benefit Trust (BBT).”
2. D
 ividend whose record date falls during the fiscal year and whose effective date falls in the following fiscal year

Foreign currency translation adjustment

Millions of yen

Thousands of
U.S. dollars

Total dividend

Yen

U.S. dollars

Resolution

Class of shares

Source of dividend$ 15,446

Ordinary general meeting ofshareholders on June 28, 2023

Common stock

Retained earnings¥(1,036)$ (7,760)

317

2,374

Total amount of dividends determined by Ordinary general meeting of shareholders held on the June 28, 2023 includes dividends of ¥18 million on shares heldby “Board Benefit Trust (BBT).”¥  (341)¥  (719)$ (5,386)

Amount total of other comprehensive income����

¥(6,060)¥(1,536)$(11,506)

Income tax effect�����������������������������������������������

2,120

975

7,307

Amount after adjustment of income tax effect�������

¥(3,940)¥  (561)$ (4,199)

Remeasurements of defined benefit plans

15

Number of shares increased������������������������������������������

2023

Income tax effect�����������������������������������������������

Amount before income tax effect�����������������������

16,118891

2022
Unrealized gain on available for sale securities¥ 3

FY2021 (April 1, 2021 to March 31, 2022)
The Group recognized impairment loss on the following asset groups forthe year ended March 31, 2022.
The asset grouping is made by business location for assets used by the2023

Number of shares at the beginning of year���������������������

Millions of yen

Remeasurements of defined benefit plans

Buildings and structures���������������������������������������(h) Impairment losses

Thousand shares

2022

Common stock

Millions of yen

Amount arising during the year��������������������������

Millions of yen(b) Class and number of shares of treasury stock were as follows:

Unrealized gain on available for sale securities

Deferred gains or losses on hedges(e) Gains on sales of fixed assets were as follows:

2023

2022

Common stock
Number of shares increased������������������������������������������

Purpose2. Increase in the number of treasury shares of common stock of 15,227
thousand shares consists of the increase of 15,000 thousand shares
due to a tender offer of the number of treasury shares based on a board
meeting held on September 21, 2021, the increase of 226 thousand
shares due to the acquisition of the Company’s shares through the“Board Benefit Trust (BBT)” and the increase in one thousand shares dueto the purchase of shares less than one unit.
a) FY2022 (April 1, 2022 to March 31, 2023)
1. T he number of treasury shares of common stock at the end of theconsolidated FY 2022 includes 225 thousand shares held by “Board
Benefit Trust (BBT)”
2. Increase in the number of treasury shares of common stock of one
thousand shares was due to the purchase of shares less than one unit.
3. D
 ecrease in the number of treasury shares of common stock of 0
thousand shares was due to transfer of shares from “Board Benefit Trust(BBT)” to retired directors, and sales of shares less than one unit basedon their demand to purchase shares.

Thousand shares

55,592

Location(d) Research and development expenses for the years ended March 31,
2022 and 2023 were as follows:(a) Class and total number of shares issued were as follows:

Number of shares at the beginning of year���������������������(c) Major items and amounts under selling, general and administrative
expenses are as follows:
Millions of yen

17. Notes to Consolidated statements of changes in net assets¥3,216$24,081

Dividend per share¥81$0.607

March 31, 2023

June 29, 2023

Other comprehensive income

NISHIMATSU CONSTRUCTION CO., LTD.

Financial Report 2023

16

18. Financial instruments

Thousands of U.S. dollars(a) Disclosure on financial instruments(1) Policy on financial instruments
Funds are limited to short-term deposits, and methods of raising funds aredebt from banks, commercial papers and bond issuance.
The Group utilizes derivatives to hedge risks against the fluctuation offoreign exchange rate and interest rate related to debt, and does notengage in speculative financial transactions.
(2) Types of financial instruments, related risks, and financial risk management
Notes receivable, accounts receivable from completed construction
contracts and other are subject to customer credit risk.
The Group evaluates each customer’s credit before receiving an orderand monitors due dates and outstanding balances after receiving an order
to find out and reduce the risk of collectability.
Investment securities, mainly held-to-maturity securities or equity of theCompany related in business, are subject to the risk derived from futurechanges in market prices.
The Group monitors fair value and financial position periodically andreviewed the status of its holdings in instruments on an ongoing basis.
Loans, mainly provided to business partners, are subject to customer credit
risk.
The Group evaluates each customer’s credit in advance.
The Group monitors due dates and outstanding balances, and confirms
the credibility of the client periodically.
Due dates of notes payable, accounts payable for construction contracts
and other come mostly within one year.

(b) Fair value of financial instruments
1. R edemption schedule for receivable and securities to maturity at March
31, 2022 and 2023
Millions of yen

Within 1 year
Cash and deposits��������������������
Notes receivable, accounts
receivable from completed
construction contracts andother���������������������������������������

¥ 47,122

Over 1 year
within 5 years¥

Over 5 years
within 10 years—¥

Over 10 years—¥—(3) Supplemental explanation for fair value of financial instruments
The fair value of financial instruments includes either the value determinedbased on market prices or the value based on a reasonable calculation if
no market price is available.
However, as certain variables are used for these calculations, the resultof such calculations may vary if different assumptions are used.
The contract amounts of derivatives do not measure the market risk inderivative transactions.

163,526

19,046893—

Investment in securities
Debt security held to maturity(government bonds)����������������

—

1

—

—

Long-term loan��������������������������

—

457

569

21

Total������������������������������������������

¥210,648¥19,504¥1,462¥ 21

NISHIMATSU CONSTRUCTION CO., LTD.

Financial Report 2023—

Lease liability��������������

212

Total��������������������������� $112,546

2023
Over
3 years
within4 yearsOver
4 years
within5 yearsOver
5 years$149,779 $112,335 $142,290 $142,290 $134,801
—

—

3,172

20,471

—

144

101

7,140

2

—

$149,923 $112,436 $152,602 $162,763 $134,801

The book value, fair value, and difference of the financial instruments on the
consolidated balance sheet as of March 31, 2022 and 2023 were as
follows.
This table does not include financial instruments for which it is extremely
difficult to determine the fair value.
Millions of yen

2022
Book value

Fair value

Difference¥183,465¥182,650¥(815)

Investment in securities (*3)

27,056

27,056(0)Long-term loans

1,048

2023
Within 1 year
Cash and deposits��������������������
Notes receivable, accounts
receivable from completed
construction contracts andother���������������������������������������

¥ 53,727

Over 1 year
within 5 years¥

165,598

Over 5 years
within 10 years—

Over 10 years¥ —24,908¥———Notes receivable, accounts receivable fromcompleted construction contracts andother

Allowance for doubtful accounts (*4)

Investment in securities
Debt security held to maturity(government bonds)����������������

Assets

1

—

—

—

Bond

Long-term loan��������������������������

—

785

198

15

Long-term debt

Total������������������������������������������

¥219,326¥25,693

¥198

¥ 15

Lease liability
Liabilities

2023
Within 1 year

Over 1 year
within 5 years

Cash and deposits��������������������

$  402,356$

Notes receivable, accounts
receivable from completed
construction contracts andother���������������������������������������

1,240,158

Debt security held to maturity(government bonds)����������������

Over 5 years
within 10 years—$

Over 10 years

—

—

—

1,014

1,014

—

¥ 88,014¥ 87,926¥ (88)¥4,247

114

Silent partnerships���������������������������������������

3,365

Total������������������������������������������

$1,642,523$192,415$1,486$114

Stock for non-consolidated subsidiaries andaffiliates�����������������������������������������������������

817

—

—

—

—

—

—

28

19

14

953

—

Total���������������������������

¥10,032¥15,028¥20,019¥15,014¥19,953¥18,000

Allowance for doubtful accounts (*4)
Assets2023

Lease liability

Within1 yearOver
2 years
within3 yearsOver
3 years
within4 yearsOver
4 years
within5 yearsOver
5 years¥15,000¥20,000¥15,000¥19,000¥19,000¥18,000—

Liabilities

Millions of yen

—

—

—

424

2,734

Lease liability��������������

28

19

14

953

0

—

Total���������������������������

¥15,028¥20,019¥15,014¥20,377¥21,734¥18,000

2023

2023

Book value

Book value*4 Allowance for doubtful accounts individually accrued to long-term loan are omitted.

(c) E xplanation of the valuation methods and inputs used in
calculating fair value
The fair values of financial instruments are categorized into the following
three levels, in accordance with the observability and importance of the
inputs used in the fair value calculation.
Explanation of the evaluation techniques used in the calculation of the fairvalue and the inputs to the calculation of the fair value.

¥190,507¥190,312¥(195)

24,566

24,566

(0)

932

910

(22)

1. F
 inancial assets and financial liabilities with the carrying amount recorded
using the fair value¥216,005¥215,788¥(217)¥ 91,000¥ 90,843¥(158)

3,157

3,157

—

(66)

986

986

—

¥ 95,143¥ 94,986¥(158)

Millions of yen

2022
Fair value
Category

Level 1

Level 2

Level 3¥27,055

¥—

¥—

Total

Investment securities
Available-for-sale securities
Shares���������������������������������������

Long-term debt����������

Thousands of
U.S. dollars

Difference998

Long-term loans

Long-term debt

Over
1 year
within2 years$(1,180)

Fair value

Millions of yen

BondMillions of yen$  711,344

Book value*4 Allowance for doubtful accounts individually accrued to long-term loan are omitted.

2023

32

$  712,525

Liabilities*1 The description of “Cash and deposit” is omitted because it is cash and the market value isclose to the book value because the deposit is settled in a short period of time.
*2 “Notes payable, accounts payable for construction contracts and other,” “Short-term debt,”“Commercial paper,” “Current portion of bonds payable,” “Short term lease liability” areomitted because these are settled in a short period of time.
*3 The following financial products are not included in “Securities and investment securities”
because there is no market price.

Level 1 fair value: F air value calculated using inputs that are directly
or indirectly observable, the (unadjusted) market
price in an active market for an identical asset or
liability.
Level 2 fair value: F air value calculated using inputs that are directly
or indirectly observable, other than the Level 1
inputs.
Level 3 fair value: F air value calculated using important inputs thatcannot be observed. If multiple inputs that have asignificant impact on the calculation of the fairvalue are used, among the levels to which each ofthese inputs belongs, the fair value is classified
into the lowest priority level in the calculation of
the fair value.

Millions of yen

Lease liability��������������

—

6,272

1,486

Long-term debt����������

7,387¥ (88)

5,877¥18,000

7,387¥ 86,912—¥19,000—

Lease liability¥ 87,000

Long-term loan��������������������������

¥15,000

23,64347,679Book value¥20,000$  680,314

23,643

838

Classification¥15,000$(1,180)$  681,495

Long-term debt

Stock for non-consolidated subsidiaries and affiliates�������

2022

Investment in securities (*3)$(1,626)¥(864)

Millions of yen

Notes receivable, accounts receivable fromcompleted construction contracts and
other

(169)

$1,616,026¥210,634

Unlisted securities����������������������������������������

Over
5 years

6,816$1,617,653¥211,498—Over
4 years
within5 years

(493)
6,984

$30,702—¥10,000

Allowance for doubtful accounts (*4)

6,367

—

Over
3 years
within4 years0

7,477

Long-term loans¥4,1009Over
2 years
within3 years$(1,457)

183,972

Silent parnerships�������������������������������������������������������������

—Over
1 year
within2 years$1,425,238

183,972

Unlisted securities�������������������������������������������������������������

—

2022

$1,426,697(49)

186,538

2. R
 edemption schedule for bond, long-term debt, and lease liability as ofMarch 31, 2022 and 2023.

Difference928*1 The description of “Cash and deposit” is omitted because it is cash and the market value isclose to the book value because the deposit is settled in a short period of time.
*2 “Notes payable, accounts payable for construction contracts and other,” “Short-term debt,”“Commercial paper,” “Current portion of bonds payable,” “Short term lease liability” areomitted because these are settled in a short period of time.
*3 The following financial products are not included in “Securities and investment securities”
because there is no market price.

Investment in securities

Fair value

Classification

(71)

$ —

Bond��������������������������

Investment in securities (*3)

Book value

977—

Within1 yearNotes receivable, accounts receivable fromcompleted construction contracts and
other

Bond

Millions of yen

Bond��������������������������

17Long-term debt����������

Over
2 years
within3 years

AssetsThousands of U.S. dollars

Short-term debt and commercial papers are mainly for business
operations, and long-term debt, for investment in facilities. Floating interest
debt is subject to interest-rate risk, therefore, the Group utilizes derivatives
for some long-term floating interest debt in each transaction (interest rateswap) as a hedging instrument to fix the payment interest.
Evaluating hedge effectiveness is omitted because requirements for an
exceptional accounting treatment in interest rate swap are satisfied.
The Group reviews derivative transactions in advance, and regularly
confirms the conditions and details in conformity with the policy on risk
management.
The Group enters into derivative contracts only with financial institutionsof high credit to reduce credit risks.
Operating liabilities, debt, commercial papers and bond are subject toliquidity risks.
The Group manages these risks with monthly cash report and so on.
The internal control committee makes each department responsible for a
specific risk, and establishes control systems of preventive risk
management and heuristic risk management.

Over
1 year
within2 years

Within1 yearBond�������������������������� $112,334

2022

Thousands of U.S. dollars

2023

NISHIMATSU CONSTRUCTION CO., LTD.

¥27,055

Financial Report 2023

18

Millions of yen

Thousands of U.S. dollars

2023

2023

Level 1

Level 2

Level 3Category

Total

Investment securities
Available-for-sale securities
Shares���������������������������������������

¥24,138¥ —¥—¥24,138

Others���������������������������������������

—

427

—

427

¥24,138¥427¥—¥24,565

AssetsThousands of U.S. dollars

Level 1

Level 2

Level 3

Total

Investment securities$180,771

$

—

$—

—

3,191

—

3,191

$3,191$—$183,962

2. Financial assets and financial liabilities with the carrying amount notrecorded using the fair value
Millions of yen

2022
Fair value
Category

Level 1

Notes receivable, accounts
receivable from completed
construction contracts andother���������������������������������������

¥Level 2

Level 3

Total—

¥182,650¥—¥182,650

Debt securities���������������������������

1

—

—

1

Long-term loans������������������������

—

928

—

928

Assets¥     1

¥183,578¥—¥183,579

Bonds payable��������������������������

86,912——

86,912Long-term debt�������������������������

—

—

—

—

Lease liability�����������������������������

—

1,014

—

1,014

Investment securities
Held-to-maturity securities

Liabilities¥86,912¥  1,014¥—

2023
Fair value
Level 1

Notes receivable, accounts
receivable from completed
construction contracts andother���������������������������������������

¥—Level 2

¥190,312

Level 3¥—

Total

¥190,312

Investment securities
Held-to-maturity securities
Debt securities���������������������������

1

—

—

1

Long-term loans������������������������

—

910

—

910

¥1

¥191,222¥—¥191,223

Bonds payable��������������������������

90,842——

90,842Long-term debt�������������������������

—

3,157

—

3,157

AssetsLease liability�����������������������������
Liabilities

19

—

987

—

987

¥90,842¥  4,144¥—¥ 94,986

NISHIMATSU CONSTRUCTION CO., LTD.

Financial Report 2023—

$1,425,239

Level 3$—

Total

$1,425,239

Investment securities
Held-to-maturity securities
Debt securities���������������������������

9

—

—

9

Long-term loans������������������������

—

6,816

—

6,816

$9

$1,432,055$—$1,432,064

Bonds payable��������������������������

680,314——680,314Long-term debt�������������������������

—23,643—23,643

Lease liability�����������������������������

—

7,387

—

7,387

$680,314$  31,030$—$  711,344

Investment securities
Listed shares and government bonds are valued using the market price.
Because listed shares are traded on active markets, their fair value iscategorized as a level 1 fair value. The fair value of real estate investment
trusts is the net assets value because no market price is available. This iscategorized as a level 2 fair value.
Notes receivable, accounts receivable from completed construction
contracts and other
The fair value of notes receivable, accounts receivable from completed
construction contracts and other is calculated using the discounted cash
flow method based on interest rates considering the claim amount, theperiod until maturity, and the credit risk for each claim divided into set
periods, and this is categorized as a level 2 fair value.
Long-term loans
The fair value of long-term loans is calculated using the discounted cash
flow method based on interest rates considering the future cash flow, theperiod until the payment due date, and the credit risk for each obligation
divided into set periods, and this is categorized as a level 2 fair value.

Balance sheet amount, change in this and the preceding fiscal years, andfair value for properties were as follows:
Millions of yen

Bond
The fair value of bond is calculated based on the market price if there is amarket price, and the market fair value is classified as level 1 fair value.
Those without a market price are calculated by the discounted cash flow
method based on the total amount of principal and interest, the remaining
maturity of the bond, and the interest rate that takes into account credit
risk, and this is categorized as a level 2 fair value.
Long-term borrowings
The fair value of long-term borrowings is calculated using the discounted
cash flow method based on interest rates considering the total amount of
the sum of principal and interest, the remaining period of the concerned
obligation, and the credit risk for each obligation, and this is categorized as
a level 2 fair value.
Lease obligations
The fair value of lease obligations is calculated by the discounted cash flow
method based on interest rates considering when a new lease contract isconcluded, which is the same as the total amount of principal, and this iscategorized as a level 2 fair value.

(b) Increase (decrease) of asset retirement obligations as of March
31, 2022 and 2023 was as follows:
Thousands of
U.S. dollars

Millions of yen

2023

2022

2023

Balance at beginning of year���������������������������������

¥637

¥762

$5,704

New obligations by acquisition of fixed assets������

117

19

141

Increase because a reasonable estimate can bemade�����������������������������������������������������������������

3

—

—

Adjustment for time’s passage������������������������������

5

5

37

Fair value

Decrease because of executed obligation�������������

—

(28)

(206)

April 1, 2021

Increased (decreased)

March 31, 2022

March 31, 2022

Balance at end of year������������������������������������������

¥762

¥758

$5,676¥115,824¥13,709¥129,533¥171,807

Carrying amountMillions of yen
Carrying amount

Fair value

21. Revenue recognition

April 1, 2022

Increased (decreased)

March 31, 2023

March 31, 2023

¥129,533¥(6,926)¥122,607¥154,308

1. Information about disaggregation of revenue from the contract
with the customer
For the year ended March 31, 2022

Fair value

Net sales:

Millions of yen

Thousands of U.S. dollars
Carrying amount
April 1, 2022

Increased (decreased)

March 31, 2023

March 31, 2023

$970,066$(51,867)$918,199$1,155,602

1. C arrying amount is net of accumulated depreciation and accumulated
impairment losses from acquisition cost.
2. T he main reason for the increase in 2022 was a purchase of ¥21,144
million ($172,759 thousand), the reasons for the decrease were transfers
to sales of real estate of ¥3,398 million ($27,761 thousand), depreciationof ¥2,309 million ($18,866 thousand), selling of ¥1,728 million ($14,120
thousand).
The main reason for the increase in 2023 was a purchase of ¥18,208
million ($136,357 thousand), the reasons for the decrease were transfers
to sales of real estate of ¥22,704 million ($170,031 thousand),depreciation of ¥2,324 million ($17,403 thousand).
3. F air value at the end of fiscal year is assessed by the Company mainly
based on “real-estate appraisal criterion.”¥ 87,926

Millions of yen

Category$

Level 2

$180,771$180,771

Others���������������������������������������
Assets

Notes receivable, accounts
receivable from completed
construction contracts andother���������������������������������������

Liabilities

Available-for-sale securities
Shares���������������������������������������

Level 1

Assets2023
Fair value
Category

The Company and some subsidiaries have office buildings (including land)
for rent in Tokyo district and other area.
Profit for investment and rental properties in 2022 was ¥3,509 million, in
2023 was ¥3,255 million ($24,380 thousand).

Fair value

Fair value
Category

19. Investment and rental properties

20. Asset retirement obligations
The asset retirement obligations included in the financial statements for theyears ended March 31, 2022 and 2023 were as follows:(a) O utline of asset retirement obligations and methods used to
calculate asset retirement obligations
1O
 bligation to remove asbestos based on ‘Act on Asbestos Health
Damage Relief’
The estimated period of service of the building is 6 to 31 years fromacquisition and the discount rate has calculated the adjustment amountof asset retirement obligations by having used 0.000 to 2.308%.
2O bligation to soil investigation based on Soil Contamination
Countermeasures Act
The estimated period of service of the building is 8 to 24 years fromacquisition and the discount rate has calculated the adjustment amountof an asset retirement obligation by having used 0.583 to 1.989%.
3R ationally estimated cost of obligation to restore to original state basedon real estate rental contract
The estimated period of service of rental stores owned by the Group isfrom 19 years to 47 years based on periodical lease contract and thediscount rate has calculated the adjustment amount of an asset
retirement obligations by having used 0.189 to 2.155%. The estimatedperiod of service of the offices which the Group rents is from 1 year to 42
years based on periodical lease contract and the discount rate has
calculated the adjustment amount of asset retirement obligations by
having used from 0.000 to 0.889%.

2022

Goods or services transferredover time��������������������������������

Civil
Engineering

Building
Construction¥119,995¥178,031

Development
and Real Estate

¥

—

Total

¥298,026

Goods or services to betransferred at one time������������

1,978

6,232

7,328

15,538

Revenue from contracts withcustomers������������������������������

121,973

184,2637,328

313,564

Other revenue����������������������������

——10,19010,190

Sales to customers��������������������

¥121,973¥184,263¥17,518¥323,754

For the year ended March 31, 2023
Millions of yen

2023

Net sales:
Civil
Engineering

Building
Construction

Goods or services transferredover time��������������������������������

¥119,459¥178,729

Goods or services to betransferred at one time������������

351

8,756

Revenue from contracts withcustomers������������������������������

119,810

Other revenue����������������������������

—Sales to customers��������������������

¥119,810

Development
and Real Estate

¥

Total

—

¥298,188

21,88030,987

187,485

21,880329,175—

10,582

10,582¥187,485¥32,462¥339,757

Thousands of U.S. dollars

2023
Civil
Engineering

Building
Construction

Development
and Real Estate

Goods or services transferredover time��������������������������������

$894,622$1,338,496$

Goods or services to betransferred at one time������������

2,632

Revenue from contracts withcustomers������������������������������
Other revenue����������������������������
Sales to customers��������������������

Total

—

$2,233,118

65,572

163,854

232,058

897,254

1,404,068

163,854

2,465,176——

79,251

79,251$897,254$1,404,068$243,105$2,544,427

2. Information to understand the amount of revenue for the current
period and the following period(a) Balance of contract assets and contract liabilities, etc.
Millions of yen

Thousands of
U.S. dollars

2023

2023

¥ 60,942$456,395

Receivables arising from contracts with customers as of March 31, 2023���

58,599438,846

Contract assets as of April 1, 2022���������������������������������������������

121,675

911,219

Contract assets as of March 31, 2023����������������������������������������

131,177

982,381Contract liabilities as of April 1, 2022������������������������������������������

14,563109,059

Contract liabilities as of March 31, 2023�������������������������������������

15,965127,049

Receivables arising from contracts with customers as of April 1, 2022��������NISHIMATSU CONSTRUCTION CO., LTD.

Financial Report 2023

20

Contract assets are mainly related to consideration for works that meet
performance obligations at the end of the fiscal year but have not yetclaimed.
Contract assets are transferred to receivables when the right to payment
becomes unconditional.
Contract liabilities are primarily related to advances received on
construction contracts in progress.
In the construction industry, the normal payment time differs dependingon the contract, and there is no clear relationship with the time when theperformance obligation is satisfied.
Regarding the revenue recognized for the year ended March 31, 2022,
the amount included in the contract liability balance as of the beginning of
the period was ¥8,436 million.
Revenue recognized from performance obligations that have been met or
partially met in the past period are not significant.
Regarding the revenue recognized for the year ended March 31, 2023,
the amount included in the contract liability balance as of the beginning of
the period was ¥10,620 million.
Revenue recognized from performance obligations that have been met or
partially met in the past period is not significant.
(b) Transaction price allocated to residual performance obligations
The total transaction price allocated to the remaining performanceobligations of the Company is as follows.
In addition, all costs arising from contracts with customers, andundecided cost which is the estimated amount of additional and designchange construction, are included.
Millions of yen

2022

Residual performance obligation

Civil
Engineering

Building
Construction

Total¥362,155¥311,393¥673,548

Civil Engineering............................... Contract for civil engineering project
Building Construction....................... Contract for architecture
construction project
Development and Real Estate.......... Lease and sale of real estate andasset management(b) M ethods used to calculate net sales, profit (loss), assets,
liabilities, and other items for each reportable business segment
The accounting policies of the reportable business segments are mostly thesame as those disclosed in “Summary of significant accounting policies.”
And the internal profit between segments and amount transferred to othersegment are based on market price.
(c) Net sales, profit or loss, assets and liabilities by reportablebusiness segments for the years ended March 31, 2022 and 2023

Civil
Engineering

2023

Residual performance obligation

Residual performance obligation¥399,963¥313,668¥713,631

Domestic

Southeast Asia

¥311,632¥28,125

Other area

Consolidated¥—¥339,757

—

76

—

76

Building
Development
Elimination
Construction and Real Estate

Consolidated

Millions of yen

Building
Development
Elimination
Construction and Real Estate

Consolidated

Customers������������������������ ¥121,973¥184,263¥17,517¥ —¥323,754

—

—

223

(223)

—

Total������������������������������� ¥121,973¥184,263¥17,740

Operating income (loss)����

12,356

6,404

4,780

—

23,540Depreciation andamortization�������������������

658

662

2,408

—

3,728

Domestic

Southeast Asia

Other area

Consolidated$—$2,544,427

Net sales:

Net sales:¥(223) ¥323,754

1. O perating income (loss) is consistent with the consolidated financial
statement.
2. A
 ssets of each segment are not mentioned due to the absence ofdistribution to the business segment.

Thousands of U.S. dollars

Customers������������������������������ $2,333,802$210,625

Information about tangible assets
This item is omitted because the tangible assets located in Japan
represented over 90% of the tangible assets on the consolidated balance
sheet.

2023

Millions of yen

Building
Development
Elimination
Construction and Real Estate

Consolidated

2022

Customers������������������������ ¥119,810¥187,485¥32,462—¥339,757

—

946

251

(1,197)—

Total������������������������������� ¥119,810¥188,431¥32,713¥

Sales
Ministry of Land, Infrastructure, Transport
and Tourism����������������������������������������������

—

3,967

1. “Adjustments” of negative 24 million yen in “Operating income (loss)” isdue to the deletion of segment transactions.
2. A djustments are made between “Segment profit” and “Operating income(loss)” reported in the consolidated statement of income.
3. A
 ssets of each segment are not mentioned due to the absence ofdistribution to the business segment.

Civil
Engineering

22. Segment information

Building
Development
Elimination
Construction and Real Estate

Consolidated

Net sales:¥39,071

Civil Engineering, Building
Construction

2023
Sales

Segments¥38,627

Civil Engineering, Building
Construction

$ 60

$—

$ 60

Balance at March 31, 2023��

—

—

509

—

509

(6) Information on Gains on Negative Goodwill by Reported Segment
Not Applicable.
(7) Information on Related Party Transaction
There is no related party transaction for the year ended March 31, 2022.
The detail for the year ended March 31,2023 was as follows:
Millions of yen

ITOCHU Corporation�����������

2023
Ministry of Land, Infrastructure, Transport
and Tourism����������������������������������������������

Segments$289,277

Civil Engineering, Building
Construction(4) Impairment losses
Information on impairment losses for the years ended March 31, 2022 wassummarized as follows:Business
Content¥253,448

General trading
company

10,255

Real estatebusiness

Transaction
Details

Transaction
Amount10%

Land·
Buildings¥6,245—

Buildings

565

2023

ITOCHU Corporation�����������

Sales

Capital or
Investment

Voting Rights
Ownership
Ratio

Thousands of U.S. dollars

Thousands of U.S. dollars

ITOCHU Property
Development, Ltd��������������

Capital or
Investment

Business
Content$1,898,060

General trading
company

76,799Real estatebusiness

Voting Rights
Ownership
Ratio

Transaction
Details

Transaction
AmountLand·
Buildings$46,769— Buildings

4,231

10%

Prices and other transaction conditions are negotiated each time a contract
is concluded, taking into consideration the prevailing market conditions.

Millions of yen$1,404,068$243,105— $2,544,427

—

7,086

1,875

Total������������������������������� $897,254$1,411,154$244,980

Operating income (loss)����

57,836(40,637)

77,459(179)

94,479Impairment losses���������������

Depreciation andamortization�������������������

4,669

4,587

20,451—

29,707

There is no impairment loss transaction for the year ended March 31, 2023.

(8,961)$—

ITOCHU Property
Development, Ltd��������������

Customers������������������������ $897,254
Intersegment or transfer����

$

$—

2023

Millions of yen

Ministry of Land, Infrastructure, Transport
and Tourism����������������������������������������������

Depreciation for the year������

Segments¥(1,197) ¥339,757

2,731

2023
Civil
Engineering(3) Major customers
Net sales to single customer representing 10% or more of total net sales of
the consolidated statement of income for the years ended March 31, 2022
and 2023 were as follows:

Millions of yen

Intersegment or transfer����

2023
Civil
Engineering

68

612

Financial Report 2023

—

¥ 8

2023

NISHIMATSU CONSTRUCTION CO., LTD.

¥ 4

Balance at March 31, 2022��

—

Thousands of U.S. dollars

21

¥—

68

624

Therefore, the Group consists of three reportable business segments
according to the business based on each management division as follows:

¥ 4

—

2023

The Company has management divisions for each operating segment suchas Civil Engineering, Building Construction, and Development and Real
Estate, and develop their domestic and overseas business.

¥——

12,616(a) Decision of reportable segments
The Group’s reportable business segments are components of the units forwhich separate financial information is available and such information isused regularly by the board of directors in deciding how to allocate
resources and in assessing results of performance.

¥—

Balance at March 31, 2023��

Consolidated

Intersegment or transfer����

Customers������������������������������

Consolidated

Depreciation for the year������

2023

(24)

It is expected that the performance obligation of the civil engineeringbusiness will be satisfied within 7 years and the performance obligation of
the construction business will be satisfied within 3 years.
There is no significant amount of consideration that results from thecontract with the customer that is not included in the transaction price.

2023

Building
Development
Elimination
Construction and Real Estate2022

10,343$5,344,353

Millions of yen

Civil
Engineering¥—(5,426)$2,349,046¥323,754

2022

Customers������������������������������

¥ 8

7,723

$2,995,307¥—

Millions of yen¥—

Depreciation andamortization�������������������
Total¥23,788

Consolidated¥—

Operating income (loss)����

Building
Construction¥299,966

Other area

Net sales:

Depreciation for the year������

Thousands of U.S. dollars
Civil
Engineering

Southeast Asia

Thousands of U.S. dollars

Net sales:
Total

2022
Domestic

Millions of yen
Building
Development
Elimination
Construction and Real Estate

Civil
Engineering

Building
Construction

Millions of yen(5) Information on Amortization of Goodwill and Unamortized
Balance by Reported Segment
Information by amortization of goodwill and unamortized balance byreportable business segment for the year ended March 31, 2022 and 2023
were summarized as follows:

Net sales:

Millions of yen
Civil
Engineering(2) Geographical areas
Information by geographical segment for the years ended March 31, 2022
and 2023 were summarized as follows:

2022

—

Civil
Engineering$(8,961) $2,544,427¥—

Building
Development
Elimination
Construction and Real Estate

¥—

¥952

¥—

Consolidated¥952

Related information(1) Products and services
Information about products and services is included in “(c) Net sales, profit
or loss, assets and liabilities by reportable business segments for the years
ended March 31, 2022 and 2023.”

NISHIMATSU CONSTRUCTION CO., LTD.

Financial Report 2023

22

Independent Auditor’s Report

23. Per share information
Basic net income per share shown below is computed based on theweighted average number of shares of common stock outstanding during
each year.

24. Q
 uarterly Information for FY2022 (April 1, 2022 toMarch 31, 2023)
a) Accumulated period
Millions of yen
Three months
ended

Diluted net income per share is not disclosed as the Group had no dilutive
potential of common shares as of March 31, 2022 and 2023.
a) Per share information
yen

U.S. dollars

2022

2023

2023

Net assets:�����������������������������������������������������������

¥3,833.71¥3,770.77$28.239

Basic�����������������������������������������������������������������

¥  312.34¥  244.43$ 1.831

Net income:1. Diluted net income per share for the years ended March 31, 2022 and2023 were not presented because the Company had no shares withdilutive effects.
b) The basis of calculating net income per share was as follows:
Thousands of
U.S. dollars

Millions of yen
Profit attributable to owners of parent�������������������

2022

2023

2023

¥15,103¥ 9,648$72,255

Amount that does not belong to generalshareholders������������������������������������������������������

—

—

—

Profit attributable to owners of parent�������������������

15,103

9,648

72,255

Average number of shares of common stockduring the year (Unit:1000)���������������������������������

48,356¥69,722¥157,274¥245,065¥339,757

Profit before income taxes���������

4,237

10,668

12,613

13,596

Profit attributable to owners ofparent�������������������������������������

2,802

7,365

8,777

9,648

Per share of net income (Yen)����

70.99

186.58222.36244.43Three months
ended

Six months
ended

Thousands of U.S. dollars

2022

2023

2023

¥157,716¥156,149$1,169,387

6,387

7,307

54,719(Of which non-controlling interests)�����������������������

(6,387)(7,307)(54,719)

Net assets at the end of the year related tocommon stock���������������������������������������������������

151,328

148,842

1,114,667

Number of shares of common stock at the end of
the year used in the calculation of net assets
per share (Unit:1000)�����������������������������������������

39,47339,472Financial Report 2023

Nine months
endedYear ended

Apr 1, 2022
Jul 1, 2022
Oct 1, 2022
Jan 1, 2023
Jun 30, 2022 Sep 30, 2022 Dec 31, 2022 Mar 31, 2023
Net sales�����������������������������������

$522,145$1,177,814$1,835,282$2,544,427

Profit before income taxes���������

31,732

79,893

94,461

101,818

Profit attributable to owners ofparent�������������������������������������

20,98555,15465,732

72,255Per share of net income (U.S.
dollars)������������������������������������

0.532

1.397

1.665

1.831

1st quarter2nd quarter3rd quarter

4th quarterb) Each periodYen¥70.99¥115.59

1st quarter2nd quarter

Thousands of
U.S. dollars

Amount deducted from the total amount under
net assets����������������������������������������������������������NISHIMATSU CONSTRUCTION CO., LTD.

Net sales�����������������������������������

Per share of net income�������������

1. The Company’s shares in the “Board Benefit Trust (BBT),” which arereported as treasury shares under Shareholders’ equity, are counted as
the number of treasury shares as of the average number of shares
outstanding for the period for the purpose of not including for computing
earnings and net assets per share.
2. In calculating the amount of net assets per share, the number of stock
deducted was 225 thousand shares at the end of the previous
consolidated fiscal year and at the end of the fiscal year.

23

Year ended

Apr 1, 2022
Jul 1, 2022
Oct 1, 2022
Jan 1, 2023
Jun 30, 2022 Sep 30, 2022 Dec 31, 2022 Mar 31, 2023

c) The basis of calculating net assets per share was as follows:

Total amount under net assets������������������������������

Nine months
ended

Apr 1, 2022
Jul 1, 2022
Oct 1, 2022
Jan 1, 2023
Jun 30, 2022 Sep 30, 2022 Dec 31, 2022 Mar 31, 2023

39,473

Millions of yen

Six months
ended¥35.78¥22.07

U.S. dollars
3rd quarter

4th quarterApr 1, 2022
Jul 1, 2022
Oct 1, 2022
Jan 1, 2023
Jun 30, 2022 Sep 30, 2022 Dec 31, 2022 Mar 31, 2023
Per share of net income�������������

$0.532$0.866$0.268$0.165

1. D
 iluted net income per share for the years ended March 31, 2022 and2023 were not presented because the Company had no shares withdilutive effects.
2. T he Company’s shares in the “Board Benefit Trust (BBT),” which arereported as treasury shares under Shareholders’ equity, are counted as
the number of treasury shares as of the average number of shares
outstanding for the period for the purpose of not including for computing
earnings and net assets per share.

NISHIMATSU CONSTRUCTION CO., LTD.

Financial Report 2023

24

25

NISHIMATSU CONSTRUCTION CO., LTD.

Financial Report 2023

NISHIMATSU CONSTRUCTION CO., LTD.

Financial Report 2023

26

27

NISHIMATSU CONSTRUCTION CO., LTD.

Financial Report 2023

NISHIMATSU CONSTRUCTION CO., LTD.

Financial Report 2023

28

Non-Consolidated Five-Year Summary
Nishimatsu Construction Co., Ltd.
March 31, 2022 and 2023
Millions of yen

2019

2020

2021

2022

2023

Orders received��������������������������������������������������������������

¥340,302¥361,014¥312,278¥328,094¥327,401

Orders received from overseas���������������������������������������

11,088(1,384)

2,089

42,29844,835Percentage of orders received from overseas�����������������

3.3%(0.4%)

0.7%

12.9%

13.7%

Net sales������������������������������������������������������������������������

336,854377,167

328,253

317,707328,386

Cost of sales������������������������������������������������������������������

294,629

334,773

290,118

274,686

296,488

Selling, general and administrative expenses������������������

17,68817,742

17,867

19,16919,832

Profit before income taxes����������������������������������������������

26,65925,51025,663

22,61013,061

Profit�������������������������������������������������������������������������������

18,62619,14318,087

15,0039,394

Percentage of income against net sales��������������������������

5.5%

5.1%

5.5%

4.7%

2.9%

Total assets��������������������������������������������������������������������

452,214483,112464,220

462,400

490,939

Net assets����������������������������������������������������������������������

192,845

193,587

203,231

147,941

145,070

Percentage of net assets against total assets�����������������

42.6%

40.1%

43.8%

32.0%

29.6%

Common stock���������������������������������������������������������������

23,514

23,514

23,514

23,514

23,514

Net income�����������������������������������������������������������������

¥ 340.48¥ 349.94¥ 330.64¥ 310.27¥ 237.98

Cash dividends applicable to the year�������������������������

105.00105.00105.00221.00221.00Net assets������������������������������������������������������������������

3,525.31

3,538.96

3,715.32

3,747.90

3,675.22

Number of shareholders�������������������������������������������������

17,535

17,854

17,17016,582

33,977

Number of employees����������������������������������������������������

2,606

2,684

2,762

2,794

2,804

Per share of common stock (in yen)Note:
*1 Effective beginning the March 31, 2022 fiscal year, the Company has adopted the “Accounting Standard for Revenue Recognition, etc.
(Accounting Standards Board of Japan (ASBJ) Guidance No.29 of March 31, 2020).”*2 Highest stock price and lowest stock price were those recorded on the First Section of the Tokyo Stock Exchange until April 3, 2022, and those recorded on the Prime Market of the Tokyo Stock
Exchange on April 4, 2022 and onwards.
*3 The Company’s shares in the “Board Benefit Trust (BBT),” which are reported as treasury shares under Shareholders’ equity, are counted as the number of treasury shares as of the average number ofshares outstanding for the period for the purpose of not including for computing earnings and net assets per share.

29

NISHIMATSU CONSTRUCTION CO., LTD.

Financial Report 2023

NISHIMATSU CONSTRUCTION CO., LTD.

Financial Report 2023

30

Non-Consolidated Balance Sheet
Nishimatsu Construction Co., Ltd.
March 31, 2022 and 2023
Millions of yen

Thousands of U.S. dollars

2023

2022

2023

AssetsThousands of U.S. dollars

2022

2023

2023

Short-term debt from banks (Note 18)��������������������������������������������

¥ 43,039¥ 59,239$  443,638

Current portion of bonds payable (Note 18)������������������������������������

10,00015,000112,334

Commercial papers������������������������������������������������������������������������

20,000——Liabilities and Net assets

Current assets:

Current liabilities:¥ 36,812¥ 38,291$  286,757   Notes (Note 18)��������������������������������������������������������������������������

7,023

7,039

52,714   Accounts (Note 18)���������������������������������������������������������������������

175,642

181,619

1,360,137   Allowance for doubtful accounts (Notes 2 and 17)����������������������

(19)

(20)

(151)

   Notes (Note 18)��������������������������������������������������������������������������

18,27823,950179,358

Cash and time deposits (Note 18)��������������������������������������������������
Notes and accounts receivable, trade:

Notes and accounts payable, trade:

Marketable securities (Note 15)������������������������������������������������������

—

1

10

   Accounts (Note 18)���������������������������������������������������������������������

40,804

46,321

346,895

Inventories (Notes 2 and 9)�������������������������������������������������������������

15,25021,067

157,766

Advances received on uncompleted contracts (Note 18)����������������

14,485

16,637

124,591

Short-term loans to subsidiaries and affiliates���������������������������������

122

314

2,352

Provision for warranties for completed construction (Notes 2 and 17)

7,923

1,658

12,416

Advance paid (Note 18)������������������������������������������������������������������

11,015

12,437

93,140

Provision for bonuses (Notes 2 and 17)��������������������������������������������

3,635

2,771

20,755Prepaid expenses��������������������������������������������������������������������������

482

618

4,631

Provision for loss on construction contracts (Notes 2 and 17)�����������

2,820

7,920

59,313

Other current assets����������������������������������������������������������������������

3,925

9,606

71,939Accrued income taxes�������������������������������������������������������������������

5,832

1,784

13,361   Total current assets��������������������������������������������������������������������

250,252

270,9722,029,295

Provision for loss on real estate business and other (Notes 2 and 17)

38

34

255

Property and equipment (Notes 2 and 16):Land����������������������������������������������������������������������������������������������

80,06783,657

626,504

Buildings����������������������������������������������������������������������������������������

92,79382,345

616,680

Machinery and equipment��������������������������������������������������������������

9,897

9,802

73,404

Accumulated depreciation��������������������������������������������������������������

(39,654)(34,472)(258,160)   Total property and equipment�����������������������������������������������������

143,103

141,332

1,058,428

Investments and other assets:

Lease obligations���������������������������������������������������������������������������

25

22

161

Accounts payable - other���������������������������������������������������������������

2,127

2,580

19,322

Accrued expenses�������������������������������������������������������������������������

72

83

619

Deposits received��������������������������������������������������������������������������

45,86464,365

482,027

Unearned revenue��������������������������������������������������������������������������

5

4

29

Asset retirement obligations�����������������������������������������������������������

28

—

—

Other current liabilities��������������������������������������������������������������������

38

120

910

   Total current liabilities������������������������������������������������������������������

215,013242,488

1,815,984

Bonds payable (Note 18)����������������������������������������������������������������

87,00091,000681,495

Long-term liabilities:
Accrued retirement benefits ����������������������������������������������������������

5,904

6,066

45,425

Provision for share awards for directors (and other officers) (Note 17)���

54

107

800

Asset retirement obligations�����������������������������������������������������������

705

729

5,459

Lease obligations���������������������������������������������������������������������������

42

21

159

Other long-term liabilities����������������������������������������������������������������

5,741

5,458

40,875   Total long-term liabilities��������������������������������������������������������������

99,446

103,381774,213  Total liabilities�����������������������������������������������������������������������������

314,459

345,869

2,590,197

Investment securities (Notes 2 and 15)�������������������������������������������

34,50833,804

253,159

Investments in subsidiaries and affiliates (Notes 2 and 10)��������������

12,132

16,013

119,924

Investments in capital of subsidiaries and affiliates�������������������������

4,712

4,661

34,904

Common stock :Long-term loans to subsidiaries and affiliates���������������������������������

1,137

1,357

10,164

Authorized - 160,000,000 shares

Deferred tax assets (Notes 2 and 11)���������������������������������������������

5,582

6,655

49,841

Issued and outstanding - 55,591,502 shares���������������������������������

23,514

23,514

176,093

20,78020,780155,623

Net assets:Long-term loans receivable������������������������������������������������������������

71

326

2,440

Capital surplus�������������������������������������������������������������������������������

Long-term prepaid expenses���������������������������������������������������������

44

42

311

Legal reserve���������������������������������������������������������������������������������

5,878

5,878

44,022

Investments in capital���������������������������������������������������������������������

26

26

193

Retained earnings��������������������������������������������������������������������������

149,133

147,769

1,106,629

Others��������������������������������������������������������������������������������������������

10,90915,822

118,485

Treasury stock, at cost�������������������������������������������������������������������

(57,335)(57,338)(429,404)

Allowance for doubtful accounts (Notes 2 and 17)�������������������������

(76)

(71)

(528)

Valuation difference on available-for-sale securities������������������������

5,971

4,467

33,456   Total investments and other assets���������������������������������������������

69,04578,635588,893   Total net assets��������������������������������������������������������������������������

147,941

145,070

1,086,419  Total assets��������������������������������������������������������������������������������

¥462,400¥490,939$3,676,616   Total liabilities and net assets������������������������������������������������������

¥462,400¥490,939$3,676,616

The accompanying notes are an integral part of this statement.

31

Millions of yen

NISHIMATSU CONSTRUCTION CO., LTD.

Financial Report 2023

The accompanying notes are an integral part of this statement.

NISHIMATSU CONSTRUCTION CO., LTD.

Financial Report 2023

32

Non-Consolidated Statement of Income

Non-Consolidated Statement of Changes in Net Assets

Nishimatsu Construction Co., Ltd.
March 31, 2022 and 2023

Nishimatsu Construction Co., Ltd.
March 31, 2022 and 2023
Millions of yen

Thousands of U.S. dollars

2023

2022

Millions of yen

2023

Net sales (Note 2):Completed construction contract���������������������������������������������������
Real estate business and other������������������������������������������������������

¥295,642¥299,682

CapitalsurplusLegalreserve¥23,514¥20,780

Retainedearnings

Treasury stock,at costValuationdifference on
available-forsale securities

Total
net assets¥144,796¥ (2,177)¥10,440¥203,231$2,214,051

18,02532,744245,215

Balance at April 1, 2021������������������

317,707328,386

2,459,266

Dividends declared�������������������������

(10,666)

Profit�����������������������������������������������

15,003

Cost of sales (Notes 2 and 19):
Cost of completed construction contract���������������������������������������

263,592

276,1072,067,757

Cost of real estate business and other�������������������������������������������

11,094

20,381

152,630

274,686

296,488

2,220,387

Gross profit������������������������������������������������������������������������������������

43,021

31,897

238,879

Selling, general and administrative expenses�����������������������������

19,16919,832

Income from operations�����������������������������������������������������������������

Commonstock

12,06523,852¥5,878(55,158)

Net changes of items other thanshareholder’s equity��������������������
Balance at April 1, 2022������������������

¥23,514¥20,780¥5,878¥149,133(10,758)

148,523

Profit�����������������������������������������������

9,394

90,356

Purchase of treasury shares������������

Interest and dividend income���������������������������������������������������������

752

652

4,882

Net changes of items other thanshareholder’s equity��������������������

Compensation for delay�����������������������������������������������������������������

499

—

—

Balance at March 31, 2023�������������

Foreign currency exchange gain�����������������������������������������������������

277

185

1,387

Gain on investments in silent partnerships��������������������������������������

134

155

1,164

Reversal of allowance for doubtful accounts����������������������������������

149

5

38

(521)

(652)

(4,880)Financing expenses�����������������������������������������������������������������������

(790)

(109)

(817)

¥23,514¥20,780¥5,878(55,158)(4,469)(4,469)¥ 5,971¥147,941(10,758)
9,394¥147,769

(5)

(5)

2

2
(1,504)(1,504)¥(57,338)¥ 4,467¥145,070

Thousands of U.S. dollars

Commonstock

CapitalsurplusLegalreserve

Retainedearnings

Treasury stock,at costValuationdifference on
available-forsale securities

Total
net assets$176,093$155,623$44,022$1,116,849$(429,383)$ 44,720$1,107,924

Advisory Expenses�������������������������������������������������������������������������

(632)

—

—

Balance at April 1, 2022������������������

Gain on sales of investment securities��������������������������������������������

2,107

707

5,297

Dividends declared�������������������������

(80,569)

Gain on sales of non-current assets�����������������������������������������������

1,273

238

1,779

Profit�����������������������������������������������

70,349Provision for warranties for completed construction�����������������������

(2,998)——Purchase of treasury shares������������

Impairment losses��������������������������������������������������������������������������

(925)

—

—

Disposal of treasury shares�������������

Loss on support of subsidiaries������������������������������������������������������

(387)

—

—

Loss on valuation of investment securities��������������������������������������

(21)

(311)

(2,329)Net changes of items other thanshareholder’s equity��������������������

Loss on valuation of golf club membership�������������������������������������

—

(74)

(555)

Balance at March 31, 2023�������������

Loss on retirement of non-current assets���������������������������������������

(24)

(23)

(173)

The accompanying notes are an integral part of this statement.

Loss on sales of non-current assets�����������������������������������������������

(73)

(8)

(63)

Infectious disease related costs�����������������������������������������������������

(10)

—

—

Other-net���������������������������������������������������������������������������������������

(52)

231

1,730

(1,242)

996

7,460

22,61013,061

97,816

Current������������������������������������������������������������������������������������������

8,241

4,078

30,540

Deferred�����������������������������������������������������������������������������������������

(634)

(411)

(3,073)

7,607

3,667

27,467¥ 15,003¥  9,394$   70,349

Profit before income taxes������������������������������������������������������������

¥(57,335)0

Disposal of treasury shares�������������

Interest expenses���������������������������������������������������������������������������

15,003Purchase of treasury shares������������

Dividends declared�������������������������

Other income (expenses):(10,666)

0$176,093$155,623$44,022$1,106,629(80,569)
70,349
(38)

(38)

17

17

$(429,404)(11,264)(11,264)$ 33,456$1,086,419

Income taxes (Note 2)

Profit������������������������������������������������������������������������������������������������Yen

U.S. dollars

Per share of common stock
Net income (loss)���������������������������������������������������������������������������

¥310.27¥237.98$1.782

Cash dividends applicable to the year��������������������������������������������

221.00221.00

1.655

The accompanying notes are an integral part of this statement.

33

NISHIMATSU CONSTRUCTION CO., LTD.

Financial Report 2023

NISHIMATSU CONSTRUCTION CO., LTD.

Financial Report 2023

34

Notes to Non-Consolidated Financial Statements

1. Basis of presenting non-consolidated financial
statements
The accompanying non-consolidated financial statements of Nishimatsu
Construction Co., Ltd. (the “Company”) have been prepared in accordancewith the provisions set forth in the Japanese Corporation Law and in
conformity with generally accepted accounting principles and practices inJapan.
Certain reclassification of the prior year’s non-consolidated financial
statements has been made to conform to the current year presentation.
In preparing the non-consolidated financial statements for the purpose ofinclusion in this Corporate Report, certain reclassifications andrearrangements have been made to the non-consolidated financial
statements issued domestically in Japan in order to present thesestatements in a form which is more familiar to readers of these statements
outside Japan.

2. Summary of significant accounting policies(a) Foreign currency transactions
All short-term and long-term monetary receivables and payables
denominated in foreign currencies are translated into Japanese yen at theexchange rates at the balance sheet date. The foreign exchange gains andlosses from translation are recognized in the non-consolidated statement ofincome to the extent that they are not hedged by foreign exchange
derivatives.
(b) Investments in securities
Held-to-maturity securities are either amortized or accumulated to facevalue.
Other securities with quoted market prices are carried at market value.
The difference between the acquisition costs and the carrying value ofother securities, including unrealized gains and losses, is recognized as acomponent of net assets and is reflected as “Valuation difference on
available-for-sale securities”.
The cost of other securities sold is computed by the moving averagemethod.
Other securities without quoted market prices are stated at cost basedon the moving average method.
(c) Inventories
Inventories other than materials and supplies are stated at the accumulated
construction cost for each project, which does not include selling, generaland administrative expenses.
Materials and supplies are stated at cost determined by the moving
average method.
Regarding real estate held for sale, cost of uncompleted real estatedevelopment projects and materials and supplies, when deterioration in
profitability is recognized, their book values on balance sheets aredevalued.
(d) Depreciation and amortization
Property and equipment (excluding lease assets):
Property and equipment, including significant renewals and additions, arecarried at cost.
The cost of property and equipment retired or otherwise disposed of andaccumulated depreciation in respect thereof are eliminated from the related
accounts, and the resulting gain or loss is reflected in income.
Maintenance and repairs, including minor renewals and improvements,
are charged to income as incurred.
Depreciation is computed generally by the declining balance method at
rates based on the useful lives, which is determined under standards that
conform to the methods provided for in the Corporation Tax Act.

35

NISHIMATSU CONSTRUCTION CO., LTD.

Financial Report 2023

The straight-line method is applied to buildings acquired after April 1,
1998, and facilities attached to building and structures acquired after April
1, 2016.
Intangible assets (excluding lease assets):
Intangible assets are carried at cost.
Useful lives of assets are determined based on standards that conformto the methods provided for in the Corporation Tax Act. Software forinternal use is amortized using the straight-line method based on an internal
estimate of its useful life (five years).
Lease assets:
Lease assets associated with finance leases that do not transfer ownershipare accounted for based on the straight-line method with the term of leaseas the useful life and the residual value as zero.
Long-term prepaid expenses
The straight-line method is applied.
(e) Investments in subsidiaries and affiliates
Investments in subsidiaries and affiliates are stated at cost.
(f) Accrued retirement benefits
Accrued retirement benefits are calculated based on an estimate of the
projected retirement benefit obligation and the plan assets.
Assets in the Company’s defined benefit corporate pension plan arerecorded as Others under Investment other assets as in the case of theplan assets exceeding the retirement benefit obligations.
Actuarial gains or losses are amortized on the straight-line method over
10 years beginning immediately the following year.
(g) Recognition of sales and related costs
In the construction business, which is the main business of the Company,
we provide customers with the design and construction of buildings, etc.
based on construction contracts. The main payment terms for ourtransactions are the payment terms agreed with the customer by contract,
and the contract does not include any significant financial components.
(1) T he method of recognizing revenue over time (former the percentage ofcompletion method)
Regarding construction contracts in the construction business, we judge
that performance obligations will be satisfied over time, mainly for long-term
construction contracts, and we recognize revenue based on the progressof fulfillment of performance obligations. The method of estimating the
progress related to the fulfillment of performance obligations is calculatedby the ratio of the costs already incurred to the total estimated construction
cost (i.e., the input method).
(2) R evenue recognition by other methods
Cost recovery method: Regarding works for which the progress rate
related to the fulfillment of performance obligations cannot be reasonably
estimated, we recognize the same amount of revenue as the costs
incurred.
Completed contract method: Regarding works that are reasonably
expected to have a very small contract amount and a very short period, we
recognize revenue when the performance obligations are fully satisfied.
(h) Income taxes
Deferred income taxes are recognized applying the asset and liability
method.
Under this method, deferred tax assets and liabilities are determinedbased on the difference between the financial reporting and tax basis of theassets and liabilities, and are measured using the enacted tax rates andlaws that will be in effect when the differences are expected to reverse.

(i) Hedge accounting
Interest rate swaps are utilized to avoid interest volatility risk on debt.
The interest rate swaps which qualify for hedge accounting and meet
specific matching criteria are not remeasured at market value but the net
amount to be paid or received under the interest rate swap contracts arerecognized and included in interest expense and income as incurred.
Forward foreign exchange contracts utilized as a hedging instrument
against risk arising from exchange rate fluctuations which meet the required
criteria are accounted for by the allocation method. In the allocation
method, assets and liabilities subject to foreign forward contract aretranslated by the contracted rate of exchange.
(j) Appropriations of retained earnings
Appropriations of retained earnings are accounted for and reflected in theaccompanying non-consolidated financial statements when approved by
the shareholders.
(k) Allowance for doubtful accounts
The Company provides for possible losses due to uncollectible of notes,
accounts, loans receivable and others based on the Company’s past credit
loss experience and management’s estimate.
(l) Provision for warranties for completed construction
Provision for losses which are expected to occur in the future related to
defects of completed work is provided based on the estimated amountcalculated using an actual percentage of related losses during a certain
past period and the estimate future warranty expense amount for the
specific properties.
(m) Provision for share awards for directors (and other officers)
Preparing for issuing of Company’s shares under the performance-based
compensation for directors and executive officers, the estimated number ofshares to be paid according to the points allocated to the officers can bereasonably estimated.
(n) Provision for bonuses for directors (and other officers)
The estimated amount of cash payment by the performance-based
compensation for directors and executive officers can be reasonably
estimated.
(o) Provision for bonuses
Provision for bonuses is based on the estimated value of the bonus to be
paid to employees.
(p) Provision for loss on construction contracts
Provision for loss on construction contracts is provided with respect toconstruction projects for which the losses can be reasonably estimated.
(q) Provision for loss on real estate business
Provision for losses which are expected to occur in the future related to realestate businesses is provided when the loss can be reasonably estimated.
(r) Other accounting policies on preparing non-consolidated
financial statements(1) Accounting for unrecognized actuarial gain or loss or unrecognized past
service cost on non-consolidated balance sheet is different from theaccounting on consolidated balance sheet.
(2) Accounting principles and procedures adopted when requirements
under the relating accounting standards are not clearly defined
In the construction business, joint venture accounting process is mainly
recognized assets, liabilities, profit and expenses by member’s investment
ratio.

3. Important accounting estimates(a) E stimation the method of recognizing revenue over time (former thepercentage of completion method)
FY2021
Sales from the method of recognizing revenue over time (former thepercentage of completion method) are ¥293,514 million ($2,398,186
thousand).
Provision for loss on construction contracts is ¥2,820 million ($23,041
thousand).
FY2022
Sales from the method of recognizing revenue over time (former thepercentage of completion method) are ¥289,364 million ($2,167,030
thousand).
Provision for loss on construction contracts is ¥7,920 million ($59,313
thousand).
The identified item is same information as “Notes to consolidated financial
statements, (a) Estimation for the method of recognizing revenue over time
(former the percentage of completion method) under Note 3. Importantaccounting estimates.”(b) Provision for warranties for completed construction
FY2021
Provision for warranties for completed construction are ¥7,923 million($64,737 thousand).
FY2022
Provision for warranties for completed construction are ¥1,658 million($12,416 thousand).
The identified item is same information as “Notes to consolidated financial
statements, (b) Provision for warranties for completed construction under
Note 3. Important accounting estimates.”

4.Changes in Accounting Policy
The Implementation Guidance on Accounting Standard for Fair Value
Measurement (ASBJ Guidance No. 31, Jun 27, 2021; “Implementation
Guidance on Accounting Standard” hereinafter) has been applied since thebeginning of the fiscal year ended March 31, 2023. In accordance with theprovisional handling described in Paragraph 27-2 of Implementation
Guidance on Accounting Standard, the new accounting policies set forth in
Implementation Guidance on Accounting Standard and related standards
have been applied to future accounts. This change has little effect on nonconsolidated financial statements for the fiscal year ended March 31, 2023.

5.Changes in presentation(a) Notes to non-consolidated Balance Sheet“Prepaid expenses” which was listed in “Other current assets” under“Current assets” and “Long-term loans receivable,” “Long-term prepaid
expenses” and “Investments in capital” which were listed in “Others” under“Investments and other assets” and “Lease obligations,” “Accounts payable- other,” “Accrued expenses,” “Unearned revenue” which were listed in“Other current liabilities” under “Current liabilities” and “Lease obligations”
which was listed in “Other long-term liabilities” under “Long-term liabilities”
in the previous fiscal year, are separately listed from the fiscal year ended
March 31, 2023, for the understanding of users of non-consolidated
financial statements.
The non-consolidated financial statements of the previous fiscal year
have been reclassified to reflect this change in presentation.
As a result, ¥4,407 million presented in “Other current assets” in the

NISHIMATSU CONSTRUCTION CO., LTD.

Financial Report 2023

36

non-consolidated balance sheet of the previous fiscal year have been
reclassified as ¥482 million of “Prepaid expenses” and ¥3,925 million of“Other current assets.”And ¥11,050 million presented in “Others” under “Investments and otherassets” in the non-consolidated balance sheet of the previous fiscal year
have been reclassified as ¥71 million of “Long-term loans receivable,” ¥44
million of “Long-term prepaid expenses”, ¥26 million of “Investments incapital” and ¥10,909 million of “Others.”
And ¥2,267 million presented in “Other current liabilities” in the nonconsolidated balance sheet of the previous fiscal year have been
reclassified as ¥25 million of “Lease obligations,” ¥2,127 million of“Accounts payable - other,” ¥72 million of “Accrued expenses”, ¥5 million of“Unearned revenue” and ¥38 million of “Other current liabilities.”And ¥5,783 million presented in “Other long-term liabilities” under “Longterm liabilities” in the non-consolidated balance sheet of the previous fiscal
year have been reclassified as ¥42 million of “Lease obligations” and¥5,741 million of “Other long-term liabilities.”(b) Notes to non-consolidated statement of Income“Loss on valuation of investment securities,” which was listed in “Other-net”
under “Other income (expenses)” in the previous fiscal year, is separately
listed from the fiscal year ended March 31, 2023, because of morequantitative materiality.
The non-consolidated financial statements of the previous fiscal year
have been reclassified to reflect this change in presentation.

As a result, ¥73 million presented in “Other-net” under “Other income(expenses)” in the non-consolidated statements of income of the previous
fiscal year have been reclassified as ¥21 million of “Loss on valuation of
investment securities” and ¥52 million of “Other-net.”

Composition of deferred tax assets and liabilities(a) D eferred tax assets and liabilities as of March 31, 2022 and 2023 wereas follows:

6. Additional information

7. United States dollar amounts
The United States dollar amounts presented in the accompanying nonconsolidated financial statements are included solely for convenience andare stated, as a matter of arithmetical computation only, at the rate of¥133.53 = US$1, which was the exchange rate prevailing as of March 31,
2023.
These conversions should not be construed as representations that theJapanese yen amounts actually represent, or have been or could be
converted into, United States dollars at that rate.

(Issue of unsecured bonds)
The Company has issued unsecured bonds (Sustainability-Linked Bond) with a payment date of July 27, 2023, under the following conditions. This issuance isbased on a comprehensive resolution of the board meeting held on June 27, 2023, which determined the total amount to be offered, etc.
20 billion yen
100 yen for every 100 yen offered
0.600% per year
July 27, 2023
July 27, 2028
Bond redemption and capital investment funds“Collateral provision restriction clause” is attached.

2023

2022

10. Securities

Inventories comprised the following:

As no quoted market prices are available, the fair value of stocks ofsubsidiaries and affiliates is not mentioned.

2023

Thousands of
U.S. dollars

2022

2023

Costs on uncompleted construction contracts������

¥ 6,202¥ 6,045

$ 45

2022

2023

2023

Real estate for sale�����������������������������������������������

8,755

14,415

108

Stocks of subsidiaries�������������������������������������������

¥11,949¥15,830$118,549

Raw materials and supplies����������������������������������

293

607

5

Stocks of affiliates�������������������������������������������������

183

183

1,375

Total������������������������������������������������������������������

¥15,250¥21,067$158

Total������������������������������������������������������������������

¥12,132¥16,013$119,924

Millions of yen

2023

Provision for allowance for loss on construction
projects�����������������������������������������������������������

¥   863¥ 2,424$ 18,150

Impairment loss of long-lived assets������������������

2,441

2,362

17,688Provision for warranties for completed
construction����������������������������������������������������

3,573

2,172

16,262

2022

2023

2023

Accrued retirement obligations���������������������������

1,933

1,710

12,807

Total amount of loan commitment�������������������������

¥20,000¥20,000$149,779

Provision for bonuses����������������������������������������

1,095

838

6,279

Loans outstanding������������������������������������������������

¥10,000¥—$—

Loss on valuation of real estate��������������������������

253

253

1,897

Valuation loss on investment securities��������������

154

192

1,439

Other�����������������������������������������������������������������

2,511

3,141

23,529Subtotal deferred tax assets����������������������������

¥12,823¥13,092$ 98,051

Valuation allowance�����������������������������������������

(3,880)(3,722)(27,874)

Gross deferred tax assets�������������������������������

¥ 8,943¥ 9,370$ 70,177(c) D ue to have ready working capital efficiently, the Company concludes
rental commitment contracts.

(d) T he Company transfers property and equipment to assets for sale ofestate included in inventories due to purpose of possession.

2022

2023

2023

¥  606¥ 6,734$ 50,426

Structures�������������������������������������������������������������

—

143

1,073

¥ (2,633)¥ (1,970)$(14,752)

Land���������������������������������������������������������������������

2,924

9,785

73,279Reserve for reduction entry of replaced property

(380)

(378)

(2,835)

Total������������������������������������������������������������������

¥3,530¥16,662$124,778

Others���������������������������������������������������������������

(348)

(367)

(2,749)Gross deferred tax liabilities�����������������������������

¥ (3,361)¥ (2,715)$(20,336)

Net deferred tax assets (liabilities)��������������������

¥ 5,582¥ 6,655$ 49,841(e) T he amount of reduction entry which was conducted in current fiscal
year is as follows:(b) R econciliation between the statutory tax rate and the effective tax rate
was as follows:

Thousands of
U.S. dollars

Millions of yen

2023

2022

2023

2022

2023

Buildings��������������������������������������������������������������

¥20

¥—

Statutory tax rate (Adjustment)������������������������������������������

30.6%

30.6%

Construction in progress��������������������������������������

—

0

1

Permanent non-deductible items�����������������������������������

1.7%

2.9%

Total������������������������������������������������������������������

¥20

¥ 0

$ 1

Permanent non-taxable items����������������������������������������

(0.4)%(0.4)%

Inhabitant taxes on per capita levy���������������������������������

0.6%

1.1%

Valuation allowance�������������������������������������������������������

0.0%(1.2)%Tax credit�����������������������������������������������������������������������

(0.8)%(3.8)%

Other�����������������������������������������������������������������������������

1.9%(1.1)%

Effective tax rate���������������������������������������������������������������

33.6%

28.1%

$—

14. Notes to non-consolidated statement of income(a) Gain on sales of fixed assets was as follows:
Thousands of
U.S. dollars

2023

2023

Buildings and structures���������������������������������������

¥  372¥ —12. Revenue recognitionLand���������������������������������������������������������������������

897—

Information that forms the basis for understanding revenue from contracts
with customers is same as described in Note 21. Revenue recognition in
the consolidated financial statements.

Machinery�������������������������������������������������������������

4

27

198

Other��������������������������������������������������������������������

—

211

1,581

Total������������������������������������������������������������������

¥1,273¥238$1,779$——(b) Loss on sales of fixed assets was as follows:

13. Notes to non-consolidated balance sheet

Thousands of
U.S. dollars

Millions of yen

Collateral assets and secured liabilities(a) P ledged assets for loans on subsidiaries, affiliates and other obligations
as of March 31, 2022 and 2023 were as follows:

Buildings and structures���������������������������������������

¥—¥1$11.00Land���������������������������������������������������������������������

70

7

52

Thousands of
U.S. dollars

Machinery�������������������������������������������������������������

3

0

0

Total������������������������������������������������������������������

¥ 73

¥8

$   63

2023

2023

Pledged assets for loans on subsidiaries andaffiliates:

Financial Report 2023

Thousands of
U.S. dollars

Millions of yen

Unrealized gain on available-for-sale securities���Deferred tax liabilities:

Millions of yen

NISHIMATSU CONSTRUCTION CO., LTD.

Thousands of
U.S. dollars

Millions of yen

Buildings��������������������������������������������������������������

2022

37

$12

2023

Millions of yen

9. Inventories
Thousands of
U.S. dollars

2023

¥2

¥4

2022

Millions of yen

Thousands of
U.S. dollars

Millions of yen

2022
Deferred tax assets:

The notes on the Transactions involving issue of Company stock to
Directors and others via trust are omitted because the same content is
described in the “Notes (Additional Information)” section of the consolidated
financial statements.

(b) Loan guarantee
The Company provides guarantee for employees’ housing loans from bank:Thousands of
U.S. dollars

Millions of yen

8. Significant subsequent events

1. The total amount of issued corporate bonds
2. Issued price3. Interest rate
4. Payment date
5. Redemption deadline
6. Use of funds
7. Financial covenants

11. Income taxes

Buildings������������������������������������������������������������

¥255

¥245

$1,839Land������������������������������������������������������������������

37

37

275

Investment securities�����������������������������������������

128

138

1,032

Total����������������������������������������������������������������

¥420

¥420

$3,146

2023

2022

2023

(c) Loss on retirement of non-current assets was as follows:
Thousands of
U.S. dollars

Millions of yen

2023

2022

2023

Buildings and structures���������������������������������������

¥ 3

¥ 0

Machinery�������������������������������������������������������������

18

5

$  0
39

Fixtures����������������������������������������������������������������

1

3

22

Others������������������������������������������������������������������

2

15

112

Total������������������������������������������������������������������

¥24

¥23

$173

NISHIMATSU CONSTRUCTION CO., LTD.

Financial Report 2023

38

15. Details on securities

16. Details of fixed assets(a) Stock
Investment Securities - Available-for-sale securities

Millions of yen

Millions of yen
Number of shares

IssuerThousands of
U.S. dollars

Balance as of March 31, 2023 onbalance sheets

Type of assets

Balance at April 1,
2022

Increase during
the year

Decrease during
the year

Balance at March 31,
2023

Accumulated
depreciation or
accumulated
amortization atMarch 31, 2022

Depreciation forthe yearNet balance at
March 31, 2023

Tangible assets

SUMITOMO REALTY & DEVELOPMENT CO., LTD.

5,000,000¥14,910$111,660

Buildings�����������������������������������������������������������

¥ 87,937¥ 4,813¥14,536¥ 78,214¥24,476¥2,742¥ 53,738

TEIKOKU SEN-I CO., LTD.

1,000,000

1,653

12,379Structures���������������������������������������������������������

3,583

15

593

3,005

1,558

106

1,447

HULIC CO., LTD.

1,405,500

1,528

11,442

Machinery and equipment���������������������������������

7,323

365

499

7,189

6,377

299

812

MIZUHO FINANCIAL GROUP, INC.

705,548

1,325

9,923

Vehicles������������������������������������������������������������

364

8

53

319

301

16

18

TSURUYA DEPARTMENT STORE INC.

12,000

1,104

8,268

Tools, furniture, and supplies�����������������������������

2,083

138

45

2,176

1,682

238

494

KYUSHU RAILWAY COMPANY

274,300

809

6,058

Land�����������������������������������������������������������������

80,067

13,467

9,877

83,657——83,657

JAPAN NUCLEAR FUEL LIMITED

66,664667

4,993

Lease assets�����������������������������������������������������

126

—

9

117

78

23

39

CENTRAL JAPAN RAILWAY COMPANY

32,500514

3,848Construction in progress�����������������������������������

1,274

4,446

4,593

1,127

—

—

1,127

SHIKOKU ELECTRIC POWER CO.,INC

625,055

471

3,525

Total tangible assets�����������������������������������������������

¥182,757¥23,252¥30,205¥175,804¥34,472¥3,424¥141,332

KYUSHU ELECTRIC POWER COMPANY,INC.

437,788331

2,482
Intangible assets

6,300

315

2,359

233,607

301

2,259

Leasehold interests in land��������������������������������

—

300

—

300

—

—

300

6,000

300

2,247

Software�����������������������������������������������������������

3,836

526

102

4,260

3,204

312

1,056

EAST JAPAN RAILWAY COMPANY

37,500275

2,060

Others���������������������������������������������������������������

533

4,594

29

5,098

263

14

4,835

TOKYO ELECTRIC POWER COMPANY HOLDINGS, INC.

579,375

274

2,052

WEST JAPAN RAILWAY COMPANY

50,000273

2,043

Total intangible assets���������������������������������������������

4,369

5,420

131

9,658

3,467

326

6,191

KEIKYU CORPORATION

211,103

266

1,990

Long-term prepaid expenses����������������������������������

73

16

6

83

41

19

42

ELECTRIC POWER DEVELOPMENT CO.,LTD.

118,000

251

1,883

Deferred assets������������������������������������������������������

—

—

—

—

—

—

—

Total deferred assets����������������������������������������������

—

—

—

—

—

—

—

KANSAI INTERNATIONAL AIRPORT LAND COMPANY, LTD.
KANSAI ELECTRIC POWER CO.,INC.
METROPOLITAN INTERCITY RAILWAY COMPANYOTHER (85 ISSUES)
Total(b) Bonds
Securities - Held to maturity securities
Thousands ofPhilipine Peso
IssuerTotal face value

Government bond (1 issue) *1
Total

Millions of yen

Thousands of
U.S. dollars

Figure on balance sheet

2,587

19,375¥28,154$210,846

Thousands of U.S. dollars

Type of assets

Balance at April 1,
2022

Increase during
the year

Decrease during
the year

Balance at March 31,
2023

Accumulated
depreciation or
accumulated
amortization atMarch 31, 2022

Depreciation forthe yearNet balance at
March 31, 2023

Buildings�����������������������������������������������������������

$  658,553$ 36,049$108,861$  585,741$183,300$20,535$  402,441

Structures���������������������������������������������������������

26,834112

4,440

22,506

11,666791

10,8406,080

Tangible assets

₱520

¥1

$10

Machinery and equipment���������������������������������

54,842

2,730

3,740

53,83247,752

2,240

₱520

¥1

$10

Vehicles������������������������������������������������������������

2,730

62

395

2,397

2,260

121

137

Tools, furniture, and supplies�����������������������������

15,602

1,033

335

16,30012,598

1,781

3,702

Land�����������������������������������������������������������������

599,622

100,851

73,969626,504——

626,504

Lease assets�����������������������������������������������������

941

—

66

875

584

173

291

Construction in progress�����������������������������������

9,538

33,29434,399

8,433

—

—

8,433

Total tangible assets�����������������������������������������������

$1,368,662$174,131$226,205$1,316,588$258,160$25,641$1,058,428

Leasehold interests in land��������������������������������

—

2,247

—

2,247

—

—

2,247

Software�����������������������������������������������������������

28,7293,941

761

31,90923,997

2,338

7,912

Others���������������������������������������������������������������

3,988

34,401

217

38,172

1,968

106

36,204

Total intangible assets���������������������������������������������

32,71740,58997872,32825,9652,444

46,363Long-term prepaid expenses����������������������������������

547

120

48

619

308

140

311

Deffered assets������������������������������������������������������

—

—

—

—

—

—

—

Total deferred assets����������������������������������������������

—

—

—

—

—

—

—

*1 Foreign currencies are displayed with the following abbreviations.
₱...Philipine Peso(c) Other
Investment Securities - Available-for-sale securities
Number ofinvestment
units, etc

Type and issue

2,916,193
13,717,433

Millions of yen

Thousands of
U.S. dollars

Figure on balance sheet

Investment in anonymous association(Kohoku capital Godokaisha)���������������������������������������������

—¥1,784$13,363

Investment in anonymous association(Toranomon Nigo Godokaisha)������������������������������������������

—

1,112

8,324

Investment in anonymous association(Kamiyamacho Property Godokaisha)��������������������������������

—

873

6,534

Investment in anonymous association(Toranomon Ichigo Godokaisha)����������������������������������������

—

750

5,617

Investment in anonymous association(Genesis two Godokaisha)�������������������������������������������������

—

452

3,388

Mitsui Fudosan Private REIT Inc���������������������������������������������

300

426

3,191

Investment in limited investment association (2 issues)�����������

103

91

680

Investment in anonymous association (2 issues)���������������������

—

162

1,216

Total��������������������������������������������������������������������������������������������

—¥5,650$42,313

Intangible assets(a) Major increase during the year
Type of asset

Location

PurposeMillions of yen

Thousands of U.S.
dollars$21,022

Buildings

Fukuoka-shi, Fukuoka

For rent¥2,807

Buildings

Osaka-shi, OsakaFor rent

410

3,070

Land

Sapporo-shi, Hokkaido

For rent

2,280

17,075Land

Minato-ku, Tokyo

For rent

2,090

15,577

Land

Osaka-shi, OsakaFor rent

1,640

12,280Location

PurposeMillions of yen

Thousands of U.S.
dollars(b) Major decrease during the year
Type of asset

39

NISHIMATSU CONSTRUCTION CO., LTD.

Financial Report 2023

Buildings

Minato-ku, Tokyo

For rent¥2,967$22,219

Buildings

Sapporo-shi, Hokkaido

For rent

2,777

20,796Land

Sapporo-shi, Hokkaido

For rent

3,465

25,947Land

Minato-ku, Tokyo

For rent

2,947

22,073NISHIMATSU CONSTRUCTION CO., LTD.

Financial Report 2023

40

17. Details on provision

2. Notes receivablea) Breakdown by payer

Millions of yen
Decrease
Increase
Decrease Balance atBalance atduring theduring theduring the March 31,
April 1, 2022
year (usedyear
year (other)2023
for purpose)
Allowance for doubtful
accounts�������������������������������

¥   95¥   20¥—¥ 24¥   91

Provision for warranties forcompleted construction���������

7,923

805

7,070

—

1,658

Provision for bonus�������������������

3,577

2,740

3,577

—

2,740

Provision for bonuses for
directors (and other officers)��

58

33

60

—

31

Provision for loss on
construction contracts�����������

2,820

6,680

727

853

7,920

Provision for loss on real estatebusiness and other����������������

38

34

38

—

34

Provision for share awards for
directors (and other officers)��

5. Cost on uncompleted construction contract

Millions of yen

Thousands of
U.S. dollars

Chiyoda Corporation��������������������������������������������������������

¥3,906$29,252

TAKUMA CO., LTD�����������������������������������������������������������

1,342

10,054

AEON Mall Co., Ltd����������������������������������������������������������

369

2,759

Honda Auto Body Co., Ltd�����������������������������������������������

341

2,554

TAIHEIYO ENGINEERING CORPORATION�����������������������

144

1,075

Payer

Others������������������������������������������������������������������������������
Total

937

7,020

¥7,039$52,7142023, April������������������������������������������������������������������������

¥1,448$10,847     May������������������������������������������������������������������������

632

4,730

Thousands of U.S. dollars     June�����������������������������������������������������������������������

4,461

33,407

Decrease
Increase
Decrease Balance atBalance atduring theduring theduring the March 31,
April 1, 2022
year (usedyear
year (other)2023
for purpose)     July������������������������������������������������������������������������

184

1,380

     August��������������������������������������������������������������������

189

1,418

      September and beyond������������������������������������������

125

932

¥7,039$52,714

5—

107

Allowance for doubtful
accounts�������������������������������

$   713$   152$—$  186$   679

Provision for warranties forcompleted construction���������

59,336

6,029

52,949—12,416

Provision for bonus�������������������

26,791

20,52026,791—

20,520

Provision for bonuses for
directors (and other officers)��

434

252

451

—

235

Provision for loss on
construction contracts�����������

21,11950,026

5,441

6,391

59,313

Provision for loss on real estatebusiness and other����������������

285

255

285

—

255

Provision for share awards for
directors (and other officers)��

408

431

39

—

800

(a) “Decrease during the year (Other)” for allowance for doubtful accounts
represents the reversal amount based on the actual ratio of bad debts inthe past for general accounts receivables of 20 million yen and collectionof loans receivable of 5 million yen.
(b) “Decrease during the year (Other)” for provision for loss on construction
contracts represents the reversal amount due to the decrease in the
expected loss amount.

18. Major assets and liabilities

Millions of yen

Thousands of
U.S. dollars¥    31$    235

Current deposits���������������������������������������������������������

13,639102,138

Saving deposits����������������������������������������������������������

23,840178,539

Time deposits�������������������������������������������������������������

718

5,374

Others�������������������������������������������������������������������������

63

471

¥38,291$286,757

Deposits

Total

Settlement month

Total

The figure for May includes items unsettled as of April 30 (worth ¥15 million)
as April 30, 2023 was a bank holiday.

Work in progress�����������������������

$46,450$2,066,580

Amounttransferred tocost ofcompleted
construction
contract

Balance at
March 31,2023

$2,067,756$45,274

Materials cost�������������������������������������������������������������������

¥4,215$31,563

Labor cost������������������������������������������������������������������������

11

80

Subcontracts cost������������������������������������������������������������

767

5,749

Others������������������������������������������������������������������������������

1,052

7,881

Total������������������������������������������������������������������������������

¥6,045$45,2732023, April������������������������������������������������������������������������

¥  704$ 5,277     May������������������������������������������������������������������������

1,218

9,120

¥1,922$14,397

Millions of yen

Thousands of
U.S. dollars

Hanwa Co., Ltd����������������������������������������������������������������

¥ 1,417$ 10,609

Marubeni Itochu Sumisho Techno Steel����������������������������

876

6,558

KINDEN CORPORATION��������������������������������������������������

704

5,276

TAKEHARA STEEL CONSTRUCTION�������������������������������

562

4,211

JFE Shoji Steel Construction Materials Corp���������������������

528

3,953

Others������������������������������������������������������������������������������

17,940134,354¥22,027$164,961

Millions of yen

Thousands of
U.S. dollars

2023, April������������������������������������������������������������������������

¥ 9,866$ 73,886     May������������������������������������������������������������������������

12,161

91,075¥22,027$164,961

Millions of yen

Thousands of
U.S. dollars

Total

Recipient

Totalb) Breakdown by settlement month
Settlement month

Total

Millions of yen

Thousands of
U.S. dollars

Operation cost payment���������������������������������������������������

¥  326$ 2,443

Other part-time business disbursements��������������������������

2,495

18,681

Recipient

301

2,254

Marubeni Itochu Sumisho Techno Steel����������������������������

¥ 1,558$ 11,670¥3,122$23,378

TAKEHARA STEEL CONSTRUCTION�������������������������������

1,455

10,892

Kobayashi Kogyo Co.,LTD������������������������������������������������

875

6,556

Hanwa Co., Ltd����������������������������������������������������������������

721

5,398

Tanimura Corporation�������������������������������������������������������

652

4,884

Others������������������������������������������������������������������������������

41,060307,495

Total������������������������������������������������������������������������������

¥46,321$346,895

Millions of yen

Thousands of
U.S. dollars

Mizuho Bank, Ltd. �����������������������������������������������������������

¥19,000$142,290

Sumitomo Mitsui Banking Corporation������������������������������

15,850118,700

Resona Bank, Ltd�������������������������������������������������������������

5,858

43,870

The Norinchukin Bank������������������������������������������������������

5,500

41,189MUFG Bank, Ltd��������������������������������������������������������������

5,000

37,445

Higo Bank, Ltd�����������������������������������������������������������������

3,000

22,467

Sumitomo Mitsui Trust Bank, Limited��������������������������������

1,000

7,489

Mizuho Trust & Banking Co., Ltd. ������������������������������������

867

6,493

Others������������������������������������������������������������������������������

3,164

23,695Item¥ 20,759$  155,462

Others������������������������������������������������������������������������������

Central Nippon Expressway Company Limited�����������������

19,564

146,512

Total������������������������������������������������������������������������������

TODA CORPORATION�����������������������������������������������������

11,61686,995NAGAREYAMA KYOUDOUKAIHATU��������������������������������

10,67879,965

Sumitomo Realty & Development Co., Ltd������������������������

10,27676,960

Others������������������������������������������������������������������������������

108,726

814,243

Total������������������������������������������������������������������������������

¥181,619$1,360,137b) Stagnation
Millions of yen

Thousands of
U.S. dollars

Posted in fiscal year 2023�������������������������������������������������

¥178,645$1,337,855

Posted in fiscal year 2022 or before����������������������������������

2,974

22,282

Total������������������������������������������������������������������������������

¥181,619$1,360,137

Millions of yen

Thousands of
U.S. dollars¥ 1,043$ 7,813

Building for sale����������������������������������������������������������������

10,25076,758

Total������������������������������������������������������������������������������

¥11,293$84,571

Square meter

Millions of yen

Thousands of
U.S. dollars

Tohoku region�����������������������������

26,764.16¥  996

Kanto region�������������������������������

6,383.00

Total����������������������������������������

33,147.16

Breakdown of land is as follows:
RegionThousands of
U.S. dollars

2. Electronically recorded obligationa) Breakdown by recipientThousands of
U.S. dollars

The Organization of the Ministry of Land, Infrastructure,
Transport and Tourism���������������������������������������������������

Land for sale���������������������������������������������������������������������

¥6,045

Millions of yen

Item

Millions of yen

Item¥276,107

Breakdown of the balance at March 31, 2023 is as follows:

Thousands of
U.S. dollars

Payer

Balance at
March 31,2023

Thousands of U.S. dollars

Cost for theyear

Millions of yen

Settlement monthAmounttransferred tocost ofcompleted
construction
contract

6. Payment on estate trade

3. Accounts receivable from completed construction contractsa) Breakdown by payer

4. Real estate for sale

Cash��������������������������������������������������������������������������������

¥275,950

7. Raw materials & supplies
Millions of yen

Thousands of
U.S. dollars¥343$2,567

Unused material ��������������������������������������������������������������

6

41

Raw materials & supplies��������������������������������������������������

10

78

Others������������������������������������������������������������������������������

248

1,859

Total������������������������������������������������������������������������������

¥607$4,545Item
Materials for sale ��������������������������������������������������������������

8. Advance paid
Millions of yen

Thousands of
U.S. dollars

JV, such as advances paid�����������������������������������������������

¥12,301$92,124

Others������������������������������������������������������������������������������

136

1,016

Total������������������������������������������������������������������������������

¥12,437$93,140

Item(Assets)
1. Cash and deposits
Cash and deposits¥6,202Work in progress�����������������������

Cost for theyearb) Breakdown by settlement monthMillions of yen

58

Balance atApril 1, 2022

Balance atApril 1, 2022

Thousands of
U.S. dollars

54b) Breakdown by settlement monthMillions of yen(Liabilities)
1. Notes payablea) Breakdown by recipient

LenderTotal������������������������������������������������������������������������������

Thousands of
U.S. dollars

MINAMITEKKEN.,CO.LTD�������������������������������������������������

¥  273$ 2,042$7,463NISSEI BUILD KOGYO CO., LTD��������������������������������������

214

1,603

47

350

TSUTSUMIKOGYO Co, Ltd�����������������������������������������������

197

1,476

¥1,043$7,813

FUJIPASSC Co., Ltd���������������������������������������������������������

103

771

Futaba Steel Co., Ltd��������������������������������������������������������

69

519

Others������������������������������������������������������������������������������

1,066

7,986

¥1,922$14,397

Total

4. Short-term debt

Long-term debt due within one year���������������������������������

Millions of yen

Recipient

3. Accounts for payable for construction¥—¥59,239$—$443,638

5. Advances received on uncompleted construction
Millions of yen

Balance atApril 1, 2022

Amountreceived forthe yearAmounttransferred tocost ofcompleted
construction
contract

Balance at
March 31,2023

¥14,485¥156,757¥154,605¥16,637

Thousands of U.S. dollars

41

NISHIMATSU CONSTRUCTION CO., LTD.

Financial Report 2023

Balance atApril 1, 2022

Amountreceived forthe yearAmounttransferred tocost ofcompleted
construction
contract

Balance at
March 31,2023

$108,476$1,173,943$1,157,828$124,591

NISHIMATSU CONSTRUCTION CO., LTD.

Financial Report 2023

42

Independent Auditor’s Report

The difference of ¥173,781 million between total sales of ¥328,386 million
on the non-consolidated statement of income and the amount transferred
to net sales of ¥154,605 million indicated above is equal to the sum ofaccounts receivable from completed construction contracts of ¥175,630
million for fiscal 2022 and the decrease of ¥1,850 million as a result of
making adjustment to the contract value of prior-period settled construction
contracts.
6. Deposits received
Millions of yen

Thousands of
U.S. dollars

JV deposits����������������������������������������������������������������������

¥40,949$306,665

Deposit consumption tax��������������������������������������������������

22,796

170,718

Others �����������������������������������������������������������������������������

620

4,644

Total������������������������������������������������������������������������������

¥64,365$482,027

Millions of yen

Thousands of
U.S. dollars

Corporation (8th unsecured straight bond)������������������������

¥ 20,000$149,779

Corporation (9th unsecured straight bond)������������������������

15,000112,334

Corporation (10th unsecured straight bond)����������������������

15,000112,334

Corporation (11th unsecured straight bond)����������������������

19,000142,290

Corporation (12th unsecured straight bond)����������������������

18,000134,801

Corporation (13th unsecured straight bond)����������������������

19,000142,290

Total������������������������������������������������������������������������������

¥106,000$793,828

Classification

7. Corporate bonds
Issued byMore details are mentioned at FINANCIAL SECTION, 1 CONSOLIDATEDFINANCIAL STATEMENTS.

19. Cost of completed construction
1. Cost of completed construction
Millions of
yen
Item

Thousands of
U.S. dollars% to Total

2023% to Total

2023

Raw materials���������������������� ¥ 56,765

21.5%¥ 65,23523.6%$  488,543

14,7005.6%

14,585

5.3%

109,225

Labor�����������������������������������

2022

Millions ofyen(of which, outsourced laborcost) ��������������������������������

(14,700)(5.6)%(14,585)(5.3%)(109,225)

Outsourcing cost�����������������

149,75056.8%

150,73254.6%

1,128,830

Expenses����������������������������

42,37716.1%

45,55516.5%

341,159(of which, personnel
expenses)�������������������������

(15,075)(5.7)%(15,335)(5.6%)(114,844)

Total��������������������������������� ¥263,592

100.0%¥276,107

100.0%$2,067,757

Cost is calculated under the job-order cost method.
2. Cost of sales on estate business and other
Millions ofyen
Item
Land������������������������������������

Millions ofyen

Thousands of
U.S. dollars

2022% to Total

2023% to Total

2023¥ 2,872

25.9%¥ 7,453

36.5%$ 55,813
26,658

Buildings�����������������������������

3

0.0%

3,560

17.5%

Expenses����������������������������

6,146

55.4%

6,459

31.7%

48,375Sub-total�����������������������������

9,021

81.3%

17,47285.7%

130,846

Other�����������������������������������

2,073

18.7%

2,909

14.3%

21,784

Total���������������������������������

¥11,094

100.0%¥20,381100.0%$152,630

Cost is calculated under the job-order cost method.

43

NISHIMATSU CONSTRUCTION CO., LTD.

Financial Report 2023

NISHIMATSU CONSTRUCTION CO., LTD.

Financial Report 2023

44

45

NISHIMATSU CONSTRUCTION CO., LTD.

Financial Report 2023

NISHIMATSU CONSTRUCTION CO., LTD.

Financial Report 2023

46

47

NISHIMATSU CONSTRUCTION CO., LTD.

Financial Report 2023

NISHIMATSU CONSTRUCTION CO., LTD.

Financial Report 2023

48

49

NISHIMATSU CONSTRUCTION CO., LTD.

Financial Report 2023

Inquiries:
Nishimatsu Construction Co., Ltd.
Sustainability Promotion Department, Strategy Management Office
Toranomon Hills Business Tower,
17-1, Toranomon 1-chome, Minato-ku, Tokyo,105-6407 Japan
https://www.nishimatsu.co.jp/eng/