ANNUAL REPORT
2018

CONTENTS
PROFILE

1

THE MESSAGE FROM THE PRESIDENT

2

CONSOLIDATED BALANCE SHEETS

6

CONSOLIDATED STATEMENTS OF INCOME

8

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

9CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS

10CONSOLIDATED STATEMENTS OF CASH FLOWS

13

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

15

INDEPENDENT AUDITOR'S REPORT56

NON-CONSOLIDATED BALANCE SHEETS

58

NON-CONSOLIDATED STATEMENTS OF INCOME

60

NON-CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS

61

NOTES TO NON-CONSOLIDATED FINANCIAL STATEMENTS

64

INDEPENDENT AUDITOR'S REPORT78

CORPORATE OUTLINE

80

CORPORATE DATA

81

Disclaimer for Forward-Looking Statements:
This document contains forward-looking statements about the performance and management plans of SMCC Group based on available
information and management’s assumptions in light of their experience and perception of historical trends, current conditions, future
developments and other factors they believe appropriate. By their nature, forward-looking statements involve risk and uncertainty, because they
relate to events and depend on circumstances that will occur in the future and various economic and other factors could cause actual results anddevelopments to differ materially from those expressed in or implied by such forward-looking statements. Although it is believed that the
expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to becorrect and you are therefore cautioned not to place undue reliance on these forward-looking statements which speak only as at the date of thisdocument.

PROFILE

1

THE MESSAGE FROM THE PRESIDENT

2

3

4

Consolidated Financial Statements
Sumitomo Mitsui Construction Co., Ltd.
and Consolidated Subsidiaries
Year ended March 31, 2018with Independent Auditor’s Report55Mitsui Construction Co., Ltd.
Sumitomo Mitsui Construction Co.,Sumitomo
Ltd.
Consolidated Balance Sheets
and Consolidated Subsidiaries
March 31, 2018
Consolidated Balance Sheets

AssetsCurrent assets:
Cash and deposits (Notes 5-(b), 9 and 10)
Trade notes receivable, accounts receivable on completed
construction contracts and other (Note 10)
Inventories (Notes 5-(a) and 5-(e))
Deferred tax assets (Note 14)
Other current assets (Note 5-(b))
Allowance for doubtful receivables (Note 10)
Total current assets

Non-current assets:
Property and equipment, at cost:
Land (Notes 5-(b) and 5-(c))
Buildings and structures (Note 5-(b))
Machinery, equipment and vehicles (Note 5-(b))
Construction in progress
Accumulated depreciation
Property and equipment, net
Intangible fixed assets
Investments and other assets:
Investments in securities (Notes 5-(b), 10 and 11)
Deferred tax assets (Note 14)
Investments in unconsolidated subsidiaries and affiliates
Other (Note 5-(b))
Allowance for doubtful receivables (Note 10)
Total investments and other assets
Total non-current assets

Total assets

6

6

As of March 31,
2018
2017
2018
(Millions of yen)(Thousands of
U.S. dollars)(Note 3)¥80,788¥ 68,122$

760,429

146,933
25,9093,409
13,390－270,431

143,631
22,3003,248
19,733(31)
257,005

1,383,028
243,872
32,087126,035－
2,545,472

14,611
16,353
18,796
54(25,718)
24,096

14,973
16,492
17,982
12(25,140)
24,320137,528
153,925
176,920508(242,074)
226,807

2,109

2,101

19,851

12,889
1,594
916
6,899
(1,259)21,05047,256

10,2591,538
1,006
12,825(6,904)
18,72645,147

121,413
15,0038,621
64,937(11,850)
198,136444,804¥317,688¥302,152$2,990,286

Sumitomo Mitsui Construction Co., Ltd.
Consolidated Balance Sheets
March 31, 2018

Liabilities and net assets
Current liabilities:
Trade notes payable, accounts payable on construction contracts
and other (Note 10)
Electronically recorded payable (Note 10)
Short-term bank loans and current portion of long-term debt
(Notes 5-(b), 5-(f), 10 and 19)
Accrued expenses
Income tax payable
Advances received on construction contracts in progress
Reserve for defects on completed construction projects
Allowance for losses on construction contracts (Note 5-(e))
Allowance for contingency loss
Allowance for loss related to Antitrust Law
Other current liabilities
Total current liabilities
Long-term liabilities:
Long-term debt (Notes 5-(b), 5-(f), 10 and 19)
Deferred tax liability on land revaluation (Note 5-(c))
Liability for retirement benefits (Note 13)
Other long-term liabilities
Total long-term liabilities

As of March 31,
2018
2017
2018
(Millions of yen)(Thousands of
U.S. dollars)(Note 3)¥

94,632
31,691¥ 104,111
26,387$0890,737
298,296

2,769
7,354
3,178
28,707
976
127
2,159
－
18,511
190,108

10,201
7,172
4,681
24,263
801
389
2,159
146
10,948191,262

26,063
69,22029,913
270,208
9,186
1,195
20,321－
174,237
1,789,420

21,353285
18,231
4,857
44,727

23,640285
18,7205,001
47,647200,988
2,682
171,60245,717420,999

12,003

12,003112,980

524
63,790523
45,506

4,932
600,432(262)
76,056(247)
57,786(2,466)
715,888

1,010
(0)

312
(4)

9,506
(0)

73
(466)
(660)
(44)
6,840
82,852¥317,688

73
(601)
(617)
(837)
6,293
63,242¥302,152

687(4,386)(6,212)(414)
64,382779,856$2,990,286

Contingent liabilities (Notes 5-(d) and 16)
Net assets:
Shareholders’ equity:
Capital stock:
Common stock:
Authorized:
533,892,994 shares in 2018 and 2017
Issued and outstanding:
162,673,321 shares in 2018 and 2017
Additional paid-in capital
Retained earnings
Treasury stock, at cost:
131,601 shares in 2018 and 102,288 shares in 2017
Total shareholders’ equity
Accumulated other comprehensive income:Unrealized holding gain on securities
Deferred (loss) on hedging instruments, net of taxes(Note 12)Land revaluation (Note 5-(c))
Translation adjustments
Retirement benefits liability adjustment (Note 13)
Total accumulated other comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets

The accompanying notes are an integral part of these statements.
77

Sumitomo Mitsui Construction Co., Ltd.

Sumitomo Mitsui Construction Co., Ltd.
Consolidated Statements of Income and Consolidated Subsidiaries
March 31, 2018

Consolidated Statements of Income
Years ended March 31,
2018
2017
2018
(Millions of yen)(Thousands of
U.S. dollars)(Note 3)

Net sales (Note 6-(a))
Cost of sales (Notes 6-(b) and 6-(d))
Gross profit
Selling, general and administrative expenses(Notes 6-(c), 6-(d) and 13)
Operating income
Other income (expenses):
Interest and dividend income
Payments received from insurance claims
Interest expense
Exchange (loss), net
Litigation expenses
Gain on sales of property and equipment (Note 6-(e))
Gain on donation of assets (Note 6-(f))
Gain on sales of investment in securities (Note 11-(c))
Gain on liquidation of subsidiaries and affiliates
Loss on sales and disposal of property and equipment(Note 6-(g))
Impairment loss (Note 6-(h))
PCB disposal expenses
Other, net
Profit before income taxes
Income taxes (Note 14):
Current
DeferredProfitProfit attributable to:Non-controlling interests
Owners of parent¥417,310
366,252
51,057¥403,908
357,484
46,424$3,927,993
3,447,402
480,581

20,47318,483

192,705

30,58427,941

287,876

905
126
(556)
(420)
(983)
8
－
189
45

814
138
(539)
(207)
(108)
9
207
29
－

8,518
1,185
(5,233)(3,953)(9,252)
75
－
1,778
423

(79)
(581)
－
(1,197)(2,542)
28,041

(118)
(624)
(115)
(1,998)(2,512)
25,428(743)(5,468)－(11,266)(23,926)
263,940

7,200
(553)
6,646

7,906
(394)
7,511

67,771(5,205)62,556

21,395

17,916201,383672¥ 20,723

881
17,035

6,325$ 195,058¥(Yen)

Profit per share (Note 17)¥ 127.48

The accompanying notes are an integral part of these statements.
88(U.S. dollars)(Note 3)
¥ 104.79$

1.199

Mitsui Construction Co., Ltd.
Sumitomo Mitsui Construction Co.,Sumitomo
Ltd.
and Consolidated
Subsidiaries
Consolidated Statements of Comprehensive
IncomeMarch 31, 2018

Consolidated Statements of Comprehensive Income
Years ended March 31,
2017
2018
2018
(Millions of yen)(Thousands of
U.S. dollars)(Note 3)¥21,395¥17,916$201,383

697
3
183
(14)

(64)
(10)
(586)
71

6,560
28
1,722
(131)

Total other comprehensive income (Note 7)
Comprehensive income

870¥022,265(590)¥017,326

8,189$209,572

Comprehensive income attributable to:
Owners of the parent
Non-controlling interests¥021,515
750¥016,525800$202,513
7,059

ProfitOther comprehensive income:Unrealized holding gain (loss) on securities
Deferred gain (loss) on hedging instruments, net of taxes
Translation adjustments
Retirement benefits liability adjustments

The accompanying notes are an integral part of these statements.

99Mitsui Construction Co., Ltd.
Sumitomo Mitsui Construction Co.,Sumitomo
Ltd.
Consolidated Statements of Changes Inand
Net Consolidated
Assets
Subsidiaries
March 31, 2018

Consolidated Statements of Changes in Net Assets

Capitalstock
Balance at the beginning of theperiodChanges in items during the period:
Change in a parent’s ownershipinterest due to transaction with
non-controlling interests
Dividends from surplus
Profit attributable to owners of
the parent
Change in the scope of
consolidation
Purchases of treasury stock
Disposition of treasury stock
Net changes in items other thanshareholders’ equity
Total changes in items during theperiodBalance at the end of the period¥12,003¥523

6¥45,506―¥12,003¥1,312

1¥524¥(247)

Total
shareholders’equity¥57,786(2,438)6(2,438)20,723

20,723(4)

Unrealized
holding
gain onsecurities
Balance at the beginning of theperiodChanges in items during the period:
Change in a parent’s ownershipinterest due to transaction with
non-controlling interests
Dividends from surplus
Profit attributable to owners of
the parent
Change in the scope of
consolidation
Purchases of treasury stock
Disposition of treasury stock
Net changes in items other thanshareholders’ equity
Total changes in items during theperiodBalance at the end of the period

Year ended March 31, 2018
Shareholders’ equity
Additional
Treasurypaid-instock,
Retained
capitalat costearnings(Millions of yen)

18,284¥63,790

(21)
6

(21)
2

(15)
¥(262)

18,270¥76,056

Year ended March 31, 2018
Accumulated other comprehensive income
DeferredTotal(loss) gain
Retirement accumulatedon hedging
otherbenefits
Noninstruments,
liability comprehensive controlling
Land
Translation
net of taxes revaluation adjustments adjustments
incomeinterests(Millions of yen)
¥(4)

¥73

¥(601)¥(617)¥(837)¥6,293Total
net assets¥63,242

6(2,438)20,723
(21)
2
697

3

―

134

(43)

792

546

1,338

697
¥1,010

3
¥(0)

―
¥73

134
¥(466)(43)¥(660)

792¥ (44)

546¥6,84019,609¥82,85210

10

Mitsui Construction Co., Ltd.
Sumitomo Mitsui Construction Co.,Sumitomo
Ltd.
Consolidated Statements of Changes Inand
Net Consolidated
Assets
Subsidiaries
March 31, 2018

Consolidated Statements of Changes in Net Assets (continued)

Capitalstock
Balance at the beginning of theperiodChanges in items during the period:
Change in a parent’s ownershipinterest due to transaction with
non-controlling interests
Dividends from surplus
Profit attributable to owners of
the parent
Change in the scope of
consolidation
Purchases of treasury stock
Disposition of treasury stock
Net changes in items other thanshareholders’ equity
Total changes in items during theperiodBalance at the end of the period$112,980$4,92256$428,332―$112,980$2,936

9$4,932$(2,324)

Total
shareholders’equity$543,919(22,948)

56(22,948)

195,058

195,058(37)

Unrealized
holding
gain onsecurities
Balance at the beginning of theperiodChanges in items during the period:
Change in a parent’s ownershipinterest due to transaction with
non-controlling interests
Dividends from surplus
Profit attributable to owners of
the parent
Change in the scope of
consolidation
Purchases of treasury stock
Disposition of treasury stock
Net changes in items other thanshareholders’ equity
Total changes in items during theperiodBalance at the end of the period

Year ended March 31, 2018
Shareholders’ equity
Additional
Treasurypaid-instock,
Retained
capitalat costearnings(Thousands of U.S. dollars) (Note 3)

172,100$600,432

(197)
56

(197)
18

(141)
$(2,466)

171,969$715,888

Year ended March 31, 2018
Accumulated other comprehensive income
DeferredTotal(loss) gain
Retirement accumulatedon hedging
otherbenefits
Noninstruments,
liability comprehensive controlling
Land
Translation
net of taxes revaluation adjustments adjustments
incomeinterests(Thousands of U.S. dollars) (Note 3)
$(37)

$687

$(5,657)$(5,807)$(7,878)$59,233

Total
net assets$595,274

56(22,948)
195,058
(197)
18
6,560

28

―

1,261

(404)

7,454

5,139

12,5946,560$9,506

28
$ (0)

―
$687

1,261
$(4,386)(404)$(6,212)

7,454$ ,(414)5,139$64,382

184,572$779,85611

11

Mitsui Construction Co., Ltd.
Sumitomo Mitsui Construction Co.,Sumitomo
Ltd.
Consolidated Statements of Changes Inand
Net Consolidated
Assets
Subsidiaries
March 31, 2018

Consolidated Statements of Changes in Net Assets (continued)

Capitalstock
Balance at the beginning of theperiodChanges in items during the period:
Change in a parent’s ownershipinterest due to transaction with
non-controlling interests
Dividends from surplus
Profit attributable to owners of
the parent
Change in the scope of
consolidation
Purchases of treasury stock
Disposition of treasury stockReversal of land revaluation
Net changes in items other thanshareholders’ equity
Total changes in items during theperiodBalance at the end of the period¥12,003¥523

0¥30,131(0)―¥12,003

¥373

(0)
¥523

¥(246)

Total
shareholders’equity¥42,412(1,625)0(1,625)

17,035

17,035(18)

Unrealized
holding
gain (loss)
onsecurities
Balance at the beginning of theperiodChanges in items during the period:
Change in a parent’s ownershipinterest due to transaction with
non-controlling interests
Dividends from surplus
Profit attributable to owners of
the parent
Change in the scope of
consolidation
Purchases of treasury stock
Disposition of treasury stockReversal of land revaluation
Net changes in items other thanshareholders’ equity
Total changes in items during theperiodBalance at the end of the period

Year ended March 31, 2017
Shareholders’ equity
Additional
Treasurypaid-instock,
Retained
capitalat costearnings(Millions of yen)

(16)

15,374¥45,506

(1)
0

(18)
(1)
0
(16)

(0)
¥(247)

15,373¥57,786

Year ended March 31, 2017
Accumulated other comprehensive income
DeferredTotalgain (loss)
Retirement accumulatedon hedging
otherbenefits
Noninstruments,
liability comprehensive controlling
Land
Translation
net of taxes revaluation adjustments adjustments
incomeinterests(Millions of yen)
¥6

¥56¥(130)¥(652)¥(345)¥6,069Total
net assets¥48,1360(1,625)
17,035
(18)
(1)
0
(16)
(61)

(10)

16

(470)

34

(491)

224

(267)

(61)
¥312

(10)
¥ (4)

16
¥73

(470)
¥(601)

34¥(617)(491)¥(837)

224¥6,293

15,106¥63,242

The accompanying notes are an integral part of these statements.
1212

Mitsui Construction Co., Ltd.
Sumitomo Mitsui Construction Co.,Sumitomo
Ltd.
Consolidated Statements of Cash Flowsand Consolidated Subsidiaries
March 31, 2018
Consolidated Statements of Cash Flows

Years ended March 31,
2017
2018
2018
(Millions of yen)(Thousands of
U.S. dollars)(Note 3)Operating activities
Profit before income taxes
Depreciation and amortization
Impairment loss
(Decrease) increase in allowance for doubtful receivables
Increase in reserve for defects on completed construction projects(Decrease) in allowance for losses on construction contracts(Decrease) in allowance for loss related to Antitrust Law(Decrease) in liability for retirement benefits
Loss on sales and disposal of property and equipment
Interest and dividend income
Interest expense
Exchange loss, net(Increase) in trade notes receivable, accounts receivable on completed
construction contracts and other(Increase) decrease in inventories
Decrease (increase) in other assets
Increase in retirement benefits liability adjustments included inaccumulated other comprehensive income.
(Decrease) in trade notes payable, accounts payable on construction
contracts and other
Increase (decrease) in advances received on construction contracts inprogress
Increase (decrease) in other liabilities
Other
SubtotalInterest and dividends received
Interest paid
Income taxes paid
Net cash provided by (used in) operating activities
Investing activities(Increase) in fixed deposits
Purchases of property and equipment
Proceeds from sales of property and equipment
Purchases of intangible fixed assets
Purchases of investments in securities
Proceeds from sales of investments in securities
Purchases of shares of subsidiaries and affiliates
Proceeds from liquidation of subsidiaries and affiliates
Disbursements for loans receivable
Proceeds from collection of loans receivable
Other
Net cash (used in) investing activities

13

13¥28,041
1,998
581
(12)
171
(262)
(146)
(486)
70
(905)
556
494

¥25,428
1,947
624
451
5
(543)
(140)
(742)
109
(814)
539
49

$263,940
18,806
5,468
(112)
1,609
(2,466)(1,374)(4,574)658(8,518)
5,233
4,649

(3,163)(3,603)6,276(9,008)7,437(5,893)(29,772)(33,913)59,0732

8

18(4,318)(7,403)(40,643)

4,427
7,041
(209)
36,553893(574)(8,592)
28,279(7,528)
(480)
(173)
3,873
900
(528)
(8,127)(3,882)

41,66966,274(1,967)344,060
8,405(5,402)(80,873)
266,180(1,322)(1,908)274(275)(1,921)
651
(183)
45
(22)
93
327
(4,241)(362)(1,602)
353
(308)
(1)
88
－
－
(29)
100
114
(1,648)(12,443)(17,959)
2,579(2,588)(18,081)
6,127(1,722)
423
(207)
875
3,077
(39,919)

Mitsui Construction Co., Ltd.
Sumitomo Mitsui Construction Co.,Sumitomo
Ltd.
Consolidated Statements of Cash Flowsand Consolidated Subsidiaries
March 31, 2018

Consolidated Statements of Cash Flows (continued)
Years ended March 31,
2017
2018
2018
(Millions of yen)(Thousands of
U.S. dollars)(Note 3)Financing activities(Decrease) in short-term bank loans
Proceed from long-term debt
Payments of long-term debt
Increase in long-term loans of employees(Increase) in treasury stock
Cash dividends paid
Cash dividends paid for non-controlling shareholders
Other
Net cash (used in) provided by financing activities¥ (196)－(9,557)333(19)(2,430)(164)(541)(12,576)

Effect of exchange rate changes on cash and cash equivalents
Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of the year
Increase in cash and cash equivalents due to inclusion inconsolidation
Cash and cash equivalents at end of the year (Note 9)(972)
15,000(3,680)279(1)(1,615)
(567)
(648)
7,792

$ (1,844)－(89,956)
3,134
(178)
(22,872)(1,543)(5,092)(118,373)(146)
11,31559,809(203)
2,058
57,730(1,374)
106,504
562,961－¥71,125

21¥59,809－$669,474

The accompanying notes are an integral part of these statements.

14

14

¥

and Consolidated Subsidiaries
Notes
Sumitomo Mitsui Construction Co.,
Ltd. to Consolidated Financial Statements
Notes to Consolidated Financial Statements
March 31, 2018 and 2017
March 31, 2018
1.

Basis of Preparation

The accompanying consolidated financial statements of Sumitomo Mitsui Construction Co.,
Ltd. (the “Company”) and consolidated subsidiaries (collectively the “Group”) are preparedon the basis of accounting principles generally accepted in Japan, which are different incertain respects as to the application and disclosure requirements of International Financial
Reporting Standards, and have been compiled from the consolidated financial statements
prepared by the Company as required by the Financial Instruments and Exchange Law ofJapan.
Certain reclassifications have been made to present the accompanying consolidated financial
statements in a format which is familiar to readers outside Japan. In addition, certain amounts
in the prior year’s financial statements have been reclassified to conform to the current year’s
presentation.
As permitted, amounts of less than one million yen have been omitted. As a result, the totals
shown in the accompanying consolidated financial statements do not necessarily agree withthe sums of the individual amounts.
2.

Summary of Significant Accounting Policies(a) Basis of Consolidation and Accounting for Investments in Unconsolidated Subsidiaries
and Affiliates
The accompanying consolidated financial statements include the accounts of the Company
and the significant companies which it controls directly or indirectly. Companies overwhich the Company exercises significant influence in terms of their operating andfinancial policies have been included in the consolidated financial statements on an
equity basis. In the elimination of investments in subsidiaries, the assets and liabilitiesof the subsidiaries, including the portion attributable to non-controlling shareholders,
are recorded based on the fair value at the time the Company acquired control of therespective subsidiaries. All significant intercompany balances and transactions havebeen eliminated in consolidation.
The excess of the cost over the underlying net assets at fair value at the respective
dates of acquisition of the consolidated subsidiaries (goodwill) or the excess of fairvalue of the net assets acquired over cost (negative goodwill) is charged or credited toincome in the year of acquisition.
Investments in affiliates not accounted for by the equity method are principally statedat cost.
The Company had 18 consolidated subsidiaries and 1 affiliates accounted for by theequity method as of March 31, 2018.
15

15

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 20182.

Summary of Significant Accounting Policies (continued)(b) Fiscal Year of Consolidated Subsidiaries
All foreign consolidated subsidiaries (7 companies) have a fiscal year that ends on
December 31. The accompanying consolidated financial statements were preparedbased on the financial statements as of the same date. Necessary adjustments forconsolidation were made on significant transactions that took place during the period
between the fiscal year-end of the subsidiaries and the fiscal year-end of the Company.
(c) Securities
The accounting standard for financial instruments requires that securities be classified
into three categories: trading, held-to-maturity or other securities. Trading securities
are carried at fair value and held-to-maturity securities are carried at amortized cost.
Marketable securities classified as other securities for which market prices are
determinable are carried at fair value with any changes in unrealized holding gain or
loss, net of the applicable income taxes, included directly in net assets. Non-marketablesecurities classified as other securities are carried at cost. Cost of securities sold isdetermined by the moving average method.
(d) Inventories
Inventories other than materials and supplies are stated at cost determined by the
specific identification method. Materials and supplies are valued at cost determined by
the average method. Book values are written down based on any decline in profitability.
(e) Depreciation and Amortization(1) Property and equipment (except leased assets) and investments in real estate
Depreciation of property and equipment (except leased assets) and investments inreal estate is determined primarily by the declining-balance method based on theestimated useful lives and the residual value of the respective assets as prescribedin the Corporation Tax Law of Japan except that the straight-line method is applied
to office buildings (except facilities attached to buildings) acquired on or after
April 1, 1998 and facilities attached to buildings and structures acquired on orafter April 1, 2016.
Depreciation at all overseas subsidiaries is determined by the straight-line method
or by the declining-balance method based on the estimated useful lives of therespective assets.
(2) Intangible fixed assets (except leased assets)
Amortization of intangible fixed assets (except leased assets) is calculated by thestraight-line method based on the estimated useful lives of the respective assets asprescribed in the Corporation Tax Law of Japan. Amortization of computer software
for internal use is calculated by the straight-line method over the estimated useful
lives of 5 years.

1616

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 20182.

Summary of Significant Accounting Policies (continued)(e) Depreciation and Amortization (continued)(3)

Leased assets
Depreciation of leased assets under finance leases other than those that transfer
the ownership of the leased assets to the lessees is calculated by the straight-line
method over the lease term with a residual value of zero.

(f)Advances Received on Construction Contracts in Progress
As is customary in Japan, the Company and its domestic consolidated subsidiaries
receive payments from customers on an installment basis in accordance with the termsof the respective construction contracts.

(g) Allowance for Doubtful Receivables
An allowance for doubtful receivables has been provided for future losses on general
receivables at an amount calculated by applying the percentage of actual losses oncollection experienced in the past, and an uncollectible amount for doubtful receivables
estimated based on an individual assessment of each receivable and probability ofcollection.
(h) Reserve for Defects on Completed Construction Projects
A reserve has been provided at an estimated amount for the fiscal year’s sales proceeds
in order to cover the liability for future costs of defects of the completed construction
projects.
(i)

Allowance for Losses on Construction Contracts
An allowance has been provided based on the estimated amount for the future losses
on construction projects in progress at the fiscal year end which are anticipated to be
substantial losses in the future.

(j)

Allowance for Contingency Loss
An allowance for contingency loss related to the defective piling work at acondominium in Yokohama has been provided based on the reasonably estimatedamount necessary for payments to be borne as the contractor in accordance with defectliability applicable to the construction contract.

(k) Accounting for Retirement Benefits(1) Method of attributing expected retirement benefits to periods
In calculating the retirement benefit obligation, the benefit formula method isapplied to attribute the expected retirement benefits to the periods up to year ended
March 31, 2018.

17
17

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 20182.

Summary of Significant Accounting Policies (continued)(k) Accounting for Retirement Benefits (continued)(2) Amortization of actuarial gain or loss and prior service cost
Actuarial gain or loss is amortized in the year following the year in which thegain or loss is recognized by the straight-line method over periods (mainly 11 years),
which are shorter than the average remaining years of service of the employees.
Prior service cost is being amortized as incurred by the straight-line method overperiods (mainly 11 years), which are shorter than the average remaining years ofservice of the employees.
(l)Recognition of Revenues and Costs on Construction Contracts
Revenues and costs of construction contracts that commenced on or after April 1, 2009,of which the percentage of completion can be reliably estimated, are recognized by thepercentage-of-completion method. The percentage of completion is calculated at thecost incurred as a percentage of the estimated total cost. The completed-contract
method is applied for contracts for which the percentage of completion cannot be
reliably estimated.

(m) Recognition of Income from Finance Leases
Income from finance leases is recorded as sales and cost of sales at the time a lease
payment is received.
(n) Derivatives and Hedge Accounting(1) Method of hedge accounting
Derivative financial instruments are mainly stated at fair value except thoseaccounted for under deferred hedge accounting.
Foreign exchange forward contracts qualifying for allocation accounting aretranslated at the contract rate.
(2) Hedging instruments and hedged items
Hedging instruments:

Forward foreign exchange contracts

Hedged items:

Future foreign currency transactions(3) Hedging policy
The Company utilizes foreign exchange forward contracts only for the purpose ofhedging future risks of fluctuation of foreign currency exchange rates.

18
18

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 20182.

Summary of Significant Accounting Policies (continued)(n) Derivatives and Hedge Accounting (continued)(4) Assessment of hedge effectivenessThe evaluation of hedge effectiveness for a foreign exchange forward contract isperformed on a quarterly basis to confirm that amount of the foreign exchange
contract is within amount of the underlying hedged item to assess whether theforward contract qualifies for hedge accounting.
(o) Cash Equivalents
All highly liquid investments with a maturity of three months or less when purchased,
which can easily be converted to cash and are subject to little risk of change in value,
are considered cash equivalents.
(p) Consumption Taxes
Consumption taxes are accounted for by the tax exclusion method.
(q) Income Taxes
Deferred tax assets and liabilities are determined based on the differences between theamounts calculated for financial reporting purposes and the tax bases of the assets andliabilities and are measured using the enacted tax rates and laws which will be in effectwhen the differences are expected to reverse.
The Company has adopted the consolidated taxation system.
3.

U.S. Dollar Amounts

The translation of yen amounts into U.S. dollar amounts is included solely for the convenienceof readers outside Japan and has been made, as a matter of arithmetic computation only, at¥106.24 = U.S.$1.00, the approximate rate of exchange in effect on March 31, 2018. Thistranslation should not be construed as a representation that yen have been, could have been,or could in the future be, converted into U.S. dollars at that or any other rate.

19
19

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 2018

4.

Unapplied Accounting Standard and Implementation Guidance(a) “Accounting Standard for Revenue Recognition”(ASBJ Statement No. 29 issued on March 30, 2018)“Implementation Guidance on Accounting Standard for Revenue Recognition”(ASBJ Guidance No. 30 issued on March 30, 2018)(1) Outline
This is a comprehensive accounting standard for revenue recognition. Revenue isrecognised using the following five steps:(i)

Identify the contract(s) with a customer(ii) Identify the performance obligations in the contract(s)(iii) Determine the transaction price(iv) Allocate the transaction price to the performance obligations(v) Recognise revenue when (or as) the entity satisfied each performanceobligation(2)

Scheduled Date of Application
The Company will apply the accounting standard and the implementation
guidance from the beginning of the year ended March 31, 2022.

(3)

Impact of the Application of the Unapplied Accounting Standard and the
Implementation Guidance
The Company is currently assessing the effects of application of the accounting
standards and the implementation guidance on its consolidated financial
statements.

20

20

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 2018

5.

Notes to Consolidated Balance Sheets(a) Inventories
The components of inventories as of March 31, 2018 and 2017 were as follows:
As of March 31,
2018
2017
2018
(Millions of yen)(Thousands of
U.S. dollars)
Merchandise and finished goods
Materials and supplies
Costs on uncompleted construction
contracts
Real estate for sale

¥

1,148
1,939
22,8192¥25,909

¥

366
2,051

19,8792¥22,300$

10,805
18,251

214,78718$243,872(b) Pledged Assets
The following assets were pledged at March 31, 2018 and 2017 principally as collateralfor short-term bank loans, long-term debt, and guarantees (such as guarantees for thecompletion of construction contracts):
As of March 31,
2018
2017
2018
(Millions of yen)(Thousands of
U.S. dollars)
Cash and deposits
Land
Buildings and structures, net ofaccumulated depreciation
Machinery, equipment and vehicles,
net of accumulated depreciation
Investments in securities
Others (Current assets)
Others (Investments and other assets)

¥

21

21

0
9,831

¥

0
9,831

$

0
92,535

766

787

7,210

117
10
9
530
¥11,268

151
20
–
530
¥11,323

1,101
94
84
4,988
$106,061

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 2018

5.

Notes to Consolidated Balance Sheets (continued)(b) Pledged Assets (continued)
Of the above property and equipment, mortgaged assets for factory foundations at
March 31, 2018 and 2017 were summarized as follows:
As of March 31,
2018
2017
2018
(Millions of yen)(Thousands of
U.S. dollars)
Land
Buildings and structures, net ofaccumulated depreciation
Machinery, equipment and vehicles,
net of accumulated depreciation¥1,258¥1,258$11,841

213

219

2,004

117
¥1,589151¥1,6291,101$14,956

The secured liabilities as of March 31, 2018 and 2017 were summarized as follows:
As of March 31,
2018
2017
2018
(Millions of yen)(Thousands of
U.S. dollars)
Short-term bank loans[Including current portion of
long-term debt]
Long-term debt

¥011

¥ 134

$ 103

[11]
103

[134]
115

[103]
969

(c) Land Revaluation
Land for operations was revalued by a consolidated subsidiary under the Law for Land
Revaluation during the year ended March 31, 2001. The revaluation amount is shown
as a separate component of net assets.
The market value of the land was ¥666 million ($6,268 thousand) and ¥692 million
more than the revalued book amount at March 31, 2018 and 2017, respectively.

22
22

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 2018

5.

Notes to Consolidated Balance Sheets (continued)(d) Contingent Liabilities
At March 31, 2018 and 2017, the Company and consolidated subsidiaries were
contingently liable for the following:
As of March 31,
2018
2017
2018
(Millions of yen)(Thousands of
U.S. dollars)
As guarantors of bank loans toemployees (house building fund)As endorsers of notes receivablediscounted with banks

¥

4

300

¥

5

$0,0372502,823(e) Estimated Loss on Uncompleted Construction Contracts
An estimated loss on uncompleted construction contracts was recognized and included
as part of inventories but was not offset against the amount on the balance sheet. It has
been recorded as an allowance for losses on construction contracts in the amounts of¥8 million ($75 thousand) and ¥222 million as of March 31, 2018 and 2017,
respectively.
(f)

Trade Notes Maturing on the Balance Sheet Date
Trade notes maturing at the end of the fiscal year are settled on the dates they mature.
Since the last day of the fiscal year in 2018 fell on a bank holiday, the below-listed
trade notes maturing on that date were excluded from the corresponding balances in
the consolidated balance sheets as of March 31, 2018.
As of March 31,
2018
2017
2018
(Millions of yen)(Thousands of
U.S. dollars)¥－¥278$2,616
－
2,579
274
－
630
67

Trade notes receivable
Trade notes payable
Electronically recorded payable(g) Financial covenants
For the year ended March 31, 2018

(1) The Company has entered into a syndicated loan contract dated on March 29,
2016 and loan commitment agreement dated on March 31, 2016 with its sevenbanks with Sumitomo Mitsui Banking Corporation as arranger. The following
financial covenant is included in the contract:23

19

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 2018

5.

Notes to Consolidated Balance Sheets (continued)(g) Financial covenants (continued)
Total consolidated net assets at the end of each fiscal year beginning March 31,
2016 shall be equal to or exceed 75% of total consolidated net assets as of March
31, 2014 or of total consolidated net assets at the end of the most recent fiscal
year, whichever is greater.
In calculating consolidated net assets, any allowance or costs related to thecondominium in Yokohama will be excluded from the calculation in accordancewith instructions received from the Ministry of Land, Infrastructure Transportation
and Tourism of Japan on January 13, 2016.
In addition, the balance of bank borrowings under this syndicated loan contract is¥10,000 million ($94,126 thousand) in long-term debt as of March 31, 2018.
Unused amount on loan commitment agreement as of March 31, 2018 and 2017
were as follows.

Maximum limit under the agreement
Loan balance outstanding
Difference (unused portion)

As of March 31,
2018
2017
2018
(Millions of yen)(Thousands of
U.S. dollars)¥20,000¥20,000$188,253–––¥20,000$188,253¥20,000(2) The Company has entered into a syndicated loan contract dated on September 28,
2016 with its seven banks (same bank as we had contracted for the year ended
March 31, 2016) with Sumitomo Mitsui Banking Corporation as arranger. The
following financial covenant is included in the contract:
Total consolidated net assets at the end of each fiscal year beginning March 31,2017 shall be equal to or exceed 75% of total consolidated net assets as of March
31, 2014 or of total consolidated net assets at the end of the most recent fiscal
year, whichever is greater.
In calculating consolidated net assets, any allowance or costs related to thecondominium in Yokohama will be excluded from the calculation in accordancewith instructions received from the Ministry of Land, Infrastructure Transportation
and Tourism of Japan on January 13, 2016.
In addition, the balance of bank borrowings under this syndicated loan contract is¥8,500 million ($80,007 thousand) in long-term debt (including the current
portion) as of March 31, 2018.

24
24

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 2018

5.

Notes to Consolidated Balance Sheets (continued)(g) Financial covenants (continued)(3) The Company has entered into a syndicated loan contract dated on September 28,
2016 with its seven banks (including different 5 bank from above (2)) with
Sumitomo Mitsui Banking Corporation as arranger. The following financial covenant
is included in the contract:
Total consolidated net assets at the end of each fiscal year beginning March 31,2017 shall be equal to or exceed 75% of total consolidated net assets as of March
31, 2016 or of total consolidated net assets at the end of the most recent fiscal
year, whichever is greater.
In addition, the balance of bank borrowings under this syndicated loan contract is¥4,250 million ($40,003 thousand) in long-term debt (including the current
portion) as of March 31, 2018.
(4) The Company has entered into a committed syndicated loan contract dated on
March 30, 2018 with its seven banks (same bank as we had contracted for theyear ended March 31, 2016) with Sumitomo Mitsui Banking Corporation asarranger. The following financial covenant is included in the contract:
Total consolidated net assets at the end of each fiscal year beginning March 31,2018 shall be equal to or exceed 75% of total consolidated net assets as of March
31, 2017 or of total consolidated net assets at the end of the most recent fiscal
year, whichever is greater.
In calculating consolidated net assets, any allowance or costs related to thecondominium in Yokohama will be excluded from the calculation in accordancewith instructions received from the Ministry of Land, Infrastructure Transportation
and Tourism of Japan on January 13, 2016.
In addition, the balance of bank borrowings under the committed syndicated loan
contract is immaterial as of March 31, 2018.
Unused amount on the committed syndicated loan contract as of March 31, 2018and 2017 were as follows.
As of March 31,
2018
2017
2018
(Millions of yen)(Thousands of
U.S. dollars)¥10,000¥–$94,126–––¥10,000¥–$94,126

Maximum limit under the contract
Loan balance outstanding
Difference (unused portion)

25
25

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 2018

5.

Notes to Consolidated Balance Sheets (continued)(g) Financial covenants (continued)
For the year ended March 31, 2017(1)

The Company has entered into a syndicated loan contract dated on August 6, 2014
with its seven banks with Sumitomo Mitsui Banking Corporation as arranger. The
following financial covenant is included in the contract:
Total consolidated net assets at the end of each fiscal year beginning March 31,
2015 shall be equal to or exceed 75% of total consolidated net assets as of March
31, 2014 or of total consolidated net assets at the end of the most recent fiscal
year, whichever is greater.
In addition, the balance of bank borrowings under this syndicated loan contract is¥7,500 million in long-term debt (including the current portion) as of March 31,
2017.

(2) The Company has entered into a syndicated loan contract dated on March 29,
2016 and loan commitment agreement dated on March 31, 2016 with its sevenbanks (same bank as we had contracted for the year ended March, 31 2015) with
Sumitomo Mitsui Banking Corporation as arranger. The following financial covenant
is included in the contract:
Total consolidated net assets at the end of each fiscal year beginning March 31,
2016 shall be equal to or exceed 75% of total consolidated net assets as of March
31, 2014 or of total consolidated net assets at the end of the most recent fiscal
year, whichever is greater.
In calculating consolidated net assets, any allowance or costs related to thecondominium in Yokohama will be excluded from the calculation in accordancewith instructions received from the Ministry of Land, Infrastructure Transportation
and Tourism of Japan on January 13, 2016.
In addition, the balance of bank borrowings under this syndicated loan contract is¥10,000 million in long-term debt as of March 31, 2017.
Unused amount on loan commitment agreement as of March 31, 2017 and 2016
were as follows.

Maximum limit under the agreement
Loan balance outstanding
Difference (unused portion)

26
26

As of March 31,
2017
2016
(Millions of yen)
¥20,000¥20,000––¥20,000¥20,000

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 2018

5.

Notes to Consolidated Balance Sheets (continued)(g) Financial covenants (continued)(3) The Company has entered into a syndicated loan contract dated on September 28,
2016 with its seven banks (same bank as we had contracted for the year ended
March 31 2015 and 2016) with Sumitomo Mitsui Banking Corporation as arranger.
The following financial covenant is included in the contract:
Total consolidated net assets at the end of each fiscal year beginning March 31,2017 shall be equal to or exceed 75% of total consolidated net assets as of March
31, 2014 or of total consolidated net assets at the end of the most recent fiscal
year, whichever is greater.
In calculating consolidated net assets, any allowance or costs related to thecondominium in Yokohama will be excluded from the calculation in accordancewith instructions received from the Ministry of Land, Infrastructure Transportation
and Tourism of Japan on January 13, 2016.
In addition, the balance of bank borrowings under this syndicated loan contract is¥9,500 million in long-term debt (including the current portion) as of March 31,
2017.
(4) The Company has entered into a syndicated loan contract dated on September 28,
2016 with its seven banks (including different 5 bank from above (3)) with
Sumitomo Mitsui Banking Corporation as arranger. The following financial covenant
is included in the contract:
Total consolidated net assets at the end of each fiscal year beginning March 31,2017 shall be equal to or exceed 75% of total consolidated net assets as of March
31, 2016 or of total consolidated net assets at the end of the most recent fiscal
year, whichever is greater.
In addition, the balance of bank borrowings under this syndicated loan contract is¥4,750 million in long-term debt (including the current portion) as of March 31,
2017.
6.

Notes to Consolidated Statements of Income(a) Net Sales Based on Percentage-of-completion Method
Net sales on construction contracts accounted for under the percentage-of-completion
method amounted to ¥323,114 million ($3,041,359 thousand) and ¥303,814 million
for the years ended March 31, 2018 and 2017, respectively.
(b) Allowance for Losses on Construction Contracts Included in Cost of Sales
The allowance for losses on construction contracts was included in cost of sales in theamounts of ¥93 million ($875 thousand) and ¥113 million for the years ended March
31, 2018 and 2017, respectively.
27
27

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 2018

6.

Notes to Consolidated Statements of Income (continued)(c) Selling, General and Administrative Expenses
The significant components of selling, general and administrative expenses at March
31, 2018 and 2017 were as follows:
Years ended March 31,
2018
2017
2018
(Millions of yen)(Thousands of
U.S. dollars)
Salaries and wages
Retirement benefit expenses
Provision of allowance for doubtfulreceivables
Other
Total

¥ 9,339636¥ 8,456604$ 87,904
5,986

1
10,497¥20,473

66
9,357¥18,483

998,804$192,705(d) Research and Development Expenses
Research and development costs included in selling, general and administrative
expenses and manufacturing costs amounted to ¥2,067 million ($19,455 thousand) and¥1,657 million for the years ended March 31, 2018 and 2017, respectively.
(e) Gain on Sale of Property and Equipment
The significant components of gain on sale of property and equipment for the years
ended March 31, 2018 and 2017 were as follows:
Years ended March 31,
2017
2018
2018
(Millions of yen)(Thousands of
U.S. dollars)
Buildings and structures
Machinery, equipment and vehicles
Land
Total

¥0
7
0
¥8

28
28

¥–
6
2
¥9

$00
65
0
$75

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 2018

6.

Notes to Consolidated Statements of Income (continued)(f)Loss on Sales and Disposal of Property and Equipment
The significant components of loss on sales and disposal of property and equipment
for the years ended March 31, 2018 and 2017 were as follows:
Years ended March 31,
2018
2017
2018
(Millions of yen)(Thousands of
U.S. dollars)
Loss on disposal
Loss on sales
Others
Total

¥77
0
1
¥79

¥113
4

$724
0
9
$743

―

¥118

(g) Impairment Loss
The Group recognized impairment loss on the following asset groups.
The Group principally calculates impairment loss by grouping together assets of theconstruction segments and by grouping assets of the other segment individually.
(1) For the year ended March 31, 2018
The book values of following assets were reduced to their recoverable values as aresult of profit deterioration on elder care facility and determination of sales ofassets for business. The corresponding write-down was recognized in the amountof ¥581 million ($5,468 thousand) as part of other expenses.
Location

Usage

Classification

Hachioji, Tokyo

Elder care facility(1 building)Land, buildings and structures

Sayama, Saitama

Year ended
March 31, 2018
(Millions of (Thousands ofyen)
U.S. dollars)
¥568

5,346

Assets for business Land
(1 building)

6

56

Shizuoka, Shizuoka Assets for business Land, buildings and structures(1 building)656

In addition, the recoverable value of above assets was estimated at its net realizablevalue based on amounts determined by a valuation made in accordance with realestate appraisal standards.
(2) For the year ended March 31, 2017
The book values of following assets were reduced to their recoverable values as aresult of determination of closure of product department in factory of assets forbusiness. The corresponding write-down was recognized in the amount of ¥624
million as part of other expenses.
2929Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 2018

6.

Notes to Consolidated Statements of Income (continued)(g) Impairment Loss (continued)
Location

Iwaki, Fukushima

Usage

Classification

Year ended
March 31, 2017
(Millions ofyen)

Assets for business Land, buildings and structures,(1 building)machinery, equipment andvehicles¥601

Shizuoka, Shizuoka Assets for business Land, buildings and structures(1 building)

12

Sayama, Saitama

Assets for business Land, buildings and structures(1 building)8

Kobe, Hyougo

Assets for business Land, buildings and structures(1 building)1

In addition, the recoverable value of above assets was estimated at its net realizablevalue based on amounts determined by a valuation made in accordance with realestate appraisal standards.

30
30

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 20187.

Notes to Consolidated Statements of Comprehensive Income

Amount of recycling and amount of income tax effects associated with other comprehensive
income for the years ended March 31, 2018 and 2017 were as follows:
Years ended March 31,
2018
2017
2018
(Millions of yen)(Thousands of
U.S. dollars)
Unrealized holding gain on securities:
Changes in items during the period
Amount of recycling
Before income tax effect adjustment
Income tax effect adjustment
Unrealized holding gain on securities¥1,194
(188)
1,005
(307)
697

¥ (78)
(14)
(92)
28
(64)

$11,238(1,769)9,459(2,889)
6,560

6
–
6
(2)

(15)
–
(15)
4

56
–
56
(18)

3

(10)

28

Translation adjustments:
Changes in items during the period
Amount of recycling
Before income tax effect adjustment
Income tax effect adjustment
Translation adjustments

183
–
183
–
183

(586)
–
(586)
–
(586)

1,722
–
1,722
–
1,722

Retirement benefits liability adjustments:
Changes in items during the period
Amount of recycling
Before income tax effect adjustment
Income tax effect adjustment
Retirement benefits liability adjustments

(65)
67
2
(17)
(14)

(67)
75
8
62
71

(611)
630
18
(160)
(131)

Total other comprehensive income¥ 870¥(590)$ 8,189

Deferred gain on hedging instruments,
net of taxes:
Changes in items during the period
Amount of recycling
Before income tax effect adjustment
Income tax effect adjustment
Deferred gain on hedging instruments,
net of taxes

31

31

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 20188.

Notes to Consolidated Statements of Changes in Net Assets(a) Type and number of shares issued and treasury stock
For the year ended March 31, 2018
Balance atApril 1,
2017
Shares issued:
Common stockNote:813,366,605

Increase
Decrease(Number of shares)–

650,693,284

Balance at
March 31,2018

162,673,321

The Company executed the consolidation of shares at the ratio of 5 shares into 1 shareeffective from October 1, 2017. Decrease of common stock is due to the consolidation ofshares.
Balance atApril 1,
2017

Treasury shares:
Common stock

511,444

Increase
Decrease(Number of shares)
40,743

420,586

Balance at
March 31,2018

131,601

Note 1:

Increase of common stock is due to the purchase of fractional 36,919 shares and the purchaseof 3,824 shares related to the consolidation of shares.

Note 2:

Decrease of common stock is due to the sale of fractional 3,896 shares in response toshareholder requests and the decrease of 416,690 shares related to the consolidation of shares.

For the year ended March 31, 2017
Balance atApril 1,
2016
Shares issued:
Common stock

813,366,605
Balance atApril 1,
2016

Treasury shares:
Common stock

501,516

Increase
Decrease(Number of shares)–

813,366,605–

Increase
Decrease(Number of shares)
10,394

Balance at
March 31,
2017

466

Balance at
March 31,2017

511,444

Note 1:

Increase of common stock is due to the purchase of fractional shares.

Note 2:

Decrease of common stock is due to the sale of fractional shares in response to shareholder
requests.

32

28

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 20188.

Notes to Consolidated Statements of Changes in Net Assets (continued)(b)Dividends:(1) Dividends paid
For the year ended March 31, 2018

Resolution
Annual general
meeting of theshareholders on
June 29, 2017

Note:

Type of shares
Common stock

Total
dividends(Millions ofyen)

Dividends
per share(Yen)¥2,438¥3.00

Cut-off
dateMarch 31,2017

Effective
date
June 30,
2017

The Company executed the consolidation of shares at the ratio of 5 shares into 1 shareeffective from October 1, 2017. Dividends per share with the cut-off date in the year ended
March 31, 2017 is the amount before the consolidation of shares.

For the year ended March 31, 2017

Resolution
Annual general
meeting of theshareholders on
June 29, 2016

Type of shares
Common stock

Total
dividends(Millions ofyen)

Dividends
per share(Yen)¥1,625¥2.00

Cut-off
dateMarch 31,2016

Effective
date
June 30,
2016(2) Dividends with the cut-off date in the year ended March 31, 2018 and theeffective date in the year ending March 31, 2019 were as follows:

Resolution
Annual general
meeting of theshareholders on
June 28, 2018

Type of shares

Common stock

Total
dividends(Millions ofyen)

Dividends
per share(Yen)¥2,925¥18.00Cut-off
dateMarch 31,2018

Effective
date
June 29,2018

Dividends with the cut-off date in the year ended March 31, 2017 and theeffective date in the year ending March 31, 2018 were as follows:

Resolution
Annual general
meeting of theshareholders on
June 29, 2017

Type of shares

Common stock

33

Total
dividends(Millions ofyen)

Dividends
per share(Yen)¥2,438¥3.00

Cut-off
dateMarch 31,2017

Effective
date
June 30,2017

29

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 2018

9.

Notes to Consolidated Statements of Cash Flows
Cash and Cash Equivalents
Cash and cash equivalents at March 31, 2018 and 2017 were as follows:
As of March 31,
2018
2017
2018
(Millions of yen)(Thousands of
U.S. dollars)
Cash and deposits
Time deposits with maturities of overthree months
Cash and cash equivalents

10.

¥80,788¥68,122$760,429(9,662)¥71,125(8,313)¥59,809(90,945)$669,474

Financial Instruments(a) Overview(1) Policy for financial instruments
The Group limits investments of surplus funds to short-term bank deposits andraises necessary funds through bank loans.
In addition, the Group only uses derivatives for hedging risk of fluctuation offoreign currency exchange rates or interest rates, not for speculative transactions.
(2) Types of financial instruments and related risk and risk management system
Trade notes receivable, accounts receivable on completed construction contracts
and other are exposed to credit risk in relation to customers and trading partners.
Also, the Group’s main investments in securities are shares of companies, andthey are exposed to market price fluctuation risk.
Management of credit risks (Risks of default by customers and trading partners)
The Company manages due dates and balances of trade notes receivable, accounts
receivable on completed construction contracts and other for individual customers
and trading partners through its internal systems and monitors their credit status.
These systems enable the Group to identify any concerns for doubtful receivables at
an early stage and reduce risks of uncollectible amounts. Consolidated subsidiaries
also manage credit risks in the same manner as the Company. The Company
minimizes credit risks by mainly holding held-to-maturity securities with highcredit ratings.

34

34

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 201810

Financial Instruments (continued)(a)Overview (continued)
Management of market risks (Risks of fluctuations in currency exchange andinterest rates)
The Company and certain consolidated subsidiaries hold trade receivables inforeign currencies. However, the risk of fluctuations in the currency exchange
rate is not significant because a similar amount of trade payables are also held,
and the Company utilizes foreign exchange forward contracts to hedge the risk ofchanges in the foreign currency exchange rate.
Loan payables are mainly for short-term operating funds. The Group manages
loan payables to flexibly execute or revise its fund management plans.
Derivatives are foreign currency exchange forward contracts held for the purposeof hedging future risk of fluctuation of foreign currency exchange rate of themonetary liabilities denominated in foreign currencies.
Derivative transactions are carried out in accordance with the Companies’ internal
rules on transactions, and with highly rated financial institutions used as counterparties to reduce the risk of default.
Information regarding the method of hedge accounting, hedging instruments andhedged items, hedging policy, and assessment of hedge effectiveness is found in
Note 2-(n).
(3) Supplementary explanation of the fair value of financial instruments
The fair values of financial instruments are based on market prices, or, if nomarket prices are available, they include estimated amounts. Because estimationsof the fair value incorporate various factors, applying different assumptions can,in some cases, result in different fair values.
In addition, the amounts of derivatives in Note 12 “Derivative and Hedge
Accounting” are not necessarily indicative of the actual market risk involved in
the derivative transactions.

35
35

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 201810.

Financial Instruments (continued)(b) Fair value of financial instruments
Amounts recognized in the consolidated balance sheets, market value, and the difference
at March 31, 2018 and 2017, were as shown below. Moreover, items for which it isextremely difficult to determine fair values are not included in the following table (seeNote 2).
Carrying
value
Cash and deposits
Trade notes receivable,accounts receivable oncompleted construction
contracts and other
Allowance for doubtfulreceivables (*1)
Securities and investments
in securities
Held-to-maturity
securities
Other securities
Total assets
Trade notes payable,accounts payable on
construction contracts
and other
Electronically recorded
payableShort-term bank loans
and current portion of
long-term debt
Long-term debt
Total liabilities
Derivative transactions (*2)
Hedge accounting is notappliedHedge accounting isapplied¥ 80,788

As of March 31, 2018
Fair
Carrying
Fair
value
value
value
Difference
Difference(Millions of yen)(Thousands of U.S. dollars)¥ 80,788¥–

146,933$ 760,429$ 760,429$–

1,383,028–
146,933

146,919(13)–
1,383,028

1,382,897(122)

10,083

10,0895

94,907

94,964

47

283
9,800
237,805

289
9,800
237,797

5
–
(7)

2,663
92,2432,238,375

2,720
92,2432,238,300

47
–
(65)

94,632

94,632–890,737

890,737–

31,691

31,691–

298,296298,296–

2,769
21,353¥150,447

2,746
21,098¥150,169

(23)
(255)
¥(278)

26,063200,988$1,416,105

25,847
198,588$1,413,488(216)(2,400)$(2,616)

(4)

(4)

–

(37)

(37)

–

(0)

(0)

–

(0)

(0)

–

(*1): Allowance for doubtful receivables recognized individually is offset.
(*2): Assets and liabilities arising from derivative transactions are shown at net value. If total is liabilities,
amounts is shown as “( ).”3636

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 2018

10. Financial Instruments (continued)(b) Fair value of financial instruments (continued)
As of March 31, 2017
Carrying
Fair
value
value
Difference(Millions of yen)
Cash and deposits
Trade notes receivable,accounts receivable oncompleted construction
contracts and other
Allowance for doubtfulreceivables (*1)
Securities and investments
in securities
Held-to-maturity
securities
Other securities
Total assets
Trade notes payable,accounts payable on
construction contracts andotherElectronically recorded
payableShort-term bank loans
and current portion of
long-term debt
Long-term debt
Total liabilities
Derivative transactions (*2)
Hedge accounting is notappliedHedge accounting is applied(*1):¥ 68,122¥ 68,122¥–

143,603(27)
143,603

143,589

(14)

7,618

7,626

7

282
7,336
219,345289
7,336
219,3387–(6)

104,111104,111–

26,387

26,387–

10,201
23,640¥164,339

10,15723,425¥164,081

(43)
(214)
¥(258)

(10)
(5)

(10)
(5)

–
–

Allowance for doubtful receivables recognized individually is offset.

(*2): Assets and liabilities arising from derivative transactions are shown at net value. If total is liabilities,
amounts is shown as “( ).”Note 1:

Calculation of the fair value of financial instruments and other mattersrelated to investment securities and derivative transactions

Assets(1) Cash and deposits
Because settlement periods of deposits are short and their market values arealmost the same as their book values, the book values are used.
(2) Trade notes receivable, accounts receivable on completed construction contracts
and other
The fair values are determined using the present value of discounted collectible
principal and interest amounts estimated reflecting their collectability based on an
appropriate rate in which a credit spread is added to a risk-free benchmark rate
(such as a government bond yield) corresponding to the remaining term.
37
37

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 2018

10. Financial Instruments (continued)(b) Fair value of financial instruments (continued)(3) Securities and investments in securities
Concerning the market value of investment securities, the market value for stocks
is the price quoted on the stock exchange, and the market value for bonds is theprice provided by financial institutions.
In addition, for matters concerning to securities, see “Notes on securities.”
Liabilities(1) Trade notes payable, accounts payable on construction contracts, Electronicallyrecorded payable
The book values are used, because these are operation payable and settlement
periods are within a year and their market values are almost the same as theirbook values.
(2) Short-term bank loans
The carrying amount of the current portion of long-term debt approximates fairvalue since the carrying amount is equivalent to the present value of future cash
flows discounted using the current borrowing rate for similar debt with a compatible
maturity. For borrowings other than the current portion of long-term debt, thecarrying amount approximates fair value due to the short maturities of these
instruments.
(3) Long-term debt
Fair value of long-term debt is based on the price provided by financial institutionsor the present value of future cash flows discounted using the current borrowing
rate for similar debt with a comparable maturity.
The information of the fair value for derivatives is included in Note 12.

3838

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 2018

10. Financial Instruments (continued)(b) Fair value of financial instruments (continued)
Note 2:Financial instruments for which it is extremely difficult to measure the fairvalue
As of March 31,
2018
2017
2018
(Millions of yen)(Thousands of
U.S. dollars)

Unlisted stocks (*)¥3,367¥3,183$31,692(*): Unlisted stocks are not included in “Securities and investments in securities”
because these have no market value and it is extremely difficult to measure thefair value.
Note 3:

The redemption schedule for monetary claims and held-to-maturity debt
securities with maturity dates subsequent to March 31, 2018 and 2017
As of March 31, 2018
Within1 yearDeposits¥ 80,767
Trade notes receivable,accounts receivable oncompleted construction
contracts and other
139,873
Securities and investments
in securities
Held-to-maturity
securities (Bonds)
9¥220,650

Within1 yearDeposits¥ 68,090
Trade notes receivable,accounts receivable oncompleted construction
contracts and other133,983
Securities and Investments
in securities
Held-to-maturity
securities (Bonds)–¥202,074

Note 4:OverOver
1 year
5 years
and within and within
5 years
10 years(Millions of yen)¥Over
10 yearsOverOver
1 year
5 years
Within and within and withinOver
5 years
10 years 10 years
1 year(Thousands of U.S. dollars)

–

¥ –

¥–

$ 760,231

$

7,060

–

–

1,316,575

212¥7,272

60
¥60

–
¥–

$2,076,901

84

As of March 31, 2017
Over
Over
1 year
5 years
and within and within
5 years
10 years(Millions of yen)
¥

–

¥

–

$

–

$–

66,453––

1,995$68,448

564
$564

–
$–

Over
10 years

–

¥–

9,620

–

–

213
¥9,834

68
¥68

–
¥–

The redemption schedule for corporate bonds, long-term debt and otherinterest bearing debt with maturity dates subsequent to March 31, 2018 and2017. See Note 19.
3939

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 2018

11.

Securities

Securities at March 31, 2018 and 2017 were summarized as follows:(a) Held-to-maturity securities

Securities whose fairvalue exceeds theircarrying value:
Bonds

Securities whose fairvalue exceeds theircarrying value:
Bonds

As of March 31, 2018
Carrying
Fair
Unrealized Carrying
Fair
Unrealized
value
value
gain
value
value
gain
(Millions of yen)(Thousands of U.S. dollars)

¥283

¥289

¥5

$2,663$2,720$47

As of March 31, 2017
Carrying
Fair
Unrealized
value
value
gain
(Millions of yen)

¥282

¥289

¥7

(b) Other securities
Balancesheet
amountUnrealized gain:
Stock
Unrealized loss:
Stock
Total

Unrealized gain:
Stock
Unrealized loss:
Stock
Total

As of March 31, 2018
Balance
Unrealized
Unrealized
sheet
Cost
Cost
gain (loss)
gain (loss)
amount(Millions of yen)(Thousands of U.S. dollars)¥4,707¥2,667¥2,039$44,305$25,103$19,192

5,093¥9,8005,663¥8,331(570)¥ 1,469

47,938$92,243

53,303$78,416(5,365)$13,827

As of March 31, 2017
Balance
Unrealized
sheet
Cost
gain (loss)
amount(Millions of yen)
¥4,330¥2,604¥1,726

3,005¥7,336

4,267¥6,872(1,262)¥463(c) Sales of other securities
Year ended March 31,
2018
2017
2018
(Millions of yen)(Thousands of
U.S. dollars)
Sales proceeds
Total gain on sales of security
Total loss on sales of security

¥651
188
–
40

40

¥87
29
(1)

$6,1271,769–

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 201812. Derivatives and Hedge Accounting
Derivative transactions for the years ended March 31, 2018 and 2017 were summarized asfollows:(a) Derivative transactions to which the hedge accounting is not applied.
Currency-related transactions
Transaction Contract
Segmentation
type
amountOff-market
transaction

Note 1:

Foreignexchange
forwardcontracts
Long
U.S. dollar¥102

As of March 31, 2018
Over
Fair Valuation Contract
Over
Fair
Valuation
1 year value(loss)
amount1 yearvalue(loss)(Millions of yen)(Thousands of U.S. dollar)

¥–

¥(4)

¥(4)

$–

$960

$(37)

$(37)

Estimated fair value was provided by the counterparty financial institution.

As of March 31, 2017
Transaction Contract
Over
Fair Valuation
Segmentation
1 year value
type
amount(loss)(Millions of yen)
Off-market
Foreigntransaction
exchange
forwardcontracts
Long
¥102
¥(10)
¥(10)
¥876
U.S. dollar
Note 1:

Estimated fair value was provided by the counterparty financial institution.

(b) Derivative transactions to which the hedge accounting is applied
Currency-related transactions
Method ofhedge
accounting

As of March 31, 2018
Transaction
type

Allocation Foreign
accounting exchange
method for forward
foreigncontracts
exchangeLongforward
U.S. dollar
contracts
Long
U.S. dollar
Total

Hedgeditem
Accounts
payableFuture foreign
currencytransactions

ContractOver
Fairamount1 yearvalue(Millions of yen)ContractOver
Fairamount1 yearvalue(Thousands of U.S. dollars)¥–¥–Note 2$–$–

Note 2

9
¥9

¥–

–

¥(0)
¥(0)

84
$84

$–

–

$(0)
$(0)

Note 1:

Estimated fair value was provided by the counterparty financial institution.

Note 2:Since foreign exchange forward contracts accounted for are included in that of the account payable as thehedged item, the fair values of the contracts are included in the fair values of the account payable.

41

41

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 201812.

Derivatives and Hedge Accounting (continued)(b)

Derivative transactions to which the hedge accounting is applied (continued)
Method ofhedge
accounting

As of March 31, 2017
Transaction
type

Allocation Foreign
accounting exchange
method for forward
foreigncontracts
exchangeLongforward
U.S. dollar
contracts
Long
U.S. dollar
Total

Hedgeditem
Accounts
payableFuture foreign
currencytransactions

ContractOver
Fairamount1 yearvalue(Millions of yen)

¥ 11

¥–

Note 2

285
¥296

9
¥9

¥(5)
¥(5)

Note 1:

Estimated fair value was provided by the counterparty financial institution.

Note 2:Since foreign exchange forward contracts accounted for are included in that of the account payable as thehedged item, the fair values of the contracts are included in the fair values of the account payable.

13. Retirement Benefit Plans
For the year ended March 31, 2018, the Group has either funded or unfunded defined benefit
and defined contribution plans.
The Group has a defined benefits pension plan, i.e. defined benefit company pension plan
and lump-sum retirement benefit plans. Certain consolidated domestic subsidiaries participate
in the Small and Medium Enterprise Retirement Allowance Mutual Aid Scheme. Certain
foreign consolidated subsidiaries have an employee pension trust. The Company and certain
consolidated subsidiaries have a defined contribution pension plan.
In addition, for certain defined benefit company pension plan and lump-sum retirement benefit
plans and the defined contribution pension plan of the Company and certain consolidated
subsidiaries, the simplified method is applied to calculate their liability for retirement benefits
and retirement benefits expenses.
The changes in the retirement benefit obligation during the year ended March 31, 2018 and2017 were as follows (excluding plans for which the simplified method is applied):Year ended March 31,
2018
2017
2018
(Millions of yen)(Thousands of
U.S. dollars)
Balance at the beginning of year
Service cost
Interest cost
Actuarial loss
Retirement benefit paid
Prior service cost
Foreign currency translation
Balance at the end of year

¥17,499851
75
26(1,556)36(3)¥16,92942
42¥18,318879
74
65(1,821)–(16)¥17,499$164,711
8,010
705
244
(14,646)338(28)$159,346

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 2018

13. Retirement Benefit Plans (continued)

The changes in plan assets during the year ended March 31, 2018 and 2017 were as follows(excluding plans for which the simplified method is applied):Years ended March 31,
2018
2017
2018
(Millions of yen)(Thousands of
U.S. dollars)
Balance at the beginning of year
Expected return on plan assets
Actuarial gain
Retirement benefit paid
Foreign currency translation
Balance at the end of year

¥59
4
(2)
(7)
(1)
¥52

¥65
3
(1)
(2)
(5)
¥59

$555
37
(18)
(65)
(9)
$489

The changes in liability for retirement benefits based on the simplified method during theyear ended March 31, 2018 and 2017 were as follows:
Years ended March 31,
2018
2017
2018
(Millions of yen)(Thousands of
U.S. dollars)
Balance at the beginning of year
Retirement benefit expense
Retirement benefit paid
Contribution to defined contribution plan
Balance at the end of year

¥1,280
156
(72)
(10)
¥1,354¥1,221121(53)(8)¥1,280$12,048
1,468
(677)
(94)
$12,744

A reconciliation of the funded retirement benefit obligation and plan assets and the net
liability for retirement benefits recognized in the consolidated balance sheet at March 31,2018 and 2017 is as follows:
As of March 31,
2018
2017
2018
(Millions of yen)(Thousands of
U.S. dollars)
Funded retirement benefit obligation
Plan assets at fair value
Unfunded retirement benefit obligation
Net liability for retirement benefits in the
consolidated balance sheet
Liability for retirement benefits
Assets for retirement benefits
Net liability for retirement benefits in the
consolidated balance sheet

¥

350
(185)
165
18,066
18,231

¥

347
(195)
151
18,56818,720$3,294(1,741)
1,553
170,048
171,602

18,231–

18,720–171,602–¥18,231¥18,720$171,602

Note: Including plans for which the simplified method is applied.
39
43

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 201813.

Retirement Benefit Plans (continued)

The components of retirement benefit expense during the year ended March 31, 2018 and2017 were as follows:Year ended March 31,
2018
2017
2018
(Millions of yen)(Thousands of
U.S. dollars)Service cost
Interest cost
Expected return on plan assets
Amortization of actuarial loss
Amortization of prior service cost
Retirement benefit expense calculated by
the simplified method
Total retirement benefit expense

¥

851
75
(4)
430
(363)
153

¥ 1,146

¥

879
74
(3)
438
(363)
121

$ 8,010
705
(37)
4,047
(3,416)1,440¥ 1,147$10,786

The components of retirement benefit liability adjustments included in other comprehensive
income (before tax effect) during the year ended March 31, 2018 and 2017 were as follows:
Years ended March 31,
2018
2017
2018
(Millions of yen)(Thousands of
U.S. dollars)
Actuarial loss
Prior service cost
Total

¥402
(399)
¥ 2

¥371
(363)
¥ 8

$3,783(3,755)$, ,,,18

The components of retirement benefit liability adjustments included in accumulated othercomprehensive income (before tax effect) as of March 31, 2018 and 2017 were follows:
Years ended March 31,
2018
2017
2018
(Millions of yen)(Thousands of
U.S. dollars)
Unrecognized actuarial loss
Unrecognized prior service cost
Total

¥2,328(1,584)¥ 743

44¥2,730(1,983)¥ 746$21,912(14,909)$ 6,99340

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 2018

13. Retirement Benefit Plans (continued)

The fair value of plan assets, by major category, as a percentage of total plan assets as ofMarch 31, 2018 and 2017 were follows:
2018
Bonds
Cash and Deposits
Other
Total

As of March 31,

95%
4%
1%
100%

2017
84%
15%
1%
100%

The expected return on plan assets has been estimated based on the anticipated allocation toeach asset class and the expected long-term returns on assets held in each category.
The principal assumptions used for above plans were as follows:
2018
Discount rate
Expected rate of return on plan assets
Expected rate of increase in salaries

As of March 31,

Principally 0.3%
5.4%
Principally 4.4%

2017

Principally 0.3%
5.0%
Principally 4.1%

The contribution to defined contribution plans in the company and consolidated subsidiaries
were as follows:
Years ended March 31,
2018
2017
2018
(Millions of yen)(Thousands of
U.S. dollars)
Contribution to defined contribution plans

¥808

45
45

¥814

$7,605

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 2018

14. Income Taxes
The significant components of deferred tax assets and liabilities at March 31, 2018 and 2017
were as follows:
As of March 31,
2018
2017
2018
(Millions of yen)(Thousands of
U.S. dollars)
Deferred tax assets:
Liability for retirement benefits
Accounts payable and accrued expenses
Impairment loss
Allowance for bad debts
Reserve for defects on completed
construction projects
Allowance for losses on construction
contracts
Other
Gross deferred tax assets
Valuation allowance
Total deferred tax assets¥ 5,660
3,697
979
384

¥ 5,819
3,491
744
2,173

$ 53,275
34,798
9,214
3,614

299

246

2,814

39
2,723
13,784(7,943)
5,841

116
2,040
14,631(9,322)
5,309

367
25,630129,743(74,764)
54,979

(337)
(449)
(49)
(837)
¥ 5,004

(361)
(141)
(19)
(522)
¥ 4,786(3,172)(4,226)(461)(7,878)$ 47,100Deferred tax liabilities:
Retained earnings of foreign consolidated
subsidiaries
Unrealized holding gain on securities
Other
Total deferred tax liabilities
Net deferred tax assets

The following table summarizes the significant differences between the statutory tax rate
and the effective tax rates for the years ended March 31, 2018 and 2017:
Years ended March 31,
2018
2017
Statutory tax rate
Non-deductible expenses
Non-taxable income
Per capita inhabitants’ taxes
Tax credit
Valuation allowance
Different tax rate applied to foreign subsidiaries
Retained earnings of foreign consolidated
subsidiaries
Other
Effective tax rates

30.9%
0.7
(0.9)
0.4
(2.3)
(6.2)
0.5

–%
–
–
–
–
–
–

(0.1)
0.7
23.7%

–
–
–%

The significant differences between the statutory tax rate and the effective tax rates for theyears ended March 31, 2017 has been omitted as its difference was less than 5% of thestatutory tax rate.
46
46

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 201815.

Segment Information, etc.

Segment Information(a) Outline of Segments
The Company’s reportable operating segments are components for which separate
financial information is available and that are evaluated regularly by the board of directors
in determining the allocation of management resources and in assessing performance.
The Company currently divides its operations into Civil Construction and Building
Construction, managed by the Civil Engineering Division and the Building Administration
Division, respectively. Business strategies are formulated by each segment.
Accordingly, the Company divides its operations into two reportable operating segmentson the same basis as it uses internally; Civil Construction and Building Construction.
Civil Construction consists mainly of governmental public works like bridge construction.
Building Construction is awarded by private sector companies for things like high riseapartment buildings.
(b) Accounting methods used to calculate segment income (loss), segment assets andother items for reportable segments
Accounts for reportable segments are for the most part calculated in line with thegenerally accepted standards used for the preparation of the consolidated financial
statements.
Segment income (loss) for reportable segments is based on gross profit.
Amounts for intersegment transactions or transfers are based on the market prices
determined by third party transactions.
The Company does not allocate any assets to reportable operating segments.

47

47

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 201815. Segment Information, etc. (continued)

Segment Information (continued)(c) Segment income, segment assets and other items for reportable segments
Year ended March 31, 2018
Reportable operating segments
Civil
Building
Total
Others
Total(Millions of yen)

Sales
External
Customers
Intersegment
transactions
or transfers
Net sales
Segment income

Adjustments Consolidated¥161,704¥254,787¥416,492¥817¥417,310¥–¥417,310

1,478¥163,183

1¥254,788

1,479¥417,972

91
¥909

1,570
¥418,881(1,570)¥(1,570)–¥417,310

23,69327,19750,891

322

51,213(156)

51,057

Year ended March 31, 2018
Reportable operating segments
Civil
Building
Total
Others
Total(Thousands of U.S. dollars)

Adjustments Consolidated

Sales
External
Customers
Intersegment
transactions
or transfers
Net sales$1,522,063$2,398,221$3,920,293$7,690$3,927,993$–$3,927,993

13,911$1,535,984

9$2,398,230

13,921$3,934,224

856$8,556

14,777$3,942,780(14,777)$(14,777)–$3,927,993

Segment income

223,013

255,995

479,019

3,030

482,050(1,468)

480,581

Note 1:“Others” which includes the Company’s business of solar power, elder care facilities and insurance agent,
does not qualify as a reportable operating segment.

Note 2:Adjustment for segment income is the reduction of income recognized between reportable operating
segments.

Note 3:

Segment income corresponds to gross profit in the consolidated statement of income.
Year ended March 31, 2017
Reportable operating segments
Civil
Building
Total
Others
Total(Millions of yen)

Sales
External
Customers
Intersegment
transactions
or transfers
Net sales
Segment income

Adjustments Consolidated¥162,950¥240,182¥403,132¥775¥403,908¥–¥403,908

1,134¥164,08477¥240,259

1,211¥404,344

71
¥847

1,283
¥405,191(1,283)¥(1,283)–¥403,908

22,50323,822

46,325

225

46,551(127)

46,424Note 1:“Others” which includes the Company’s business of solar power, elder care facilities and insurance agent,
does not qualify as a reportable operating segment.

Note 2:Adjustment for segment income is the reduction of income recognized between reportable operating
segments.

Note 3:

Segment income corresponds to gross profit in the consolidated statement of income.

48
48

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 201815. Segment Information, etc. (continued)
Related Information

For the year ended March 31, 2018(a) Product and service information
See “Segment income, segment assets and other items for reportable segments.”(b) Geographical segment information(1) SalesYear ended March 31, 2018
Asia
Others
Total
Japan
Asia
Others
Total(Millions of yen)(Thousands of U.S. dollars)Japan¥358,797¥54,123¥4,389¥417,310$3,377,230 $509,440$41,312$3,927,993

Notes: Geographical segments are determined based on the country/region of domicile ofcustomers.

(2) Tangible fixed assets
Geographical segment information on tangible fixed assets has been omitted as
the amount of tangible fixed assets in Japan constituted over 90% of total as ofMarch 31, 2018.
(c) Major customer information
Information on major customers has been omitted as there were no sales to a single
customer constituting over 10% of net sales for the year ended March 31, 2018.
For the year ended March 31, 2017(a) Product and service information
See “Segment income, segment assets and other items for reportable segments.”(b) Geographical segment information(1) SalesYear ended March 31, 2017
Japan

Asia

Others

Total(Millions of yen)
¥344,543¥56,505¥2,859¥403,908

Notes: Geographical segments are determined based on the country/region of domicile ofcustomers.

50
49

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 201815. Segment Information, etc. (continued)

Related Information (continued)(b) Geographical segment information (continued)(2) Tangible fixed assets
Geographical segment information on tangible fixed assets has been omitted as
the amount of tangible fixed assets in Japan constituted over 90% of total as ofMarch 31, 2017.
(c) Major customer information
Information on major customers has been omitted as there were no sales to a single
customer constituting over 10% of net sales for the year ended March 31, 2017.
Losses on impairment by reportable segment
For the year ended March 31, 2018, ¥581 million ($5,468 thousand) impairment loss wasrecorded.
Note 1:

The above amount consists of elder care facilities of ¥568 million ($5,346
thousand) and assets for business of ¥13 million ($122 thousand).

Note 2:The impairment loss was not allocated to operating segments.

For the year ended March 31, 2017, ¥624 million impairment loss was recorded.
Note 1:

The above amount is assets for business.

Note 2:The impairment loss was not allocated to operating segments

Amortization of goodwill and unamortized balance by reportable segment
For the year ended March 31, 2018 and 2017, there were no amortization and unamortizedbalance of goodwill by reportable segment.
Gain on negative goodwill by reportable segment
For the years ended March 31, 2018 and 2017, there were no gain on negative goodwill byreportable segment.

51
50

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 2018

16. Related Party Transactions
Related party transaction
Transactions with affiliates for the year ended March 31, 2018 were summarized asfollows:

Affiliated company:
Yoshiikikaku Co., Ltd.
(Real estate business)

Capitalinvestment

Number of
voting shares
held as apercentage ofvoting sharesissued¥1030.0%Year ended March 31, 2018

Long-term
non operating
accounts
receivable
Long-term
accounts
payableAffiliated company:
Yoshiikikaku Co., Ltd.
(Real estate business)

Capitalinvestment

Number of
voting shares
held as apercentage ofvoting sharesissued$94

30.0%

Balance sheet
account

Balance at
March 31,2018¥–

Long-term
non operating
accounts
receivable¥3,158¥–Long-term
accounts
payable¥2,579Nature ofTotal amounttransactionof transaction(Millions of yen)

Year ended March 31, 2018

Nature ofTotal amounttransactionof transaction(Thousands of U.S. dollars)

Balance sheet
account

Balance at
March 31,2018

Long-term
non operating
accounts
receivable$–

Long-term
non operating
accounts
receivable$29,725$–

Long-term
accounts
payable$24,275

Long-term
accounts
payableNote 1:

Total amount of transaction represents the amount of a claim for damages from Yoshiikikaku Co., Ltd. and theamount of guarantee for financial institution.

Note 2:

Allowance for above long-term non operating accounts receivable was recognized in the amount of ¥2,843
million ($26,760 thousand).

Note 3:

Consumption tax was excluded from the total amount of the transaction, however it was included in the balance
at March 31, 2018

.

51

52

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 2018

16. Related Party Transactions (continued)
Related party transaction (continued)
Transactions with affiliates for the year ended March 31, 2017 were summarized asfollows:

Affiliated company:
Yoshiikikaku Co., Ltd.
(Real estate business)

Capitalinvestment

Number of
voting shares
held as apercentage ofvoting sharesissued¥1030.0%Year ended March 31, 2017

Balance sheet
account

Balance at
March 31,2017¥–

Long-term
non operating
accounts
receivable¥3,158¥–Long-term
accounts
payable¥2,579Nature ofTotal amounttransactionof transaction(Millions of yen)
Long-term
non operating
accounts
receivable
Long-term
accounts
payableNote 1:

Total amount of transaction represents the amount of a claim for damages from Yoshiikikaku Co., Ltd. and theamount of guarantee for financial institution.

Note 2:

Allowance for above long-term non operating accounts receivable was recognized in the amount of ¥2,843
million.

Note 3:

Consumption tax was excluded from the total amount of the transaction, however it was included in the balance
at March 31, 2017.

17. Per Share Information
Net assets and basic profit per share as of and for the years ended March 31, 2018 and 2017
were as follows:
2017

2018
(Yen)

Net assets per share
Profit per share¥467.65
127.48¥350.30
104.792018(U.S. dollars)$4.401
1.199

Note 1: Profit per share – diluted was omitted as there were no diluted share for the year
ended March 31, 2018 and 2017.
Note 2: The Company executed the consolidation of shares at the ratio of 5 shares into 1
share effective from October 1, 2017. Net assets per share and Profit per share arerecalculated on the assumption that the consolidation of shares executed at the
beginning of the year ended March 31, 2017.

52

48

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 201817. Per Share Information (continued)

The basis of calculation for net assets per share at March 31, 2018 and 2017 were as
follows:
As of March 31,
2018
2017
2018
(Millions of yen)(Thousands of
U.S. dollars)
Total net assets
Amounts deducted from total net assets[Including non-controlling interests]
Total net assets attributable to common stock¥82,852
6,840[6,840]¥76,012¥63,242
6,293[6,293]¥56,948$779,856
64,382[64,382]$715,474(Thousands of shares)

Number of shares of common stock used todetermine net assets per share

162,541

162,571

The basis for calculating basic profit per share – based and profit per share – diluted for theyears ended March 31, 2018 and 2017 were as follows:
Years ended March 31,
2018
2017
2018
(Millions of yen)(Thousands of
U.S. dollars)Profit per share – basic:
Profit attributable to owners of parent
Amount not available to common shareholders
Profit attributable to owners of parent
per share – basic¥17,035–$195,058–¥20,723¥17,035$195,058(Thousands of shares)

Average number of shares of common stock
outstanding
18.

¥20,723–

162,560

162,572

Subsequent Event

Stock Repurchase
At the meeting of the Board of Directors held on May 14, 2018, the Company resolved torepurchase its stock in accordance with Article 156 of the Company Act of Japan, as
applied pursuant to paragraph 3 of Article 165 of the Companies Act of Japan.
(a) Reason for repurchase of treasury stock
To improve capital efficiency and to engage flexible capital policies in response tochanges in management environment.

54
53

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 201818.

Subsequent Event (continued)(b) Details of repurchase(1) Class of share(2) Total number of shares ofcommon stock to be repurchased

Common stock of the Company
Up to 2,600,000 shares(1.60% of the total number of shares ofcommon stock outstanding excluding
treasury stock)
Up to 1,500,000,000 yen
From May 15, 2018 to September 28, 2018
Auction market on Tokyo Stock Exchange(3) Total amount(4) Period(5) Repurchase method(Reference)
Result of repurchase(1) Class of share(2) Total number of shares ofcommon stock to repurchased(3) Total amount(4) Period

Common stock of the Company
2,016,800 shares
1,499,917,500 yen
From May 15, 2018 to June 14, 2018(contract basis)
Auction market on Tokyo Stock Exchange(5) Repurchase method

19. Short-Term Bank Loans and Long-Term Debt
Short-term bank loans generally represent notes, principally at average annual interest rates
of 4.5% and 4.8% at March 31, 2018 and 2017, respectively.
Long-term debt at March 31, 2018 and 2017 were summarized as follows:
As of March 31,
2018
2017
2018
(Millions of yen)(Thousands of
U.S. dollars)
Debt with collateral (at average interest ratesof 2.5% at 2018 and 2.3% at 2017)
Debt without collateral (at average interest
rates of 1.2% at 2018 and 1.3% at 2017)
Lease obligations
Current portion (excluding lease obligations)
Current portion of lease obligations
Deposits from employees

55
54

¥

115

23,525956(2,286)(392)
2,714¥24,631¥249

32,971931(9,581)(490)
2,381¥26,462$

1,082

221,432
8,998(21,517)(3,689)25,545$231,842

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 201819. Short-Term Bank Loans and Long-Term Debt (continued)
The aggregate annual maturities of long-term debt subsequent to March 31, 2018 weresummarized as follows:Year ending March 31,
2019
2020
2021
2022 and thereafter(Millions ofyen)(Thousands of
U.S. dollars)¥ 2,286
1,511
11,511
8,330¥23,640$ 21,517
14,222
108,349
78,407$222,515

The aggregate annual maturities of lease obligations subsequent to March 31, 2018 weresummarized as follows:Year ending March 31,
2019
2020
2021
2022 and thereafter

56

55(Millions ofyen)(Thousands of
U.S. dollars)

¥392
189
174
200
¥956

$3,689
1,778
1,637
1,882
$8,998

56

Non-Consolidated Financial Statements
Sumitomo Mitsui Construction Co., Ltd.
Year ended March 31, 2018with Independent Auditor’s Report59
57

Sumitomo Mitsui Construction Co., Ltd.
Sumitomo Mitsui Construction Co., Ltd.
Non-Consolidated Balance Sheets
March 31, 2018

Non-Consolidated Balance Sheets

AssetsCurrent assets:
Cash and deposits
Trade notes receivable (Note 3-(d))
Accounts receivable on completed construction contracts
Inventories
Deferred tax assets (Note 6)
Other current assets (Note 3-(d))
Allowance for doubtful receivables
Total current assets

Non-current assets:
Property and equipment, at cost:
Land (Note 3-(b))
Buildings (Note 3-(b))
Structures (Note 3-(b))
Machinery and equipment
VehiclesTools, furniture and fixtures
Construction in progress
Accumulated depreciation
Property and equipment, net
Intangible fixed assets
Investments and other assets:
Investments in securities
Investments in subsidiaries and affiliates (Notes 3-(b) and 5)
Long-term loans receivable
Long-term loans to employees
Long-term prepaid expenses
Deferred tax assets (Note 6)
Other
Allowance for doubtful receivables
Total investments and other assets
Total non-current assets

Total assets

60

58

As of March 31,
2018
2017
2018
(Millions of yen)(Thousands of
U.S. dollars)(Note 2)
¥ 54,534
2,500
117,106
21,3452,540
16,927－214,954¥ 40,546
1,210
120,549
19,056
2,341
22,097(161)
205,640$ 513,309
23,531
1,102,277
200,91323,908159,327－
2,023,286

5,328
4,689
782
3,119
318
3,741
45
(9,283)
8,741

5,328
4,671
771
2,817
320
3,272
4
(9,324)
7,862

50,15044,135
7,360
29,3582,993
35,212
423(87,377)
82,275

1,532

1,502

14,42012,49014,287
73
500
22
1,107
5,244
(4,769)28,95639,23010,032
14,092
5,618
556
27
1,056
5,614
(9,886)27,11336,478

117,564
134,478
687
4,706
207
10,41949,359(44,888)272,552
369,258¥254,185¥242,118$2,392,554

Sumitomo Mitsui Construction Co., Ltd.
Non-Consolidated Balance Sheets
March 31, 2018

Liabilities and net assets
Current liabilities:
Trade notes payable (Note 3-(a))
Electronically recorded payable (Note 3-(a))
Accounts payable on construction contracts (Note 3-(a))
Short-term bank loans and current portion of long-term debt
(Notes 3-(d), 3-(e) and 8)
Income taxes payable
Advances received on construction contracts in progress
Reserve for defects on completed construction projects
Allowance for losses on construction contracts
Allowance for losses on business of subsidiaries and affiliates
Allowance for contingency loss
Other current liabilities
Total current liabilities
Long-term liabilities:
Long-term debt (Notes 3-(e), 8)
Accrued retirement benefits
Other long-term liabilities
Total long-term liabilities

As of March 31,
2018
2017
2018
(Millions of yen)(Thousands of
U.S. dollars)(Note 2)
¥ 11,817
26,68562,304¥ 14,286
30,70760,903$ 111,229
251,176
586,445

2,275
2,202
24,807
852
115
32
2,159
21,568
154,820

9,546
4,207
20,405
692
328
－
2,159
13,722
156,959

21,413
20,726
233,499
8,019
1,082
301
20,321203,0121,457,266

21,25014,3172,989
38,557

23,525
14,952
2,908
41,386200,018
134,760
28,134362,923

12,003

12,003112,980

393
393

398
398

3,699
3,699

590
47,07147,662347
30,95731,304

5,553
443,062448,625(262)
59,797(247)
43,460(2,466)562,848

1,010
(0)
1,010
60,807¥254,185

317
(4)
313
43,773¥242,118

9,506
(0)
9,506
572,355$2,392,554

Contingent liabilities (Note 3-(c))
Net assets:
Shareholders’ equity:
Capital stock:
Common stock:
Authorized:
533,892,994 shares in 2018 and 2017
Issued and outstanding:
162,673,321 shares in 2018 and 2017
Capital surplus:
Other capital surplus
Total capital surpluses
Retained earnings:
Legal retained earnings
Earned surplus carried forward
Total retained earnings
Treasury stock, at cost:
131,601 shares in 2018 and 102,288 shares in 2017
Total shareholders’ equity
Valuation, translation adjustments and other:
Unrealized holding gain on securities
Deferred (loss) on hedging instruments, net of taxes
Total valuation, translation adjustments and otherTotal net assets
Total liabilities and net assets

See accompanying notes to non-consolidated financial statements.
61

59

Sumitomo Mitsui Construction Co., Ltd.
Mitsui Construction Co., Ltd.
Non-Consolidated Statements ofSumitomo
IncomeMarch 31, 2018

Non-Consolidated Statements of Income
Years ended March 31,
2018
2017
2018
(Millions of yen)(Thousands of
U.S. dollars)(Note 2)

Net sales:
Completed construction (Note 4-(a))
OthersCost of sales:
Completed construction
OthersGross profit
Completed construction
OthersSelling, general and administrative expenses (Note 4-(d))
Operating income
Other income (expenses):
Interest and dividend income (Note 4-(b))
Payments received from insurance claims
Royalty income (Note 4-(b))
Interest expense
Provision of allowance for doubtful receivables (Note 4-(b))
Exchange (loss), net
Litigation expenses
Gain on sales of investments in securities
Gain on liquidation of subsidiaries and affiliates
Loss on sales and disposal of property and equipment(Note 4-(c))
Loss on valuation of investments in subsidiaries and affiliates
Other, net
Profit before income taxes
Income taxes (Note 6):
Current
DeferredProfit¥316,065
84
316,150¥305,70246
305,749$2,975,009
790
2,975,809

275,96942
276,011

268,67423
268,698

2,597,599
395
2,597,995

40,09542

37,02723

377,400
395

40,13837,050377,804

14,84825,29013,36023,690139,759
238,045

1,214
110
580
(613)
(530)
(422)
(983)
189
45

1,466
127
713
(583)
(552)
(238)
(106)
12
–

11,426
1,035
5,459(5,769)(4,988)(3,972)(9,252)
1,778
423

(45)
(685)
(990)
(2,131)
23,158(95)(820)(1,135)(1,214)22,475(423)(6,447)(9,318)(20,058)
217,978

4,919
(556)
4,362
¥ 18,795

6,346
29
6,375
¥ 16,099

46,300(5,233)41,057$ 176,910(Yen)
Profit per share – basic¥ 115.62

See accompanying notes to non-consolidated financial statements.
62

60¥00099.03(U.S. dollars)(Note 2)$

1.088

Sumitomo Mitsui Construction Co., Ltd.
Non-Consolidated Statements ofSumitomo
Changes In Net
AssetsConstruction Co., Ltd.
MitsuiMarch 31, 2018

Non-Consolidated Statements of Changes in Net Assets
Year ended March 31, 2018
Shareholders’ equity
Additional
paid-in capital

Balance at the beginning of
the period
Changes in items during
the period
Dividends from surplus
Provision of legal retained
earnings
ProfitPurchases of treasury stock
Disposition of treasury stock
Net changes in items otherthan shareholders’ equity
Total changes in items during
the period
Balance at the end of theperiodCapitalstock

Other capitalsurplus

Earnedreserve¥12,003

¥398

¥347

243

Treasurystock, at cost

Total
shareholders’equity¥(247)¥43,460¥30,957¥31,304(2,438)(2,438)(2,438)(243)
18,795–
18,795(21)
6–18,795
(21)
2

(4)

–

(4)

243

16,113

16,357(15)

16,337¥12,003

¥393

¥590

¥47,071¥47,662¥(262)¥59,797

Year ended March 31, 2018
Valuation, translation adjustments and other
DeferredTotal(loss) gain
valuation,
Unrealized
on hedging
translation
holding
instruments,
adjustments
gain
net of taxes
and otheron securities(Millions of yen)
Balance at the beginning of
the period
Changes in items during
the period
Dividends from surplus
Provision of legal retained
earnings
ProfitPurchases of treasury stock
Disposition of treasury stock
Net changes in items otherthan shareholders’ equity
Total changes in items during
the period
Balance at the end of theperiodRetained earnings
Earned surplus
carriedTotal retained
forwardearnings(Millions of yen)

¥0,317¥(4)¥0,313Total
net assets¥43,773(2,438)–18,795
(21)
2

692

3

696

696

692

3

696

17,033¥1,010¥(0)¥1,010¥60,807

63

61

Sumitomo Mitsui Construction Co., Ltd.
Mitsui
Non-Consolidated Statements ofSumitomo
Changes In Net
AssetsConstruction Co., Ltd.
March 31, 2018

Non-Consolidated Statements of Changes in Net Assets (continued)
Year ended March 31, 2018
Shareholders’ equity
Additional
paid-in capital

Balance at the beginning of
the period
Changes in items during
the period
Dividends from surplus
Provision of legal retained
earnings
ProfitPurchases of treasury stock
Disposition of treasury stock
Net changes in items otherthan shareholders’ equity
Total changes in items during
the period
Balance at the end of theperiodCapitalstock

Other capitalsurplus$112,980$3,746

Retained earnings
Earned surplus
carriedEarnedTotal retained
forwardreserveearnings(Thousands of U.S. dollars) (Note 2)$3,266

2,287

Total
shareholders’equity$(2,324)$409,073$291,387$294,653(22,948)(22,948)(22,948)(2,287)
176,910–
176,910

(197)
56

–
176,910
(197)
18

(37)

–

(37)

2,287

151,666

153,962(141)

153,774$112,980$3,699$5,553$443,062$448,625$(2,466)$562,848

Year ended March 31, 2018
Valuation, translation adjustments and other
DeferredTotal(loss) gain
valuation,
Unrealized
on hedging
translation
holding
instruments,
adjustments
Total
gain
net of taxes
and other
net assets
on securities(Thousands of U.S. dollars) (Note 2)
Balance at the beginning of
the period
Changes in items during
the period
Dividends from surplus
Provision of legal retained
earnings
ProfitPurchases of treasury stock
Disposition of treasury stock
Net changes in items otherthan shareholders’ equity
Total changes in items during
the period
Balance at the end of theperiodTreasurystock, at cost

$2,983$(37)$2,946$412,019(22,948)–
176,910
(197)
18

6,513

28

6,551

6,551

6,513

28

6,551

160,325$9,506$ (0)$9,506$572,355

64

62

Sumitomo Mitsui Construction Co., Ltd.
Non-Consolidated Statements ofSumitomo
Changes In Net
AssetsConstruction Co., Ltd.
MitsuiMarch 31, 2018

Non-Consolidated Statements of Changes in Net Assets (continued)
Year ended March 31, 2017
Shareholders’ equity
Additional
paid-in capital

Balance at the beginning of
the period
Changes in items during
the period
Dividends from surplus
Provision of legal retained
earnings
ProfitPurchases of treasury stock
Disposition of treasury stock
Net changes in items otherthan shareholders’ equity
Total changes in items during
the period
Balance at the end of theperiodCapitalstock

Other capitalsurplus

Earnedreserve¥12,003

¥398

¥184

162

Treasurystock, at cost

Total
shareholders’equity¥(246)¥28,987¥16,646¥16,830(1,625)(1,625)(1,625)(162)
16,099–16,099(1)
0–
16,099
(1)
0

(0)

–

(0)

162

14,311

14,474(0)

14,473¥12,003

¥398

¥347

¥30,957¥31,304¥(247)¥43,460

Year ended March 31, 2017
Valuation, translation adjustments and other
Deferred gain
Total
(loss) on
valuation,
Unrealized
hedgingtranslation
holding gain
instruments,
adjustments(loss) on
net of taxes
and othersecurities(Millions of yen)
Balance at the beginning of
the period
Changes in items during
the period
Dividends from surplus
Provision of legal retained
earnings
ProfitPurchases of treasury stock
Disposition of treasury stock
Net changes in items otherthan shareholders’ equity
Total changes in items during
the period
Balance at the end of theperiodRetained earnings
Earned surplus
carriedTotal retained
forwardearnings(Millions of yen)

¥376

¥6

¥382

Total
net assets¥29,369(1,625)–16,099
(1)
0

(58)

(10)

(69)

(69)

(58)

(10)

(69)

14,403

¥317

¥ (4)

¥313

¥43,773

See accompanying notes to non-consolidated financial statements.

65

63

Sumitomo Mitsui Construction Co., Ltd.
Notes to Non-Consolidated Financial Statements

Sumitomo Mitsui Construction Co.,Ltd.

Notes to Non-Consolidated Financial Statements
March 31, 2018 and 2017
March 31, 2018
1.

Summary of Significant Accounting Policies(a) Basis of Presentation
The accompanying non-consolidated financial statements of Sumitomo Mitsui Construction
Co., Ltd. (the “Company”) are prepared on the basis of accounting principles generally
accepted in Japan, which are different in certain respects as to the application anddisclosure requirements of International Financial Reporting Standards, and have been
compiled from the non-consolidated financial statements prepared by the Company as
required by the Financial Instruments and Exchange Law of Japan.
Certain reclassifications have been made to present the accompanying financial statements
in a format which is familiar to readers outside Japan. In addition, certain amounts in theprior year’s financial statements have been reclassified to conform to the current year’s
presentation.
As permitted, amounts of less than one million yen have been omitted. As a result, thetotals shown in the accompanying financial statements do not necessarily agree withthe sums of the individual amounts.
(b) Securities and Investments in Subsidiaries and Affiliates
The accounting standard for financial instruments requires that securities be classified
into three categories: trading, held-to-maturity or other securities. Under this standard,
trading securities are carried at fair value and held-to-maturity securities are carried atamortized cost. Marketable securities classified as other securities for which market prices
are determinable are carried at fair value with any changes in unrealized holding gain or
loss, net of the applicable income taxes, included directly in net assets. Non-marketablesecurities classified as other securities are carried at cost. Cost of securities sold isdetermined by the moving average method. Investments in subsidiaries and affiliates
are stated at cost determined by the moving average method.
(c) Inventories
Inventories other than materials and supplies are stated at cost determined by the specificidentification method. Materials and supplies are valued at cost determined by theaverage method. Book values are written down based on any decline in profitability.

864Sumitomo Mitsui Construction Co.,Ltd.

Notes to Non-Consolidated Financial Statements
March 31, 2018
1. Summary of Significant Accounting Policies (continued)(d) Depreciation and Amortization(1) Property and equipment (except leased assets)
Depreciation of property and equipment (except leased assets) is determined by the
declining-balance method based on the estimated useful lives and the residual value ofthe respective assets as prescribed in the Corporation Tax Law of Japan except thatthe straight-line method is applied to office buildings (except facilities attached tobuildings) acquired on or after April 1, 1998 and facilities attached to buildings
and structures acquired on or after April 1, 2016.
(2) Intangible fixed assets (except leased assets) and long-term prepaid expenses
Amortization of intangible fixed assets (except leased assets) and long-term
prepaid expenses is calculated by the straight-line method based on the estimateduseful lives of the respective assets as prescribed in the Corporation Tax Law ofJapan. Amortization of computer software for internal use is calculated by thestraight-line method over the estimated useful lives of 5 years.
(3) Leased assets
Depreciation of leased assets under finance leases other than those that transfer
the ownership of the leased assets to the lessees is calculated by the straight-line
method over the lease term with a residual value of zero.
(e) Advances Received on Construction Contracts in Progress
As is customary in Japan, the Company receives payments from customers on an
installment basis in accordance with the terms of the respective construction contracts.
(f)

Allowance for Doubtful Receivables
An allowance for doubtful receivables has been provided for future losses on general
receivables at an amount calculated by applying the percentage of actual losses oncollection experienced in the past, and an uncollectible amount for doubtful receivables
estimated based on an individual assessment of each receivable and probability ofcollection.

(g) Reserve for Defects on Completed Construction Projects
A reserve has been provided at an estimated amount for the fiscal year’s sales proceeds
in order to cover the liability for future costs of defects of the completed construction
projects.
(h) Allowance for Losses on Construction Contracts
An allowance has been provided based on the estimated amount for the future losses
on construction projects in progress at the fiscal year end which are anticipated to be
substantial losses in the future.
65

9Sumitomo Mitsui Construction Co.,Ltd.

Notes to Non-Consolidated Financial Statements
March 31, 2018
1. Summary of Significant Accounting Policies (continued)(i)

Allowance for Losses on Business of Subsidiaries and Affiliates
An allowance has been provided for the future losses on business of subsidiaries andaffiliates which is estimated beyond the amount of investments and loans to thesubsidiaries and the affiliates.

(j)

Allowance for Contingency Loss
An allowance for contingency loss related to the defective piling work at acondominium in Yokohama has been provided based on the reasonably estimatedamount necessary for payments to be borne as the contractor in accordance with defectliability applicable to the construction contract.

(k) Employees’ Retirement Benefits(1) Method of attributing expected retirement benefits to periods
In calculating the retirement benefit obligation, the benefit formula method isapplied to attribute the expected retirement benefits to the periods up to year
ended March 31, 2018.
(2) Amortization of actuarial gain or loss and prior service cost
Actuarial gain or loss is amortized in the year following the year in which the gainor loss is recognized by the straight-line method over periods (11 years), which
are shorter than the average remaining years of service of the employees.
Prior service cost is being amortized as incurred by the straight-line method overperiods (11 years), which are shorter than the average remaining years of serviceof the employees.
(l)Recognition of Revenues and Costs on Construction Contracts
Revenues and costs of construction contracts that commenced on or after April 1, 2009,of which the percentage of completion can be reliably estimated, are recognized by thepercentage-of-completion method. The percentage-of-completion is calculated at thecost incurred as a percentage of the estimated total cost. The completed-contract method
is applied for contracts for which the percentage of completion cannot be reliably
estimated.

(m) Derivatives and Hedge Accounting(1) Method of hedge accounting
Derivative financial instruments are mainly stated at fair value except thoseaccounted for under deferred hedge accounting.
Foreign exchange forward contracts qualifying for allocation accounting are translated
at the contract rate.
66

10

Sumitomo Mitsui Construction Co.,Ltd.

Notes to Non-Consolidated Financial Statements
March 31, 2018
1. Summary of Significant Accounting Policies (continued)(m)

Derivatives and Hedge Accounting (continued)(2) Hedging instruments and hedged items
Hedging instruments:

Forward foreign exchange forward contracts

Hedged items:

Future foreign currency transactions(3) Hedging policy
The Company utilizes foreign exchange forward contracts only for the purpose ofhedging future risks of fluctuation of foreign currency exchange rates.
(4) Assessment of hedge effectivenessAn evaluation of hedge effectiveness for a foreign exchange forward contract isperformed on a quarterly basis to confirm that amount of the foreign exchange
contract is within amount of the underlying hedged item to assess whether theforward contract qualifies for hedge accounting.
(n) Accounting for Retirement Benefits
Accounting for unrecognized actuarial loss and unrecognized prior service cost on
non-consolidated financial statements is different from the accounting on consolidated
financial statements.
(o) Consumption Taxes
Consumption taxes are accounted for by the tax exclusion method.
(p) Income Taxes
Deferred tax assets and liabilities are determined based on the differences between theamounts calculated for financial reporting purposes and the tax bases of the assets andliabilities and are measured using the enacted tax rates and laws which will be in effectwhen the differences are expected to reverse.
The Company has adopted the consolidated taxation system.
2.

U.S. Dollar Amounts

The translation of yen amounts into U.S. dollar amounts is included solely for the convenienceof readers outside Japan and has been made at ¥106.24 = U.S.$1.00, the approximate rate ofexchange prevailing on March 31, 2018. This translation should not be construed as arepresentation that yen have been, could have been, or could in the future be, converted into
U.S. dollars at that or any other rate.

69
67

Sumitomo Mitsui Construction Co.,Ltd.

Notes to Non-Consolidated Financial Statements
March 31, 20183.

Notes to Non-Consolidated Balance Sheets(a) Outstanding Balances with Subsidiaries and Affiliates
Significant outstanding balances for subsidiaries and affiliates other than individuallypresented on the accompanying non-consolidated balance sheets at March 31, 2018and 2017 were as follows:
As of March 31,
2018
2017
2018
(Millions of yen)(Thousands of
U.S. dollars)
Trade notes payable
Electronically recorded payable
Accounts payable on construction
contracts

¥ 218
5,432

¥ 385
8,280

$ 2,051
51,129

8,219

8,878

77,362(b) Pledged Assets
The following assets were pledged at March 31, 2018 and 2017 principally as
collateral for short-term bank loans, long-term debt and guarantees (such as guarantees
for the completion of construction contracts):
As of March 31,
2018
2017
2018
(Millions of yen)(Thousands of
U.S. dollars)
Land
Buildings, net of accumulated
depreciation
Structures, net of accumulated
depreciation
Investments in subsidiaries and affiliates
Total¥5,209¥5,209$49,030

273

265

2,569

60
369
¥5,91258
369¥5,902564
3,473$55,647

The secured liabilities as of March 31, 2018 and 2017 are summarized as follows:
As of March 31,
2018
2017
2018
(Millions of yen)(Thousands of
U.S. dollars)
Short-term bank loans[Including current portion of long-term
debt]

68

70

¥–

¥100

$–

[–]

[100]

[–]

Sumitomo Mitsui Construction Co.,Ltd.

Notes to Non-Consolidated Financial Statements
March 31, 2018
3. Notes to Non-Consolidated Balance Sheets (continued)(c) Contingent Liabilities
At March 31, 2018 and 2017, the Company was contingently liable for the following:
As of March 31,
2018
2017
2018
(Millions of yen)(Thousands of
U.S. dollars)
As guarantor of bank loans to subsidiaries
and other¥2,113¥2,977$19,888(d) Trade Notes Maturing on the Balance Sheet Date
Trade notes maturing at the end of the fiscal year are settled on the dates they mature.
Since the last day of the fiscal year in 2018 fell on a bank holiday, the below-listed
trade notes maturing on that date were excluded from the corresponding balances in
the non-consolidated balance sheets as of March 31, 2018.
As of March 31,
2018
2017
2018
(Millions of yen)(Thousands of
U.S. dollars)
¥95
¥–
$894

Trade notes receivable
Other current assets[Non-operating notes receivable]

8

–

75

(e) Financial covenants
For the year ended March 31, 2018
(1) The Company has entered into a syndicated loan contract dated on March 29,
2016 and loan commitment agreement dated on March 31, 2016 with its sevenbanks with Sumitomo Mitsui Banking Corporation as arranger. The following
financial covenant is included in the contract:
Total consolidated net assets at the end of each fiscal year beginning March 31,
2016 shall be equal to or exceed 75% of total consolidated net assets as of March
31, 2014 or of total consolidated net assets at the end of the most recent fiscal
year, whichever is greater.
In calculating consolidated net assets, any allowance or costs related to thecondominium in Yokohama will be excluded from the calculation in accordancewith instructions received from the Ministry of Land, Infrastructure Transportation
and Tourism of Japan on January 13, 2016.
In addition, the balance of bank borrowings under this syndicated loan contract is¥10,000 million ($94,126 thousand) in long-term debt as of March 31, 2018.

6913

Sumitomo Mitsui Construction Co.,Ltd.

Notes to Non-Consolidated Financial Statements
March 31, 2018
3. Notes to Non-Consolidated Balance Sheets (continued)(e) Financial covenants (continued)
Unused amount on loan commitment agreement as of March 31, 2018 and 2017
were as follows.
As of March 31,
2017
2018
2018
(Millions of yen)(Thousands of
U.S. dollars)
Maximum limit under the agreement
Loan balance outstanding
Difference (unused portion)¥20,000–¥20,000¥20,000–¥20,000$188,253–$188,253(2) The Company has entered into a syndicated loan contract dated on September 28,
2016 with its seven banks (same bank as we had contracted for the year ended
March 31, 2016) with Sumitomo Mitsui Banking Corporation as arranger. The
following financial covenant is included in the contract:
Total consolidated net assets at the end of each fiscal year beginning March 31,2017 shall be equal to or exceed 75% of total consolidated net assets as of March
31, 2014 or of total consolidated net assets at the end of the most recent fiscal
year, whichever is greater.
In calculating consolidated net assets, any allowance or costs related to thecondominium in Yokohama will be excluded from the calculation in accordancewith instructions received from the Ministry of Land, Infrastructure Transportation
and Tourism of Japan on January 13, 2016.
In addition, the balance of bank borrowings under this syndicated loan contract is¥8,500 million ($80,007 thousand) in long-term debt (including the current
portion) as of March 31, 2018.
(3) The Company has entered into a syndicated loan contract dated on September 28,
2016 with its seven banks (including different 5 bank from above (2)) with
Sumitomo Mitsui Banking Corporation as arranger. The following financial covenant
is included in the contract:
Total consolidated net assets at the end of each fiscal year beginning March 31,2017 shall be equal to or exceed 75% of total consolidated net assets as of March
31, 2016 or of total consolidated net assets at the end of the most recent fiscal
year, whichever is greater.
In addition, the balance of bank borrowings under this syndicated loan contract is¥4,250 million ($40,003 thousand) in long-term debt (including the current
portion) as of March 31, 2018.

72
70

Sumitomo Mitsui Construction Co.,Ltd.

Notes to Non-Consolidated Financial Statements
March 31, 2018
3. Notes to Non-Consolidated Balance Sheets (continued)(e) Financial covenants (continued)(4) The Company has entered into a committed syndicated loan contract dated on
March 30, 2018 with its seven banks (same bank as we had contracted for theyear ended March 31, 2016) with Sumitomo Mitsui Banking Corporation asarranger. The following financial covenant is included in the contract:
Total consolidated net assets at the end of each fiscal year beginning March 31,2018 shall be equal to or exceed 75% of total consolidated net assets as of March
31, 2017 or of total consolidated net assets at the end of the most recent fiscal
year, whichever is greater.
In calculating consolidated net assets, any allowance or costs related to thecondominium in Yokohama will be excluded from the calculation in accordancewith instructions received from the Ministry of Land, Infrastructure Transportation
and Tourism of Japan on January 13, 2016.
In addition, the balance of bank borrowings under the committed syndicated loan
contract is immaterial as of March 31, 2018.
Unused amount on the committed syndicated loan contract as of March 31, 2018and 2017 were as follows.
As of March 31,
2018
2017
2018
(Millions of yen)(Thousands of
U.S. dollars)¥10,000¥–$94,126–––¥–$94,126¥10,000

Maximum limit under the contract
Loan balance outstanding
Difference (unused portion)
For the year ended March 31, 2017

(1) The Company has entered into a syndicated loan contract dated on August 6, 2014
with its seven banks with Sumitomo Mitsui Banking Corporation as arranger.
The following financial covenant is included in the contract:
Total consolidated net assets at the end of each fiscal year beginning March 31,
2015 shall be equal to or exceed 75% of total consolidated net assets as of March
31, 2014, or of total consolidated net assets at the end of the most recent fiscal
year, whichever is greater.
In addition, the balance of bank borrowings under this syndicated loan contract is¥7,500 million in long-term debt (including the current portion) as of March 31,
2017.

73
71

Sumitomo Mitsui Construction Co.,Ltd.

Notes to Non-Consolidated Financial Statements
March 31, 2018
3. Notes to Non-Consolidated Balance Sheets (continued)(e) Financial covenants (continued)(2) The Company has entered into a syndicated loan contract dated on March 29,
2016 and loan commitment agreement dated on March 31, 2016 with its sevenbanks (same bank as we had contracted for the year ended March, 31 2015) with
Sumitomo Mitsui Banking Corporation as arranger. The following financial
covenant is included in the contract:
Total consolidated net assets at the end of each fiscal year beginning March 31,
2016 shall be equal to or exceed 75% of total consolidated net assets as of March
31, 2014 or of total consolidated net assets at the end of the most recent fiscal
year, whichever is greater.
In calculating consolidated net assets, any allowance or costs related to thecondominium in Yokohama will be excluded from the calculation in accordancewith instructions received from the Ministry of Land, Infrastructure Transportation
and Tourism of Japan on January 13, 2016.
In addition, the balance of bank borrowings under this syndicated loan contract is¥10,000 million in long-term debt as of March 31, 2017.
Unused amount on loan commitment agreement as of March 31, 2017 and 2016
were as follows.
As of March 31,
2016
2017
(Millions of yen)
Maximum limit under the agreement
Loan balance outstanding
Difference (unused portion)¥20,000–¥20,000¥20,000–¥20,000(3) The Company has entered into a syndicated loan contract dated on September 28,
2016 with its seven banks (same bank as we had contracted for the year ended
March, 31 2015 and 2016.) with Sumitomo Mitsui Banking Corporation as arranger.
The following financial covenant is included in the contract:
Total consolidated net assets at the end of each fiscal year beginning March 31,2017 shall be equal to or exceed 75% of total consolidated net assets as of March
31, 2014 or of total consolidated net assets at the end of the most recent fiscal
year, whichever is greater.
In calculating consolidated net assets, any allowance or costs related to thecondominium in Yokohama will be excluded from the calculation in accordancewith instructions received from the Ministry of Land, Infrastructure Transportation
and Tourism of Japan on January 13, 2016.

74
72

Sumitomo Mitsui Construction Co.,Ltd.

Notes to Non-Consolidated Financial Statements
March 31, 2018
3. Notes to Non-Consolidated Balance Sheets (continued)(e) Financial covenants (continued)
In addition, the balance of bank borrowings under this syndicated loan contract is¥9,500 million in long-term debt (including the current portion) as of March 31,
2017.
(4) The Company has entered into a syndicated loan contract dated on September 28,
2016 with its seven banks (including different 5 bank from above (3)) with
Sumitomo Mitsui Banking Corporation as arranger. The following financial covenant
is included in the contract:
Total consolidated net assets at the end of each fiscal year beginning March 31,2017 shall be equal to or exceed 75% of total consolidated net assets as of March
31, 2016 or of total consolidated net assets at the end of the most recent fiscal
year, whichever is greater.
In addition, the balance of bank borrowings under this syndicated loan contract is¥4,750 million in long-term debt (including the current portion) as of March 31,
2017.

4.

Notes to Non-Consolidated Statements of Income(a) Net Sales Based on Percentage-of-completion Method
Net sales on construction contracts accounted for under the percentage-of-completion
method amounted to ¥270,863 million ($2,549,538 thousand) and ¥254,900 million
for the years ended March 31, 2018 and 2017, respectively.
(b) Transactions with Subsidiaries and Affiliates
Significant transactions with subsidiaries and affiliates other than individually presented
on the accompanying non-consolidated statements of income for the years ended
March 31, 2018 and 2017 were as follows:
Years ended March 31,
2018
2017
2018
(Millions of yen)(Thousands of
U.S. dollars)
Dividend income
Royalty income
Provision of allowance for doubtfulreceivables (expense)

¥737
580
(516)

75
73

¥1,121713(157)$6,937
5,459(4,856)

Sumitomo Mitsui Construction Co.,Ltd.

Notes to Non-Consolidated Financial Statements
March 31, 2018
4. Notes to Non-Consolidated Statements of Income (continued)(c) Loss on Sales and Disposal of Property and Equipment
The significant components of loss on sales and disposal of property and equipment
for the years ended March 31, 2018 and 2017 were as follows:
Years ended March 31,
2018
2017
2018
(Millions of yen)(Thousands of
U.S. dollars)
Loss on disposal
Loss on sales
Others
Total

¥45
–
–
¥45

¥92
0
3
¥95

$423
–
–
$423

(d) Selling, General and Administrative Expenses
The significant components of selling, general and administrative expenses for theyears ended March 31, 2018 and 2017 were as follows:
Years ended March 31,
2018
2017
2018
(Millions of yen)(Thousands of
U.S. dollars)
Salaries and wages
Provision of allowance for doubtfulreceivables
Depreciation expenses
Other
Total

76
74

¥ 7,045¥ 6,341$066,312

–
491
7,312
¥14,848

27
420
6,570
¥13,360–
4,621
68,825$139,759

Sumitomo Mitsui Construction Co.,Ltd.

Notes to Non-Consolidated Financial Statements
March 31, 2018
5.

Securities

Stocks of subsidiaries and affiliates at March 31, 2018 and 2017 were as follows:
As of March 31, 2018
Carrying
Fair
Unrealized Carrying
Fair
Unrealized
value
value
gain
value
value
gain
(Millions of yen)(Thousands of U.S. dollars)
Stocks ofa subsidiary¥717¥3,606¥2,889$6,748$33,942$27,193

As of March 31, 2017
Carrying
Fair
Unrealized
value
value
gain
(Millions of yen)
Stocks ofa subsidiary¥717¥2,470¥1,753

Note: Stocks of subsidiaries and affiliates for which it is extremely difficult to determine
market values were excluded from the above as follows:
As of March 31,
2017
2018
2018
Carrying value(Millions of yen)(Thousands of
U.S. dollars)
Stocks of
subsidiaries
Stocks ofaffiliates¥3,797¥3,638$35,739

10

10

94

75

77

Sumitomo Mitsui Construction Co.,Ltd.

Notes to Non-Consolidated Financial Statements
March 31, 2018
6.

Income Taxes

The significant components of the Company’s deferred tax assets and liabilities at March 31,2018 and 2017 were as follows:
As of March 31,
2018
2017
2018
(Millions of yen)(Thousands of
U.S. dollars)
Deferred tax assets:
Accrued retirement benefits
Allowance for bad debts
Account payable and accrued expenses
Loss on devaluation of investments in
subsidiaries and affiliates
Reserve for defects on completed
construction projects
Allowance for losses on construction
contracts
Other
Gross deferred tax assets
Valuation allowance
Total deferred tax assets
Deferred tax liabilities:
Unrealized holding gain on securities
Asset retirement obligations
Deferred (loss) on hedging instruments, netof taxes
Total deferred tax liabilities
Net deferred tax assets¥ 4,384
1,460
2,094

¥ 4,582
3,076
1,956

$ 41,265
13,742
19,710

1,404

1,117

13,215

260

213

2,447

35
1,215
10,854(6,754)
4,100

101
1,141
12,189(8,647)
3,542

329
11,436102,164(63,573)
38,591

(445)
(6)

(139)
(3)

(4,188)
(56)

–
(452)
¥ 3,648(0)(143)¥ 3,398–(4,254)$ 34,337

The following table summarizes the significant differences between the statutory tax rates
and the effective tax rates for the years ended March 31, 2018 and 2017:
Years ended March 31,
2018
2017
Statutory tax rates
Non-deductible expenses
Non-taxable income
Per capita inhabitants’ taxes
Tax credit
Valuation allowance
Other
Effective tax rates

30.9%
0.5
(1.0)
0.2
(2.7)
(8.2)
(0.9)
18.8%

30.9%
0.4
(1.5)
1.5
(3.1)
0.8
(0.6)
28.4%

76

20

Sumitomo Mitsui Construction Co.,Ltd.

Notes to Non-Consolidated Financial Statements
March 31, 2018
7.

Subsequent Event

Stock Repurchase
At the meeting of the Board of Directors held on May 14, 2018, the Company resolved torepurchase its stock in accordance with Article 156 of the Company Act of Japan, as
applied pursuant to paragraph 3 of Article 165 of the Companies Act of Japan.
(a) Reason for repurchase of treasury stock
To improve capital efficiency and to engage flexible capital policies in response tochanges in management environment.
(b) Details of repurchase(1) Class of share(2) Total number of shares ofcommon stock to be repurchased(3) Total amount(4) Period(5) Repurchase method(Reference)
Result of repurchase(1) Class of share(2) Total number of shares ofcommon stock to repurchased(3) Total amount(4) Period(5) Repurchase method

8.

Common stock of the Company
Up to 2,600,000 shares(1.60% of the total number of shares ofcommon stock outstanding excluding
treasury stock)
Up to 1,500,000,000 yen
From May 15, 2018 to September 28, 2018
Auction market on Tokyo Stock Exchange

Common stock of the Company
2,016,800 shares
1,499,917,500 yen
From May 15, 2018 to June 14, 2018(contract basis)
Auction market on Tokyo Stock Exchange

Short-Term Bank Loans and Long-Term Debt

Short-term bank loans generally represent notes, principally at average interest rates of none
at March 31, 2018 and 2017.
Long-term debt at March 31, 2018 and 2017 were summarized as follows:
As of March 31,
2018
2017
2018
(Millions of yen)(Thousands of
U.S. dollars)
Debt with collateral (at average interest rates
of none and 2.0% at 2018 and 2017)
¥–
¥ 100
$–
Less current portion
–
(100)
–
¥–
¥ –
$–
77

21

78

79

CORPORATE OUTLINE
Corporate Name:

Main Scope of Business:

Main Banks

Sumitomo Mitsui Construction Co.,Ltd.

1) To contract, plan, design and/or supervise
civil engineering, architectural, prestressed
concrete, electrical, piping and other works

Sumitomo Mitsui Banking Corporation
Sumitomo Mitsui Trust Bank, Limited

Established:
October 14, 1941

Permission:(Special-28)No.200, Specified Constructor,
granted by the Minister of Land,
Infrastructure and Transport

License:(15)No.1, Housing, Land and Building Dealer,
granted by the Minister of Land, Infrastructure
and Transport

Main Shareholders
2) To plan, design and supervise marine
development, regional development,
urban development, natural resource
development and environment
maintenanceJapan Trustee Services Bank, Ltd.

3) To manufacture, sell and lease materials
for civil and building works, prestressed
concrete products, seismic isolating
device, seismic damping device, andother machinery and instruments

Mitsui Fudosan Co., Ltd.

Corporate History

80

The Master Trust Bank of Japan, Ltd.
NORTHERN TRUST GLOBAL SERVICES
LIMITED, LUXEMBOURG RE LUDU
RE: UCTIS CLIENTS 15.315 PCT NON
TREATY ACCOUNT
Sumitomo Realty & Devlopment Co.,Ltd.

CORPORATE DATAHEAD OFFICE

Bangkok:(Thailand)

SMCC Overseas Singapore Pte. Ltd.

2-1-6 Tsukuda, Chuo-ku,
Tokyo, 104-0051, Japan

26/49, 14th Floor, Orakarn Building, Soi Chidlom,
Ploenchit Road, Lumpini, Pathumwan, Bangkok
10330, Thailand
TEL:66-2-250-0560
FAX:66-2-254-7405

2 Bukit Merah Central #14-01 & 02, Singapore
159835
TEL:65-6933-8000
FAX:65-6933-8001

INTERNATIONAL DIVISION
2-1-6 Tsukuda, Chuo-ku,
Tokyo, 104-0051, Japan
TEL:81-3-4582-3171
FAX:81-3-4582-3247

OVERSEAS OFFICESMCC Malaysia Sdn.Bhd.
Yangon:(Myanmar)#602, 6Floor, Tower B, Mindhama Condo,
Mindhama Road, Mayangone Township, Yangon,
Myanmar
TEL:95-1-1224236

Level 13, Suite13. 06, Johor Bahru City Square(Office Tower)
106-108 Jalan Wong Ah Fook, 80000 Johor Bahru,
Malaysia
TEL:60-7-207-1133
FAX:60-7-207-3311

Manila:(Philippines)
The Peninsula Court 6th Floor, 8735 Paseo deRoxas cor. Makati Avenue, Makati City, Metro
Manila, Philippines
TEL:63-2-840-4913
FAX:63-2-840-4912

Guam:(USA)Suite 105-107, IBC Building, J.L. Baker Street,
Harmon Industrial Park, Harmon, Guam 96913(P.O.Box 9670, Tamuning, Guam 96931)
TEL:1-671-649-7521
FAX:1-671-649-7550

Hanoi:(Vietnam)#502-504, 5th Floor, V-Tower, 649 Kim Ma str., Ba
Dinh Dist., Hanoi, Vietnam
TEL:84-24-3942-8888
FAX:84-24-3942-8808

Singapore:
2 Bukit Merah Central #14-01 & 02, Singapore
159835
TEL:65-6933-8000
FAX:65-6933-8001

Jakarta:(Indonesia)
Summitmas 2, 20th Floor JL.Jend. Sudirman Kav.
61-62, Jakarta Selatan 12190, Indonesia
TEL 62-21-520-1757
FAX 62-21-525-0905

SUBSIDIARY COMPANIES INOVERSEAS
SMCC(Thailand)Co.,Ltd.
26/49, 14th Floor, Orakarn Building, Soi Chidlom,
Ploenchit Road, Lumpini, Pathumwan, Bangkok
10330, Thailand
TEL:66-2-250-0560
FAX:66-2-254-7405

PT.SMCC Utama Indonesia
Summitmas 2, 20th Floor JL.Jend. Sudirman Kav.
61-62, Jakarta Selatan 12190, Indonesia
TEL:62-21-520-1757
FAX:62-21-525-0905

SMCC Construction India Ltd.
201, 2nd Floor, Plot No. -D1, Ras Vilas, Saket
District Centre, Saket, New Delhi - 110017, India
TEL:91-11-41392800
FAX:91-11-41652592,41652593

SMCC Philippines, Inc.
The Peninsula Court 6th Floor, 8735 Paseo deRoxas cor. Makati Avenue, Makati City, Metro
Manila, Philippines
TEL:63-2-840-4913
FAX:63-2-840-4912

81

SMCC Taiwan Co., Ltd.
3F., No.129, Sec.2, Zhongshan N.Rd.,
Zhongshan Dist., Taipei City 104, Taiwan (R.O.C.)
TEL:886-2-2563-9833
FAX:886-2-2563-3839