34Notes to Non-Consolidated Financial Statements
I.

Notes on Matters Related to Important Accounting Policies
1.

Criteria and methods for evaluating assets(1) Derivatives: Market value method(2)

Inventory assets: Based on cost method using retail method (balance sheet values are calculatedusing method of reducing book value when the contribution of inventories to profitabilitydeclines)

2.

Method of depreciation of noncurrent assets(1) Property, plant and equipment: Straight line method(2) Intangible assets: Straight line method
As for the software used in-house, the Company adopts the straight-line method based on anexpected usage period of five years for internal use.

3.

Criteria for recording reserves
Provision for directors’ retirement benefits: The Company records required allowance as of the end of
the term in accordance with internal rules on payment of directors’ retirement benefits to prepare forthe payment of retirement benefits to directors.

4.

Treatment of consumption tax, etc.
The accounting treatment of consumption tax and local consumption tax is based on tax exclusion
method.

5.

Inclusion of interest payable, etc. in noncurrent assets acquisition cost
The interest payable and loan-related ancillary cost incurred during the construction of the passenger
terminal building have been added to the acquisition cost (for the fiscal year under review – 742
million yen; cumulative at the end of the fiscal year under review -- 4,125 million yen) and recorded
as part of noncurrent assets.

6.

Hedge accounting method(1) Hedge accounting method: Deferred hedge treatment(2) Hedge procedure and hedge target
Hedge procedure: Derivative trading (interest swap trading)Items hedged: Borrowings based on variable interest rate(3) Hedge policy: It is carried out with the aim of avoiding risks rising from future fluctuation ofinterest rate and the Company’s policy is not to carry out any speculative transactions.
(4) Method to evaluate the hedge effectivenessThe assessment on the effectiveness is omitted, as the important conditions for hedge proceduresand hedge target are the same and it is assumed in advance to fully offset the risk of interest rate
fluctuations from the start of the hedge and continuously thereafter.

II.

Notes on Balance Sheet
1.

The amounts are rounded down to the nearest million.

52.

Pledged assets
Assets pledged as collateral(Millions of yen)
Ordinary deposits

43,987

Accounts receivable – trade51

Buildings

92,749Structures

1,169

Machinery and equipment

5,819

Separately managed penalty in trust

1,000

Liabilities corresponding to the above
Current portion of long-term loans payable

5,796Long-term loans payable

93,155

3.

Total depreciation of property, plant and equipment

4.

Monetary claims and obligations to subsidiaries and affiliates
Monetary claims

Monetary obligations

61,156

Accounts receivable – trade400

Accounts receivable – other21

Accounts payable – trade

3,563

Accrued expenses

3,173

Shareholder subordinated bonds

6,660

Long-term loans payable

6,660

Long-term lease deposit received

262

III. Notes on Income Statement(Millions of yen)1.

Reported amounts are rounded down to the nearest million yen.

2.

Transactions with subsidiaries and affiliates

Operating transactions
Non-operating transactions

IV. Notes on Tax Effect Accounting
Breakdown of main causes for deferred tax assets(Deferred tax assets)(Millions of yen)Accrued enterprise tax, etc.

133

Provision for directors’ retirement benefits

16

Deferred losses on hedges

1,863

Other

240

Deferred tax assets subtotal

2,254

Valuation reserve− 16

Deferred tax assets total

2,238

6

58,845446

V.

Main corporate shareholders etc.
1.

Main corporate shareholders etc.
(Millions of yen)Type

Name of thecompany etc.

Other relatedcompany

Mainshareholder

Japan Airport
Terminal Co.,
Ltd

Japan Airlines
Co., Ltd.

Main
shareholder

ANAHoldings Inc.

DirectorToshihiro
Kawasaki
Representativ
e Director andPresident,TEPCOEnergyPartner,
Incorporated

Director

FutoshiNagataRepresentativ
e Director andSenior
Executive
President,
NaritaInternational
AirportCorporation

Ratio ofvoting rights
and otherownership

38.78%
directly held

19.36%
directly held

Relationshipwith the party

Procurementof goods andconsignmentof operationof stores etc.:
anddouble-hattin
g of directors

Transactions

Transacti
on value

Account title

Balance attheterm-end

Financing(Note 1)

-6,600Borrowing offunds (Note 2)
Businessconsignment(Note 3)
Procurement ofgoods (Note 4)-Shareholder
subordinatedbonds
Long-termloans payableAccrued
expenses
Accounts
payable—trade

3,563

Shareholder
subordinatedbonds
Long-term
loans

3,330

Shareholder
subordinatedbonds
Long-term
loans

3,330

1,260

19,45137,642Financing(Note 1)-

Borrowing offunds (Note 2)-

Financing(Note 1)
Borrowing offunds (Note 2)--

19.36%
directly held--

Borrowing offunds

Borrowing offunds(Note 2)
(Note 5)Long-termloans-

Borrowing offunds

Borrowing offunds(Note 2)
(Note 6)Long-term
loans

6,660
3,137

3,330

3,330

1,620

Terms and conditions of transactions and policy on determining them
Note 1: Financing terms and conditions are in accordance with the Shareholder Subordinated Bond
Agreement signed between the Company and its six shareholders including the above threecompanies on March 30, 2012 following the approval by the Board of Directors Meeting onFebruary 23, 2012 (prepared based on the loan terms of the Shareholders Agreement agreed
among the shareholders as of the establishment of the Company).
As for the repayment of the principal, it has been agreed that the order of the settlement of claims
is after that of repayment of preferred loans from the lenders based on the Limited Loan Contract
Alteration Contract signed with the lenders.
Note 2: Loan terms and conditions are in accordance with the Shareholder Subordinated Loan Agreement
signed between the Company and its nine shareholders including the above three companies onMarch 27, 2008 following the approval by the Board of Directors Meeting on March 18, 20087

(prepared based on the loan terms of the Shareholders Agreement agreed among the shareholders
as of the establishment of the Company).
As for the repayment of the principal, it has been agreed that the order of the settlement of claims
is after that of repayment of preferred loans from the lenders based on the Limited Loan Contract
Alteration Contract signed with the lenders.
Note 3: The business consignment terms and conditions are determined as in the cases of any other similartransactions conducted generally.
Note 4: The terms and conditions for procurement of goods are determined as in the cases of any othersimilar transactions conducted generally.
Note 5: This transaction was conducted for a third party by Toshihiro Kawasaki, a director at our company,in the capacity of a representative of TEPCO Energy Partner, Incorporated.
Note 6: This transaction was conducted for a third party by Futoshi Osada, a director at our company, inthe capacity of a representative of Narita International Airport Corporation.
Note 7: Among the amounts indicated in the table above, transaction amounts do not include consumption
tax.
Note 8: The ratios of voting rights and other ownership are rounded down to the nearest two decimal
places.

VI. Notes on data per share
1.

Net asset per share:

5,872,767.18 yen

2.

Current net profit per share:

1,497,353.71 yen

VII. Matters Concerning Important Subsequent Events(Issuance of Shares for Subscription by a Third-Party Allotment)
The Company decided to issue shares for subscription by a third-party allotment in an extraordinary general
meeting of shareholders held on October 26, 2017. Moreover, in the board of directors meeting held on thesame day, the allotment of shares for subscription was resolved, and the payment was completed on April
27, 2018. As a result, the capital stock and the total number of shares outstanding respectively amounted to13,265 million yen and 5,306 shares.
Moreover, Japan Airport Terminal Co., Ltd. came to own 51.00% of the voting rights of the Company due tocapital increase through third-party allocation, and the Company became a consolidated subsidiary of arelated company and an equity method affiliate of Japan Airport Terminal Co., Ltd.
1.

Type and number of shares to be issued：Common stock 1,706 shares

2.

Issuance price：5 million yen per share

3.

Total issue amount：8,530 million yen

4.

Amount of capital incorporation：4,265 million yen

5.

Payment date：April 27, 20186.

Allottee and number of shares to be allotted：Japan Airport Terminal Co., Ltd. 1,310 shares

Japan Airlines Co., Ltd.

198 shares

ANA Holdings Inc.

198 shares

87.

Purpose of funds
The funds will be applied to renovation and reconstruction works for the international passenger
terminals, etc. and repair works to improve the function of existing facilities.

9