HAZAMA ANDO CORPORATIONFINANCIAL REVIEW 2021
Year ended March 31, 2021

CONTENTS
Consolidated Financial Review........................................................................ 1
Consolidated Balance Sheets.......................................................................... 4
Consolidated Statements of Income............................................................... 6
Consolidated Statements of Comprehensive Income...................................... 7
Consolidated Statements of Changes in Net Assets........................................ 8
Consolidated Statements of Cash Flows....................................................... 10
Notes to Consolidated Financial Statements................................................. 12
Independent Auditor‘s Report...................................................................... 35

Consolidated Financial Review
HAZAMA ANDO CORPORATION and Consolidated Subsidiaries
For the years ended March 31, 2021, 2020, 2019, 2018 and 2017

Summary
Thousands of
U.S. dollars

Millions of yen
2021

2020

2019

2018

2017

2021

$2,994,491

Operating results:
Revenues¥331,550¥358,191¥334,245¥348,879¥378,983

Other activities

20,451

19,94525,72728,14229,011

184,709

Total

352,001

378,136

359,972

377,021407,994

3,179,200

303,836

330,918

314,180

319,666

348,836

2,744,184

48,16547,21845,79257,35559,158435,016

20,80822,517

22,10021,64022,140187,933

27,357

24,701

23,69235,71537,018247,083

17,18916,804

8,863

23,862

26,277

155,247

Total assets¥339,611¥339,772¥349,657¥329,778¥318,387$3,067,296

Total liabilities

192,935

202,873

215,974

207,378

217,643

1,742,549

Total net assets

146,676

136,899

133,683

122,400

100,744

1,324,747¥29,155¥(3,103)¥5,900¥38,127¥(1,802)$263,322(3,954)(3,016)(2,357)(2,261)

6,317(35,712)(12,656)(13,244)(7,780)(3,962)(3,376)(114,306)

Construction contracts

Cost of sales
Gross profit
Selling, general andadministrative expenses
Operating income
Profit attributable toowners of parent
Financial position:

Cash flows:
Cash flows from operating
activities
Cash flows from investing
activities
Cash flows from financing
activities

Yen

U.S. dollars

Per share amounts:
Profit attributable toowners of parent
Basic
Diluted¥89.80¥84.42¥45.21¥128.97¥142.30

$0.81

89.78

84.40

44.20

119.41131.600.81

Dividends
Common stock
Net assets

30.00

30.00

30.00

25.00

20.00

0.27

782.28704.86664.78651.77541.43

7.07

Note: 1. U.S. dollar amounts in this annual report are translated from yen at the rate of ¥110.72 to US$1.00 for convenience.
2. The dividend per share for 2018 includes a ¥5 special dividend.

1Financial Review
Revenues
Revenues in fiscal 2021 totaled ¥352,001 million (US$3,179,200 thousand), of which ¥331,550 million (US$2,994,491 thousand)came from construction projects and ¥20,451 million (US$184,709 thousand) from other activities. These two business segments
accounted for 94.2% and 5.8%, respectively, of total revenues.
Costs and Expenses
Cost of sales amounted to ¥303,836 million (US$2,744,184 thousand), which is equivalent to 86.3% of revenues. Selling, generaland administrative expenses amounted to ¥20,808 million (US$187,933 thousand), which is equivalent to 5.9% of revenues.
Operating income reached ¥27,357 million (US$247,083 thousand), and the operating margin was 7.8%. Profit attributable toowners of parent amounted to ¥17,189 million (US$155,247 thousand). Basic profit attributable to owners of parent per share was¥89.80 (US$0.81). HAZAMA ANDO CORPORATION paid dividend of ¥15(US$0.135) per share for the fiscal year ended March
31, 2020 on June 29, 2020, and paid interim dividend of ¥15 (US$0.135) per share for the fiscal year ended March 31, 2021 on
December 4, 2020.
Financial Position and Analysis
Total assets amounted to ¥339,611 million (US$3,067,296 thousand), total liabilities amounted to ¥192,935 million (US$1,742,549
thousand), and total net assets amounted to ¥146,676 million (US$1,324,747 thousand) at the end of fiscal 2021.
Net worth to total assets ratio was 43.0%. Net assets per share amounted to ¥782.28 (US$7.07).
Cash Flows
Cash and cash equivalents at the end of the year increased by ¥12,573 million (US$113,557 thousand) to ¥128,035 million(US$1,156,385 thousand).
Net cash provided by operating activities amounted to ¥29,155 million (US$263,322 thousand) mainly as the result of income
before income taxes amounted to ¥25,087 million (US$226,581 thousand), decrease in notes and accounts payable amounted to¥8,290 million (US$74,874 thousand) , increase in other inventories amounted to ¥4,137 million (US$37,365 thousand) and income
taxes paid amounted to ¥7,756 million (US$70,051 thousand) .
Net cash used in investing activities amounted to ¥(3,954) million (US$(35,712) thousand) mainly as a result of purchase ofproperty, plant and equipment amounted to ¥2,935 million (US$26,508 thousand).
Net cash used in financing activities amounted to ¥(12,656) million (US$(114,306) thousand) mainly as a result of Cashdividends paid amounted to ¥5,803 million (US$52,411 thousand), Repayment of long-term loans payable amounted to ¥5,535
million (US$49,991 thousand), purchase of treasury stock amounted to ¥4,936 million (US$44,581 thousand) and proceeds fromlong-term loans payable amounted to ¥4,107 million (US$37,094 thousand).
Construction Business (Non-Consolidated Construction Projects)
As HAZAMA ANDO CORPORATION’s construction business accounts for a large percentage of consolidated group business,
the financial performance of the business is presented below for reference.
Thousands of
U.S. dollars

Millions of yen
Revenues

2021

2020

2019

2018

2017

2021

Government sector¥85,020¥78,588¥70,268¥88,070¥99,198$767,883

Private sector

43,63835,98340,531

34,072

31,434394,129

7,275

9,743

7,991

5,331

3,543

65,706135,933

124,314

118,790

127,473

134,175

1,227,718

Civil engineering
Domestic

Overseas
Subtotal
Building construction
Domestic
Government sector

18,59230,131

26,932

27,71645,292

167,919

Private sector

164,052

180,720

161,430

168,806

169,470

1,481,684

9,467

16,363

20,497

19,47324,16185,504

Subtotal

192,111227,214

208,859

215,995

238,923

1,735,107

Total construction projects¥328,044¥351,528¥327,649¥343,468¥373,098$2,962,825

Overseas2

Revenue from the civil engineering category accounted for ¥135,933 million (US$1,227,718 thousand), or 41.4% of total revenue
from construction projects, with domestic projects contributing ¥128,658 million (US$1,162,012 thousand), or 94.6%.
The government sector contributed ¥85,020 million (US$767,883 thousand), or 66.1%, of total domestic civil engineering
revenue, while private-sector civil engineering revenue amounted to ¥43,638 million (US$394,129 thousand), or 33.9% of total
domestic civil engineering revenue. Overseas civil engineering revenue reached ¥7,275 million (US$65,706 thousand), equivalent
to 5.4% of total revenue in the civil engineering category.
Revenue from the building construction category accounted for ¥192,111 million (US$1,735,107 thousand), or 58.6% of total
construction revenue. Domestic projects accounted for ¥182,644 million (US$1,649,603 thousand), or 95.1%.
The government sector contributed ¥18,592 million (US$167,919 thousand), or 10.2%, of total domestic building construction
revenue, while private-sector building construction revenue amounted to ¥164,052 million (US$1,481,684 thousand), or 89.8%, of
total domestic building construction revenue. Overseas building construction revenue reached ¥9,467 million (US$85,504
thousand), equivalent to 4.9% of total revenue in the building construction category.
Total overseas construction revenue reached ¥16,742 million (US$151,210 thousand) and accounted for 5.1% of total
construction revenue. Civil engineering projects accounted for 43.5% of this total, and building construction for 56.5%.
Thousands of
U.S. dollars

Millions of yen
Orders Received

2021

2020

2019

2018

2017

2021

Civil engineering¥101,528¥193,575¥192,179¥123,469¥193,008$916,980

Building construction

199,341

186,706

235,473

225,723

236,278

1,800,406

Total construction projects¥300,869¥380,281¥427,652¥349,192¥429,286$2,717,386

Orders received for construction projects during fiscal 2021 amounted to ¥300,869 million (US$2,717,386 thousand). Overseas
work contributed 1.4% of orders in the construction category. Civil engineering orders amounted to ¥101,528 million (US$916,980
thousand), or 33.7% of total construction orders. Building construction orders amounted to ¥199,341 million (US$1,800,406
thousand), which is equivalent to 66.3% of total construction orders.
Thousands of
U.S. dollars

Millions of yen
Year-end Backlog
Civil engineering

2021

2020

2019

2018

2017

2021

¥329,836¥364,120¥294,914¥221,679¥226,120$2,979,010

Building construction

189,782

182,579

223,318

196,300

186,748

1,714,072

Total construction projects¥519,618¥546,699¥518,232¥417,979¥412,868$4,693,082

Order backlog for construction projects at the end of fiscal 2021 amounted to ¥519,618 million (US$4,693,082 thousand), withcivil engineering work accounting for ¥329,836 million (US$2,979,010 thousand), or 63.5%, and building construction for¥189,782 million (US$1,714,072 thousand), or 36.5%.

3

Consolidated Balance Sheets
HAZAMA ANDO CORPORATION and Consolidated Subsidiaries
March 31, 2021 and 2020

Thousands of
U.S. dollars(Note 1)
2021

Millions of yen
2021

2020

AssetsCurrent assets:
Cash and time deposits (Notes 4 and 25)¥129,317¥102,972$1,167,964

Marketable securities (Notes 3 and 25)－

14,000

－

6,901

2,930

62,328

Receivables (Note 25):
Notes

114,490

134,800

1,034,050

Inventories (Notes 5 and 8)

14,711

9,615

132,867

Other (Note 7)

9,023

13,28081,494

(12)

(14)

(108)

274,430

277,5832,478,595

Land

15,80015,505

142,702

Buildings and structures

23,64922,297

213,593

Machinery and equipment

12,013

11,456

108,499

818

1,467

7,388

52,28050,725472,182(22,724)(21,577)(205,238)

29,55629,148

266,944

Accounts

Less allowance for doubtful accounts
Total current assets

Property, plant and equipment (Notes 7, 9,14, 15 and 16):

Other
Less accumulated depreciation
Net property, plant and equipment

Investments and other assets:
21,521

18,513

194,373

Investments in unconsolidated subsidiaries and affiliates

176

185

1,590

Long-term loans receivable (Note 7)

133

145

1,201

Net defined benefit asset

707

－

6,385

Deferred tax assets (Note 19)

7,819

9,528

70,619Other (Note 7)

5,270

4,671

47,598

(1)

(1)

(9)

Investment securities (Notes 3, 7 and 25)

Less allowance for doubtful accounts
Total investments and other assets
Total assets
See accompanying notes.

4

35,62533,041

321,757¥339,611¥339,772$3,067,296

Thousands of
U.S. dollars(Note 1)
2021

Millions of yen
2021

2020

¥12,166¥12,258$109,881

4,147

5,133

37,455

292

342

2,637

Notes

17,82420,203160,983

Accounts

55,841

61,658504,344

Income taxes payable

4,907

4,812

44,319Advances received (Note 17)

32,62934,244

294,698

Liabilities and Net Assets
Current liabilities:
Short-term loans payable (Notes 6 and 25)
Current maturities of long-term loans payable (Notes 6 and 25)
Current portion of bonds (Notes 6 and 25)
Payables (Note 25):

Accrued expenses
Provision for losses on construction contracts (Note 8)

36

38

325

1,249

955

11,281

Provision for losses on fire disaster

5,996

6,699

54,155

Other

38,89933,045351,328

173,986

179,387

1,571,406

400

692

3,613

Total current liabilities
Long-term liabilities:
Bonds (Notes 6 and 25)
Long-term loans payable, less current maturities (Notes 6 and 25)

8,271

8,713

74,702

Net defined benefit liability (Note 18)

8,858

12,77680,003

Provision for environmental spending

139

148

1,255

Provision for management board incentive plan trust

117

94

1,057

Deferred tax liabilities (Note 19)
Other

37

46

334

1,127

1,017

10,179Total long-term liabilities

18,94923,486

171,143

Total liabilities

192,935

202,873

1,742,549

153,595

Net assets (Notes 21 and 22):
Shareholders’ equity:
Capital stock
Common stock

Authorized - 400,000,000 shares
17,00617,006

Capital surplus

19,91919,926

179,904

Retained earnings

115,086

103,700

1,039,433

Less treasury stock, at cost

(10,188)(5,284)(92,016)

141,823

135,348

1,280,916

3,755

1,880

33,914

Issued – 200,343,397 shares

Total shareholders’ equity
Accumulated other comprehensive income:
Valuation difference on available-for-sale securities
Foreign currency translation adjustment

56

117

506

Accumulated remeasurements of defined benefit plans281(1,287)2,538

Total accumulated other comprehensive income

4,092

710

36,958

Share subscription rights

3

4

27

Non-controlling interests

758

837

6,846

Total net assets

146,676

136,899

1,324,747

Total liabilities and net assets¥339,611¥339,772$3,067,296

5Consolidated Statements of Income
HAZAMA ANDO CORPORATION and Consolidated Subsidiaries
For the years ended March 31, 2021 and 2020

Thousands of
U.S. dollars(Note 1)
2021

Millions of yen
2021

2020

¥331,550¥358,191

20,451

19,945

184,709352,001

378,136

3,179,200

Construction contracts

287,107314,0132,593,091

Other activities

16,72916,905151,093

303,836

330,918

2,744,184

48,16547,218435,016

20,80822,517

187,933

27,357

24,701

247,083

Revenues (Notes 11 and 23):
Construction contracts
Other activities$2,994,491

Cost of sales (Notes 12 and 23):

Gross profit
Selling, general and administrative expenses (Notes 13 and 23):
Operating income
Other income (expenses):
Interest and dividends income

366

426

3,306

Interest expense

(333)

(422)

(3,008)Foreign exchange loss

(19)

(336)

(171)

Commission fee

(850)

(136)

(7,677)

Gain on sales of noncurrent assets (Note 15)

13

87

117

Gain on sales of investment securities

160

255

1,445

Gain on reversal of provision for losses on fire disaster

28

733

253

Subsidy income

355

－

3,206

Loss on sales of noncurrent assets (Note 16)

(20)

(30)

(181)

Loss on tax purpose reduction entry of noncurrent assets

(355)

－

(3,206)

Loss on sales of investments securities

－

(143)

－

Loss on valuation of investments securities

－

(70)

－

(885)

－

(7,993)

Impairment loss (Note 14)
Loss on litigation

(75)

(47)

(677)

Losses on fire disaster

(25)

(315)

(226)

(630)

(248)

(5,690)(2,270)(246)(20,502)

25,08724,455

226,581

Current

7,790

7,875

70,358Deferred

138

(147)

1,247

7,928

7,728

71,605

17,15916,727

154,976

(30)

(77)

(271)

¥17,189¥16,804$155,247

Other, net
Income before income taxes
Income taxes (Note 19):

ProfitProfit attributable to non-controlling interests
Profit attributable to owners of parent

U.S. dollars

Yen(Note 1)

2021

2020

2021

Basic

¥89.80¥84.42$0.81

Diluted

89.78

84.40

0.81

30.00

30.00

0.271

Per share amounts (Note 24):
Profit attributable to owners of parent

Cash dividends applicable to the year
Common stock
See accompanying notes.

6Consolidated Statements of Comprehensive Income
HAZAMA ANDO CORPORATION and Consolidated Subsidiaries
For the years ended March 31, 2021 and 2020

2021

2020

Thousands of
U.S. dollars(Note 1)
2021

¥17,159¥16,727$154,976

1,875(2,602)

16,934－3－

Foreign currency translation adjustment

(108)

104

(975)

Remeasurements of defined benefit plans
Total other comprehensive income (Note 20)

1,568

69

14,162Millions of yen

ProfitOther comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges

Comprehensive income

3,335(2,426)30,121

20,49414,301

185,097

20,571

14,328

185,793

(77)

(27)

(696)

Comprehensive income attribute to:Comprehensive income attribute to owners of the parent
Comprehensive income attribute to non-controlling interests
See accompanying notes.

7

Consolidated Statements of Changes in Net Assets
HAZAMA ANDO CORPORATION and Consolidated Subsidiaries
For the years ended March 31, 2021 and 2020

Millions of yen
Shareholders’ equity
Capital stock
Balance at April 1, 2019¥17,006

CapitalsurplusRetainedearnings¥19,927

TreasuryStock¥92,945

Cash dividends paid

(6,004)

Profit attributable toowners of parent

16,804(1)

Disposal of treasury stock¥ (256)38(5,066)

Acquisition of treasury stock
Change of scope of
consolidation(45)

Net changes in items otherthan shareholders’ equity
Balance at April 1, 2020

¥17,006¥19,926¥103,700

Cash dividends paid

(5,803)

Profit attributable toowners of parent

17,189(7)

Disposal of treasury stock¥ (5,284)

32(4,936)

Acquisition of treasury stock
Change of scope of
consolidation
Net changes in items otherthan shareholders’ equity
Balance at March 31, 2021

Balance at April 1, 2019¥17,006¥19,919¥115,086¥ (10,188)

Millions of yen
Accumulated other comprehensive income
Valuation
Foreign
Accumulated
Deferred gains
difference on
currency
remeasurements ofor losses onavailable-for-saletranslation
defined benefit planshedgessecurities
adjustment¥4,483¥ (3)¥63¥ (1,357)

Share
subscription
rights¥5

Noncontrollinginterests¥870¥133,683

Cash dividends paid

(6,004)

Profit attributable toowners of parent

16,804

Disposal of treasury stock37

Acquisition of treasury stock(5,066)

Change of scope ofConsolidation(45)

Net changes in items otherthan shareholders’ equity(2,603)

3

54

70

(1)

(33)

(2,510)

Balance at April 1, 2020

¥1,880¥－¥117¥(1,287)¥4¥837

136,899

Cash dividends paid

(5,803)

Profit attributable toowners of parent

17,189

Disposal of treasury stock

25

Change of scope ofConsolidation－(4,936)

Acquisition of treasury stock

8

Total

Net changes in items otherthan shareholders’ equity

1,875

Balance at March 31, 2021

¥3,755

¥－

(61)

1,568

(1)

(79)

3,302

¥56

¥281

¥3

¥758

¥146,676

Thousands of U.S. dollars (Note 1)
Shareholders’ equity

Balance at April 1, 2020

Capital stock

CapitalsurplusRetained
Earnings

Treasurystock$153,595$179,967$936,597$(47,724)

Cash dividends paid

(52,411)

Profit attributable toowners of parent

155,247(63)

Disposal of treasury stock289(44,581)

Acquisition of treasury stock
Change of scope ofConsolidation
Net changes in items otherthan shareholders’ equity
Balance at March 31, 2021

$153,595$179,904$1,039,433$(92,016)

Thousands of U.S. dollars (Note 1)
Valuationdifference on
available-for-salesecurities
Balance at April 1, 2020

$16,979

Accumulated other comprehensive income
Deferred gains
or losses onhedgesForeign currencytranslation
adjustment

Accumulated
remeasurements ofdefined benefit
plans

Share
subscription
rights

Noncontrollinginterests$－$1,057$(11,624)$36$7,560Total$1,236,443

Cash dividends paid

(52,411)

Profit attributable toowners of parent

155,247

Disposal of treasury stock

226

Acquisition of treasury stock(44,581)

Change of scope ofConsolidation
Net changes in items otherthan shareholders’ equity

16,935

Balance at March 31, 2021

$33,914$－(551)

14,162(9)(714)

29,823$506$2,538$27$6,846$1,324,747

See accompanying notes.

9Consolidated Statements of Cash Flows
HAZAMA ANDO CORPORATION and Consolidated Subsidiaries
For the years ended March 31, 2021 and 2020

2021

2020

Thousands of
U.S. dollars(Note 1)2021

¥25,087¥24,455$226,581

2,080
885
355
(355)
25
(2)
(241)
294
(703)
(1,912)
(448)
(366)
333
(73)
(160)
－
(13)

1,815
－
－
－
315
3
484
(779)
(1,044)
(87)
－
(426)
422
189
(112)
70
(57)

18,786
7.993
3,206(3,206)226(18)(2,177)
2,655(6,349)(17,269)(4,046)(3,306)
3,008(659)(1,445)－(117)

16,318(963)(4,137)991(8,290)(3,245)
3,050
3,254
5,866
37,630
393
(356)
(756)
(7,756)29,155(19,060)
2,834
340
1,224
6,339
(15,154)(3,101)
281
4,288
3,239
446
(434)
(1,027)(5,327)(3,103)

147,381(8,698)(37,365)
8,951(74,874)(29,308)
27,547
29,38952,980339,866
3,550(3,215)(6,828)(70,051)
263,322

(61)
221
(429)
299
(2,935)
17
355
－
(955)
(466)
(3,954)(1,474)
1,250
(856)
1,145
(3,805)
235
40
290
(11)
170
(3,016)

(551)
1,996
(3,875)
2,701(26,508)
153
3,206
－
(8,625)(4,209)(35,712)

Millions of yen
Cash flows from operating activities:
Income before income taxes
Adjustment to reconcile income before income taxes to net
cash provided by operating activities:
Depreciation and amortization
Impairment loss
Loss on tax purpose reduction entry of noncurrent assets
Subsidy income
Loss on fire disaster
Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in provision for warranties for completed construction
Increase (decrease) in provision for loss on construction contracts
Increase (decrease) in provision for losses on fire disaster
Increase (decrease) in net benefit defined liability
Decrease (increase) in net benefit defined asset
Interest and dividends income
Interest expense
Foreign exchange loss (gain)
Loss (gain) on sales of investment securities
Loss (gain) on valuation of investment securities
Loss (gain) on sales of property, plant and equipment
Changes in assets and liabilities:
Decrease (increase) in notes and accounts receivable
Decrease (increase) in costs on uncompleted construction contracts
Decrease (increase) in other inventories
Decrease (increase) in advances paid
Increase (decrease) in notes and accounts payable
Increase (decrease) in advances received
Increase (decrease) in deposit received
Increase (decrease) in consumption tax payable
Other, net
SubtotalInterest and dividends received
Interest paid
Compensation for damage paid
Income taxes paid
Net cash provided by (used in) operating activities
Cash flows from investing activities:
Payments into time deposits
Proceeds from withdrawal of time deposits
Purchase of marketable securities and investment securities
Proceeds from sales of short-term and long-term investment securities
Purchase of property, plant and equipment
Proceeds from sales of property, plant and equipment
Proceeds from subsidies
Proceeds from sales of intangible assets
Payments of leasehold and guarantee deposits
Other, net
Net cash used in investing activities

10Millions of yen

Thousands of
U.S. dollars(Note 1)
2021

2021

2020

(92)
4,107
(5,535)－(342)(4,936)(5,803)(3)(52)(12,656)
28
12,573
115,462

9
5,304(7,398)358(394)(5,066)(6,004)(5)(48)(13,244)(184)(19,547)
135,094(831)
37,094(49,991)－(3,089)(44,581)(52,411)(27)(470)(114,306)
253
113,557
1,042,828

－

(85)

－

¥128,035¥115,462$1,156,385

Cash flows from financing activities:
Net increase (decrease) in short-term loans payable
Proceeds from long-term loans payable
Repayments of long-term loans payable
Proceeds from issuance of bonds
Redemption of bonds
Purchase of treasury stock
Cash dividends paid
Dividends paid to non-controlling interests
Other, net
Net cash used in financing activities
Effect of exchange rate changes on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year
Decrease in cash and cash equivalents resulting from exclusion ofsubsidiaries from consolidation
Cash and cash equivalents at end of year (Note 4)
See accompanying notes.

11Notes to Consolidated Financial Statements
HAZAMA ANDO CORPORATION and Consolidated Subsidiaries
For the years ended March 31, 2021 and 2020

1. Basis of Presenting Consolidated Financial Statements
The accompanying consolidated financial statements of HAZAMA ANDO CORPORATION (“the Company”) and its consolidated
subsidiaries have been prepared in accordance with the provisions set forth in the Japanese Financial Instruments and Exchange
Law and its related accounting regulations, and in conformity with accounting principles generally accepted in Japan (“Japanese
GAAP”), which are different in certain respects as to application and disclosure requirements of International Financial ReportingStandards.
The accompanying consolidated financial statements have been restructured and translated into English with some expanded
descriptions from the consolidated financial statements of the Company prepared in accordance with Japanese GAAP and filedwith the appropriate Local Finance Bureau of the Ministry of Finance as required by the Financial Instruments and Exchange Law.
Some supplementary information included in the statutory Japanese language consolidated financial statements, but not required
for fair presentation, is not presented in the accompanying consolidated financial statements.
The translations of the Japanese yen amounts into U.S. dollars are included solely for the convenience of readers outside Japan,
using the prevailing exchange rate at March 31, 2021, which was ¥110.72 to U.S. $1.00. The convenience translations should not
be construed as representations that the Japanese yen amounts have been, could have been, or could in the future be, converted into
U.S. dollars at this or any other rate of exchange.
2. Summary of Significant Accounting Policies(1) Consolidation
The consolidated financial statements include the accounts of the Company and its significant subsidiaries (“the Companies”). All
significant intercompany transactions and unrealized profits and losses among the Companies have been eliminated in consolidation.
All companies are required to consolidate all significant investees, which are controlled through substantial ownership ofmajority voting rights or existence of certain conditions. Investments in affiliates over which the Company has the ability to exercise
significant influence over operating and financial policies of the investees, are accounted for by the equity method.
Investments in remaining unconsolidated subsidiaries and affiliates, which have immaterial effect on the consolidated financial
statements, are accounted for at cost. Such investments are adjusted for any non-recoverable diminution in value, and income fromthese unconsolidated subsidiaries and affiliates is recognized only when the Companies receive dividends therefrom.
(2) Revenue and cost recognition
When the outcome of construction contracts can be estimated reliably, the percentage-of-completion method (cost-to-cost method
for the estimated progress) is mainly applied. Otherwise the completed-contract method is applied.
(3) Foreign currency translation
Revenues and expenses denominated in foreign currencies are translated at the rates of exchange prevailing when transactions are
made. Assets and liabilities denominated in foreign currencies are generally translated at the rates of foreign exchange prevailingat the balance sheet date and the resulting translation gains or losses are included in earnings.
(4) Cash and cash equivalents
Cash and cash equivalents include cash on hand, highly liquid investments with maturity of three month or less from the purchasedate. See Note 4 as to a reconciliation of cash and cash equivalents reported in the consolidated statements of cash flows with cash
and time deposits reported in the consolidated balance sheets.
(5) Allowance for doubtful accounts
To prepare for credit loss on receivables, collectability of normal receivables is estimated by applying the historical overall credit
loss rates, and collectability of doubtful receivables is analyzed individually and the estimated uncollectible amount is recorded.
(6) Inventories
Inventories are stated at cost as determined on a specific project basis.

12(7) Securities
Securities of the Companies are classified into one of the following categories based on the intent of holding, and are accounted
for as follows:(a) Debt securities that are intended to be held to maturity (“held-to-maturity debt securities”) are stated at amortized cost.
(b) Securities other than trading securities, held-to-maturity debt securities and shares issued by unconsolidated subsidiaries andaffiliated companies which are not accounted for under the equity method (“available-for-sale securities”) are stated at fair market
values, if their fair market values are readily determinable. Unrealized gains and losses on these securities are reported, net of
applicable income taxes, as a separate component of net assets. Realized gains and losses on sale of these securities are computed
using moving-average cost. Available-for-sale securities without readily determinable fair market values are stated at movingaverage cost.
(8) Derivatives and hedging transactions
Derivative financial instruments are stated at fair value and changes in the fair value are recognized as gains or losses unlessderivative financial instruments are used for hedging purposes.
If derivative financial instruments are used as hedges and meet certain hedging criteria, the Companies defer recognition ofgains or losses resulting from changes in fair value of derivative financial instruments until the related losses or gains on the hedged
items are recognized.
If a forward foreign exchange contract is executed to hedge an existing foreign currency receivable or payable,(a) the difference, if any, between the Japanese yen amount of the hedged foreign currency receivable or payable translated using
the spot rate at the inception date of the contract and the book value of the receivable or payables is recognized in the consolidated
statements of income in the period which includes the inception date, and(b) the discount or premium on the contract (that is the difference between the Japanese yen amount of the contract translated using
the contracted forward rate and that translated using the spot rate at the inception date of the contract) is recognized over the termof the contract.
Also, if interest rate swap contracts are used as hedge and meet certain hedging criteria, the net amount to be paid or received
under the interest rate swap contract is added to or deducted from the interest on the assets or liabilities for which the swap contract
was executed.
The Companies use forward foreign currency contracts and interest rate swap contracts as derivative financial instruments only
for the purpose of mitigating future risks of fluctuation of foreign currency exchange rates and interest rate increases.
The Companies evaluate hedge effectiveness by comparing the cumulative changes in cash flows from or the changes in fairvalue of hedged items and the corresponding changes in the hedging derivative instruments during the period from the inception
date of hedging to the evaluation of hedge effectiveness. However, the evaluation of hedge effectiveness is omitted for interest rate
swap contracts as they meet certain hedging criteria.
(9) Property, plant and equipment, depreciation
Property, plant and equipment are carried at cost. Depreciation of buildings (excluding facilities attached to buildings) and facilities
attached to buildings and structures, which were acquired since April 1, 2016 is mainly recorded on the straight-line method, anddepreciation of other property, plant and equipment is recorded on the declining-balance method over estimated useful lives, exceptthat the declining-balance method is applied to buildings of one consolidated subsidiary.
Expenditures for significant renewals and betterments are capitalized, while expenditures for normal repairs and maintenanceare charged to expense when incurred.
(10) Provision for losses on construction contracts
To prepare for future losses related to construction contracts, the amount of estimated losses is recorded for the construction
contracts when losses are probable to occur and such losses can be reasonably estimated.
(11) Provision for losses on fire disasterTo prepare for future losses due to the fire, the amount of estimated losses other than construction costs at the end of the current
consolidated fiscal year is recorded in the provision for losses on fire disaster.
(12) Provision for environmental spending
To prepare for the treatment of Polychlorinated Biphenyl waste, which is obligated by the “Act on Special Measures Concerning
Promotion of Proper Treatment of PCB Waste,” the estimated cost for treatment is recorded.

13

(13) Provision for management board incentive plan trust
To prepare for future awards of the Company’s stock to the Directors, the estimated cost for stock award debt based on
predetermined regulations for awarding stock is recorded.
(14) Retirement and severance benefits
The retirement benefit obligation is calculated by allocating the estimated retirement benefit amount to periods until the end of thecurrent consolidated fiscal year on a benefit formula basis. Actuarial differences are recognized in expenses using the straight-line
method over period less than the average of the estimated remaining service lives (9 years) commencing with the succeeding period.
Prior service costs are recognized in expenses using the straight-line method over period less than the average of the estimatedremaining service lives (3 years) commencing with present period.
The Company has calculated retirement and severance benefits and retirement benefit costs under certain lump-sum payment
plans using simplified method.
(15) Lease transactions(a) Finance leases which transfer ownership of leased assets
Leased assets arising from finance lease transactions which transfer ownership to the lessee are depreciated by the same method as
the depreciation of fixed assets.
(b) Finance leases which do not transfer ownership of leased assets
Leased assets arising from finance lease transactions which do not transfer ownership to the lessee are depreciated to a residual
value of zero by the straight-line method using the contract term as useful life.
(16) Income taxes
The Companies recognize tax effects of temporary differences between the carrying amounts of assets and liabilities for tax andfinancial reporting purposes. The provision for income taxes is computed based on the pretax income included in the consolidated
statements of income. The asset and liability approach is used to recognize deferred tax assets and liabilities for the expected future
tax consequences of temporary differences.
(17) Appropriations of retained earnings
Appropriations of retained earnings are reflected in the accompanying consolidated financial statements for the following year
upon the shareholders’ meeting approval.
(18) Amounts per share
Basic profit attributable to owners of parent per share is based on the weighted average number of common stock outstanding
during the period, and diluted profit per share reflects the potential dilution that could occur if preferred stock were converted into
common stock or share subscription rights were exercised.
Cash dividends per share represent amounts applicable for the respective years on accrual basis.
A net asset per share is reported at the amounts of ¥782.28 (US$7.07) and ¥704.86 at March 31, 2021 and 2020, respectively.
(19) Other significant matters in preparation of the consolidate financial statements(Accounting policies and procedures adopted in the absence of specific regulations in relevant accounting standards, etc.)
The Company does accounts processing for joint venture constructions according to each investment ratio.
(Consumption taxes)
Consumption tax and local consumption tax are accounted for under the tax-exclusive method.

14

(20) Significant accounting estimates(Estimates for the application of the percentage-of-completion method)(a) The amount recorded in the consolidated financial statements for the current consolidated fiscal year
Revenues from construction contracts recognized by the percentage-of-completion method for the fiscal year ended March 31,
2021 was ¥316,473 million (US$2,858,318 thousand) .
(b) Information on the nature of significant accounting estimates for identified items
The Company records revenues and cost of sales related to construction contracts by applying the percentage-of-completion method
to the constructions whose total amounts of revenues, costs, and progresses as of the account closing date can be estimated reliably.
In estimating total amount of costs, it creates individual working budgets which incorporate the factors specific to each projectbased on past construction results and reflects modifications of construction nature due to changes in the situations after starts ofconstructions and so on in the budgets as they arise. However, construction cost increases caused by unexpected events (e.g.
increasing costs of subcontracts, materials, equipment, and additional costs for corrections) will affect its future businessperformance.
(21) Changes in presentation(Application of Accounting Standards for Disclosure of Accounting Estimates)
The Company adopted “Accounting Standard for Disclosure of Accounting Estimates” (ASBJ Statement No. 31, March 31, 2020)
to the consolidated financial statements for the current consolidated fiscal year, and therefore significant accounting estimates aredisclosed in the note to the consolidated financial statements.
The note does not include information for the previous consolidated fiscal year in accordance with the transitional provision set
out in paragraph 11 of the Accounting Standard.
(Statements of Income)“Compensation for damage” which was presented separately in the previous year is included in “Other, net” under other income(expenses), as it accounts for less than 10% of the total amount of non-operating expenses from the current consolidated fiscal year.
“Commission fee” which was included in “Other, net” under other income (expenses) in the previous year is presented separately,as it accounts for more than 10% of the total amount of non-operating expenses from the current consolidated fiscal year.
Consolidated financial statements for the previous consolidated fiscal year have been reclassified in order to reflect this change inpresentation. As a result, ¥(170) million in “Compensation for damage” and ¥(214) million in “Other, net” presented in under otherincome (expenses) in the consolidated statements of income for the previous consolidated fiscal year has been reclassified into¥(136) million in “Commission fee” and ¥(248) million in “Other, net”.
(Consolidated Statements of Cash Flows)“Payments of leasehold and guarantee deposits” and“Proceeds from subsidies” which were included in “Other, net” under cash
flows from investing activities in the previous year is presented separately from the current consolidated fiscal year, as its
quantitative materiality has increased. Consolidated financial statements for the previous consolidated fiscal year have been
reclassified in order to reflect this change in presentation. As a result, ¥199 million presented in “Other, net” under cash flows frominvesting activities in the consolidated cash flow statement for the previous consolidated fiscal year has been reclassified into ¥(11)
million in “Payments of leasehold and guarantee deposits”, ¥40 million in “Proceeds from subsidies”, and ¥170 million in “Other,net”.
(22) New accounting standards not yet applied• “Accounting Standard for Revenue Recognition”(ASBJ Statement No. 29, March 31, 2020)• “Implementation Guidance on Accounting Standard for Revenue Recognition” (ASBJ Guidance No. 30, March 26, 2021)(a) Summary
The accounting standard is comprehensive accounting standard for revenue recognition. An entity recognizes revenue based on thefollowing five-steps.
Step 1: Identify the contracts with a customer
Step 2: Identify the performance obligations in the contract
Step 3: Determine the transaction price
Step 4: Allocate the transaction price to the performance obligations in the contract
Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation(b) Scheduled date of application
Scheduled date of application is from April 1, 2021.

15

(c) Effect of application of the accounting standard
In principal, the Company applies the new accounting principle to all previous accounting periods retrospectively according toaccounting standard for revenue recognition, paragraph 84. However, the Company will implement the retroactive application
based on the accounting standard, paragraph 85. The effect due to the application is currently under evaluation at the time of
preparation of the consolidated financial statements but it is expected to be minor.
• “Accounting Standard for Fair Value Measurement”(ASBJ Statement No. 30, July 4, 2019)• “Implementation Guidance on Accounting Standard for Fair Value Measurement”(ASBJ Guidance No. 31, July 4, 2019)• “Accounting Standard for Measurement of Inventories”(ASBJ Statement No. 9, July 4, 2019)• “Accounting Standard for Financial Instruments”(ASBJ Statement No. 10, July 4, 2019)• “Implementation Guidance on Disclosures about Fair Value of Financial Instruments”(ASBJ Guidance No. 19, March 31, 2020)(a) Summary
In order to enhance comparability with internationally recognized accounting standards, “Accounting Standard for Fair Value
Measurement” and “Implementation Guidance on Accounting Standard for Fair Value Measurement” (together, hereinafterreferred to as “Fair Value Accounting Standards”) were developed and guidance on methods measuring fair value was issued. Fair
Value Accounting Standards are applicable to the fair value measurement of the following item.
•Financial instruments set forth in“Accounting Standard for Financial Instruments”•Inventories held for trading purposes set forth in“Accounting Standard for Measurement of Inventories”
Additionally, the “Implementation Guidance on Disclosures about Fair Value of Financial Instruments” has been revised, and thenotes related to the breakdown and other information, of fair value of financial instruments by level have been established.
(b) Scheduled date of application
Scheduled date of application is from April 1, 2021.
(c) Effect of application of the accounting standard
The effect on the consolidated financial statements is currently under evaluation.
(23) Additional information(Performance-linked stock compensation plan for directors and executive officers)(a) Transaction summary
The Company was resolved to introduce a performance-linked stock compensation plan as an incentive plan for its directors andexecutive officers (the “Directors”). The plan is highly transparent and objective and closely linked with the Company’s
performance for the Directors, with the goal of increasing awareness of the importance of contributing to further enhancing thecorporate value and performance over the medium-to-long-term.
The Company’s stock is acquired through the Board Incentive Plan Trust (“BIP Trust”) and awarded to the Directors in accordancewith performance targets achieved.
(b) The Company’s own stock in the Trust
The Company’s own stock in the Trust is recorded in treasury stock under net assets based on the book value in the Trust(excluding ancillary expenses). The book value and the number of these treasury stock in the Trust as of the current fiscal year
were ¥ 211million ($1,906 thousand) and 357,131shares, respectively.
(Application of Accounting Standard for Accounting Policy Disclosures, Accounting Changes and Error Corrections)
The Company adopted “Accounting Standard for Accounting Policy Disclosures, Accounting Changes and Error Corrections”(ASBJ Statement No. 24, March 31, 2020) to the consolidated financial statements for the current consolidated fiscal year anddisclosed “Accounting principles and procedures for the adopted accounting treatment in the absence of specific regulations inrelevant accounting standards, etc. “.

163. Securities(1) The following tables summarize book values and acquisition costs of available-for-sale securities at March 31, 2021 and 2020:
Millions of yen
Book values
Type
Securities with book values exceeding acquisition costs

2021
Acquisition
costs

DifferenceBook values

2020
Acquisition
costs

Difference

Equity securities¥14,890¥8,886¥6,004¥9,674¥5,981¥3,693Sub total

14,890

8,886

6,004

9,674

5,981

3,693

¥2,719¥3,294¥(575)¥5,129¥6,136¥(1,007)－－－

12,00012,000－

Securities with book values not exceeding acquisition costs
Equity securities
Negotiable certificatesof deposit
Other

－

－

－

2,000

2,000

－

Sub total

2,719

3,294

(575)

19,12920,136(1,007)¥17,609¥12,180¥5,429¥28,803¥26,117¥2,686

Total

Thousands of U.S. dollars
Book values

Type
Securities with book values exceeding acquisition costs

2021
Acquisition
costs

Difference

Equity securities$134,484$80,257$54,227

Sub total

134,484

80,25754,227$24,557$29,750$(5,193)－－－

Securities with book values not exceeding acquisition costs
Equity securities
Negotiable certificatesof deposit
Other
Sub total
Total

－

－

－

24,55729,750(5,193)$159,041$110,007$49,034(2) Total sales, related gains and losses of available-for-sale securities for the year ended March 31, 2021 and 2020 are as follows:

2021

2020

Thousands of
U.S. dollars
2021

Sales

¥299

¥1,145$2,701

Related gains

160

255

1,445

Related losses

－

143

－

Millions of yen
Type
Equity securities

174. Cash and Cash Equivalents
Cash and cash equivalents reported in the consolidated statements of cash flows at March 31, 2021 and 2020 were reconciled withcash and time deposits reported in the consolidated balance sheets as follows:

2021

2020

Thousands of
U.S. dollars
2021¥129,317¥102,972$1,167,964(1,282)(1,510)(11,579)

Millions of yen
Cash and time deposits
Time deposits with maturities of exceeding
3-month from the date of acquisition－

14,000－¥128,035¥115,462$1,156,385

2021

2020

Thousands of
U.S. dollars
2021

Accumulated Costs on uncompleted construction contracts¥5,888¥4,928$53,179

Others

8,823

4,687

79,688

Total¥14,711¥9,615$132,867

Securities with remaining maturities of 3-month or lessTotal: Cash and cash equivalents

5. Inventories
Inventories at March 31, 2021 and 2020 consisted of the following:
Millions of yen

6. Short-Term Bank Loans and Long-Term Debt
Short-term bank loans are represented mainly by loan on deed. The average interest rates of short-term loans were 1.1% and 1.2%
at March 31, 2021 and 2020.
Bonds at March 31, 2021 and 2020 are summarized below:

2021

2020

Thousands of
U.S. dollars
2021$6,250Millions of yen
Long-term debt from bonds, insurance companies, and others due serially through 2024:
Unsecured 0.2% (average interest rates)¥692¥1,034

Less current maturities

(292)

(342)

(2,637)

Total

¥400

¥692

$3,613

2020

Thousands of
U.S. dollars
2021

Long-term loans payable at March 31, 2021 and 2020 are summarized below:
Millions of yen
2021
Long-term debt from banks, insurance companies, and others due serially through 2026:
1.5% (average interest rates)

¥557

¥643

$5,031

Unsecured 1.2% (average interest rates)

11,861

13,203

107,126

Secured18

Less current maturities(4,147)(5,133)(37,455)

Total¥8,271¥8,713$74,702

Repayment schedules for bonds are summarized below:

2022

¥292

Thousands of
U.S. dollars$2,637

2023

237

2,141

2024

127

1,147

2025

36

325

2026

－

－

Total

¥692

$6,250Millions of yen

Years ending March 31,

Repayment schedules for the long-term loans payable are summarized below:

2022¥4,147

Thousands of
U.S. dollars$37,455

2023

3,640

32,876

2024

2,552

23,049

2025

1,445

13,051

2026

634

5,726

Total

¥12,418$112,157

Millions of yen

Years ending March 31,

As is customary in Japan, long-term and short-term bank loans are made under general agreements which provide that additional
security and guarantees for present and future indebtedness will be given under certain circumstances at the request of the banks,
and that any collateral furnished will be applicable to all indebtedness due to that bank.
In addition, the agreements provide that the bank has the right to offset cash deposited against any long-term and short-term
debt that become due and in case of default and certain other specified events, against all other debts payable to the bank. Suchrights have never been exercised by the bank.

7. Pledged Assets
The following assets were pledged to secure short-term bank loans, long-term debt and certain other obligation at March 31, 2021
and 2020:
Thousands of
U.S. dollars

Millions of yen
Property, plant and equipment

2021

2020

2021

¥1,504¥1,559$13,584759

Investment securities

84

84

Other assets

96

109

867

¥1,684¥1,752$15,210Total

8. Estimated loss on uncompleted construction contracts
Amount of costs on uncompleted construction contracts for which a construction loss is anticipated and reserve for expected losses
on construction contracts in process are presented without being offset.
Thousands of
U.S. dollars

Millions of yen

Amount of costs on uncompleted construction contracts for which aconstruction loss is anticipated, matching with reserve for expected
losses on construction contracts in process

2021

2020

2021

¥363

¥327

$3,27919

9. Tax purpose reduction entry
The amount of tax purpose reduction entry deducted from the corresponding acquisition costs due to receiving subsidies for theyear ended March 31, 2021 and 2020 are as follows:

2021

2020

Thousands of
U.S. dollars
2021

buildings and structures

¥395

¥40

$3,568

Total

¥395

¥40

$3,568Millions of yen
Type of assets

10. Contingent Liabilities(1) At March 31, 2021 and 2020, the Companies had the following contingent liabilities for loan guaranteed:
Millions of yen
2021

2020

Thousands of
U.S. dollars
2021

Guarantees for loan
Loans of employees

¥0

¥1

$0

Total

¥0

¥1

$0

(2) other
Regarding the fire occurred at the building under construction by the Company in Tama city, Tokyo on July 26, 2018, the Company
recognized expected compensation for damages under the construction contracts and fire-damaged equipment outside of theconstruction range other than the construction costs in the provision for losses on fire disaster.
However, the Company does not record expected compensation for damages that cannot be reasonably estimated and amount of
insurance to cover losses caused by the fire, in the provision for losses on fire disaster.
If the events different from those for which the provision for losses on fire disaster occur, the Company reconsiders the provision
for losses which may have effect on the Company’s consolidated financial statements.
11. Revenues from construction contracts recognized by the percentage-of-completion method
Revenues from construction contracts recognized by the percentage-of-completion method for the fiscal year ended March 31,
2021 and 2020 were ¥316,473 million (US$2,858,318 thousand) and ¥340,091 million, respectively.
12. Provision for losses on construction contracts included in cost of sales of construction contracts
Provision for losses on construction contracts included in cost of sales of construction contracts for the fiscal year ended March 31,
2021 and 2020 were ¥1,154 million (US$10,423 thousand) and ¥741 million, respectively.
13. Research and Development Expenses
Research and development expenses included in manufacturing costs, and selling, general and administrative expenses amounted
to ¥2,832 million (US$25,578 thousand) and ¥2,633 million for the years ended March 31, 2021 and 2020, respectively.

2014. Impairment Loss
No impairment loss is recognized for the year ended March 31, 2020.
Impairment loss for the year ended March 31, 2021 is as follows:
Location

Use

Type of assets

Miyagi Prefecture

Real estate rent

Land

Millions of yen
¥885
¥885

Total

The Company generally does asset grouping in the units of assets that it can continuously grasp their incomes and expenses.
Due to an aging deterioration, the Company decided to rebuild “Tohoku branch building” which has been used as a business asset.
At the same time, it changed the use of part of the said asset (building and its land) to rental use for the purpose of expanding profits
from non-construction businesses. Accordingly, it considered the profitability of the rental use part and wrote down the book value
to a recoverable amount.
For your information, recoverable amounts are measured based on net selling prices, and net selling prices are evaluated based onreal estate appraisal values.
15. Gain on Sales of Noncurrent Assets
Gain on sales of noncurrent assets for the year ended March 31, 2021 and 2020 are as follows:
Thousands of
U.S. dollars

Millions of yen
Type of assets

2021

2020

2021

Land and Buildings

¥－

¥55

$－

Other

13

32

117

Total

¥13

¥87

$117

16. Loss on Sales of Noncurrent Assets
Loss on sales of noncurrent assets for the year ended March 31, 2021 and 2020 are as follows:
Thousands of
U.S. dollars

Millions of yen
Type of assets

2021

2020

2021

Land and Buildings

¥－

¥30

$－

Total

¥－

¥30

$－

17. Advances Received
As is customary in Japan, the Companies normally receive payments from customers on a progress basis in accordance with theterms of the respective construction contracts.

2118. Net Defined Benefit Liability
The Company and its consolidated subsidiaries have adopted the lump-sum payment plan and the retirement benefit pension planas their defined benefit plan.
The Company and its consolidated subsidiaries have calculated net defined benefit liability and retirement benefit costs undercertain lump-sum payment plans using simplified method.
Although the Company had adopted a multiple of retirement benefit plans due to its merger with ANDO Corporation as at April
1, 2013, the Company integrated these retirement benefit plans and migrated into defined benefit plans as at April 1, 2014.
Defined benefit plans
2021

2020

Thousands of
U.S. dollars
2021

Millions of yen(1) Movement in retirement benefit obligations¥30,744¥31,612$277,673

Service cost

1,410

1,436

12,735Interest cost

307

316

2,773

Actuarial loss (gain)

(349)

(411)

(3,152)

Balance at April 1, 2020 and 2019

Benefits paid

(1,942)(2,209)(17,540)

Balance at March 31, 2021 and 2020

¥30,170¥30,744$272,489¥19.454¥20,187$175,704

225

232

2,032

1,537

(704)

13,882(2) Movement in plan assets
Balance at April 1, 2020 and 2019
Expected return on plan assets
Actuarial loss (gain)Contributions paid by the employer

3,571

1,186

32,253

Benefits paid

(1,320)(1,447)(11,922)

Balance at March 31, 2021 and 2020

¥23,467¥19,454$211,949$13,421(3) Movement in simplified method¥1,486¥1,535Retirement benefit costs

251

255

2,267

Benefits paid

(300)

(297)

(2,710)

Balance at April 1, 2020 and 2019

Other
Balance at March 31, 2021 and 2020

11

(7)

100

¥1,448¥1,486$13,078(4) Reconciliation from retirement benefit obligations and plan assets to liability (asset) for retirement benefits
Funded retirement benefit obligation¥30,170¥30,745$272,489

Plan assets(23,467)(19,454)(211,949)

Sub total

6,703

11,29160,540Unfunded retirement benefit obligation

1,448

1,485

13,078

Total net liability (asset) for retirement benefits at March 31, 2021 and 2020

8,151

12,776

73,618Net defined benefit liability

8,858

12,77680,003Net defined benefit asset

(707)

－

(6,385)

Total net liability (asset) for retirement benefits at March 31, 2021 and 2020

¥8,151¥12,776$73,618(Note) Retirement benefit obligation under the lump-sum payment plan is included in funded retirement benefit obligation because a retirement
benefit trust has been established for lump-sum payment plans. In addition, the retirement benefit trust that has been established for the lump-sum
payment plan is included in plan assets.

22

2021

2020

Thousands of
U.S. dollars
2021$12,735

Millions of yen(5) Retirement benefit costs
Service cost

¥1,410¥1,436

Interest cost

307

316

2,773

Expected return on plan assets

(225)

(232)

(2,032)

Net actuarial loss amortization

375

393

3,386

Retirement benefit expenses by simplified method

251

254

2,267

¥2,118¥2,167$19,129

Total retirement benefit costs for the fiscal year ended March 31, 2021 and 2020
(6) Remeasurements of defined benefit plans
Net actuarial loss

¥2,261¥100$20,421

Total adjustments for retirement benefit¥2,261¥100$20,421(7) Accumulated remeasurements of defined benefit plans
Actuarial gains and losses that are yet to be recognized¥(405)¥1,856$(3,658)

Total accumulated adjustments for retirement benefit¥(405)¥1,856$(3,658)(8) Plan assets
1. Plan assets comprise:
2021

2020

Bonds

38%

44%

Equity securities

18

18

General account assets

14

17

Cash and deposits

14

3

Other

16

18

Total

100%

100%

(Note) The retirement benefit trust that has been established for the corporate pension plan accounts for 11% and 11% of the total plan assets forthe year ended March 31, 2021 and 2020.
2. Long-term expected rate of return:Current and target asset allocations, historical and expected returns on various categories of plan assets have been considered in determining
the long-term expected rate of return.
(9) Actuarial assumptions
The principal actuarial assumptions at March 31, 2021 and 2020 (expressed as weighted averages) follow:
2021

2020

Discount rate

1.0%

1.0%

Long-term expected rate of return

1.2%

1.2%

23

19. Income Taxes
Differences between the statutory tax rate and the effective tax rate for the year ended March 31, 2021 and 2020 were not disclosed,
since the difference between the statutory tax rate and the effective tax rate is less than 5% of the statutory effective tax rate.
Significant components of deferred tax assets and liabilities at March 31, 2021 and 2020 are as follows:
2021

2020

Thousands of
U.S. dollars
2021

Net defined benefit liability¥4,161¥5,116$37,581

Others

9,838

9,278

88,855Gross deferred tax assets

13,99914,394

126,436

Less: Valuation allowance(2,628)(2,382)(23,736)

Total deferred tax assets

11,371

12,012

102,700

Millions of yen
Deferred tax assets:

Deferred tax liabilities:
Valuation difference on available-for-sale securities

1,669

799

15,074

Others

1,920

1,731

17,341

Total deferred tax liabilities

3,589

2,530

32,415Net deferred tax assets¥7,782¥9,482$70,285

20. Comprehensive Income
Amounts reclassified to profit for the fiscal year ended March 31, 2021 and 2020 that were recognized in other comprehensive
income in the current or previous periods and tax effects for each component of other comprehensive income are as follows:
Millions of yen
2021

2020

Thousands of
U.S. dollars
2021

Valuation difference on available-for-sale securities:
Increase (decrease) during the year

¥2,903¥(3,652)$26,219

Reclassification adjustment

(158)

60

(1,427)

Sub-total, before tax

2,745(3,592)

24,792Tax (expense) or benefit

(870)

990

(7,858)Sub-total, net of tax

1,875(2,602)

16,934

Increase (decrease) during the year

¥－

¥0

$－

Reclassification adjustment

－

5

－

Acquisition cost of assets adjustments

－

－

－

Deferred gains or losses on hedges:

Sub-total, before tax

－

5

－

Tax (expense) or benefit

－

(2)

－

Sub-total, net of tax

－

3

－

¥(108)¥104$(975)

－

－

－

(108)

104

(975)

Foreign currency translation adjustment:
Increase (decrease) during the year
Reclassification adjustment
Sub-total, before tax
Tax (expense) or benefit
Sub-total, net of tax

－

－

－

(108)

104

(975)

¥1,886¥(293)$17,034

375

393

3,387

2,261

100

20,421Remeasurements of defined benefit plans
Increase (decrease) during the year
Reclassification adjustment
Sub-total, before tax

24

Tax (expense) or benefit

(693)

(31)

(6,259)Sub-total, net of tax

1,568

69

14,162

Total other comprehensive income¥3,335¥(2,426)$30,121

21. Net Assets
Under the Japanese Corporate Law (“the Law”), the entire amount paid for new shares is required to be designated as common
stock (or preferred stock). However, a company may, by a resolution of the Board of Directors, designate an amount not exceeding
one-half of the price of the new shares as additional paid-in capital, which is included in capital surplus in the accompanying
consolidated balance sheets.
Under the Law, in cases where dividend distribution of surplus is made, the smaller of an amount equal to 10% of the dividendor the excess, if any, of 25% of common stock and preferred stock over the total of additional paid-in capital and legal earnings
reserve must be set aside as additional paid-in capital or legal earnings reserve. Legal earnings reserve is included in retained
earnings in the accompanying consolidated balance sheets.
Under the Law, legal earnings reserve and additional paid-in capital could be used to eliminate or reduce a deficit or could becapitalized generally by a resolution of the shareholders’ meeting.
Additional paid-in capital and legal earnings reserve may not be distributed as dividends. Under the Law, all additional paid-in
capital and all legal earnings reserve may be transferred to other capital surplus and retained earnings, respectively, which arepotentially available for dividends.
The maximum amount that the Company can distribute as dividends is calculated based on the non-consolidated financial
statements of the Company in accordance with the Law.
22. Consolidated Statements of Changes in Net Assets(1) Common stock issued

Balance at April 1, 2019

Number ofsharesCommonstock
200,343,397

Increase during the year－

Decrease during the year－

Balance at April 1, 2020

200,343,397

Increase during the year－

Decrease during the year
Balance at March 31, 2021

(2) Treasury stock outstanding－
200,343,397

Balance at April 1, 2019

Number ofsharesCommonstock
566,830

Increase during the year

6,815,350

Decrease during the year

66,635

Balance at April 1, 2020

7,315,545

Increase during the year

6,555,972

Decrease during the year
Balance at March 31, 2021

52,956
13,818,561(Note) Stock owned by BIP Trust is included in Treasury stock at March 31, 2021 (Included amount: 357,131 shares).

25

23. Segment Information(1) General information about reportable segments
Each reportable segment of the Companies is the business unit of the Companies, which discrete financial information is able toobtain. Reportable segments are reviewed periodically at the Board of Directors meeting in order to determine distribution ofmanagement resources and evaluate business results by each reportable segment.
The Companies mainly operate the construction and construction-related business. Among them the Company, the general
constructor, operates their businesses that are composed of the civil engineering and building construction, and each headquarter
plans and executes on their business strategy of production systems and sales process in Japan and overseas.
Furthermore, consolidated subsidiaries respectively develop their business by cooperating with the Company.
Accordingly, the Companies classify their business operating segments, identified by product and services, into three reportablesegments as “Civil engineering segment”, “Building construction segment” and “Consolidated subsidiaries segment”.
The major products and services of each segment are as follows:
Reportable segments

Major products and services

Civil engineering
Building construction
Consolidated subsidiaries

Civil engineering of the Company in Japan and overseas
Building construction of the Company in Japan and overseas
Constructions and sales of construction materials of consolidated subsidiaries(2) Basis of measurement about reported segment profit or loss, segment assets, segment liabilities and other material items
Accounting methods of reported segment are the same as that set forth in “Summary of Significant Accounting Policies”. The
segment profits or losses for each reportable segment are in conformity to the operating income of consolidated statements ofincome. Intersegment transactions and transfers are based on fair market prices.
Assets are not allocated to Civil engineering segment and Building construction segment, since the chief operating decision
maker has no financial information on assets in these segments. However, corresponding depreciation expenses including
amortization of intangible fixes assets are allocated to Civil engineering segment and Building construction segment according to
the reasonable criterion measured by depending on the degree on benefit.

26

(3) Information about reported segment profit or loss, segment assets, segment liabilities and other material items(a) Segment information as of and for the fiscal year ended March 31, 2021 is as follows:
Millions of yen
CivilengineeringYear ended March 31, 2021:

Reportable segments
Building
Consolidated
construction subsidiaries

Sub total

Other

Total

Reconciliations Consolidated

Revenues:¥135,942¥192,104¥19,092¥347,138¥4,863¥352,001

¥ －

－

7

46,093

46,10015

46,115(46,115)－

Total

135,942

192,111

65,185393,238

4,878

398,116(46,115)352,001

Segment profit

17,67913,1071,640

32,426672

33,098(5,741)

27,357

Assets

Note 4Note 444,860201,561

7,718

209,279

130,332

339,611

568

802

491

1,861

95

1,956

124

2,080

Note 4Note 4

2,544

3,022

27

3,049

394

3,443

Outside customers
Intersegment

Other material items:
Depreciation
and amortization
Capital expenditures¥352,001

Thousands of U.S. dollars
Civil
engineeringYear ended March 31, 2021:

Reportable segments
Building
Consolidated
construction subsidiaries

Sub total

Other

Total

Reconciliations Consolidated

Revenues:$1,227,800$1,735,043$172,435$3,135,278$43,922$3,179,200

$ －

－

63

416,303416,366135

416,501(416,501)－

1,227,800

1,735,106

588,738

3,551,644

44,0573,595,701(416,501)

3,179,200

Segment profit

159,673

118,380

14,812292,865

6,069

298,934(51,851)

247,083

Assets

Note 4Note 4405,166

1,820,457

69,7071,890,164

1,177,132

3,067,296

Other material items:
Depreciation
and amortization
Capital expenditures

5,130

7,243

4,435

16,808858

17,666

1,120

18,786Note 4Note 422,977

27,294244

27,5383,558

31,096

Outside customers
Intersegment
Total$3,179,200

Notes:
1. “Other” consisted of mainly research and other activities, which are not included in reportable segment.
2. Reconciliations amounts were as follows:(i) Reconciliations amount of segment profit was to ¥(5,741) million (US$(51,851) thousand), which included ¥3 million (US$27 thousand)of intersegment eliminations and others, and ¥(5,744) million (US$(51,878) thousand) of corporate expenses. Corporate expenses weremainly general and administrative expenses, which are not attributed to reportable segments.
(ii) Reconciliations amount of segment assets was to ¥130,332 million (US$1,177,132 thousand), which included ¥(22,463) million(US$(202,881) thousand) of intersegment eliminations and others, and ¥152,795 million (US$1,380,013 thousand) of corporate assets.
Corporate assets were mainly cash and time deposits, investment securities and others, which are not attributed to reportable segments.
3. Segment profit was adjusted to operating income of consolidated statements of income.
4. As discussed in Note 23. (2), assets are not allocated to Civil engineering segment and Building construction segment, since the chief
operating decision maker has no financial information on assets in these segments. Segment assets of Civil engineering segment and Building
construction segment are amounted to ¥156,701 million (US$1,415,291 thousand), and capital expenditures of these segments are amounted
to ¥478 million (US$4,317 thousand).

27

(b) Segment information as of and for the fiscal year ended March 31, 2020 is as follows:
Millions of yen
CivilengineeringYear ended March 31, 2020:

Reportable segments
Building
Consolidated
construction subsidiaries

Sub total

Other

Total

Reconciliations Consolidated

Revenues:¥124,276¥227,210¥21,746¥373,232¥4,904¥378,136

¥ －

－

4

48,53948,54315

48,558(48,558)－

Total

124,276

227,21470,285

421,775

4,919

426,694(48,558)

378,136

Segment profit

16,246

11,926

1,397

29,569844

30,413(5,712)

24,701

Assets

Note 4Note 436,615

216,0147,130

223,144

116,628

339,772

458

837

328

1,623

92

1,715

100

1,815

Note 4Note 4

1,329

4,090

－

4,090

5

4,095

Outside customers
Intersegment

Other material items:
Depreciation
and amortization
Capital expenditures¥378,136

Notes:
1. “Other” consisted of mainly research and other activities, which are not included in reportable segment.
2. Reconciliations amounts were as follows:(i) Reconciliations amount of segment profit was to ¥(5,712) million, which included ¥9 million of intersegment eliminations and others,and ¥(5,721) million of corporate expenses. Corporate expenses were mainly general and administrative expenses, which are not attributed
to reportable segments.
(ii) Reconciliations amount of segment assets was to ¥116,628 million, which included ¥(18,083) million of intersegment eliminations andothers, and ¥134,711 million of corporate assets. Corporate assets were mainly cash and time deposits, investment securities and others,
which are not attributed to reportable segments.
3. Segment profit was adjusted to operating income of consolidated statements of income.
4. As discussed in Note 23. (2), assets are not allocated to Civil engineering segment and Building construction segment, since the chief
operating decision maker has no financial information on assets in these segments. Segment assets of Civil engineering segment and Building
construction segment are amounted to ¥179,399 million, and capital expenditures of these segments are amounted to ¥2,761 million.

(4) Related information(a) Information about products and services
Disclosure of information about products and services is omitted, since reportable segments of the Companies are classified
by their products and services.
(b) Information about geographic areas(Revenues)
Revenues information about geographic areas for the year ended March 31, 2021 and 2020 are as follows:

2021

2020

Thousands of
U.S. dollars
2021¥334,237¥350,266$3,018,759

17,76427,870160,441¥352,001¥378,136$3,179,200

Millions of yen

Geographic Areas
Japan
Other
Total

(Tangible fixed assets)
Disclosure of tangible fixed assets information about geographic areas is omitted, since the proportion of tangible fixed assets
in Japan to total tangible fixed assets is over 90%.
(c) Information about major customers
Disclosure of information about major customers is omitted, since net sales to no single customer represented 10% or moreof consolidated revenues of the consolidated statements of income for the year ended March 31, 2021.

28

(d) Information about impairment loss of fixed assets by reported segment
Impairment loss of fixed assets by reported segment of the year ended March 31, 2021 and 2020 are as follows:
Millions of yen
2021

Impairment loss

Reportable segments
Building
Consolidated
Civil engineering
construction
subsidiaries
¥ －
¥ －
¥ －

Other

Eliminations
and others

¥885

Total

¥ －

¥885

(Note) The amount of "Other" relates to the asset whose use has been changed to rental use.
Thousands of U.S. dollars
2021

Impairment loss

Reportable segments
Building
Consolidated
Civil engineering
construction
subsidiaries
$ －
$ －
$ －

Other

Eliminations
and others$7,993$ －Total$7,993

Millions of yen
2020

Impairment loss

Reportable segments
Building
Consolidated
Civil engineering
construction
subsidiaries
¥ －
¥ －
¥ －

Other

Eliminations
and others

¥ －

Total

¥ －

¥ －

24. Amounts per Share of Common Stock
Basis of calculation of basic and diluted profit attributable to owners of parent per share (the “EPS”) for the year ended March 31,
2021 is as follows:
Profitattributable toowners of parent
Year ended March 31, 2021:

Millions of yen

Profit attributable to owners of parent¥17,189

Basic EPS-Profit available to common shareholders¥17,189

Weightedaverage
sharesThousands ofshares
191,421EPS
Yen

U.S. dollars¥89.80$0.81¥89.78$0.81

Effect of dilution
Shares adjusted by share subscription rights
Diluted EPS-Profit for computation－¥17,18940
191,461(Note) Shares in BIP Trust are included in treasury stock from which are deducted in calculating profit attributable to owners ofparent per share. The weighted-average number of shares issued and outstanding during the year ended March 31, 2021 were 8,921
thousand including 370 thousand of shares in BIP Trust at the year ended March 31, 2021.
Basis of calculation of basic and diluted profit attributable to owners of parent per share (the “EPS”) for the year ended March 31,
2020 is as follows:
Profitattributable toowners of parent
Year ended March 31, 2020:

Millions of yen

Profit attributable to owners of parent¥16,804

Basic EPS-Profit available to common shareholders¥16,804

Weightedaverage
sharesThousands ofshares
199,042

EPS
Yen¥84.42

Effect of dilution
Shares adjusted by share subscription rights
Diluted EPS-Profit for computation－

47¥16,804

199,089¥84.4029

25. Financial Instruments(1) Status of financial instruments(a) Policies for using financial instruments
The Companies raise funds mainly by borrowings from bank and bond issues, and restrict temporary surplus funds to the lower
risk assets such as deposits. Derivative transactions are employed for hedging of the risk described below, and never use for
speculation.
(b) Detail of financial instruments and the related risks
Notes and accounts receivable are exposed to the credits risks in relation to customers. Foreign currency-dominated notes andaccounts receivable are also exposed to foreign exchange risk.
Investment securities which are mainly share held for keep the relationship with business partners are exposed to market pricefluctuation risk.
Notes and accounts payable are mostly settled within one year.
Borrowings are primarily for working funds. With variable interest rates, it is exposed to interest-rates risk.
Borrowings, notes and accounts payable are also exposed to liquidity risk.
Derivative transactions entered into by the Companies are forward currency exchange contracts to hedge foreign exchange risk
involving oversea business and interest rate swap contracts to hedge interest-rates risk involving borrowing.
Refer to Note 2(8) “Derivatives and hedging transactions” for information about the hedging instruments and hedging items,
hedging policy and method of evaluating hedging effectiveness concerning the hedge accounting methods adopted by theCompanies.
(c) Policies and processes for risk management
In order to control customer’s credit risk, each business and sales management division within the Companies conduct periodic
monitoring of key transaction partners and attempt to find out deterioration of the financial situation at the initial stage under theinternal credit policies.
For the purpose of hedging foreign exchange risk, the Companies conduct forward exchange contracts. The Companies also
conduct interest rate swap contracts to avert interest-rate risk by each long-term borrowing.
The Fair value of investment securities is periodically reported to the Directors and Executive Officers. The possession situationof securities is also continually reviewed, taking into consideration of the Companies’ relationship with respective business
partners.
Derivative transactions are treated by the Finance Department in accordance with the established policies. The Companies deal
with credible banks to reduce the credit risk.
In order to manage the liquidity risk, the Companies update financial plan monthly.
(d) Supplementary explanation on fair value of financial instruments
The fair value of financial instruments is based on market value or reasonable estimate if there is no market value. Since certain
assumptions are used for estimating values, values could be different if different assumptions are applied. In addition, the derivative
contract amounts described in Note 26 “Derivative Financial Instruments” are not indicative of actual market risk involved inderivative transactions.
(e) Concentration of credit risk
The trade receivables for specific and large-scale customers accounted for 11.9% of the total trade receivables in the consolidated
financial statements of the current consolidated fiscal year. Since these large-scale customers are government agencies, the credit
risk is extremely low.

30

(2) Fair value of financial instruments
The following tables summarize book values and fair values of financial instruments at March 31, 2021:
Millions of yen
TypeAssets(a) Cash and time deposits

Thousands of U.S. dollars

Book values

Fair values

DifferenceBook values

Fair values

Difference¥129,317¥129,317¥ －$1,167,964$1,167,964$ －(b) Receivables:
Notes
Accounts

6,901

6,901

－

62,32862,328－114,490

114,471(19)

1,034,050

1,033,879(171)(c) Marketable securities andInvestment securities:
17,60917,609－159,041

159,041－¥268,317¥268,298¥(19)$2,423,383$2,423,212$(171)

Notes¥17,824¥17,824¥ －$160,983$160,983$ －Accounts

55,841

55,841－

504,344504,344－

12,166

12,166－

109,881

109,881

－

4,147

4,147

－

37,45537,455

－

292

292

－

2,637

2,637

－

400

399

(1)

3,613

3,604

(9)

8,271

8,280

9

74,70274,783

81¥98,941¥98,949¥8$893,615$893,687

$72

¥－

¥－

¥－

$－

$－

$ －

Available-for-sale securities
Total assets
Liabilities(a) Payables:(b) Short-term loans payable
Current maturities oflong-term loans payable
Current portion of bonds(c) Bonds(d) Long-term loans payable,
less current maturities
Total liabilities
Derivative transactions

The following tables summarize book values and fair values of financial instruments at March 31, 2020:
Millions of yen
TypeAssets(a) Cash and time deposits

Book values

Fair values

Difference¥102,972¥102,972¥ －(b) Receivables:
Notes
Accounts

2,930

2,930

－

134,800

134,773(27)(c) Marketable securities andInvestment securities:
Available-for-sale securities

28,80328,803－¥269,505¥269,478

¥(27)

Notes

¥20,203¥20,203¥ －Accounts

61,65861,658－12,25812,258

－

5,133

5,133

－

Total assets
Liabilities(a) Payables:(b) Short-term loans payable
Current maturities oflong-term loans payable
Current portion of bonds(c) Bonds(d) Long-term loans payable,
less current maturities
Total liabilities
Derivative transactions

342

342

－

692

691

(1)

8,713

8,731

18

¥108,999¥109,016

¥17

¥－

¥－

¥－

31

Notes:1. Method of measurement of financial instruments and matters concerning securities and derivatives(Assets)(a) Cash and time deposits
The fair values of this account are equivalent to the book value, since this account is settled in a short period of time.
(b) Notes and accounts receivables
The fair values of these accounts are based on the present value of discounted cash flows using the interest rate determined by the factors of theremaining terms and credit risks, with respect to each receivable categorized by collection terms.
(c) Marketable securities and Investment securities
The fair values of this account are based on the quoted market value. However, the fair value of negotiable certificates of deposit is equivalent
to the book value, since this account is settled in a short period of time.
(Liabilities)(a) Notes and accounts payables and (b) Short-term loans payable, Current maturities of long-term loans payable and Current portion of bonds
The fair values of these accounts are equivalent to the book value, since these accounts are settled in a short period of time.
(c) Bonds
The fair value of bonds issued by the Company is based on the price on bond markets or present value of the total principal and interest discounted
by an interest rate determined taking into account the remaining period of bond and current credit risk.
(d) Long-term loans payable, less current maturities
The fair values of this account are based on the present value of discounted cash flows using the interest rate which may be applicable when thesame kinds of borrowings are made.
(Derivative transactions)
See Note 26 “Derivative Financial Instruments”.
2. Financial instruments which are difficult to estimate the fair value
Non-marketable securities (book values of ¥4,088 million (US$36,922 thousand) and ¥3,895 million at March 31, 2021 and 2020, respectively)
are not included in the above “Assets (c) Marketable securities and investment securities”; since it is difficult to estimate the fair values thereof
because neither market quoted value is available nor future cash flows can be estimated.
3. Redemption schedules for cash and time deposits, receivables, held-to-maturity debt securities and other at March 31, 2021 and 2020 are as
follows:
Millions of yen
2021
Within1 yearCash and time deposits¥129,317

2020

Over
1 yearless than
5 years¥ －Over
5 yearsless than
10 years¥ －Over
10 yearsWithin1 year¥ －¥102,972Over
1 yearless than
5 years¥ －Over
5 yearsless than
10 years¥ －Over
10 years¥ －Receivables:
6,901

－

－

－

2,930

－

－

－

104,477

10,013－－

124,882

9,918

－

－

Corporate bonds

－

－

－

－

－

－

－

－

Negotiable certificates of deposit

－

－

－

－

12,000

－

－

－

Other

－

－

－

－

2,000

－

－

－

Total

¥240,695¥10,013¥ －¥ －¥244,784¥9,918

¥ －

¥ －

Notes
Accounts32

Thousands of U.S. dollars
2021
Within1 year$1,167,964

Cash and time depositsOver
1 yearless than
5 years$ －Over
5 yearsless than
10 years$ －Over
10 years$ －Receivables:
Notes

62,328－－－

Accounts

943,615

90,435－－

Corporate bonds

－

－

－

－

Negotiable certificates of deposit

－

－

－

－

Other

－

－

－

－

Total

$2,173,907$90,435$ －$ －26. Derivative Financial Instruments
Derivative transactions accounted for by the hedge accounting at March 31, 2021 and 2020 are as follows:(Interest-related transactions)
Millions of yen
2021
Type ofderivative transactions

Main items
hedged2020

Contract amount
Settled over
1 year

Fair
value

¥948

Note 2

Total

Contract amount
Settled over
1 year

Fair
value

¥627

Note 2

Total

Short-cut method:
Interest swap contract:
To pay fixed, to receive variable

Long-termloans payable

¥675

¥321

Thousands of U.S. dollars
2021
Type ofderivative transactions

Main items
hedgedContract amount
Settled over
1 yearFair
value$8,562

Note 2

Total

Short-cut method:
Interest swap contract:
To pay fixed, to receive variable

Long-termloans payable$6,096Note:
1. Fair value is based on the prices obtained from counterparty financial institutions.
2. The fair values of special case interest swap treatment are included in the fair value of long-term loans payable since such interest swap istreated together with long-term loans payable being hedged.

3327. Stock Option Plans(1) No cost for stock options is recognized for the years ended March 31, 2021 and 2020.
(2) The stock options outstanding at March 31, 2021 are mainly as follows:(a) Content
The third series
The fourth seriesof shareof sharesubscription rights (A)subscription rights (A)June 29, 2010
Persons granted
Class and numberof shares
Date of grantCondition of
settlement rights

Length of service
Exercisable period

June 29, 2011

Directors of the Company: 8
Executive officers: 8

Directors of the Company: 9
Executive officers: 13

90,000 sharesof common stock
July 16, 2010
The person who exercises
stock purchase rights shall bea director, or executive officerof the Company, who has
continued to work at theCompany from the seventh
stockholders’ meeting to theeighth stockholders’ meeting.
However, this condition isinvalid in case of death or lossof position due to theCompany circumstances.
From July 16, 2010
to July 15, 2011
From July 16, 201185,800 sharesof common stock
July 15, 2011
The person who exercises
stock purchase rights shall bea director, or executive
officer of the Company, who
has continued to work at theCompany from the eighth
stockholders’ meeting to theninth stockholders’ meeting.
However, this condition isinvalid in case of death orloss of position due to theCompany circumstances.
From July 15, 2011
to July 14, 2012
From July 15, 2012

to July 15, 2021(b) Number and priceto July 14, 2022

The third
series of sharesubscription
rights (A)The fourth
series of sharesubscription
rights (A)At the beginning of the year－－

Granted during the year
Forfeited and expired during theyear
Vested during the year

－

－

－

－

－

－

At the end of the year－－

23,50023,100Non-vested shares

Vested shares
At the beginning of the year
Vested during the year
Exercised during the year
Forfeited or expired during theyear
Unexercised at the end of the year
Exercise price

－

－

5,500

6,600

－

－

18,00016,500¥1¥1

Average stock price at exercise

¥778

¥618

Fair value price at the grant date

¥72

¥111

(3) Method to estimate fair value of stock options
The Company does not grant any stock options to its employees for the current consolidated fiscal year.
(4) Method to estimate number of vested stock options
As a reasonable estimate of the forfeited number of stock options in the future is generally difficult, the Company adopts a method
whereby only actual forfeited numbers are reflected.
34

Independent Auditor’s Report
Independent Auditor’s Report
To the Board of Directors of HAZAMA ANDO CORPORATION:
OpinionWe have audited the accompanying consolidated financial statements of HAZAMA ANDOCORPORATION (“the Company”) and its consolidated subsidiaries (collectively referred to as “theGroup”), which comprise the consolidated balance sheets as at March 31, 2021 and 2020, the consolidated
statements of income, comprehensive income, changes in net assets and cash flows for the years thenended, and notes, comprising a summary of significant accounting policies and other explanatory
information.
In our opinion, the accompanying consolidated financial statements present fairly, in all material respects,
the consolidated financial position of the Group as at March 31, 2021 and 2020, and its consolidated
financial performance and its consolidated cash flows for the years then ended in accordance withaccounting principles generally accepted in Japan.
Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted in Japan. Our
responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of
the Consolidated Financial Statements section of our report. We are independent of the Group inaccordance with the ethical requirements that are relevant to our audit of the consolidated financial
statements in Japan, and we have fulfilled our other ethical responsibilities in accordance with theserequirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide abasis for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our
audit of the consolidated financial statements of the current period. These matters were addressed in thecontext of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon,
and we do not provide a separate opinion on these matters.

35

Application of the percentage-of-completion method
The key audit matter
The Company and its consolidated subsidiaries
applied the percentage-of-completion method ofrevenue recognition to the construction contracts forwhich the realization of the portion completed by theend of the fiscal year is assured, and, otherwise, thecompleted-contract method, regarding the revenues
from construction contracts, as described in Note “2.
Summary of Significant Accounting Policies, (2)Revenue and cost recognition,” to the consolidated
financial statements. The progress toward
completion of construction was estimated based on
the cost-to-cost method. Of the revenues fromconstruction contracts, the revenues fromconstruction contracts recognized using thepercentage-of-completion method amounted to¥316,473 million.
The percentage-of-completion method is applied toconstruction contracts for which the realization of
the completed portion is assured. In applying thepercentage-of-completion method, it is necessary toreasonably estimate total construction revenue andcosts, and the progress toward completion of
construction at the end of the fiscal year.
As described in Note “2.Significant Accounting
Policies,(20) Significant accounting estimates,” total
construction costs are based on the past construction
works and reflect conditions specific to each project.
Therefore, the preparation of a project budget, which
provided the basis for estimating total construction
costs for the project, involved a high degree of
uncertainty. Specifically, management’s
determination of the following aspects ofconstruction had a significant effect on the estimatedtotal construction costs at the end of the fiscal year.
 Whether the work necessary to complete theconstruction contract was identified and theestimated costs were included in the projectbudget; and Whether any changes in work due to changes
in circumstances that occurred subsequent tothe start of construction were reflected within
the project budget in a timely and appropriatemanner.
We, therefore, determined that our assessment of thereasonableness of the Company’s estimate of total
construction costs in applying the percentage-ofcompletion method was one of the most significant
in our audit of the consolidated financial statements
for the current fiscal year, and accordingly, the key
audit matter.

How the matter was addressed in our audit
The primary procedures we performed to assess
whether the Companies’ estimate of total
construction costs in applying the percentage-ofcompletion method was reasonable included thefollowing:(1) Internal control testing
We tested the design and operating effectiveness ofcertain of the Company’s internal controls relevantto the process of preparing a project budget. In thisassessment, we focused our testing on the following
controls:
 controls to ensure compliance with the internal
rules for preparing a project budget, including
how to accumulate work hours of eachactivity, what information and data to be used,and how to reflect the risk of any uncertainties
within the budget; and controls to reflect any changes incircumstances that occur after the start ofconstruction within the project budget in atimely and appropriate manner.
(2) Assessment of the reasonableness of theestimated total construction cost
We selected mainly construction contracts for which
total construction revenue exceeded a certain
amount and those for which construction marginchanged by more than a certain level, as
construction contracts for which estimated total
construction costs or their changes might have asignificant effect. In order to assess thereasonableness of the key assumptions adopted in
preparing the project budgets, which were used as
the basis for estimating total construction costs, forthe selected construction contracts, among others,
we: assessed whether the estimated costs ofconstruction works necessary to complete theconstruction contract were included in the
project budget by inquiring the personnel
responsible for construction work about
correspondence relationships between cost
items and amounts of the project budget andthe content of the relevant activities andcomparing the estimated costs with various
documents obtained, such as a construction
timeline; compared the actual total cost of constructions
and the future expected amount with the initialproject budget, examined variances between
them, and assessed whether the causes of thosevariances were reflected in the project budget
to assess the accuracy of the project budget;and inquired of the person responsible forconstruction management, the one responsible

36for accounting and others about their judgment
on any changes in circumstances that occurred
after the start of construction and updates ofthe project budget as well as compared their
responses with the internal and external
documents, which were the basis of them, toassess the appropriateness of their judgment.

Responsibilities of Management and Corporate Auditors and the Board of Corporate Auditors for
the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of the consolidated financial statementsin accordance with accounting principles generally accepted in Japan, and for such internal control as
management determines is necessary to enable the preparation of consolidated financial statements that are
free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is responsible for assessing the Group’s
ability to continue as a going concern, disclosing, as applicable, matters related to going concern inaccordance with accounting principles generally accepted in Japan and using the going concern basis ofaccounting unless management either intends to liquidate the Group or to cease operations, or has no
realistic alternative but to do so.
Corporate auditors and the board of corporate auditors are responsible for overseeing the directors’
performance of their duties with regard to the design, implementation and maintenance of the Group’s
financial reporting process.
Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as awhole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s reportthat includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that anaudit conducted in accordance with auditing standards generally accepted in Japan will always detect amaterial misstatement when it exists. Misstatements can arise from fraud or error and are consideredmaterial if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of these consolidated financial statements.
As part of our audit in accordance with auditing standards generally accepted in Japan, we exercise
professional judgment and maintain professional skepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the consolidated financial statements, whether
due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting amaterial misstatement resulting from fraud is higher than for one resulting from error, as fraud may
involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal
control.

Obtain an understanding of internal control relevant to the audit in order to design audit proceduresthat are appropriate in the circumstances, while the objective of the audit is not to express an opinion
on the effectiveness of the Group’s internal control.

Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.

Conclude on the appropriateness of management’s use of the going concern basis of accounting andbased on the audit evidence obtained, whether a material uncertainty exists related to events orconditions that may cast significant doubt on the Group’s ability to continue as a going concern. If weconclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to
the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, tomodify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our37

auditor’s report. However, future events or conditions may cause the Group to cease to continue as agoing concern.


Evaluate whether the presentation and disclosures in the consolidated financial statements are inaccordance with accounting standards generally accepted in Japan, the overall presentation, structure
and content of the consolidated financial statements, including the disclosures, and whether the
consolidated financial statements represent the underlying transactions and events in a manner that
achieves fair presentation.

Obtain sufficient appropriate audit evidence regarding the financial information of the entities orbusiness activities within the Group to express an opinion on the consolidated financial statements. We
are responsible for the direction, supervision and performance of the group audit. We remain solely
responsible for our audit opinion.

We communicate with corporate auditors and the board of corporate auditors regarding, among othermatters, the planned scope and timing of the audit, significant audit findings, including any significant
deficiencies in internal control that we identify during our audit.
We also provide corporate auditors and the board of corporate auditors with a statement that we havecomplied with relevant ethical requirements regarding independence, and communicate with them all
relationships and other matters that may reasonably be thought to bear on our independence, and whereapplicable, related safeguards.
From the matters communicated with corporate auditors and the board of corporate auditors, we determine
those matters that were of most significance in the audit of the consolidated financial statements of thecurrent period and are therefore the key audit matters. We describe these matters in our auditor’s report
unless law or regulation precludes public disclosure about the matter or when, in extremely rare
circumstances, we determine that a matter should not be communicated in our report because the adverse
consequences of doing so would reasonably be expected to outweigh the public interest benefits of such
communication.
Convenience Translation
The U.S. dollar amounts in the accompanying consolidated financial statements with respect to the year
ended March 31, 2021 are presented solely for convenience. Our audit also included the translation of yen
amounts into U.S. dollar amounts and, in our opinion, such translation has been made on the basis
described in Note 1 to the consolidated financial statements.
Interest required to be disclosed by the Certified Public Accountants Act of Japan
We do not have any interest in the Group which is required to be disclosed pursuant to the provisions of theCertified Public Accountants Act of Japan.
Tatsunaga Fumikura
Designated Engagement Partner
Certified Public Accountant
Daio Aida
Designated Engagement Partner
Certified Public Accountant
KPMG AZSA LLC
Tokyo Office, Japan
August 19, 2021
Notes to the Reader of Independent Auditor’s Report:
This is a copy of the Independent Auditor’s Report and the original copies are kept separately by theCompany and KPMG AZSA LLC.
38

X08I Printed in Japan