ANNUAL REPORT
2017

CONTENTS
PROFILE

1

THE MESSAGE FROM THE PRESIDENT

2

CONSOLIDATED BALANCE SHEETS

6

CONSOLIDATED STATEMENTS OF INCOME

8

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

9CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS

10CONSOLIDATED STATEMENTS OF CASH FLOWS

13

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

15

INDEPENDENT AUDITOR'S REPORT53

NON-CONSOLIDATED BALANCE SHEETS

56

NON-CONSOLIDATED STATEMENTS OF INCOME

58

NON-CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS

59

NOTES TO NON-CONSOLIDATED FINANCIAL STATEMENTS

62

INDEPENDENT AUDITOR'S REPORT76

CORPORATE OUTLINE

78

CORPORATE DATA

79

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

PROFILE

1

THE MESSAGE FROM THE PRESIDENT

2

3

4

Consolidated Financial Statements
Sumitomo Mitsui Construction Co., Ltd.
and Consolidated Subsidiaries
Year ended March 31, 2017with Independent Auditor’s Report5Sumitomo Mitsui Construction Co., Ltd.
Consolidated Balance Sheets
March 31, 2017

AssetsCurrent assets:
Cash and deposits (Notes 6-(b), 10 and 11)
Trade notes receivable, accounts receivable on completed
construction contracts and other (Note 11)
Inventories (Notes 6-(a) and 6-(e))
Deferred tax assets (Notes 5 and 15)
Other current assets
Allowance for doubtful receivables (Note 11)
Total current assets

Non-current assets:
Property and equipment, at cost:
Land (Notes 6-(b) and 6-(c))
Buildings and structures (Note 6-(b))
Machinery, equipment and vehicles (Note 6-(b))
Construction in progress
Accumulated depreciation
Property and equipment, net
Intangible fixed assets
Investments and other assets:
Investments in securities (Notes 6-(b), 11 and 12)Long-term loans receivable (Note 11)
Deferred tax assets (Notes 5 and 15)
Investments in unconsolidated subsidiaries and affiliates
Other (Note 6-(b))
Allowance for doubtful receivables (Note 11)
Total investments and other assets
Total non-current assets

Total assets

2

6

As of March 31,
2017
2016
2017
(Millions of yen)(Thousands of
U.S. dollars)(Note 3)
¥ 68,122¥ 66,209$ 607,202

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

134,596
29,5303,175
13,854(41)
247,325

1,280,247
198,769
28,950175,889(276)
2,290,801

14,973
16,492
17,982
12(25,140)
24,32015,463
16,28818,417
62(25,606)
24,626

133,461
147,000
160,281106(224,084)
216,775

2,101

2,022

18,727

10,259
6,203
1,538
1,006
6,621
(6,904)
18,72645,147

10,383
6,273
1,152
1,199
7,206
(6,526)
19,68846,33791,44355,29013,708
8,966
59,015(61,538)
166,913402,415¥302,152¥293,663$2,693,216

Sumitomo Mitsui Construction Co., Ltd.
Consolidated Balance Sheets
March 31, 2017

Liabilities and net assets
Current liabilities:
Trade notes payable, accounts payable on construction contracts
and other (Note 11)
Electronically recorded payable (Note 11)
Short-term bank loans and current portion of long-term debt
(Notes 6-(b), 6-(f), 11 and 20)
Accrued expenses
Income tax payable
Advances received on construction contracts in progress
Reserve for defects on completed construction projects
Allowance for losses on construction contracts (Note 6-(e))
Allowance for contingency loss
Allowance for loss related to Antitrust Law
Other current liabilities
Total current liabilities
Long-term liabilities:
Long-term debt (Notes 6-(b), 6-(f), 11 and 20)
Deferred tax liability on land revaluation (Note 6-(c))
Liability for retirement benefits (Note 14)
Other long-term liabilities
Total long-term liabilities

As of March 31,
2017
2016
2017
(Millions of yen)(Thousands of
U.S. dollars)(Note 3)

¥104,111
26,387¥115,745
22,096$0,927,988
235,199

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

4,418
5,676
4,701
31,926
800
939
2,152
287
12,825201,569

90,92663,927
41,723
216,267
7,139
3,467
19,244
1,301
97,584
1,704,804

23,640285
18,7205,001
47,647

18,971
285
19,474
5,225
43,957

210,713
2,540
166,859
44,576424,699

12,003

12,003106,988523
45,506523
30,131

4,661
405,615(247)
57,786(246)
42,412(2,201)
515,072

312
(4)

373
6

2,780
(35)

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

56
(130)
(652)
(345)
6,069
48,136¥293,663

650(5,356)(5,499)(7,460)56,092563,704$2,693,216

Contingent liabilities (Notes 6-(d) and 17)
Net assets:
Shareholders’ equity:
Capital stock:
Common stock:
Authorized:
2,669,464,970 shares in 2017 and 2016
Issued and outstanding:
813,366,605 shares in 2017 and 2016
Additional paid-in capital
Retained earnings
Treasury stock, at cost:
511,444 shares in 2017 and 501,516 shares in 2016
Total shareholders’ equity
Accumulated other comprehensive income:Unrealized holding gain on securities
Deferred (loss) gain on hedging instruments, net of taxes (Note13)
Land revaluation (Note 6-(c))
Translation adjustments
Retirement benefits liability adjustment (Note 14)
Total accumulated other comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets

The accompanying notes are an integral part of these statements.

7

Sumitomo Mitsui Construction Co., Ltd.
Consolidated Statements of Income
March 31, 2017

Years ended March 31,
2017
2016
2017
(Millions of yen)(Thousands of
U.S. dollars)(Note 3)
Net sales (Note 7-(a))
Cost of sales (Notes 7-(b) and 7-(d))
Gross profit
Selling, general and administrative expenses(Notes 7-(c), 7-(d) and 14)
Operating income
Other income (expenses):
Interest and dividend income
Payments received from insurance claims
Interest expense
Provision of allowance for doubtful receivables
Loan related fee
Gain on sales of property and equipment (Note 7-(e))
Gain on donation of assets (Note 7-(f))
Gain on sales of investment in securities (Note 12-(c))
Loss on sales and disposal of property and equipment(Note 7-(g))
Impairment loss (Note 7-(h))
PCB disposal expenses
Loss on allowance for loss related to Antitrust Law
Other, net
Profit before income taxes
Income taxes (Notes 5 and 15):
Current
DeferredProfitProfit attributable to:Non-controlling interests
Owners of parent¥403,908
357,484
46,424¥414,958
375,163
39,794$3,600,213
3,186,415
413,798

18,48327,941

16,42923,364

164,747
249,050

814
138
(539)
(394)
(326)
9
207
29

869
138
(532)
(246)
(145)
17
–
3

7,255
1,230
(4,804)(3,511)(2,905)
80
1,845
258

(118)
(624)
(115)
–
(1,593)(2,512)
25,428

(353)
(711)
–
(287)
(3,943)(5,191)
18,173(1,051)(5,561)(1,025)–(14,199)(22,390)
226,651

7,906
(394)
7,511

6,786
725
7,511

70,469(3,511)
66,94817,916

10,661

159,693881¥ 17,035

759
9,902

7,852
$ 151,840¥(Yen)

Profit per share (Note 18)¥ 20.96

The accompanying notes are an integral part of these statements.

8(U.S. dollars)(Note 3)¥ 12.18$0.186

Sumitomo Mitsui Construction Co., Ltd.
Consolidated Statements of Comprehensive Income
March 31, 2017

Years ended March 31,
2016
2017
2017
(Millions of yen)(Thousands of
U.S. dollars)(Note 3)
¥17,916¥10,661$159,693

(64)
(10)
–
(586)
71

(830)
(188)
16
(481)
(262)

(570)
(89)
–
(5,223)632

Total other comprehensive income (Note 8)
Comprehensive income(590)¥17,326(1,746)¥08,914(5,258)$154,434

Comprehensive income attributable to:
Owners of the parent
Non-controlling interests¥16,525800¥08,368
546$147,294
7,130

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

The accompanying notes are an integral part of these statements.

9

Sumitomo Mitsui Construction Co., Ltd.
Consolidated Statements of Changes In Net Assets
March 31, 2017

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

0¥30,131(0)–¥12,003

¥373

(0)
¥523

¥(246)

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

17,035

17,035(18)

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

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

(16)

15,374¥45,506

(1)
0

(18)
(1)
0
(16)

(0)
¥(247)

15,373¥57,786

Year ended March 31, 2017
Accumulated other comprehensive income
DeferredTotalgain (loss)
Retirement accumulatedon hedging
otherbenefits
Noninstruments,
liability comprehensive controlling
Land
Translation
net of taxes revaluation adjustments adjustments
incomeinterests(Millions of yen)
¥(06

¥56

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

(10)

16

(470)

34

(491)

224

(267)

(61)
¥312

(10)
¥ 0(4)

16
¥73

(470)
¥(601)

34¥(617)(491)¥(837)

224¥6,293

15,106¥63,24210

Sumitomo Mitsui Construction Co., Ltd.
Consolidated Statements of Changes In Net Assets
March 31, 2017

Capitalstock
Balance at the beginning of theperiodChanges in items during the period:
Change in a parent’s ownershipinterest due to transaction with
non-controlling interests
Dividends from surplus
Profit attributable to owners of
the parent
Change in the scope of
consolidation
Purchases of treasury stock
Disposition of treasury stockReversal of land revaluation
Net changes in items other thanshareholders’ equity
Total changes in items during theperiodBalance at the end of the period$106,988$4,6610$268,571(0)–$106,988$3,324(0)$4,661$(2,192)

Total
shareholders’equity$378,037(14,484)

0(14,484)

151,840

151,840(160)

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

Year ended March 31, 2017
Shareholders’ equity
Additional
Treasurypaid-instock,
Retained
capitalat costearnings(Thousands of U.S. dollars) (Note 3)(142)

137,035$405,615

(8)
0

(160)
(8)
0
(142)

(0)
$(2,201)

137,026$515,072

Year ended March 31, 2017
Accumulated other comprehensive income
DeferredTotalgain (loss)
Retirement accumulatedon hedging
otherbenefits
Noninstruments,
liability comprehensive controlling
Land
Translation
net of taxes revaluation adjustments adjustments
incomeinterests(Thousands of U.S. dollars) (Note 3)
$ 53

$499

$(1,158)$(5,811)$(3,075)$54,095

Total
net assets$429,0570(14,484)
151,840
–
(160)
(8)
(142)
(543)

(89)

142

(4,189)303(4,376)

1,996(2,379)(543)$2,780

(89)
$(35)

142
$650

(4,189)$(5,356)303$(5,499)(4,376)$(7,460)

1,996$56,092

134,646$563,704

11

Sumitomo Mitsui Construction Co., Ltd.
Consolidated Statements of Changes In Net Assets
March 31, 2017

Capitalstock
Balance at the beginning of theperiodChanges in items during the period:
Change in a parent’s ownershipinterest due to transaction with
non-controlling interests
Dividends from surplus
Profit attributable to owners ofparentChange in the scope of
consolidation
Purchases of treasury stock
Disposition of treasury stockReversal of land revaluation
Net changes in items other thanshareholders’ equity
Total changes in items during theperiodBalance at the end of the period¥12,003¥479

43¥21,039–¥12,003¥1,20443¥523¥(244)

Total
shareholders’equity¥33,278

(812)

43
(812)

9,902

9,902

(0)

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

Year ended March 31, 2016
Shareholders’ equity
Additional
Treasurypaid-instock,
Retained
capitalat costearnings(Millions of yen)

2

9,092
¥30,131

(2)
0

–
(2)
0
2

(2)
¥(246)

9,133¥42,412

Year ended March 31, 2016
Accumulated other comprehensive income
DeferredTotalgain onRetirement accumulated
hedgingotherbenefits
Noninstruments,
liability comprehensive controlling
Land
Translation
net of taxes revaluation adjustments adjustments
incomeinterests(Millions of yen)
¥ 195

¥52

¥ 205

¥(467)¥ 1,191¥5,720Total
net assets¥40,190

43
(812)
9,902
–
(2)
0
2
(830)

(188)

3

(336)

(185)

(1,536)348(1,187)

(830)
¥ 373

(188)
¥ 6

3
¥56

(336)
¥(130)(185)¥(652)(1,536)¥ (345)348¥6,0697,945¥48,136

The accompanying notes are an integral part of these statements.

12

Sumitomo Mitsui Construction Co., Ltd.
Consolidated Statements of Cash Flows
March 31, 2017

Years ended March 31,
2016
2017
2017
(Millions of yen)(Thousands of
U.S. dollars)(Note 3)Operating activities
Profit before income taxes
Depreciation and amortization
Impairment loss
Increase in allowance for doubtful receivables
Increase (decrease) in reserve for defects on completed construction
projects(Decrease) in allowance for losses on construction contracts(Decrease) increase in allowance for loss related to Antitrust Law(Decrease) in liability for retirement benefits
Loss on sales and disposal of property and equipment
Interest and dividend income
Interest expense
Exchange loss, net
Equity in loss of affiliates(Increase) in trade notes receivable, accounts receivable on completed
construction contracts and other
Decrease in inventories(Increase) in other assets
Increase (decrease) in retirement benefits liability adjustments includedin accumulated other comprehensive income.
(Decrease) increase in trade notes payable, accounts payable on
construction contracts and other(Decrease) in advances received on construction contracts in progress(Decrease) in other liabilities
Other
SubtotalInterest and dividends received
Interest paid
Income taxes paid
Net cash (used in) provided by operating activities
Investing activities(Decrease) in fixed deposits
Purchases of property and equipment
Proceeds from sales of property and equipment
Purchases of intangible fixed assets
Proceeds from sales of investments in real estate
Purchases of investments in securities
Proceeds from sales of investments in securities
Disbursements for loans receivable
Proceeds from collection of loans receivable
Other
Net cash (used in) provided by investing activities

13¥25,428
1,947
624
451

¥18,173
1,832
711
233

$226,651
17,354
5,561
4,019

5
(543)
(140)
(742)
109
(814)
539
49
–

(59)
(2,088)287(1,114)
336
(869)
532
389
3

44
(4,840)(1,247)(6,613)971(7,255)
4,804
436
–

(9,008)7,437(5,893)(6,480)1,414(2,217)(80,292)
66,289(52,526)

8

(257)

71

(7,403)(7,528)
(480)
(173)
3,873
900
(528)
(8,127)(3,882)

6,095(2,774)(1,028)2,165
15,285873(540)(4,876)
10,742

65,986(67,100)(4,278)(1,542)
34,521
8,022(4,706)(72,439)(34,602)(362)(1,602)
353
(308)
–
(1)
88
(29)
100
114
(1,648)(200)(2,034)
172
(198)
2,920
(171)
3
(39)
162
190
805

(3,226)(14,279)
3,146(2,745)
–
(8)
784
(258)
891
1,016
(14,689)

Sumitomo Mitsui Construction Co., Ltd.
Consolidated Statements of Cash Flows
March 31, 2017

Years ended March 31,
2016
2017
2017
(Millions of yen)(Thousands of
U.S. dollars)(Note 3)Financing activities(Decrease) in short-term bank loans
Proceed from long-term debt
Payments of long-term debt
Increase in long-term loans of employees(Increase) in treasury stock
Cash dividends paid
Cash dividends paid for non-controlling shareholders
Other
Net cash provided by financing activities
Effect of exchange rate changes on cash and cash equivalents
Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of the year
Increase in cash and cash equivalents due to inclusion inconsolidation
Cash and cash equivalents at end of the year (Note 10)¥ (972)
15,000(3,680)279(1)(1,615)
(567)
(648)
7,792

¥ (6,448)
12,200(2,358)
154
(2)
(806)
(143)
(425)
2,168

$ (8,663)
133,701(32,801)2,486(8)(14,395)(5,05)(5,053)69,453(203)
2,058
57,730(551)
13,16544,565(1,809)18,343
514,57321¥59,809–¥57,730

187$533,104

The accompanying notes are an integral part of these statements.

14

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 2017

1.

Basis of Preparation

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

Summary of Significant Accounting Policies(a) Basis of Consolidation and Accounting for Investments in Unconsolidated Subsidiaries
and Affiliates
The accompanying consolidated financial statements include the accounts of the Company
and the significant companies which it controls directly or indirectly. Companies overwhich the Company exercises significant influence in terms of their operating andfinancial policies have been included in the consolidated financial statements on an
equity basis. In the elimination of investments in subsidiaries, the assets and liabilitiesof the subsidiaries, including the portion attributable to non-controlling shareholders,
are recorded based on the fair value at the time the Company acquired control of therespective subsidiaries. All significant intercompany balances and transactions havebeen eliminated in consolidation.
The excess of the cost over the underlying net assets at fair value at the respective datesof acquisition of the consolidated subsidiaries (goodwill) or the excess of fair value ofthe net assets acquired over cost (negative goodwill) is charged or credited to income inthe year of acquisition.
Investments in affiliates not accounted for by the equity method are principally stated at
cost.
The Company had 19 consolidated subsidiaries and 1 affiliate accounted for by theequity method as of March 31, 2017.
(b) Fiscal Year of Consolidated Subsidiaries
All foreign consolidated subsidiaries (7 companies) have a fiscal year that ends on
December 31. The accompanying consolidated financial statements were preparedbased on the financial statements as of the same date. Necessary adjustments forconsolidation were made on significant transactions that took place during the period
between the fiscal year-end of the subsidiaries and the fiscal year-end of the Company.
15

11

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 2017(c) Securities
The accounting standard for financial instruments requires that securities be classified
into three categories: trading, held-to-maturity or other securities. Trading securities arecarried at fair value and held-to-maturity securities are carried at amortized cost.
Marketable securities classified as other securities for which market prices are
determinable are carried at fair value with any changes in unrealized holding gain or
loss, net of the applicable income taxes, included directly in net assets. Non-marketablesecurities classified as other securities are carried at cost. Cost of securities sold isdetermined by the moving average method.
(d) Inventories
Inventories other than materials and supplies are stated at cost determined by the specificidentification method. Materials and supplies are valued at cost determined by theaverage method. Book values are written down based on any decline in profitability.
(e) Depreciation and Amortization(1) Property and equipment (except leased assets) and investments in real estate
Depreciation of property and equipment (except leased assets) and investments inreal estate is determined primarily by the declining-balance method based on theestimated useful lives of the respective assets as prescribed in the Corporation Tax
Law of Japan except that the straight-line method is applied to office buildings
acquired on or after April 1, 1998 and facilities attached to buildings and structuresacquired on or after April 1, 2016.
Depreciation at all overseas subsidiaries is determined by the straight-line method
or by the declining-balance method based on the estimated useful lives of therespective assets.
(2) Intangible fixed assets (except leased assets)
Amortization of intangible fixed assets (except leased assets) is calculated by thestraight-line method based on the estimated useful lives of the respective assets asprescribed in the Corporation Tax Law of Japan. Amortization of computer software
for internal use is calculated by the straight-line method over the estimated useful
lives of 5 years.
(3)

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

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

16

12

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 2017(g) Allowance for Doubtful Receivables
The allowance for doubtful receivables is provided for future losses on general receivables
at an amount calculated by applying the percentage of actual losses on collection
experienced in the past, and an uncollectible amount for doubtful receivables estimatedbased on an individual assessment of each receivable and probability of collection.
(h) Reserve for Defects on Completed Construction Projects
A reserve has been provided at an estimated amount for the fiscal year’s sales proceeds inorder to cover the liability for future costs of defects of the completed construction
projects.
(i)

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

(j)

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

(k) Allowance for Loss Related to Antitrust Law
The allowance for loss related to Antitrust Law is provided for payment for penalty
charges etc. based on Antitrust Law.
(Additional information)
SUMIKEN MITSUI ROAD CO., LTD. had recognized the allowance of ¥287 million
for a surcharge payment, etc., which will be incurred related to a violation of the
Antitrust Law on a project contracted by East Nippon Expressway Co., Ltd. for the year
ended March 31, 2016.
Thereafter, a part of the allowance for the above surcharge payment, etc. has been
reserved due to acceptance of order for payment of surcharge by Japanese Fair Trade
Commission for the year ended March 31, 2017.
(l)

Accounting for Retirement Benefits(1) Method of attributing expected retirement benefits to periods
In calculating the retirement benefit obligation, the benefit formula method isapplied to attribute the expected retirement benefits to the periods up to year ended
March 31, 2017.
(2) Amortization of actuarial gain or loss and prior service cost
Actuarial gain or loss is amortized in the year following the year in which the gainor loss is recognized by the straight-line method over periods (mainly 11 years),
which are shorter than the average remaining years of service of the employees.
1713Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 2017(l)

Accounting for Retirement Benefits (continued)
Prior service cost is being amortized as incurred by the straight-line method overperiods (mainly 11 years), which are shorter than the average remaining years ofservice of the employees.

(m) Recognition of Revenues and Costs on Construction Contracts
Revenues and costs of construction contracts that commenced on or after April 1, 2009,of which the percentage of completion can be reliably estimated, are recognized by thepercentage-of-completion method. The percentage of completion is calculated at thecost incurred as a percentage of the estimated total cost. The completed-contract method
is applied for contracts for which the percentage of completion cannot be reliably
estimated.
(n) Recognition of Income from Finance Leases
Income from finance leases is recorded as sales and cost of sales at the time a lease
payment is received.
(o) Derivatives and Hedge Accounting(1) Method of hedge accounting
Derivative financial instruments are mainly stated at fair value except thoseaccounted for under deferred hedge accounting.
Foreign exchange forward contracts qualifying for allocation accounting aretranslated at the contract rate.
Interest rate swaps qualifying for hedge accounting and meeting specific matching
criteria are not remeasured at market value, but the differential paid or received
under the swap agreements is charged or credited to income (short-cut method).
(2) Hedging instruments and hedged items
Hedging instruments:

Forward foreign exchange contracts
Interest rate swaps

Hedged items:

Future foreign currency transactions
Interest on debt

(3) Hedging policy
The Company utilizes foreign exchange forward contracts and interest rate swaps
only for the purpose of hedging future risks of fluctuation of foreign currency
exchange rates or interest rates.

18

14

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 2017(o) Derivatives and Hedge Accounting (continued)(4) Assessment of hedge effectivenessThe evaluation of hedge effectiveness for a foreign exchange forward contract isperformed on a quarterly basis to confirm that amount of the foreign exchange
contract is within amount of the underlying hedged item to assess whether theforward contract qualifies for hedge accounting.
An evaluation of hedge effectiveness for interest rate swaps is not performed as allmeet specified criteria under the short-cut method.
(p) Cash Equivalents
All highly liquid investments with a maturity of three months or less when purchased,
which can easily be converted to cash and are subject to little risk of change in value,
are considered cash equivalents.
(q) Consumption Taxes
Consumption taxes are accounted for by the tax exclusion method.
(r)

Income Taxes
Deferred tax assets and liabilities are determined based on the differences between theamounts calculated for financial reporting purposes and the tax bases of the assets andliabilities and are measured using the enacted tax rates and laws which will be in effectwhen the differences are expected to reverse.
The Company has adopted the consolidated taxation system.

3.

U.S. Dollar Amounts

The translation of yen amounts into U.S. dollar amounts is included solely for the convenienceof readers outside Japan and has been made, as a matter of arithmetic computation only, at¥112.19 = U.S.$1.00, the approximate rate of exchange in effect on March 31, 2017. Thistranslation should not be construed as a representation that yen have been, could have been,or could in the future be, converted into U.S. dollars at that or any other rate.
4.

Changes in Accounting Methods

The Company and its consolidated subsidiaries have adopted “Practical Solution on a charge
in depreciation method due to Tax Reform 2016” (ASBJ PITF No. 32 issued on June 17,2016) effective from April 1, 2016. Accordingly the depreciation method for both facilities
attached to buildings and structures acquired on or after April 1, 2016 was changed fromdeclining-balance method to the straight-line method.
In addition, the effect of these changes is immaterial for the year ended March 31, 2017.
1915

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 20175.

Additional Information

The Company and its consolidated subsidiaries have adopted “Revised Implementation
Guidance on Recoverability of Deferred Tax Assets” (ASBJ Guidance No. 26 issued on
March 28, 2016) effective from April 1, 2016.
6.

Notes to Consolidated Balance Sheets(a) Inventories
The components of inventories as of March 31, 2017 and 2016 were as follows:
As of March 31,
2017
2016
2017
(Millions of yen)(Thousands of
U.S. dollars)
Merchandise and finished goods
Materials and supplies
Costs on uncompleted construction
contracts
Real estate for sale

¥

366
2,051

19,8792¥22,300

¥

536
3,964

25,026
2¥29,530$

3,262
18,281

177,19017$198,769(b) Pledged Assets
The following assets were pledged at March 31, 2017 and 2016 principally as collateralfor short-term bank loans, long-term debt, and guarantees (such as guarantees for thecompletion of construction contracts):
As of March 31,
2017
2016
2017
(Millions of yen)(Thousands of
U.S. dollars)
Cash and deposits
Land
Buildings and structures, net ofaccumulated depreciation
Machinery, equipment and vehicles,
net of accumulated depreciation
Investments in securities
Others (Investments and other assets)

¥

0
9,831

¥

0
10,308$087,628

787

774

7,014

151
20
530
¥11,32393
20
530¥11,727

1,345
178
4,724
$100,926

20

16

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 2017(b) Pledged Assets (continued)
Of the above property and equipment, mortgaged assets for factory foundations at
March 31, 2017 and 2016 were summarized as follows:
As of March 31,
2016
2017
2017
(Millions of yen)(Thousands of
U.S. dollars)
Land
Buildings and structures, net ofaccumulated depreciation
Machinery, equipment and vehicles,
net of accumulated depreciation¥1,258¥1,258$11,213

219

180

1,952

151
¥1,62993¥1,532

1,345$14,520

The secured liabilities as of March 31, 2017 and 2016 were summarized as follows:
As of March 31,
2017
2016
2017
(Millions of yen)(Thousands of
U.S. dollars)
Short-term bank loans[Including current portion of
long-term debt]
Long-term debt

¥134

¥237

$1,194

[134]
115

[237]
249

[1,194]
1,025(c) Land Revaluation
Land for operations was revalued by a consolidated subsidiary under the Law for Land
Revaluation during the year ended March 31, 2001. The revaluation amount is shown
as a separate component of net assets.
The market value of the land was ¥692 million ($6,168 thousand) and ¥704 million morethan the revalued book amount at March 31, 2017 and 2016, respectively.
(d) Contingent Liabilities
At March 31, 2017 and 2016, the Company and consolidated subsidiaries were
contingently liable for the following:
As of March 31,
2017
2016
2017
(Millions of yen)(Thousands of
U.S. dollars)
As guarantors of bank loans tocustomers, unconsolidated subsidiaries,
an affiliate and employees
As endorsers of notes receivablediscounted with banks

¥

5

¥241

$0,044

250

–

2,228

21

17

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 2017(e) Estimated Loss on Uncompleted Construction Contracts
An estimated loss on uncompleted construction contracts was recognized and included
as part of inventories but was not offset against the amount on the balance sheet. It has
been recorded as an allowance for losses on construction contracts in the amounts of¥222 million ($1,978 thousand) and ¥277 million as of March 31, 2017 and 2016,
respectively.
(f)Financial covenants
For the year ended March 31, 2017
(1) The Company has entered into a syndicated loan contract dated on August 6, 2014
with its seven banks with Sumitomo Mitsui Banking Corporation as arranger. The
following financial covenant is included in the contract:
Total consolidated net assets at the end of each fiscal year beginning March 31,
2015 shall be equal to or exceed 75% of total consolidated net assets as of March
31, 2014 or of total consolidated net assets at the end of the most recent fiscal year,
whichever is greater.
In addition, the balance of bank borrowings under this syndicated loan contract is¥7,500 million ($66,850 thousand) in long-term debt (including the current portion)
as of March 31, 2017.
(2) The Company has entered into a syndicated loan contract dated on March 29, 2016
and loan commitment agreement dated on March 31, 2016 with its seven banks(same bank as we had contracted for the year ended March, 31 2015.) with
Sumitomo Mitsui Banking Corporation as arranger. The following financial covenant
is included in the contract:
Total consolidated net assets at the end of each fiscal year beginning March 31,
2016 shall be equal to or exceed 75% of total consolidated net assets as of March
31, 2014 or of total consolidated net assets at the end of the most recent fiscal year,
whichever is greater.
In calculating consolidated net assets, any allowance or costs related to thecondominium in Yokohama will be excluded from the calculation in accordancewith instructions received from the Ministry of Land, Infrastructure Transportation
and Tourism of Japan on January 13, 2016.
In addition, the balance of bank borrowings under this syndicated loan contract is¥10,000 million ($89,134 thousand) in long-term debt as of March 31, 2017.

22

18

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 2017(f)Financial covenants (continued)
Unused amount on loan commitment agreement as of March 31, 2017 and 2016
were as follows.

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

As of March 31,
2017
2016
2017
(Millions of yen)(Thousands of
U.S. dollars)¥20,000¥20,000$178,269–––¥20,000$178,269¥20,000(3) The Company has entered into a syndicated loan contract dated on September 28,
2016 with its seven banks (same bank as we had contracted for the year ended
March, 31 2015 and 2016.) with Sumitomo Mitsui Banking Corporation as arranger.
The following financial covenant is included in the contract:
Total consolidated net assets at the end of each fiscal year beginning March 31,2017 shall be equal to or exceed 75% of total consolidated net assets as of March
31, 2014 or of total consolidated net assets at the end of the most recent fiscal year,
whichever is greater.
In calculating consolidated net assets, any allowance or costs related to thecondominium in Yokohama will be excluded from the calculation in accordancewith instructions received from the Ministry of Land, Infrastructure Transportation
and Tourism of Japan on January 13, 2016.
In addition, the balance of bank borrowings under this syndicated loan contract is¥9,500 million ($84,677 thousand) in long-term debt (including the current
portion) as of March 31, 2017.
(4) The Company has entered into a syndicated loan contract dated on September 28,
2016 with its seven banks (including different 5 bank from above (3)) with
Sumitomo Mitsui Banking Corporation as arranger. The following financial covenant
is included in the contract:
Total consolidated net assets at the end of each fiscal year beginning March 31,2017 shall be equal to or exceed 75% of total consolidated net assets as of March
31, 2016 or of total consolidated net assets at the end of the most recent fiscal year,
whichever is greater.
In addition, the balance of bank borrowings under this syndicated loan contract is¥4,750 million ($42,338 thousand) in long-term debt (including the current
portion) as of March 31, 2017.

23

19

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 2017(f)Financial covenants (continued)
For the year ended March 31, 2016
(1)

The Company has entered into a syndicated loan contract dated on August 6, 2014
with its seven banks with Sumitomo Mitsui Banking Corporation as arranger. The
following financial covenant is included in the contract:
Total consolidated net assets at the end of each fiscal year beginning March 31,
2015 shall be equal to or exceed 75% of total consolidated net assets as of March
31, 2014 or of total consolidated net assets at the end of the most recent fiscal year,
whichever is greater.
In addition, the balance of bank borrowings under this syndicated loan contract is¥8,500 million in long-term debt (including the current portion) as of March 31,
2016.

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

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

As of March 31,
2016
2015
(Millions of yen)
¥20,000¥–––¥–¥20,000

24

20

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 20177.

Notes to Consolidated Statements of Income(a) Net Sales Based on Percentage-of-completion Method
Net sales on construction contracts accounted for under the percentage-of-completion
method amounted to ¥303,814 million ($2,708,031 thousand) and ¥311,991 million forthe years ended March 31, 2017 and 2016, respectively.
(b) Allowance for Losses on Construction Contracts Included in Cost of Sales
The allowance for losses on construction contracts was included in cost of sales in theamounts of ¥113 million ($1,007 thousand) and ¥316 million for the years ended March
31, 2017 and 2016, respectively.
(c) Selling, General and Administrative Expenses
The significant components of selling, general and administrative expenses at March 31,2017 and 2016 were as follows:
Years ended March 31,
2017
2016
2017
(Millions of yen)(Thousands of
U.S. dollars)
Salaries and wages
Retirement benefit expenses
Provision of allowance for doubtfulreceivables
Other
Total

¥ 8,456604¥ 7,566499$ 75,372
5,383

66
9,357
¥18,483

0
8,364¥16,429588
83,403$164,747(d) Research and Development Expenses
Research and development costs included in selling, general and administrative
expenses and manufacturing costs amounted to ¥1,657 million ($14,769 thousand) and¥1,380 million for the years ended March 31, 2017 and 2016, respectively.
(e) Gain on Sale of Property and Equipment
The significant components of gain on sale of property and equipment for the years
ended March 31, 2017 and 2016 were as follows:
Years ended March 31,
2017
2016
2017
(Millions of yen)(Thousands of
U.S. dollars)
Buildings and structures
Machinery, equipment and vehicles
Land
Others
Total

¥–
6
2
–
¥9

¥01
16
–
0
¥17

$0–
53
17
–
$80

25

21

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 2017(f)Gain on Donation of Assets
Gain on donation of assets was recognized at a consolidated subsidiary “Amenity Life,
Inc.,” which operates a senior care facility, due to the receipt of a bequest from a former
resident for the year ended March 31, 2017.

(g) Loss on Sales and Disposal of Property and Equipment
The significant components of loss on sales and disposal of property and equipment for
the years ended March 31, 2017 and 2016 were as follows:
Years ended March 31,
2017
2016
2017
(Millions of yen)(Thousands of
U.S. dollars)
Loss on disposal
Loss on sales
Total

¥113
4
¥118

¥046
307
¥353

$1,00735$1,051(h) Impairment Loss
The Group recognized impairment loss on the following asset groups.
The Group principally calculates impairment loss by grouping together assets of theconstruction segments and by grouping assets of the other segment individually.
(1) For the year ended March 31, 2017
The book values of following assets were reduced to their recoverable values as aresult of determination of closure of product department in factory of assets forbusiness. The corresponding write-down was recognized in the amount of ¥624
million ($5,561 thousand) as part of other income expenses.
Location

Iwaki, Fukushima

Usage

Classification

Year ended
March 31, 2017
(Millions of (Thousands ofyen)
U.S. dollars)

Assets for business Land, buildings and structures,(1 building)machinery, equipment andvehicles¥601$5,356

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

12

106

Sayama, Saitama

Assets for business Land, buildings and structures(1 building)871

Kobe, Hyougo

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

8

In addition, the recoverable value of above assets was estimated at its net realizablevalue based on amounts determined by a valuation made in accordance with realestate appraisal standards.
26

22

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 2017(h) Impairment Loss (continued)(2) For the year ended March 31, 2016
The book values of following assets were reduced to their recoverable values as aresult of profit deterioration on elder care facility and determination of closure of
product department in factory of assets for business. The corresponding writedown was recognized in the amount of ¥711 million as part of other income
expenses.

Location

Usage

Classification

Hachioji, Tokyo
Esashi, Hokkaido

Elder care facility (1 building)
Assets for business (1 building)

Rishiri, Hokkaido

Assets for business (1 building)LandLand, machinery, equipment
and vehicles
Buildings and structures,
machinery, equipment andvehiclesYear ended
March 31
2016,
(Millions of
yen)
¥692
19

0

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

27

23

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 20178.

Notes to Consolidated Statements of Comprehensive Income

Amount of recycling and amount of income tax effects associated with other comprehensive
income for the years ended March 31, 2017 and 2016 were as follows:
Years ended March 31,
2017
2016
2017
(Millions of yen)(Thousands of
U.S. dollars)
Unrealized holding gain on securities:
Changes in items during the period
Amount of recycling
Before income tax effect adjustment
Income tax effect adjustment
Unrealized holding gain on securities¥(((78)
(14)
(92)
28
(64)

¥(1,241)(0)(1,241)411(830)$(695)
(124)
(820)
249
(570)

(15)
–
(15)
4

(282)
–
(282)
93

(133)
–
(133)
35

(10)

(188)

(89)

–
–

16
16

–
–

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

(586)
–
(586)
–
(586)

(481)
–
(481)
–
(481)

(5,223)–(5,223)–(5,223)Retirement benefits liability adjustments:
Changes in items during the period
Amount of recycling
Before income tax effect adjustment
Income tax effect adjustment
Retirement benefits liability adjustments

(67)
75
8
62
71

(233)
(23)
(257)
(4)
(262)

(597)
668
71
552
632

Total other comprehensive income¥(590)¥(1,746)$(5,258)

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

28

24

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 20179.

Notes to Consolidated Statements of Changes in Net Assets(a) Type and number of shares issued and treasury stock
For the year ended March 31, 2017
Balance atApril 1,
2016
Shares issued:
Common stock

813,366,605
Balance atApril 1,
2016

Treasury shares:
Common stock

501,516

Increase
Decrease(Number of shares)––

813,366,605

Increase
Decrease(Number of shares)
10,394

Balance at
March 31,
2017

466

Balance at
March 31,2017

511,444

Note 1:

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

Note 2:

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

For the year ended March 31, 2016
Balance atApril 1,
2015
Shares issued:
Common stock

813,366,605
Balance atApril 1,
2015

Treasury shares:
Common stock

482,953

Increase
Decrease(Number of shares)––

Increase
Decrease(Number of shares)
19,300737

Balance at
March 31,2016

813,366,605
Balance at
March 31,2016

501,516

Note 1:

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

Note 2:

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

29

25

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 2017(b)

Dividends:(1) Dividends paid
For the year ended March 31, 2017

Resolution
Annual general
meeting of theshareholders on
June 29, 2016

Type of shares
Common stock

Total
dividends(Millions ofyen)

Dividends
per share(Yen)¥1,625

¥2.00

Total
dividends(Millions ofyen)

Dividends
per share(Yen)

Cut-off
date

¥812

¥1.00

March 31,2015

Cut-off
dateMarch 31,2016

Effective
date
June 30,
2016

For the years ended March 31, 2016

Resolution
Annual general
meeting of theshareholders on
June 26, 2015

Type of shares

Common stock

Effective
date
June 29,2015(2) Dividends with the cut-off date in the year ended March 31, 2017 and the effective
date in the year ending March 31, 2018 were as follows:

Resolution
Annual general
meeting of theshareholders on
June 29, 2017

Type of shares

Common stock

Total
dividends(Millions ofyen)

Dividends
per share(Yen)¥2,438¥3.00

Cut-off
dateMarch 31,2017

Effective
date
June 30,
2017

Dividends with the cut-off date in the year ended March 31, 2016 and the effective
date in the year ending March 31, 2017 were as follows:

Resolution
Annual general
meeting of theshareholders on
June 26, 2016

Type of shares

Common stock

Total
dividends(Millions ofyen)

Dividends
per share(Yen)¥1,625¥2.00

Cut-off
dateMarch 31,2016

Effective
date
June 30,
2016

30

26

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 2017

10. Notes to Consolidated Statements of Cash Flows
Cash and Cash Equivalents
Cash and cash equivalents at March 31, 2017 and 2016 were as follows:
As of March 31,
2017
2016
2017
(Millions of yen)(Thousands of
U.S. dollars)
Cash and deposits
Time deposits with maturities of overthree months
Cash and cash equivalents
11.

¥68,122¥66,209$607,202(8,313)¥59,809(8,479)¥57,730(74,097)$533,104

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

31

27

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 2017(a) Overview (continued)
Management of market risks (Risks of fluctuations in currency exchange andinterest rates)
The Company and certain consolidated subsidiaries hold trade receivables inforeign currencies. However, the risk of fluctuations in the currency exchange rate
is not significant because a similar amount of trade payables are also held, and theCompany utilizes foreign exchange forward contracts to hedge the risk of changes
in the foreign currency exchange rate.
Loan payables are mainly for short-term operating funds. The Group manages loan
payables to flexibly execute or revise its fund management plans. In order to fix
the interest expense for long-term debt bearing interest at variable rates, the Grouputilizes interest rate swap transactions for certain long-term debt.
Derivatives are foreign currency exchange forward contracts held for the purposeof hedging future risk of fluctuation of foreign currency exchange rate of themonetary liabilities denominated in foreign currencies, and interest rate swaps held
for the purpose of hedging future risk of fluctuation of interest rates on loans.
Derivative transactions are carried out in accordance with the Companies’ internal
rules on transactions, and with highly rated financial institutions used as counterparties to reduce the risk of default.
Information regarding the method of hedge accounting, hedging instruments andhedged items, hedging policy, and assessment of hedge effectiveness is found in
Note 2-(o).
(3) Supplementary explanation of the fair value of financial instruments
The fair values of financial instruments are based on market prices, or, if no market
prices are available, they include estimated amounts. Because estimations of thefair value incorporate various factors, applying different assumptions can, in somecases, result in different fair values.
In addition, the amounts of derivatives in Note 13 “Derivative and Hedge
Accounting” are not necessarily indicative of the actual market risk involved in thederivative transactions.

32

28

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 2017(b) Fair value of financial instruments
Amounts recognized in the consolidated balance sheets, market value, and the difference
at March 31, 2017 and 2016, were as shown below. Moreover, items for which it isextremely difficult to determine fair values are not included in the following table (seeNote 2).
Carrying
value
Cash and deposits
Trade notes receivable,accounts receivable oncompleted construction
contracts and other
Allowance for doubtfulreceivables (*1)
Securities and investments
in securities
Held-to-maturity
securities
Other securities
Long-term loans receivable
Allowance for doubtfulreceivables (*1)
Total assets
Trade notes payable,accounts payable on
construction contracts
and other
Electronically recorded
payableShort-term bank loans
and current portion of
long-term debt
Long-term debt
Total liabilities
Derivative transactions (*2)
Hedge accounting is notappliedHedge accounting isapplied¥ 68,122

As of March 31, 2017
Fair
Carrying
Fair
value
value
value
Difference
Difference(Millions of yen)(Thousands of U.S. dollars)¥ 68,122¥–$ 607,202

143,603$ 607,202$–

1,279,998(27)
143,603

143,589

(14)

(240)
1,279,998

1,279,873

(124)

7,618

7,626

7

67,902

67,973

62

282
7,336
6,263

289
7,336

7
–

2,513
65,38955,824

2,575
65,38962–(5,545)718
220,063697
220,035(20)(27)(49,425)
6,399
1,961,520

6,212
1,961,271

(178)
(240)

104,111104,111–927,988927,988–

26,387

26,387–

235,199

235,199–

10,201
23,640¥164,339

10,15723,425¥164,081

(43)
(214)
¥(258)

90,926
210,713$1,464,827

90,533208,797$1,462,527(383)(1,907)$(2,299)

(10)

(10)

–

(89)

(89)

–

(5)

(5)

–

(44)

(44)

–

(*1): Allowance for doubtful receivables recognized individually is offset.
(*2): Assets and liabilities arising from derivative transactions are shown at net value. If total is liabilities, amounts
is shown as “( ).”33

29

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 2017(b) Fair value of financial instruments (continued)
As of March 31, 2016
Carrying
Fair
value
value
Difference(Millions of yen)
Cash and deposits
Trade notes receivable,accounts receivable oncompleted construction
contracts and other
Securities and investments
in securities
Held-to-maturity
securities
Other securities
Long-term loans receivable
Allowance for doubtfulreceivables (*1)
Total assets
Trade notes payable,accounts payable on
construction contracts andotherElectronically recorded
payableShort-term bank loans
and current portion of
long-term debt
Long-term debt
Total liabilities
Derivative transactions (*2)
Hedge accounting is notappliedHedge accounting is applied(*1):¥ 66,209¥ 66,209

134,596

134,593

(3)

7,720

7,731

10

280
7,440
6,333

291
7,440

10
–

(5,485)848
209,375

822
209,357(25)(17)

115,745

115,745–

22,09622,096–

4,418
18,971¥161,232

4,419
18,759¥161,019

0(212)¥(212)

(22)
9

(22)
9

–
–

¥

–

Allowance for doubtful receivables recognized individually is offset.

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

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

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

34

30

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 2017(b) Fair value of financial instruments (continued)(3) Securities and investments in securities
Concerning the market value of investment securities, the market value for stocks
is the price quoted on the stock exchange, and the market value for bonds is theprice provided by financial institutions.
In addition, for matters concerning to securities, see “Notes on securities.”(4) Long-term loans receivable
These fair values are determined using the present value of discounted collectible
principal and interest amounts estimated reflecting their collectability, based on an
appropriate rate in which a credit spread is added to a risk-free benchmark rate
(such as a government bond yield) corresponding to the remaining term. Further,
the fair value of doubtful debts are determined by discounting the value of expectedcash flows using the same discount rate, or estimated collectible amount secured
by collateral or guaranteed.
Liabilities(1) Trade notes payable, accounts payable on construction contracts and other andElectronically recorded payable
The book values are used, because these are operation payable and settlement
periods are within a year and their market values are almost the same as their bookvalues.
(2) Short-term bank loans
The carrying amount of the current portion of long-term debt approximates fairvalue since the carrying amount is equivalent to the present value of future cash
flows discounted using the current borrowing rate for similar debt with a compatible
maturity. For borrowings other than the current portion of long-term debt, thecarrying amount approximates fair value due to the short maturities of these
instruments.
(3) Long-term debt
Fair value of long-term debt is based on the price provided by financial institutionsor the present value of future cash flows discounted using the current borrowing
rate for similar debt with a comparable maturity.
The information of the fair value for derivatives is included in Note 13.

35

31

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 2017(b) Fair value of financial instruments (continued)
Note 2:Financial instruments for which it is extremely difficult to measure the fairvalue
As of March 31,
2017
2016
2017
(Millions of yen)(Thousands of
U.S. dollars)

Unlisted stocks (*)¥3,183¥3,272$28,371(*): Unlisted stocks are not included in “(3) Securities and investments in securities”
because these have no market value and it is extremely difficult to measure the fairvalue.
Note 3:

The redemption schedule for monetary claims and held-to-maturity debt
securities with maturity dates subsequent to March 31, 2017 and 2016
As of March 31, 2017
Within1 yearDeposits¥ 68,090
Trade notes receivable,accounts receivable oncompleted construction
contracts and other133,983
Securities and investments
in securities
Held-to-maturity
securities (Bonds)–
Long-term loans receivable
3¥202,077

Within1 yearDeposits¥ 66,177
Trade notes receivable,accounts receivable oncompleted construction
contracts and other132,724
Securities and Investments
in securities
Held-to-maturity
securities (Bonds)–
Long-term loans receivable
1¥198,904

Note 4:OverOver
1 year
5 years
and within and within
5 years
10 years(Millions of yen)
¥

–

¥

Over
10 yearsOverOver
1 year
5 years
Within and within and withinOver
5 years
10 years 10 years
1 year(Thousands of U.S. dollars)–¥–$ 606,916

$

9,620

–

–

1,194,250

213
147¥9,981

68
562
¥631

–
4
¥4

–
26

As of March 31, 2016
Over
Over
1 year
5 years
and within and within
5 years
10 years(Millions of yen)
¥

–

¥

–

$1,801,203

–

$

–

$ –

85,747

–

–

1,898
1,310
$88,965

606
5,009$5,624

–
35
$35

Over
10 years
¥

–

1,872

–

–

166
147
¥2,186

113
70
¥183

–
628
¥628

The redemption schedule for corporate bonds, long-term debt, and otherinterest bearing debt with maturity dates subsequent to the consolidatedbalance sheet date. See Note 20.
36

32

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 201712. Securities
Securities at March 31, 2017 and 2016 were summarized as follows:(a) Held-to-maturity securities

Securities whose fairvalue exceeds theircarrying value:
Bonds

Securities whose fairvalue exceeds theircarrying value:
Bonds

As of March 31, 2017
Carrying
Fair
Unrealized Carrying
Fair
Unrealized
value
value
gain
value
value
gain
(Millions of yen)(Thousands of U.S. dollars)

¥282

¥289

¥7

$2,513$2,575$62

As of March 31, 2016
Carrying
Fair
Unrealized
value
value
gain
(Millions of yen)

¥280

¥291

¥10

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

Unrealized gain:
Stock
Unrealized loss:
Stock
Total

As of March 31, 2017
Balance
Unrealized
Unrealized
sheet
Cost
Cost
gain (loss)
gain (loss)
amount(Millions of yen)(Thousands of U.S. dollars)¥4,330¥2,604¥ 1,726$38,595$23,210$15,384

3,005¥7,336

4,267¥6,872(1,262)¥ 463

26,784$65,389

38,033$61,253(11,248)$04,126

As of March 31, 2016
Balance
Unrealized
sheet
Cost
gain (loss)
amount(Millions of yen)
¥4,033¥2,398¥ 1,635

3,406¥7,4404,485¥6,883(1,079)¥ 556(c) Sales of other securities
Year ended March 31,
2017
2016
2017
(Millions of yen)(Thousands of
U.S. dollars)
Sales proceeds
Total gain on sales of security
Total loss on sales of security

¥87
29
(1)

¥3
3
–

$775
258
(8)

37

33

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 201713. Derivatives and Hedge Accounting
Derivative transactions for the years ended March 31, 2017 and 2016 were summarized asfollows:(a) Derivative transactions to which the hedge accounting is not applied.
(1) Currency-related transactions
Transaction Contract
Segmentation
type
amountOff-market
transaction

Note 1:

Foreignexchange
forwardcontracts
Long
U.S. dollar¥876

As of March 31, 2017
Over
Fair Valuation Contract
Over
Fair
Valuation
1 year value(loss)
amount1 yearvalue(loss)(Millions of yen)(Thousands of U.S. dollar)

¥102

¥(10)

¥(10)

$7,808

$909

$(89)

$(89)

Estimated fair value was provided by the counterparty financial institution.

As of March 31, 2016
Transaction Contract
Over
Fair Valuation
Segmentation
1 year value
type
amount(loss)(Millions of yen)
Off-market
Foreigntransaction
exchange
forwardcontracts
Long
¥585
¥(22)
¥(22)
U.S. dollar ¥1,452
Note 1:

Estimated fair value was provided by the counterparty financial institution.

(b) Derivative transactions to which the hedge accounting is applied(1) Currency-related transactions
Method ofhedge
accounting

As of March 31, 2017
Transaction
type

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

Hedgeditem
Accounts
payableFuture foreign
currencytransactions

ContractOver
Fairamount1 yearvalue(Millions of yen)ContractOver
Fairamount1 yearvalue(Thousands of U.S. dollars)

¥ 11

¥–

Note 2$0,098$ –Note 2

285
¥296

9
¥9

¥(5)
¥(5)

2,540
$2,638

80
$80

$(44)
$(44)

Note 1:

Estimated fair value was provided by the counterparty financial institution.

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

38

34

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 2017(b)

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

As of March 31, 2016
Transaction
type

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

Hedgeditem
Accounts
payableFuture foreign
currencytransactions

ContractOver
Fairamount1 yearvalue(Millions of yen)

¥31

¥–

Note 2

298
¥330

30
¥30

¥9
¥9

Note 1:

Estimated fair value was provided by the counterparty financial institution.

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

(2) Interest-related transactions
There were no interest-transactions to which short-cut method is not applied for the year
ended March 31, 2017.
As of March 31, 2016
Method ofhedge
accounting
Short-cut
methodNote 1:

Transaction
type

Hedgeditem

Interest-rate
swaps:
Pay fixed/
Receivefloating

Long-term
debt

ContractOver
Fairamount1 yearvalue(Millions of yen)

¥100

–

Note 1Since these interest rate swaps accounted for by short-cut method are included in that of thelong-term debt as the hedged item, the fair values of the contracts are included in the long-term
debt (The current portion of long-term debt is short-term bank loans).

14. Retirement Benefit Plans
For the year ended March 31, 2017, the Group has either funded or unfunded defined benefit
and defined contribution plans.
The Group has a defined benefits pension plan, i.e. defined benefit company pension plan
and lump-sum retirement benefit plans. Certain consolidated domestic subsidiaries participate
in the Small and Medium Enterprise Retirement Allowance Mutual Aid Scheme. Certain
foreign consolidated subsidiaries have an employee pension trust. The Company and certain
consolidated subsidiaries have a defined contribution pension plan.
In addition, for certain defined benefit company pension plan and lump-sum retirement benefit
plans and the defined contribution pension plan of the Company and certain consolidated
subsidiaries, the simplified method is applied to calculate their liability for retirement benefits
and retirement benefits expenses.
39

35

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 2017

The changes in the retirement benefit obligation during the year ended March 31, 2017 and2016 were as follows (excluding plans for which the simplified method is applied):Year ended March 31,
2017
2016
2017
(Millions of yen)(Thousands of
U.S. dollars)
Balance at the beginning of year
Service cost
Interest cost
Actuarial loss
Retirement benefit paid
Foreign currency translation
Balance at the end of year

¥18,318879
74
65(1,821)(16)¥17,499¥19,481717
95
231(2,189)(19)¥18,318$163,276
7,834
659
579
(16,231)(142)$155,976

The changes in plan assets during the year ended March 31, 2017 and 2016 were as follows(excluding plans for which the simplified method is applied):Years ended March 31,
2017
2016
2017
(Millions of yen)(Thousands of
U.S. dollars)
Balance at the beginning of year
Expected return on plan assets
Actuarial gain
Retirement benefit paid
Foreign currency translation
Balance at the end of year

¥65
3
(1)
(2)
(5)
¥59

¥68
4
(1)
(1)
(3)
¥65

$579
26
(8)
(17)
(44)
$525

The changes in liability for retirement benefits based on the simplified method during theyear ended March 31, 2017 and 2016 were as follows:
Years ended March 31,
2017
2016
2017
(Millions of yen)(Thousands of
U.S. dollars)
Balance at the beginning of year
Retirement benefit expense
Retirement benefit paid
Contribution to defined contribution plan
Balance at the end of year

¥1,221121(53)(8)¥1,280¥1,191123(85)(8)¥1,221$10,883
1,078
(472)
(71)
$11,40940

36

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 2017

A reconciliation of the funded retirement benefit obligation and plan assets and the net
liability for retirement benefits recognized in the consolidated balance sheet at March 31,2017 and 2016 is as follows:
As of March 31,
2017
2016
2017
(Millions of yen)(Thousands of
U.S. dollars)
Funded retirement benefit obligation
Plan assets at fair value
Unfunded retirement benefit obligation
Net liability for retirement benefits in the
consolidated balance sheet
Liability for retirement benefits
Assets for retirement benefits
Net liability for retirement benefits in the
consolidated balance sheet

¥

347
(195)
151
18,568

¥

327
(209)
118
19,356$

3,092(1,738)
1,345
165,504

18,72019,474

166,859

18,720–19,474–

166,859–¥18,720¥19,474$166,859

Note: Including plans for which the simplified method is applied.
The components of retirement benefit expense during the year ended March 31, 2017 and2016 were as follows:Year ended March 31,
2017
2016
2017
(Millions of yen)(Thousands of
U.S. dollars)Service cost
Interest cost
Expected return on plan assets
Amortization of actuarial loss
Amortization of prior service cost
Retirement benefit expense calculated by
the simplified method
Total retirement benefit expense

¥ 879
74
(3)
438
(363)

¥ 717
95
(4)
385
(409)

$ 7,834
659
(26)
3,904
(3,235)121¥ 1,147

123
¥ 910

1,078
$ 10,223

41

37

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 2017

The components of retirement benefit liability adjustments included in other comprehensive
income (before tax effect) during the year ended March 31, 2017 and 2016 were as follows:
Years ended March 31,
2017
2016
2017
(Millions of yen)(Thousands of
U.S. dollars)
Actuarial loss
Prior service cost
Total

¥ 371
(363)
¥ (8)

¥ 151
(409)
¥(257)$ 3,306(3,235)$,,,,(71)

The components of retirement benefit liability adjustments included in accumulated othercomprehensive income (before tax effect) as of March 31, 2017 and 2016 were follows:
Years ended March 31,
2017
2016
2017
(Millions of yen)(Thousands of
U.S. dollars)
Unrecognized actuarial loss
Unrecognized prior service costTotal

¥ 2,730(1,983)¥ 746¥ 3,101(2,347)¥ 754$ 24,333(17,675)$ 6,649

The fair value of plan assets, by major category, as a percentage of total plan assets as ofMarch 31, 2017 and 2016 were follows:2017

As of March 31,

2016

Bonds

84%

83%

Cash and Deposits
Other
Total

15%
1%
100%

16%
1%
100%

The expected return on plan assets has been estimated based on the anticipated allocation toeach asset class and the expected long-term returns on assets held in each category.
The principal assumptions used for above plans were as follows:
2017
Discount rate
Expected rate of return on plan assets
Expected rate of increase in salaries

As of March 31,

Principally 0.3%
5.0%
Principally 4.1%

2016

Principally 0.3%
4.7%
Principally 4.0%42

38

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 2017

The contribution to defined contribution plans in the company and consolidated subsidiaries
were as follows:
Years ended March 31,
2017
2016
2017
(Millions of yen)(Thousands of
U.S. dollars)
Contribution to defined contribution plans

¥814

¥680

$7,255

15. Income Taxes
The significant components of deferred tax assets and liabilities at March 31, 2017 and 2016
were as follows:
As of March 31,
2016
2017
2017
(Millions of yen)(Thousands of
U.S. dollars)
Deferred tax assets:
Liability for retirement benefits
Accounts payable and accrued expenses
Allowance for bad debts
Reserve for defects on completed
construction projects
Allowance for losses on construction
contracts
Other
Gross deferred tax assets
Valuation allowance
Total deferred tax assets¥ 5,819
3,491
2,173

¥ 5,984
3,167
1,999

$ 51,867
31,116
19,368

246

246

2,192

116
2,784
14,631(9,322)
5,309

290
2,584
14,272(9,493)
4,778

1,033
24,815130,412(83,091)
47,321

(361)
(141)
(19)
(522)
¥ 4,786

(259)
(169)
(22)
(451)
¥ 4,327(3,217)(1,256)(169)(4,652)$ 42,659

Deferred tax liabilities:
Retained earnings of foreign consolidated
subsidiaries
Unrealized holding gain on securities
Other
Total deferred tax liabilities
Net deferred tax assets

43

39

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 2017

The following table summarizes the significant differences between the statutory tax rate andthe effective tax rates for the years ended March 31, 2017 and 2016:
Years ended March 31,
2017
2016
Statutory tax rate
Non-deductible expenses
Non-taxable income
Per capita inhabitants’ taxes
Tax credit
Valuation allowance
Different tax rate applied to foreign subsidiaries
Change in corporate tax rate
Other
Effective tax rates

–%
–
–
–
–
–
–
–
–
–%

33.1%
2.3
(1.4)
1.2
(3.0)
7.8
(0.1)
1.0
0.4
41.3%

The significant differences between the statutory tax rate and the effective tax rates for theyears ended March 31, 2017 has been omitted as its difference was less than 5% of thestatutory tax rate.
16. Segment Information, etc.
Segment Information(a) Outline of Segments
The Company’s reportable operating segments are components for which separate
financial information is available and that are evaluated regularly by the board of directors
in determining the allocation of management resources and in assessing performance.
The Company currently divides its operations into Civil Construction and Building
Construction, managed by the Civil Engineering Division and the Building Administration
Division, respectively. Business strategies are formulated by each segment.
Accordingly, the Company divides its operations into two reportable operating segmentson the same basis as it uses internally; Civil Construction and Building Construction.
Civil Construction consists mainly of governmental public works like bridge construction.
Building Construction is awarded by private sector companies for things like high riseapartment buildings.
(b) Accounting methods used to calculate segment income (loss), segment assets and otheritems for reportable segments
Accounts for reportable segments are for the most part calculated in line with thegenerally accepted standards used for the preparation of the consolidated financial
statements.
Segment income (loss) for reportable segments is based on gross profit.
Amounts for intersegment transactions or transfers are based on the market prices
determined by third party transactions.
The Company does not allocate any assets to reportable operating segments.
44

40

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 2017

Segment Information (continued)(c) Segment income, segment assets and other items for reportable segments
Year ended March 31, 2017
Reportable operating segments
Building
Total
Others
Total
Civil(Millions of yen)

Sales
External
Customers
Intersegment
transactions
or transfers
Net sales
Segment income

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

1,134¥164,08477¥240,259

1,211¥404,344

71
¥847

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

22,50323,822

46,325

225

46,551(127)

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

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

Note 3:

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

Adjustments Consolidated

Sales
External
Customers
Intersegment
transactions
or transfers
Net sales$1,452,446$2,140,850$3,593,297$6,907$3,600,213$–$3,600,213

10,107$1,462,554

686$2,141,536

10,794$3,604,100

632$7,54911,435$3,611,649(11,435)$(11,435)–$3,600,213

Segment income

200,579

212,336

412,915

2,005

414,930(1,132)413,798

Sales
External
Customers
Intersegment
transactions
or transfers
Net sales
Segment income

Year ended March 31, 2016
Reportable operating segments
Civil
Building
Total
Others
Total(Millions of yen)

Adjustments Consolidated¥165,319¥248,812¥414,131¥826¥414,958¥–¥414,958

1,127¥166,446

3¥248,815

1,130¥415,261

76
¥903

1,206
¥416,164(1,206)¥(1,206)–¥414,958

21,25918,31339,573348

39,921(127)

39,794Note 1:“Others,” which includes the Company’s business of solar power, elder care facilities andinsurance agent, does not qualify as a reportable operating segment.

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

Note 3:

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

45

41

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 2017

Related Information
For the year ended March 31, 2017(a) Product and service information
See “Segment income, segment assets and other items for reportable segments.”(b) Geographical segment information(1) Sales
Japan

Asia
Others(Millions of yen)

¥344,543¥56,505¥2,859Year ended March 31, 2017
Total
Japan
Asia
Others
Total(Thousands of U.S. dollars)¥403,908$3,071,066 $503,654$25,483$3,600,213

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

(2) Tangible fixed assets
Geographical segment information on tangible fixed assets has been omitted as theamount of tangible fixed assets in Japan constituted over 90% of total as of March
31, 2017.
(c) Major customer information
Information on major customers has been omitted as there were no sales to a single
customer constituting over 10% of net sales for the year ended March 31, 2017.
For the year ended March 31, 2016(a) Product and service information
See “Segment income, segment assets and other items for reportable segments.”(b) Geographical segment information(1) SalesYear ended March 31, 2016
Japan

Asia

Others

Total(Millions of yen)
¥350,035¥63,704¥1,217¥414,958

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

(2) Tangible fixed assets
Geographical segment information on tangible fixed assets has been omitted as theamount of tangible fixed assets in Japan constituted over 90% of total as of March
31, 2016.
46

42

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 2017

Related Information (continued)(c) Major customer information
Information on major customers has been omitted as there were no sales to a single
customer constituting over 10% of net sales for the year ended March 31, 2016.
Loss on impairment by reportable segment
For the year ended March 31, 2017, ¥624 million ($5,561 thousand) impairment loss wasrecorded.
Note 1:

The above amount is assets for business.

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

For the year ended March 31, 2016, ¥711 million impairment loss was recorded.
Note 1:

The above amount consists of elder care facilities of ¥692 million and assets forbusiness of ¥19 million.

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

Amortization of goodwill and unamortized balance by reportable segment
For the year ended March 31, 2017 and 2016, there were no amortization and unamortizedbalance of goodwill by reportable segment.
Gain on negative goodwill by reportable segment
For the years ended March 31, 2017 and 2016, there were no gain on negative goodwill byreportable segment.
17. Related Party Transactions(a) Related party transaction
Transactions with affiliates for the year ended March 31, 2017 were summarized asfollows:

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

Capitalinvestment

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

Balance sheet
account

Balance at
March 31,2017¥–

Long-term
non operating
accounts
receivable¥3,158¥–Long-term
accounts
payable¥2,579Nature ofTotal amounttransactionof transaction(Millions of yen)
Long-term
non operating
accounts
receivable
Long-term
accounts
payable47

43

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 2017(a) Related party transaction (continued)

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

Capitalinvestment

Number of
voting shares
held as apercentage ofvoting sharesissued$89

30.0%Year ended March 31, 2017

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

Balance sheet
account

Balance at
March 31,2017

Long-term
non operating
accounts
receivable$–

Long-term
non operating
accounts
receivable$28,148$–

Long-term
accounts
payable$22,987

Long-term
accounts
payableNote 1:

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

Note 2:

Allowance for above long-term non operating accounts receivable was recognized in the amount of ¥2,843
million ($25,340 thousand).

Note 3:

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

Transactions with affiliates for the year ended March 31, 2016 were summarized asfollows:

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

Capitalinvestment

Number of
voting shares
held as apercentage ofvoting sharesissued¥1030.0%Year ended March 31, 2016

Balance sheet
account

Balance at
March 31,2016

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

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

Note 2:

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

Note 3:

Consumption tax was excluded from the total amount of the transaction, however it was included in the balance
at March 31, 2016

48

44

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 201718. Per Share Information
Net assets and basic profit per share as of and for the years ended March 31, 2017 and 2016
were as follows:
2017

2016
(Yen)

Net assets per share
Profit per share¥70.0620.96

2017(U.S. dollars)¥51.7512.18$0.6240.186

Note: Profit per share – diluted was omitted as there were no diluted share for the year ended
March 31, 2017 and 2016.
The basis of calculation for net assets per share at March 31, 2017 and 2016 were as follows:
As of March 31,
2017
2016
2017
(Millions of yen)(Thousands of
U.S. dollars)
Total net assets
Amounts deducted from total net assets[Including non-controlling interests]
Total net assets attributable to common stock¥63,242
6,293[6,293]¥56,948¥48,136
6,069[6,069]¥42,066$563,704
56,092[56,092]$507,603(Thousands of shares)

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

812,855

812,865

The basis for calculating basic profit per share – based and profit per share – diluted for theyears ended March 31, 2017 and 2016 were as follows:
Years ended March 31,
2017
2016
2017
(Millions of yen)(Thousands of
U.S. dollars)Profit per share – basic:
Profit attributable to owners of parent
Amount not available to common shareholders
Profit attributable to owners of parent
per share – basic
Average number of shares of common stock
outstanding¥17,035–¥9,902–$151,840–¥17,035¥9,902$151,840(Thousands of shares)
812,860

812,87449

45

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 201719. Subsequent Event
Consolidation of Shares
The consolidation of shares was approved as proposed in the 14th Annual General Meetingof Shareholders held on June 29, 2017.
(a) Objective of the Consolidation of Shares
The total number of issued shares of the Company was 813,366,605 shares as of March
31, 2017, owing to an increase in the number of shares of common stock as a result of
the exercise of call options on preferred stock issued in September 2005.
This number of shares is very high, at approximately 4.3 times the average number oflisted shares of companies listed on the First Section of the Tokyo Stock Exchange,
and the current share price level is also significantly below the minimum level of¥50,000 which is the investment unit level that is seen as desirable in the Securities
Listing Regulation of the Tokyo Stock Exchange.
As a result, the rate of fluctuation in the share price per one yen move is relatively
large, and may attract large fluctuations in the share price as a target of speculative
trading, and the Company thus recognizes that this has a considerable impact on
general investors.
Taking this situation into consideration, the Company consolidate shares to adjusting
the investment unit to a level that is deemed desirable, and to adjust the total number
of issued shares to a level that reflects the Company’s scale.
(b)

Detail of Consolidation of Shares(1)

Type of Consolidation of Shares
Common stock(2)

Method and ratio of Consolidation of Shares
The Shares which were listed in Shareholder’s list on September 30, 2017
(Substantially September 29, 2017) will be consolidated 5 shares into 1 share in
October 1, 2017.

(3)

The number of shares to be decreased by Consolidation of Shares
Total number of shares issued before consolidation of shares
as of March 31, 2017

00000000000
0813,366,605

Number of shares to be decreased by consolidation of shares
Total number of shares issued after consolidation of shares

650,693,284
162,673,321

50

46

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 2017(b)

Detail of Consolidation of Shares (continued)
(4)

(c)

Total number of shares authorized after consolidation of shares
Total number of shares authorized before consolidation ofshares as of March 31, 2017

000000000000
2,669,464,970

Total number of shares authorized after consolidation ofshares553,892,994

Treatment for fractional share of less than one share
In case factional share of less than one share arises after the consolidation of shares,
the share shall be subject to a bulk disposal or acquisition as treasury stock inaccordance with the provisions of the Companies Act, and proceeds from the disposal,
etc. shall be distributed to shareholders for which fractions arise in proportion to theirrespective fractional share rations.

(d)Effect of Per Share Information
Effect of per share information for the year ended March 31, 2017 and 2016, assumingthat the consolidation of shares had been executed at the beginning of the year ended
March 31, 2017 is as follows
Year ended March 31,
2017
2016
2017
(Yen)
(U.S. dollars)
Net assets per share
Profit per share¥350.30
104.79¥258.76
60.91$3.122
0.934

20. Short-Term Bank Loans and Long-Term Debt
Short-term bank loans generally represent notes, principally at average annual interest rates
of 4.8% and 1.7% at March 31, 2017 and 2016, respectively.
Long-term debt at March 31, 2017 and 2016 were summarized as follows:
As of March 31,
2017
2016
2017
(Millions of yen)(Thousands of
U.S. dollars)
Debt with collateral (at average interest ratesof 2.3% at 2017and 2016)
Debt without collateral (at average interest
rates of 1.3% at 2017 and 1.4% at 2016)
Lease obligations
Current portion (excluding lease obligations)
Current portion of lease obligations
Deposits from employees¥

249

32,971931(9,581)(490)
2,381¥26,462¥487

21,415
1,310(2,930)(614)
2,101¥21,769$

2,219

293,8858,298(85,399)(4,367)
21,222$235,86751

47

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 2017

The aggregate annual maturities of long-term debt subsequent to March 31, 2017 weresummarized as follows:Year ending March 31,
2018
2019
2020
2021 and thereafter(Millions ofyen)(Thousands of
U.S. dollars)¥ 9,581
2,286
1,511
19,842¥33,221$ 85,399
20,376
13,468
176,860$296,113

The aggregate annual maturities of lease obligations subsequent to March 31, 2017 weresummarized as follows:Year ending March 31,
2018
2019
2020
2021 and thereafter(Millions ofyen)(Thousands of
U.S. dollars)

¥ 490
208
119
113
¥931

$04,367
1,853
1,060
1,007
$8,298

52

48

53

Non-Consolidated Financial Statements
Sumitomo Mitsui Construction Co., Ltd.
Year ended March 31, 2017with Independent Auditor’s Report55

Sumitomo Mitsui Construction Co., Ltd.
Non-Consolidated Balance Sheets
March 31, 2017

AssetsCurrent assets:
Cash and deposits
Trade notes receivable
Accounts receivable on completed construction contracts
Inventories
Deferred tax assets (Notes 4 and 8)
Other current assets
Allowance for doubtful receivables
Total current assets

Non-current assets:
Property and equipment, at cost:
Land (Note 5-(b))
Buildings (Note 5-(b))
Structures (Note 5-(b))
Machinery and equipment
VehiclesTools, furniture and fixtures
Construction in progress
Accumulated depreciation
Property and equipment, net
Intangible fixed assets
Investments and other assets:
Investments in securities
Investments in subsidiaries and affiliates (Notes 5-(b) and 7)
Long-term loans receivable
Long-term loans to employees
Long-term prepaid expenses
Deferred tax assets (Notes 4 and 8)
Other
Allowance for doubtful receivables
Total investments and other assets
Total non-current assets

Total assets

56

As of March 31,
2017
2016
2017
(Millions of yen)(Thousands of
U.S. dollars)(Note 2)
¥ 40,546
1,210
120,549
19,056
2,341
22,097(161)
205,640¥ 37,875
792
115,359
23,5672,207
17,082(36)
196,848$ 361,404
10,785
1,074,507
169,854
20,866
196,960(1,435)
1,832,961

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

5,328
4,789
737
2,945
416
3,276
20
(9,495)
8,018

47,49041,634
6,872
25,1092,852
29,16435(83,109)
70,077

1,502

1,383

13,38810,032
14,092
5,618
556
27
1,056
5,614
(9,886)27,11336,478

10,12913,613
5,618
624
25
1,190
6,261
(9,529)27,93337,33589,419125,608
50,075
4,955
240
9,412
50,040(88,118)
241,670
325,144¥242,118¥234,183$2,158,106

Sumitomo Mitsui Construction Co., Ltd.
Non-Consolidated Balance Sheets
March 31, 2017

Liabilities and net assets
Current liabilities:
Trade notes payable (Note 5-(a))
Electronically recorded payable (Note 5-(a))
Accounts payable on construction contracts (Note 5-(a))
Short-term bank loans and current portion of long-term debt
(Notes 5-(b), 5-(d) and 10)
Income taxes payable
Advances received on construction contracts in progress
Reserve for defects on completed construction projects
Allowance for losses on construction contracts
Allowance for contingency loss
Other current liabilities
Total current liabilities
Long-term liabilities:
Long-term debt (Notes 5-(b), 5-(d) and 10)
Accrued retirement benefits
Other long-term liabilities
Total long-term liabilities

As of March 31,
2017
2016
2017
(Millions of yen)(Thousands of
U.S. dollars)(Note 2)
¥ 14,286
30,70760,903¥ 21,251
20,95371,785$ 127,337
273,705
542,855

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

4,374
3,792
27,385
693
890
2,152
13,970167,250

85,08737,498
181,878
6,168
2,923
19,244
122,310
1,399,046

23,525
14,952
2,908
41,386

18,821
15,7003,040
37,562

209,688
133,273
25,920368,892

12,003

12,003106,988

398
398

398
398

3,547
3,547

347
30,95731,304

184
16,646
16,8303,092
275,933
279,026(247)
43,460(246)
28,987(2,201)
387,378

317
(4)
313
43,773¥242,118376
6
382
29,369¥234,183

2,825
(35)
2,789
390,168$2,158,106

Contingent liabilities (Note 5-(c))
Net assets:
Shareholders’ equity:
Capital stock:
Common stock:
Authorized:
2,669,464,970 shares in 2017 and 2016
Issued and outstanding:
813,366,605 shares in 2017 and 2016
Capital surplus:
Other capital surplus
Total capital surpluses
Retained earnings:
Legal retained earnings
Earned surplus carried forward
Total retained earnings
Treasury stock, at cost:
511,444 shares in 2017 and 501,516 shares in 2016
Total shareholders’ equity
Valuation, translation adjustments and other:
Unrealized holding gain on securities
Deferred (loss) gain on hedging instruments, net of taxes
Total valuation, translation adjustments and otherTotal net assets
Total liabilities and net assets

See accompanying notes to non-consolidated financial statements.

57

3

Sumitomo Mitsui Construction Co., Ltd.
Non-Consolidated Statements of Income
March 31, 2017

Years ended March 31,
2017
2016
2017
(Millions of yen)(Thousands of
U.S. dollars)(Note 2)
Net sales:
Completed construction (Note 6-(a))
OthersCost of sales:
Completed construction
OthersGross profit
Completed construction
OthersSelling, general and administrative expenses (Note 6-(d))
Operating income
Other income (expenses):
Interest and dividend income (Note 6-(b))
Payments received from insurance claims
Royalty income (Note 6-(b))
Interest expense
Provision of allowance for doubtful receivables
Loan related fee
Gain on sales of property and equipment
Gain on sales of investments in securities
Loss on sales and disposal of property and equipment(Note 6-(c))
Loss on valuation of investments in subsidiaries and affiliates
Other, net
Profit before income taxes
Income taxes (Notes 4 and 8):
Current
DeferredProfit¥305,70246
305,749¥320,781
45
320,826$2,724,859
410
2,725,278

268,67423
268,698

292,49324
292,518

2,394,812
205
2,395,026

37,02723

28,28720

330,038205

37,05028,308330,243

13,36023,69011,552
16,755

119,083
211,159

1,466
127
713
(583)
(552)
(326)
–
12

972
128
494
(592)
(919)
(145)
1
3

13,067
1,132
6,355(5,196)(4,920)(2,905)
–
106

(95)
(820)
(1,155)(1,214)22,475(54)(11)(3,516)(3,640)13,114(846)(7,309)(10,295)(10,820)
200,329

6,346
29
6,375
¥ 16,099

4,551
569
5,120
7,994

56,564258
56,823$ 143,497¥(Yen)
Profit per share – basic¥ 19.81(U.S. dollars)(Note 2)
¥

9.83

$

0.176

See accompanying notes to non-consolidated financial statements.

58

4

Sumitomo Mitsui Construction Co., Ltd.
Non-Consolidated Statements of Changes In Net Assets
March 31, 2017

Year ended March 31, 2017
Shareholders’ equity
Additional
paid-in capital

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

Other capitalsurplus

Earnedreserve¥12,003

¥398

¥184

162

Treasurystock, at cost

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

(0)

–

(0)

162

14,311

14,474(0)

14,473¥12,003

¥398

¥347

¥30,957¥31,304¥(247)¥43,460

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

¥376

¥ 6

¥382

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

(58)

(10)

(69)

(69)

(58)

(10)

(69)

14,403

¥317

¥ (4)

¥313

¥43,77359

5

Sumitomo Mitsui Construction Co., Ltd.
Non-Consolidated Statements of Changes In Net Assets
March 31, 2017

Year ended March 31, 2017
Shareholders’ equity
Additional
paid-in capital

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

Other capitalsurplus$106,988$3,547Retained earnings
Earned surplus
carriedEarnedTotal retained
forwardreserveearnings(Thousands of U.S. dollars) (Note 2)$1,6401,443

Treasurystock, at cost

Total
shareholders’equity$(2,192)$258,374$148,373$150,013(14,484)(14,484)(14,484)(1,443)
143,497–
143,497(8)–
143,497
(8)

0

0

(0)

–

(0)

1,443

127,560

129,013(0)

129,004$106,988$3,547$3,092$275,933$279,026$(2,201)$387,378

Year ended March 31, 2017
Valuation, translation adjustments and other
DeferredTotalgain (loss)
valuation,
Unrealized
on hedging
translation
holding
instruments,
adjustments
Totalgain (loss)
net of taxes
and other
net assets
on securities(Thousands of U.S. dollars) (Note 2)
Balance at the beginning of
the period
Changes in items during
the period
Dividends from surplus
Provision of legal retained
earnings
ProfitPurchases of treasury stock
Disposition of treasurystock
Net changes in items otherthan shareholders’ equity
Total changes in items during
the period
Balance at the end of theperiod$3,351$ 53$3,404$261,779(14,484)–
143,497
(8)
0

(516)

(89)

(615)

(615)

(516)

(89)

(615)

128,380$2,825$ 35$2,789$390,16860

6

Sumitomo Mitsui Construction Co., Ltd.
Non-Consolidated Statements of Changes In Net Assets
March 31, 2017

Year ended March 31, 2016
Shareholders’ equity
Additional
paid-in capital

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

Other capitalsurplus

Earnedreserve¥12,003

¥399

¥103

81

Treasurystock, at cost

Total
shareholders’equity¥(244)¥21,808¥09,546¥09,649

(812)

(812)

(812)

(81)
7,994

–
7,994

(2)

–
7,994
(2)

0

0

(0)

–

(0)

81

7,099

7,181

(2)

7,178

¥12,003

¥398

¥184

¥16,646¥16,830¥(246)¥28,987

Year ended March 31, 2016
Valuation, translation adjustments and otherTotalvaluation,
Deferred gaintranslation
on hedging
Unrealized
adjustments
instruments,
holding gain
and othernet of taxes
on securities(Millions of yen)
Balance at the beginning of
the period
Changes in items during
the period
Dividends from surplus
Provision of legal retained
earnings
ProfitPurchases of treasury stock
Disposition of treasurystock
Net changes in items otherthan shareholders’ equity
Total changes in items during
the period
Balance at the end of theperiodRetained earnings
Earned surplus
carriedTotal retained
forwardearnings(Millions of yen)

¥1,200¥ 195¥ 1,396

Total
net assets¥23,205
(812)
–
7,994
(2)
0

(824)

(188)

(1,013)(1,013)

(824)

(188)

(1,013)

6,164

382

¥29,369¥0,376¥

6¥

See accompanying notes to non-consolidated financial statements.

61

7

Sumitomo Mitsui Construction Co.,Ltd.

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

Summary of Significant Accounting Policies(a) Basis of Presentation
The accompanying non-consolidated financial statements of Sumitomo Mitsui
Construction Co., Ltd. (the “Company”) are prepared on the basis of accounting
principles generally accepted in Japan, which are different in certain respects as to theapplication and disclosure requirements of International Financial Reporting Standards,
and have been compiled from the non-consolidated financial statements prepared by
the Company as required by the Financial Instruments and Exchange Law of Japan.
Certain reclassifications have been made to present the accompanying financial statements
in a format which is familiar to readers outside Japan. In addition, certain amounts in theprior year’s financial statements have been reclassified to conform to the current year’s
presentation.
As permitted, amounts of less than one million yen have been omitted. As a result, thetotals shown in the accompanying financial statements do not necessarily agree withthe sums of the individual amounts.
(b) Securities and Investments in Subsidiaries and Affiliates
The accounting standard for financial instruments requires that securities be classified
into three categories: trading, held-to-maturity or other securities. Under this standard,
trading securities are carried at fair value and held-to-maturity securities are carried atamortized cost. Marketable securities classified as other securities for which market prices
are determinable are carried at fair value with any changes in unrealized holding gainor loss, net of the applicable income taxes, included directly in net assets.
Non-marketable securities classified as other securities are carried at cost. Cost of
securities sold is determined by the moving average method. Investments in
subsidiaries and affiliates are stated at cost determined by the moving average method.
(c) Inventories
Inventories other than materials and supplies are stated at cost determined by the specificidentification method. Materials and supplies are valued at cost determined by theaverage method. Book values are written down based on any decline in profitability.
(d) Depreciation and Amortization(1) Property and equipment (except leased assets)
Depreciation of property and equipment (except leased assets) is determined by the
declining-balance method based on the estimated useful lives of the respective assets
as prescribed in the Corporation Tax Law of Japan except that the straight-line
method is applied to office buildings acquired on or after April 1, 1998 andfacilities attached to buildings and structures acquired on or after April 1, 2016.

628

Sumitomo Mitsui Construction Co.,Ltd.

Notes to Non-Consolidated Financial Statements
March 31, 2017(d) Depreciation and Amortization (continued)(2) Intangible fixed assets (except leased assets) and long-term prepaid expenses
Amortization of intangible fixed assets (except leased assets) and long-term
prepaid expenses is calculated by the straight-line method based on the estimateduseful lives of the respective assets as prescribed in the Corporation Tax Law ofJapan. Amortization of computer software for internal use is calculated by thestraight-line method over the estimated useful lives of 5 years.
(3) Leased assets
Depreciation of leased assets under finance leases other than those that transfer
the ownership of the leased assets to the lessees is calculated by the straight-line
method over the lease term with a residual value of zero.
(e) Advances Received on Construction Contracts in Progress
As is customary in Japan, the Company receives payments from customers on an
installment basis in accordance with the terms of the respective construction contracts.
(f)

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

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

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

63

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Sumitomo Mitsui Construction Co.,Ltd.

Notes to Non-Consolidated Financial Statements
March 31, 2017(j)

Employees’ Retirement Benefits(1) Method of attributing expected retirement benefits to periods
In calculating the retirement benefit obligation, the benefit formula method isapplied to attribute the expected retirement benefits to the periods up to year
ended March 31, 2017.
(2) Amortization of actuarial gain or loss and prior service cost
Actuarial gain or loss is amortized in the year following the year in which thegain or loss is recognized by the straight-line method over periods (11 years),
which are shorter than the average remaining years of service of the employees.
Prior service cost is being amortized as incurred by the straight-line method overperiods (11 years), which are shorter than the average remaining years of serviceof the employees.

(k) Recognition of Revenues and Costs on Construction Contracts
Revenues and costs of construction contracts that commenced on or after April 1, 2009,of which the percentage of completion can be reliably estimated, are recognized by thepercentage-of-completion method. The percentage-of-completion is calculated at thecost incurred as a percentage of the estimated total cost. The completed-contract method
is applied for contracts for which the percentage of completion cannot be reliably
estimated.
(l)

Derivatives and Hedge Accounting(1) Method of hedge accounting
Derivative financial instruments are mainly stated at fair value except thoseaccounted for under deferred hedge accounting.
Foreign exchange forward contracts qualifying for allocation accounting aretranslated at the contract rate.
Interest rate swaps qualifying for hedge accounting and meeting specificmatching criteria are not remeasured at market value, but the differential paid or
received under the swap agreement is charged or credited to income (short-cut
method).
(2) Hedging instruments and hedged items
Hedging instruments:

Forward foreign exchange forward contracts
Interest rate swaps

Hedged items:

Future foreign currency transactions
Interest on debt

64

10

Sumitomo Mitsui Construction Co.,Ltd.

Notes to Non-Consolidated Financial Statements
March 31, 2017(l)

Derivatives and Hedge Accounting (continued)(3) Hedging policy
The Company utilizes foreign exchange forward contracts and interest rate swaps
only for the purpose of hedging future risks of fluctuation of foreign currency
exchange rates or interest rates.
(4) Assessment of hedge effectivenessAn evaluation of hedge effectiveness for a foreign exchange forward contract isperformed on a quarterly basis to confirm that amount of the foreign exchange
contract is within amount of the underlying hedged item to assess whether theforward contract qualifies for hedge accounting.
An evaluation of hedge effectiveness for interest rate swaps is not performed as
all meet specified criteria under the short-cut method.

(m) Accounting for Retirement Benefits
Accounting for unrecognized actuarial loss and unrecognized prior service cost on
non-consolidated financial statements is different from the accounting on consolidated
financial statements.
(n) Consumption Taxes
Consumption taxes are accounted for by the tax exclusion method.
(o) Income Taxes
Deferred tax assets and liabilities are determined based on the differences between theamounts calculated for financial reporting purposes and the tax bases of the assets andliabilities and are measured using the enacted tax rates and laws which will be in effectwhen the differences are expected to reverse.
The Company has adopted the consolidated taxation system.
2.

U.S. Dollar Amounts

The translation of yen amounts into U.S. dollar amounts is included solely for the convenienceof readers outside Japan and has been made at ¥112.19 = U.S.$1.00, the approximate rate ofexchange prevailing on March 31, 2017. This translation should not be construed as arepresentation that yen have been, could have been, or could in the future be, converted into
U.S. dollars at that or any other rate.

65

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Sumitomo Mitsui Construction Co.,Ltd.

Notes to Non-Consolidated Financial Statements
March 31, 2017
3.

Changes in Accounting Methods

The Company have adopted “Practical Solution on a charge in depreciation method due to
Tax Reform 2016” (ASBJ PITF No. 32 issued on June 17, 2016) effective from April 1,
2016. Accordingly the depreciation method for both facilities attached to buildings andstructures acquired on or after April 1, 2016 was changed from declining-balance method
to the straight-line method.
In addition, the effect of these changes is immaterial for the year ended March 31, 2017.
4.

Additional Information

The Company have adopted “Revised Implementation Guidance on Recoverability ofDeferred Tax Assets” (ASBJ Guidance No. 26 issued on March 28, 2016) effective from
April 1, 2016.
5.

Notes to Non-Consolidated Balance Sheets(a) Outstanding Balances with Subsidiaries and Affiliates
Significant outstanding balances for subsidiaries and affiliates other than individuallypresented on the accompanying non-consolidated balance sheets at March 31, 2017and 2016 were as follows:
As of March 31,
2017
2016
2017
(Millions of yen)(Thousands of
U.S. dollars)
Trade notes payable
Electronically recorded payable
Accounts payable on construction
contracts

¥ 385
8,280

¥

220
1,261

$ 3,43173,803

8,878

13,27879,13366

12

Sumitomo Mitsui Construction Co.,Ltd.

Notes to Non-Consolidated Financial Statements
March 31, 2017(b) Pledged Assets
The following assets were pledged at March 31, 2017 and 2016 principally as
collateral for short-term bank loans, long-term debt and guarantees (such as guarantees
for the completion of construction contracts):
As of March 31,
2017
2016
2017
(Millions of yen)(Thousands of
U.S. dollars)
Land
Buildings, net of accumulated
depreciation
Structures, net of accumulated
depreciation
Investments in subsidiaries and affiliates¥5,209¥5,209$46,430

265

290

2,362

58
369
¥5,90232
369¥5,901

516
3,289$52,607

The secured liabilities as of March 31, 2017 and 2016 are summarized as follows:
As of March 31,
2017
2016
2017
(Millions of yen)(Thousands of
U.S. dollars)
Short-term bank loans[Including current portion of long-termdebt]Long-term debt

¥100

¥200

$891

[100]
–

[200]
100

[891]
–

(c) Contingent Liabilities
At March 31, 2017 and 2016, the Company was contingently liable for the following:
As of March 31,
2016
2017
2017
(Millions of yen)(Thousands of
U.S. dollars)
As guarantor of bank loans to customers,
subsidiaries, an affiliate and employees¥2,977¥2,535$26,535

67

13

Sumitomo Mitsui Construction Co.,Ltd.

Notes to Non-Consolidated Financial Statements
March 31, 2017(d) Financial covenants
For the year ended March 31, 2017
(1) The Company has entered into a syndicated loan contract dated on August 6, 2014
with its seven banks with Sumitomo Mitsui Banking Corporation as arranger.
The following financial covenant is included in the contract:
Total consolidated net assets at the end of each fiscal year beginning March 31,
2015 shall be equal to or exceed 75% of total consolidated net assets as of March
31, 2014, or of total consolidated net assets at the end of the most recent fiscal
year, whichever is greater.
In addition, the balance of bank borrowings under this syndicated loan contract is¥7,500 million ($66,85 thousand) in long-term debt (including the current portion)
as of March 31, 2017.
(2) The Company has entered into a syndicated loan contract dated on March 29,
2016 and loan commitment agreement dated on March 31, 2016 with its sevenbanks (same bank as we had contracted for the year ended March, 31 2015.) with
Sumitomo Mitsui Banking Corporation as arranger. The following financial
covenant is included in the contract:
Total consolidated net assets at the end of each fiscal year beginning March 31,
2016 shall be equal to or exceed 75% of total consolidated net assets as of March
31, 2014 or of total consolidated net assets at the end of the most recent fiscal
year, whichever is greater.
In calculating consolidated net assets, any allowance or costs related to thecondominium in Yokohama will be excluded from the calculation in accordancewith instructions received from the Ministry of Land, Infrastructure Transportation
and Tourism of Japan on January 13, 2016.
In addition, the balance of bank borrowings under this syndicated loan contract is¥10,000 million ($89,134 thousand) in long-term debt as of March 31, 2017.
Unused amount on loan commitment agreement as of March 31, 2017 and 2016
were as follows.
As of March 31,
2017
2016
2017
(Millions of yen)(Thousands of
U.S. dollars)
Maximum limit under the agreement
Loan balance outstanding
Difference (unused portion)¥20,000–¥20,000¥20,000–¥20,000$178,269–$178,269

68

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Sumitomo Mitsui Construction Co.,Ltd.

Notes to Non-Consolidated Financial Statements
March 31, 2017(d) Financial covenants (continued)(3) The Company has entered into a syndicated loan contract dated on September 28,
2016 with its seven banks (same bank as we had contracted for the year ended
March, 31 2015 and 2016.) with Sumitomo Mitsui Banking Corporation as arranger.
The following financial covenant is included in the contract:
Total consolidated net assets at the end of each fiscal year beginning March 31,2017 shall be equal to or exceed 75% of total consolidated net assets as of March
31, 2014 or of total consolidated net assets at the end of the most recent fiscal
year, whichever is greater.
In calculating consolidated net assets, any allowance or costs related to thecondominium in Yokohama will be excluded from the calculation in accordancewith instructions received from the Ministry of Land, Infrastructure Transportation
and Tourism of Japan on January 13, 2016.
In addition, the balance of bank borrowings under this syndicated loan contract is¥9,500 million ($84,677 thousand) in long-term debt (including the current
portion) as of March 31, 2017.
(4) The Company has entered into a syndicated loan contract dated on September 28,
2016 with its seven banks (including different 5 bank from above (3)) with
Sumitomo Mitsui Banking Corporation as arranger. The following financial covenant
is included in the contract:
Total consolidated net assets at the end of each fiscal year beginning March 31,2017 shall be equal to or exceed 75% of total consolidated net assets as of March
31, 2016 or of total consolidated net assets at the end of the most recent fiscal
year, whichever is greater.
In addition, the balance of bank borrowings under this syndicated loan contract is¥4,750 million ($42,338 thousand) in long-term debt (including the current
portion) as of March 31, 2017.
For the year ended March 31, 2016
(1) The Company has entered into a syndicated loan contract dated on August 6,
2014 with its seven banks with Sumitomo Mitsui Banking Corporation asarranger. The following financial covenant is included in the contract:
Total consolidated net assets at the end of each fiscal year beginning March 31,
2015 shall be equal to or exceed 75% of total consolidated net assets as of March
31, 2014, or of total consolidated net assets at the end of the most recent fiscal
year, whichever is greater.
In addition, the balance of bank borrowings under this syndicated loan contract is¥8,500 million in long-term debt (including the current portion) as of March 31,
2016.
69

15

Sumitomo Mitsui Construction Co.,Ltd.

Notes to Non-Consolidated Financial Statements
March 31, 2017(d) Financial covenants (continued)(2) The Company has entered into a syndicated loan contract dated on March 29,
2016 and loan commitment agreement dated on March 31, 2016 with its sevenbanks (same bank as we had contracted for the year ended March, 31 2015.) with
Sumitomo Mitsui Banking Corporation as arranger. The following financial covenant
is included in the contract:
Total consolidated net assets at the end of each fiscal year beginning March 31,
2016 shall be equal to or exceed 75% of total consolidated net assets as of March
31, 2014 or of total consolidated net assets at the end of the most recent fiscal
year, whichever is greater.
In calculating consolidated net assets, any allowance or costs related to thecondominium in Yokohama will be excluded from the calculation in accordancewith instructions received from the Ministry of Land, Infrastructure Transportation
and Tourism of Japan on January 13, 2016.
In addition, the balance of bank borrowings under this syndicated loan contract is¥10,000 million in long-term debt as of March 31, 2016.
Unused amount on loan commitment agreement as of March 31, 2016 was asfollows.
As of March 31,
2016
2015
(Millions of yen)
Maximum limit under the agreement
Loan balance outstanding
Difference (unused portion)
6.

¥20,000–¥20,000¥––¥–

Notes to Non-Consolidated Statements of Income(a) Net Sales Based on Percentage-of-completion Method
Net sales on construction contracts accounted for under the percentage-of-completion
method amounted to ¥254,900 million ($2,272,038 thousand) and ¥265,349 million
for the years ended March 31, 2017 and 2016, respectively.

70

16

Sumitomo Mitsui Construction Co.,Ltd.

Notes to Non-Consolidated Financial Statements
March 31, 2017(b) Transactions with Subsidiaries and Affiliates
Significant transactions with subsidiaries and affiliates other than individually presented
on the accompanying non-consolidated statements of income for the years ended 2017and 2016 were as follows:
Years ended March 31,
2017
2016
2017
(Millions of yen)(Thousands of
U.S. dollars)
Dividend income
Royalty income¥1,121
713

¥715
494

$9,991
6,355(c) Loss on Sales and Disposal of Property and Equipment
The significant components of loss on sales and disposal of property and equipment
for the years ended March 31, 2017 and 2016 were as follows:
Years ended March 31,
2017
2016
2017
(Millions of yen)(Thousands of
U.S. dollars)
Loss on disposal
Loss on sales
Others
Total

¥92
0
3
¥95

¥16
38
–
¥54

$820
0
26
$846

(d) Selling, General and Administrative Expenses
The significant components of selling, general and administrative expenses for theyears ended March 31, 2017 and 2016 were as follows:
Years ended March 31,
2017
2016
2017
(Millions of yen)(Thousands of
U.S. dollars)
Salaries and wages
Rent
Retirement benefit expenses
Communication and traveling expenses
Legal welfare expenses
Depreciation expenses
Other
Total

¥ 6,341
1,088
499
959
943
420
3,107
¥13,360¥ 5,463
1,044
379
920
840
404
2,498
¥11,552$056,520
9,697
4,447
8,547
8,405
3,743
27,694$119,083

71

17

Sumitomo Mitsui Construction Co.,Ltd.

Notes to Non-Consolidated Financial Statements
March 31, 2017
7.

Securities

Stocks of subsidiaries and affiliates at March 31, 2017 and 2016 were as follows:
As of March 31, 2017
Carrying
Fair
Unrealized Carrying
Fair
Unrealized
value
value
gain
value
value
gain
(Millions of yen)(Thousands of U.S. dollars)
Stocks ofa subsidiary¥717¥2,470¥1,753$6,390$22,016$15,625

As of March 31, 2016
Carrying
Fair
Unrealized
value
value
gain
(Millions of yen)
Stocks ofa subsidiary¥717¥2,082¥1,364

Note: Stocks of subsidiaries and affiliates for which it is extremely difficult to determine
market values were excluded from the above as follows:
As of March 31,
2016
2017
2017
Carrying value(Millions of yen)(Thousands of
U.S. dollars)
Stocks ofa subsidiaries
Stocks ofa affiliates¥3,638¥2,448$32,427

10

10

89

72

18

Sumitomo Mitsui Construction Co.,Ltd.

Notes to Non-Consolidated Financial Statements
March 31, 2017
8.

Income Taxes

The significant components of the Company’s deferred tax assets and liabilities at March
31, 2017 and 2016 were as follows:
As of March 31,
2017
2016
2017
(Millions of yen)(Thousands of
U.S. dollars)
Deferred tax assets:
Accrued retirement benefits
Allowance for bad debts
Account payable and accrued expenses
Loss on devaluation of investments in
subsidiaries and affiliates
Reserve for defects on completed
construction projects
Allowance for losses on construction
contracts
Other
Gross deferred tax assets
Valuation allowance
Total deferred tax assets
Deferred tax liabilities:
Unrealized holding gain on securities
Deferred gain on hedging instruments,
net of taxes
Asset retirement obligations
Total deferred tax liabilities
Net deferred tax assets¥ 4,582
3,076
1,956

¥ 4,814
2,929
1,484

$ 40,841
27,417
17,434

1,117

894

9,956

213

213

1,898

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

274
1,424
12,035(8,465)3,570

900
10,170108,646(77,074)
31,571

(139)

(165)

(1,238)

(3)
(0)
(143)
¥ 3,398

(4)
(3)
(172)
¥ 3,397(26)(0)(1,274)$ 30,287

The following table summarizes the significant differences between the statutory tax rates
and the effective tax rates for the years ended March 31, 2017 and 2016:
Years ended March 31,
2017
2016
Statutory tax rates
Non-deductible expenses
Non-taxable income
Per capita inhabitants’ taxes
Tax credit
Valuation allowance
Change in corporate tax rate
Other
Effective tax rates

30.9 %
0.4
(1.5)
1.5
(3.1)
0.8
0–
(0.6)
28.4 %

33.1 %
0.8
(1.8)
1.2
(3.9)
9.3
1.3
(1.0)
39.0 %

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19

Sumitomo Mitsui Construction Co.,Ltd.

Notes to Non-Consolidated Financial Statements
March 31, 2017
9.

Subsequent Event

Consolidation of Shares
The consolidation of shares was approved as proposed in the 14th Annual General Meetingof Shareholders held on June 29, 2017.
(a)Objective of the Consolidation of Shares
The total number of issued shares of the Company was 813,366,605 shares as ofMarch 31, 2017, owing to an increase in the number of shares of common stock as aresult of the exercise of call options on preferred stock issued in September 2005.
This number of shares is very high, at approximately 4.3 times the average number oflisted shares of companies listed on the First Section of the Tokyo Stock Exchange,
and the current share price level is also significantly below the minimum level of¥50,000, which is the investment unit level that is seen as desirable in the Securities
Listing Regulation of the Tokyo Stock Exchange.
As a result, the rate of fluctuation in the share price per one yen move is relatively
large, and may attract large fluctuations in the share price as a target of speculative
trading, and the Company thus recognizes that this has a considerable impact on
general investors.
Taking this situation into consideration, the Company consolidate shares to adjusting
the investment unit to a level that is deemed desirable, and to adjust the total number
of issued shares to a level that reflects the Company’s scale.

(b)

Detail of Consolidation of Shares(1)

Type of Consolidation of Shares
Common stock(2)

Method and ratio of Consolidation of Shares
The Shares which were listed in Shareholder’s list on September 30, 2017
(Substantially September 29, 2017) will be consolidated 5 shares into 1 share in
October 1, 2017.

(3)

The number of shares to be decreased by Consolidation of Shares
Total number of shares issued before consolidation of shares
as of March 31, 2017

000000000000
813,366,605

Number of shares to be decreased by consolidation of shares
Total number of shares issued after consolidation of shares

650,693,284
162,673,321

74

20

Sumitomo Mitsui Construction Co.,Ltd.

Notes to Non-Consolidated Financial Statements
March 31, 2017(b)

Detail of Consolidation of Shares (continued)
(4)

(c)

Total number of shares authorized after consolidation of shares
Total number of shares authorized before consolidation ofshares as of March 31, 2017

000000000000
2,669,464,970

Total number of shares authorized after consolidation ofshares553,892,994

Treatment for fractional share of less than one share
In case factional share of less than one share arises after the consolidation of shares,
the share shall be subject to a bulk disposal or acquisition as treasury stock inaccordance with the provisions of the Companies Act, and proceeds from the disposal,
etc. shall be distributed to shareholders for which fractions arise in proportion to theirrespective fractional share rations.

(d)Effect of Per Share Information
Effect of per share information for the year ended March 31, 2017 and 2016,
assuming that the consolidation of shares had been executed at the beginning of theyear ended March 31, 2017 is as follows
Year ended March 31,
2017
2016
2017
(Yen)
(U.S. dollars)

Net assets per share
Profit per share¥269.26
99.03¥180.6649.17$2.4000.882

10. Short-Term Bank Loans and Long-Term Debt
Short-term bank loans generally represent notes, principally at average interest rates ofnone and 1.7% at March 31, 2017 and 2016, respectively.
Long-term debt at March 31, 2017 and 2016 were summarized as follows:
As of March 31,
2017
2016
2017
(Millions of yen)(Thousands of
U.S. dollars)
Debt with collateral (at average interest ratesof 2.0% and 2.2% at 2017 and 2016)
Less current portion

¥ 100
(100)
¥ –

¥ 300
(200)
¥ 100

$ 891
(891)
$ –

75

21

76

77

CORPORATE OUTLINE
Corporate Name:

Main Scope of Business:

Main Banks

Sumitomo Mitsui Construction Co.,Ltd.

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

Sumitomo Mitsui Banking Corporation
Sumitomo Mitsui Trust Bank, Ltd

Established:
October 14, 1941

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

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

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

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

Mitsui Fudosan Co., Ltd.

Corporate History

78

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

CORPORATE DATAHEAD OFFICE

Bangkok:(Thailand)

SMCC Shanghai

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

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

Room No.801, No.1 Building, 641 Tian Shan Road,
Chang Ning Zone, Shanghai 200336, China
TEL:86-21-6228-6780
FAX:86-21-6228-6781

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

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

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

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

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

Hanoi:(Vietnam)#502-504, 5th Floor, V-Tower, 649 Kim Ma str., Ba
Dinh Dist., Hanoi, Vietnam
TEL:84-4-3942-8888
FAX:84-4-3942-8808

Singapore:
2 Bukit Merah Central #06-01 Singapore 159835
TEL:65-6933-8000
FAX:65-6933-8001

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

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

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

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

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

79

SMCC Overseas Singapore Pte. Ltd.
2Bukit Merah Central #06-01 Singapore 159835
TEL:65-6933-8000
FAX:65-6933-8001

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