Consolidated Financial Statements
Asanuma Corporation
Year ended March 31, 2018with Independent Auditor’s ReportAsanuma Corporation
Consolidated Financial Statements
Year ended March 31, 2018

Contents

Consolidated Financial Statements
Independent Auditor’s Report ............................................................................................. 1
Consolidated Balance Sheet ................................................................................................ 2
Consolidated Statement of Income ...................................................................................... 4
Consolidated Statement of Comprehensive Income............................................................ 5
Consolidated Statement of Changes in Net Assets .............................................................. 6
Consolidated Statement of Cash Flows ............................................................................. 8
Notes to Consolidated Financial Statements ..................................................................... 10

Independent Auditor’s Report
The Board of Directors
Asanuma Corporation
We have audited the accompanying consolidated financial statements of Asanuma Corporationand its consolidated subsidiaries, which comprise the consolidated balance sheet as at March 31,
2018, and the consolidated statements of income, comprehensive income, changes in net assets,
and cash flows for the year then ended and a summary of significant accounting policies andother explanatory information, all expressed in Japanese yen.
Management’s Responsibility for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of these consolidated
financial statements in accordance with accounting principles generally accepted in Japan, andfor designing and operating such internal control as management determines is necessary toenable the preparation and fair presentation of the consolidated financial statements that are freefrom material misstatement, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on these consolidated financial statements based on
our audit. We conducted our audit in accordance with auditing standards generally accepted inJapan. Those standards require that we plan and perform the audit to obtain reasonableassurance about whether the consolidated financial statements are free from material
misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the consolidated financial statements. The procedures selected depend on theauditor’s judgment, including the assessment of the risks of material misstatement of theconsolidated financial statements, whether due to fraud or error. The purpose of an audit of theconsolidated financial statements is not to express an opinion on the effectiveness of the entity’s
internal control, but in making these risk assessments the auditor considers internal controls
relevant to the entity’s preparation and fair presentation of the consolidated financial statements
in order to design audit procedures that are appropriate in the circumstances. An audit also
includes evaluating the appropriateness of accounting policies used and the reasonableness ofaccounting estimates made by management, as well as evaluating the overall presentation of theconsolidated financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide abasis for our audit opinion.
OpinionIn our opinion, the consolidated financial statements referred to above present fairly, in allmaterial respects, the consolidated financial position of Asanuma Corporation and its
consolidated subsidiaries as at March 31, 2018, and their consolidated financial performance andcash flows for the year then ended in conformity with accounting principles generally accepted inJapan.
Convenience Translation
We have reviewed the translation of these consolidated financial statements into U.S. dollars,presented for the convenience of readers, and, in our opinion, the accompanying consolidated
financial statements have been properly translated on the basis described in Note 2.

June 28, 2018
Osaka, Japan1

Asanuma Corporation
Consolidated Balance Sheet
March 31, 2018

Millions of yen
2017
2018
AssetsCurrent assets:
Cash and cash deposits (Notes 5, 8 and 19)
Receivables:
Notes receivable (Note 19)
Accounts receivable on completed construction
contracts (Note 19)
Other accounts receivable
Allowance for doubtful accounts

Thousands of
U.S. dollars(Note 2)2018

¥ 39,914¥ 39,720$ 375,697

2,500

1,993

23,53240,0103,481(39)45,95240,5682,260(59)
44,762376,600
32,765(367)
432,530

924
34
15
973

2,609
85
42
2,736

8,697
320
142
9,159

Deferred income taxes (Note 9)
Other current assets
Total current assets

897
411
88,1471,748
446
89,412

8,443
3,868
829,697

Property and equipment, at cost:
Land (Notes 6 and 8)
Buildings and structures (Notes 6 and 8)
Machinery, equipment and vehicles
Tools, furniture and fixtures
Lease assets
Less accumulated depreciation
Construction in progress
Property and equipment, net

1,831
6,131
387
1,200
4
(4,842)
78
4,789

1,831
5,879
361
1,047
4
(4,684)277
4,715

17,23557,7093,643
11,295
38(45,576)733
45,077

9,040

8,519

85,090

128
121
471
2
1,399
(681)
10,480

116
129
397
343
1,435
(670)
10,269

1,205
1,139
4,433
19
13,169(6,410)98,645¥ 103,416¥ 104,396$ 973,419

Inventories:
Cost of uncompleted construction contracts
Real estate held for sale
Raw materials and supplies

Investments and other assets:
Investments in securities (Notes 7, 8 and 19)
Investments in an unconsolidated subsidiary
and affiliates (Note 19)
Long-term loans receivable (Note 8)
Intangible assets
Deferred income taxes (Note 9)
Other assets
Allowance for doubtful accounts
Total investments and other assets

Total assets

2Millions of yen
2017
2018
Liabilities
Current liabilities:
Short-term bank loans (Notes 8 and 19)
Current portion of long-term debt (Notes 8 and 19)
Payables:Notes payable (Note 19)
Accounts payable on construction contracts(Note 19)
Other accounts payable (Note 19)
Advances received on uncompleted construction
contracts
Deposits received
Income taxes payable (Note 9)
Provision for compensation for completed
construction
Provision for loss on construction contracts (Note 14)
Other current liabilities
Total current liabilities
Long-term liabilities:
Long-term debt (Notes 8 and 19)
Liability for retirement benefits (Note 10)
Deferred income taxes (Note 9)
Other long-term liabilities
Total long-term liabilities
Total liabilities

¥

3,828
1,624

¥

Thousands of
U.S. dollars(Note 2)
2018

7,668
1,049

$ 36,032
15,286

4,089
26,0585,802
26,08338,488245,275

3,015
33,162

8,805
40,69028,379312,142

8,465
1,326
902

7,594
840
521

79,67812,481
8,490

532
57
5,775
55,671

450
254
4,548
63,614

5,008
537
54,358524,012

7,955
4,319
54
193
12,521
68,192

6,124
4,376
16
195
10,711
74,32574,87840,653508
1,817
117,856
641,868

9,615
2,167
20,778(146)
32,414

9,615
2,166
16,394(142)
28,03390,503
20,397
195,576(1,374)305,102

3,070
(376)
2,694
116
35,224¥ 103,416

2,714
(784)
1,930
108
30,071¥ 104,396

28,897(3,539)25,358
1,091
331,551$ 973,419

Contingent liabilities (Note 12)

Net assets
Shareholders’ equity (Note 13):
Common stock:
Authorized – 293,565,000 shares
Issued– 85,086,293 shares in 2018 and 2017
Capital surplus
Retained earnings
Less treasury stock, at cost
Total shareholders’ equity
Accumulated other comprehensive income:Net unrealized holding gain on investments insecurities
Retirement benefits liability adjustments (Note 10)
Total accumulated other comprehensive income
Non-controlling interests
Total net assets (Note 21)
Total liabilities and net assets

See accompanying notes to consolidated financial statements.
3

Asanuma Corporation
Consolidated Statement of Income
Year ended March 31, 2018

Millions of yen
2017
2018
Net sales (Note 22):
Construction contracts
Other¥ 142,182
1,253
143,435¥ 131,619
1,081
132,700$ 1,338,309
11,7951,350,104

127,334
942
128,276

118,504
848
119,352

1,198,550
8,868
1,207,418

14,848311
15,15913,115
233
13,348

139,759
2,927
142,686

7,206
7,953

6,683
6,665

67,82774,859

231
(58)
(235)
(39)
(0)

228
(46)
(338)
(44)
31

2,174
(546)
(2,212)
(367)
(0)

(23)
(243)
7,586

(8)
(80)
6,408

(216)
(2,288)71,404

1,462
895
2,357
5,229

880
(1,778)
(898)
7,306

13,761
8,424
22,18549,219

Cost of sales (Notes 14 and 15):
Construction contracts
Other
Gross profit:
Construction contracts
Other

Selling, general and administrative expenses (Note 16)
Operating income (Note 22)
Other income (expenses):
Interest and dividends income
Foreign exchange loss, net
Interest expenses
Guarantee fees
（Loss）gain on sales of property and equipment, net
Loss on impairment of property and equipment (Note6)
Other, net
Profit before income taxes
Income taxes (Note 9):
Current
DeferredProfitProfit attributable to:Non-controlling interests
Owners of parent (Note 21)

Thousands of
U.S. dollars(Note 2)
2018

¥

7
5,222

¥

11
7,295

$

66
49,153

See accompanying notes to consolidated financial statements.
4

Asanuma Corporation
Consolidated Statement of Comprehensive Income
Year ended March 31, 2018

ProfitOther comprehensive income (Note 17):
Net unrealized holding gain on investments insecurities
Retirement benefits liability adjustments
Total other comprehensive income
Comprehensive income
Comprehensive income attributable to:
Owners of parent
Non-controlling interests

Millions of yen
2017
2018
¥ 5,229¥ 7,306

Thousands of
U.S. dollars(Note 2)2018
$ 49,219

356
408
764
¥ 5,993

197
651
848
¥ 8,154

3,351
3,840
7,191
$ 56,410¥ 5,9858¥ 8,14311$ 56,335
75

See accompanying notes to consolidated financial statements.
5

Asanuma Corporation
Consolidated Statement of Changes in Net Assets
Year ended March 31, 2018

Millions of yen

Balance at April 1, 2016
Issuance of new shares
Profit attributable to owners ofparentCash dividends
Purchases of treasury stock
Sales of treasury stock
Net change in items other thanshareholders’ equity
Balance at April 1, 2017
Profit attributable to owners ofparentCash dividends
Purchases of treasury stock
Sales of treasury stock
Net change in items other thanshareholders’ equity
Balance at March 31, 2018

Commonstock¥ 8,419
1,196

Capitalsurplus
¥ 970
1,196

Retainedearnings¥ 9,479–

Treasurystock,
at cost¥ (140)–Total
shareholders’equity¥ 18,728
2,392

–
–
–
–

–
–
–
0

7,295
(380)
–
–

–
–
(2)
0

7,295
(380)
(2)
0

–
9,615

–
2,166

–
16,394–(142)–
28,033

–
–
–
–

–
–
–
1

5,222
(838)
–
–

–
–
(4)
0

5,222
(838)
(4)
1

–
¥ 9,615–¥ 2,167–¥ 20,778–¥ (146)–¥ 32,414

Millions of yen

Balance at April 1, 2016
Issuance of new shares
Profit attributable to ownersof parent
Cash dividends
Purchases of treasury stock
Sales of treasury stock
Net change in items other thanshareholders’ equity
Balance at April 1, 2017
Profit attributable to ownersof parent
Cash dividends
Purchases of treasury stock
Sales of treasury stock
Net change in items other thanshareholders’ equity
Balance at March 31, 2018

Net
unrealized
holding
gain oninvestments
in securities¥ 2,517–Retirement
benefits
liability
adjustments¥(1,435)–

Total
accumulated
othercomprehensive
income¥ 1,082–

Noncontrollinginterests¥ 115–

Total net
assets¥ 19,925
2,392

–
–
–
–

–
–
–
–

–
–
–
–

–
–
–
–

7,295
(380)
(2)
0

197
2,714

651
(784)

848
1,930

(7)
108

841
30,071

–
–
–
–

–
–
–
–

–
–
–
–

–
–
–
–

5,222
(838)
(4)
1

356
¥ 3,070408¥ (376)764¥ 2,694

8
¥ 116

772
¥ 35,224

6

Asanuma Corporation
Consolidated Statement of Changes in Net Assets (Continued)
Year ended March 31, 2018

Thousands of U.S. dollars (Note 2)

Balance at April 1, 2017
Profit attributable to ownersof parent
Cash dividends
Purchases of treasury stock
Sales of treasury stock
Net change in items other thanshareholders’ equity
Balance at March 31, 2018

Commonstock

CapitalsurplusRetainedearnings

Treasurystock,
at costTotal
shareholders’equity$ 90,503$ 20,388$ 154,311$ (1,337)$ 263,865

–
–
–
–

–
–
–
9

49,153(7,888)
–
–

–
–
(37)
0

49,153(7,888)(37)
9–$ 90,503–$ 20,397–$ 195,576–$ (1,374)–$ 305,102

Thousands of U.S. dollars (Note 2)

Balance at April 1, 2017
Profit attributable to ownersof parent
Cash dividends
Purchases of treasury stock
Sales of treasury stock
Net change in items other thanshareholders’ equity
Balance at March 31, 2018

Net
unrealized
holding
gain oninvestments
in securities$ 25,546

Retirement
benefits
liability
adjustments$ (7,379)

Total
accumulated
othercomprehensive
income$ 18,167

Noncontrollinginterests$ 1,016

Total net
assets$ 283,048

–

–

–

–

49,153

–
–
–

–
–
–

–
–
–

–
–
–

(7,888)
(37)
9

3,351
$ 28,897

3,840$ (3,539)

7,191$ 25,35875$ 1,091

7,266$ 331,551

See accompanying notes to consolidated financial statements.
7

Asanuma Corporation
Consolidated Statement of Cash Flows
Year ended March 31, 2018

Millions of yen
2017
2018
Cash flows from operating activities:
Profit before income taxes
Adjustments for:
Depreciation and amortization
Loss on impairment of property and equipments
Decrease in allowance for doubtful accounts
Decrease in provision for loss on construction contracts
Increase in liability for retirement benefits
Interest and dividends income
Interest expenses
Foreign exchange loss, net
Loss (gain) on sales of property and equipment, net
Loss on valuation of membership
Loss on valuation of inventories
Decrease in notes receivable and accounts receivable
on completed construction contracts
Decrease in inventories(Increase) decrease in other accounts receivable(Decrease) increase in notes payable and accounts
payable on construction contracts(Decrease) increase in other accounts payable
Increase (decrease) in advances received on
uncompleted construction contracts
Other, net
SubtotalInterest and dividends received
Interest paid
Income taxes paid
Net cash provided by operating activities
Cash flows from investing activities:
Decrease in time deposits
Purchases of property and equipment
Proceeds from sales of property and equipment
Purchases of intangible assets
Purchases of investments in securities
Collection of loans receivable
Payments for guarantee deposits
Proceeds from collection of guarantee deposits
Other, net
Net cash (used in) provided by investing activities

Thousands of
U.S. dollars(Note 2)2018

¥ 7,586¥ 6,408$ 71,404

405
23
(9)
(197)
530
(231)
235
58
0
–
–

380
8
(144)
(151)
415
(228)
338
46
(31)
1
60

3,812
216
(85)
(1,854)
4,989(2,174)
2,212
546
0
–
–

52
1,764
(1,246)

5,910
4,068
303

489
16,604(11,727)(1,738)(5,712)877
1,313(16,359)(53,765)

871
1,682
4,073
228
(247)
(914)
3,140

(536)
(3,737)15,300
225
(343)
(951)
14,231

8,198
15,83238,3382,146(2,325)(8,603)29,556

–
(533)
0
(193)
(9)
11
(15)
40
1
¥ (698)

150
(221)
697
(109)
(9)
10
(20)
14
35
¥ 547

–
(5,017)0(1,817)
(85)
104
(141)
377
9
$ (6,570)

8

Asanuma Corporation
Consolidated Statement of Cash Flows (continued)
Year ended March 31, 2018

Millions of yen
2017
2018
Cash flows from financing activities:
Decrease in short-term bank loans, net
Proceeds from long-term debt
Repayment of long-term debt
Proceeds from issuance of common stock
Cash dividends paid
Cash dividends paid to non-controlling interests
Other, net
Net cash used in financing activities
Effect of exchange rate changes on cash and cash
equivalents
Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year (Note 5)

Thousands of
U.S. dollars(Note 2)2018

¥ (3,840)
5,963(3,558)
–
(754)
–
(2)
(2,191)¥ (8,000)–(1,051)
2,391
(340)
(24)
4
(7,020)$ (36,145)
56,128(33,490)–(7,097)–(19)(20,623)(57)
194
39,720¥ 39,914

(46)
7,712
32,008¥ 39,720

(536)
1,827
373,870$ 375,697

See accompanying notes to consolidated financial statements.
9Asanuma Corporation
Notes to Consolidated Financial Statements
March 31, 2018

1.

Basis of Preparation of Consolidated Financial Statements

The accompanying consolidated financial statements of Asanuma Corporation (the“Company”) and consolidated subsidiaries 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 consolidated financial statements prepared by theCompany as required by the Financial Instruments and Exchange Act of Japan.
In preparing the accompanying consolidated financial statements, certain reclassifications
and rearrangements have been made to the consolidated financial statements issued
domestically in order to present them in a format which is more familiar to readers outside
Japan.

2.

U.S. Dollar Amounts

The accompanying consolidated financial statements are stated in yen, the currency of thecountry in which the Company and its consolidated subsidiaries are incorporated andoperate. The translation of yen amounts into U.S. dollar amounts is included solely forthe convenience of readers outside Japan and has been made at ¥106.24 = U.S.$1.00, theexchange rate prevailing on March 31, 2018. This translation should not be construed asa representation that yen can be converted into U.S. dollars at the above or any other rate.

3.

Principles of Consolidation

At March 31, 2018 and 2017, the Company had 6 subsidiaries, respectively. The
consolidated financial statements for the years ended March 31, 2018 and 2017 include theaccounts of the Company and its 5 subsidiaries, respectively.
The Company applied the equity method to its investments in 3 affiliates, at March 31,2018 and 2017 for the purpose of consolidated financial statements for the years thenended.
The accounts of the remaining subsidiary were not consolidated nor the equity method
applied because its total assets, net sales, profit or loss and retained earnings were notmaterial to the consolidated financial statements.

10Asanuma Corporation
Notes to Consolidated Financial Statements (continued)

4.

Summary of Significant Accounting Policies(a) Cash and cash equivalents
Cash and cash equivalents consist of cash on hand, deposits with banks withdrawable
on demand, and short-term investments which are readily convertible to cash subject
to an insignificant risk of any changes in their value and which were purchased withan original maturity of three months or less.
(b) Investments in securities
Investments in securities are classified into two categories: held-to-maturity debt
securities or other securities. Held-to-maturity debt securities are stated at amortizedcost. Marketable securities classified as other securities are carried at fair value withany changes in unrealized holding gain or loss, net of the applicable income taxes,
reported as a separate component of accumulated other comprehensive income.
Non-marketable securities classified as other securities are carried at cost determinedby the moving average method.
(c) Allowance for doubtful accounts
The Company and its consolidated subsidiaries provide an allowance for doubtful
accounts at an amount calculated based on their historical experience of bad debts on
ordinary receivables plus an additional estimate of probable specific bad debts from
customers experiencing financial difficulties.
(d) Inventories
Cost of uncompleted construction contracts are stated at cost determined on an
individual project basis. Real estate held for sale is stated at the lower of cost or net
selling value, cost being determined on an individual project basis. Raw materials
and supplies are stated at the lower of cost or net selling value, cost being determinedby the period average method.
(e) Property and equipment (Other than leased assets)
Property and equipment is stated on the basis of cost. Depreciation is calculated by
the declining-balance method over the estimated useful lives of the respective assets;
however, the straight-line method is applied to buildings (except for facilities attachedto the buildings) acquired on or after April 1, 1998 and facilities attached to buildings
and other non-building structures acquired on or after April 1, 2016.

11

Asanuma Corporation
Notes to Consolidated Financial Statements (continued)

4.

Summary of Significant Accounting Policies (continued)(f) Intangible assets (Other than leased assets)
Amortization of intangible assets is calculated by the straight-line method over theestimated useful lives of the respective assets.
Expenditures related to computer software developed for internal use are charged toincome when incurred, except if they are deemed to contribute to the generation ofincome or to future cost savings. Such expenditures are capitalized as intangible
assets and amortized over an estimated useful life of 5 years.
(g) Leases
Leased assets held under finance leases that transfer ownership are depreciated by thesame methods used for owned fixed assets. For finance leases that do not transfer
ownership, depreciation expense is calculated based on the straight-line method overthe leased period of the lease with a residual value of zero.
(h) Provision for compensation for completed construction
A provision for compensation for completed construction is provided for anticipatedfuture costs arising from warranties on completed construction based on the historical
data on the compensation cost.
(i) Provision for loss on construction contracts
A provision for loss on construction contracts is provided for uncompleted
construction projects when a future loss is expected and a reasonable estimate of theamount can be made at the fiscal year end.
(j) Retirement benefits
Liability for retirement benefits for employees has been provided at an amountcalculated based on the retirement benefit obligation after the fair value of the pension
plan assets are deducted. The retirement benefit obligation for employees is
attributed to each period by the benefit formula method.
Actuarial gain or loss is amortized commencing in the year following the year inwhich the gain or loss is recognized by the straight-line method over a period of
principally 10 years, which is within the average remaining years of service of theeligible employees.
Prior service cost is charged to income when incurred.

12

Asanuma Corporation
Notes to Consolidated Financial Statements (continued)

4.

Summary of Significant Accounting Policies (continued)(k) Income taxes
Deferred tax assets and liabilities have been recognized in the consolidated financial
statements with respect to the differences between the financial reporting and tax
bases of the assets and liabilities, and were measured using the enacted tax rates andlaws which will be in effect when the differences are expected to reverse.
(l) Hedge accounting
Interest-rate swaps which meet certain conditions are accounted for as if the interest
rates applied to the swaps had originally applied to the underlying loans.
Interest-rate swaps are utilized to mitigate the risk of fluctuation in interest rates onloans. Hedging instruments and hedged items are interest-rate swaps and interest
rates on loans from financial institutions, respectively. The Company omit theevaluation of hedging effectiveness due to meet certain conditions for interest-rate
swaps.
(m) Revenue recognition
The Company recognizes revenue by applying the percentage-of-completion method
for the construction projects for which the outcome of the construction activity isdeemed certain at the end of the reporting period. To estimate the progress of such
construction projects, the Company measures the percentage of completion bycomparing costs incurred to date with the most recent estimate of total costs required
to complete the project (cost to cost basis). For other construction projects, thecompleted-contract method is applied.
Net sales related to construction contracts accounted for by the percentage-ofcompletion method totaled ¥139,690 million ($1,314,853 thousand) and ¥129,426
million for the years ended March 31, 2018 and 2017, respectively.

13

Asanuma Corporation
Notes to Consolidated Financial Statements (continued)

5.

Cash and Cash Equivalents

A reconciliation of cash and deposits in the accompanying consolidated balance sheets at
March 31, 2018 and 2017 and cash and cash equivalents in the accompanying
consolidated statements of cash flows for the years then ended is as follows:

Millions of yen
At March 31,
2018
2017
¥ 39,914¥ 39,720¥ 39,720¥ 39,914

Cash and cash deposits
Cash and cash equivalents

6.

Thousands of
U.S. dollars
2018$ 375,697$ 375,697

Loss on Impairment of Property and Equipment

Loss on impairment of property and equipment for the years ended March 31, 2018 and2017 are as follows:

Location
Osaka Prefecture

Location
Ishikawa Prefecture

Main use
Leasing

Main use
Business assets

Class
Buildings

Millions of yen
2018
¥ 23

Class
Land

Millions of yen
2017¥8

Thousands of
U.S. dollars
2018
$ 216

The Company principally groups the assets in association with the business operations at
each regional office whereas leased properties and idle assets are grouped individually and
fixed assets of its consolidated subsidiaries and investments for which the equity method
is applied are grouped per subsidiary or investment.
For the years ended March 31, 2018 and 2017, the Company decided to sell the above
assets that have been grouped as leased properties and assets in association with thebusiness operations at each regional office, respectively, as a result, the company and its
consolidated subsidiaries the carrying values of these assets to the recoverable amounts
and recognized loss on impairment of property and equipment of ¥23 ($216) and ¥8.
The recoverable amounts were measured at net selling value based on estimated sales
value.

14

Asanuma Corporation
Notes to Consolidated Financial Statements (continued)

7.

Investments in Securities

At March 31, 2018 and 2017, marketable securities classified as held-to-maturity debt
securities were as follows:
Millions of yen
Carryingvalue
Held-to-maturity debt
securities whose
estimated fair value
exceeds their carrying
value:
Government andmunicipal bonds

¥ 15
¥ 15

2018
Estimated Unrealized
fair value
gain

¥ 16
¥ 16

¥1
¥1

Carrying
value

2017
Estimated
fair value

Unrealized
gain

¥ 15
¥15

¥ 16
¥ 16

¥1
¥1

Thousands of U.S. dollars
2018
Carrying Estimated Unrealizedvalue
fair value
gain
Held-to-maturity debt
securities whose
estimated fair value
exceeds their carrying
value:
Government andmunicipal bonds

$ 141
$ 141

$ 150
$150

$9
$9

15

Asanuma Corporation
Notes to Consolidated Financial Statements (continued)

7.

Investments in Securities (continued)

At March 31, 2018 and 2017, marketable securities classified as other securities were as
follows:
Millions of yen

Other securities whosecarrying value exceeds
their acquisition costs:
Equity securities
Other securities whosecarrying value does notexceed their acquisition
costs:
Equity securities

Carrying
value

2018
Acquisition
costs

Unrealized
gain (loss)

Carrying
value

2017
Acquisition
costs

Unrealized
gain (loss)¥ 8,037¥ 3,751¥ 4,286¥ 7,706¥ 3,932¥ 3,774206¥ 8,243207¥ 3,958(1)¥ 4,285

16¥ 7,72217¥ 3,949(1)¥ 3,773

Thousands of U.S. dollars
2018
Carrying Acquisition Unrealized
value
costs
gain (loss)
Other securities whosecarrying value exceeds
their acquisition costs:
Equity securities
Other securities whosecarrying value does notexceed their acquisition
costs:
Equity securities$ 75,649$ 35,307$ 40,342

1,939$ 77,588

1,948$ 37,255(9)$ 40,333

Refer to Note 19 “Financial Instruments” for the redemption schedule at March 31, 2018
for held-to-maturity debt securities.

16

Asanuma Corporation
Notes to Consolidated Financial Statements (continued)

8.

Short-Term Bank Loans and Long-Term Debt

Short-term bank loans had average interest rates of 1.73% and 1.71% at March 31, 2018and 2017, respectively.
Long-term debt at March 31, 2018 and 2017 is summarized as follows:
Millions of yen
2017
2018
Unsecured loans due through 2034 at rates
ranging from 1.51% to 2.70%
Secured loans due through 2034 at rates
ranging from 0.33% to 2.50%
Total
Less current portion included

¥

48

9,531
9,579
(1,624)¥ 7,955

¥

56

7,117
7,173
(1,049)¥ 6,124

Thousands of
U.S. dollars
2018
$

452

89,712
90,164(15,286)$ 74,878

The aggregate annual maturities of long-term debt subsequent to March 31, 2018 aresummarized as follows:
Years ending March 31,
2019
2020
2021
2022
2023 and thereafter

Millions ofyen¥ 1,624
379
320
317
6,939
¥ 9,579

Thousands of
U.S. dollars$ 15,286
3,567
3,012
2,984
65,315$ 90,164

Assets pledged at March 31, 2018 and 2017 as collateral for long-term debt, including
current portion, and lines of credit of the Company are summarized as follows:

Cash and cash deposits
Buildings and structures
Land
Investments in securities

Millions of yen
2018
2017
¥ 218
¥ 230
1,679
1,501
1,451
1,457
6,969
6,472
¥ 10,317¥ 9,660

Thousands of
U.S. dollars
2018$ 2,052
15,804
13,65865,596$ 97,110

All assets of the consolidated subsidiaries engaged in the Private Finance Initiative
business were pledged as collateral for their loans under the project finance agreements.
Assets pledged at March 31, 2018 and 2017 amounted to ¥6,350 million ($59,770
thousand) and ¥5,657 million as collateral for loans of ¥4,731 million ($44,531 thousand)and ¥5,106 million, respectively.
17

Asanuma Corporation
Notes to Consolidated Financial Statements (continued)

8.

Short-Term Bank Loans and Long-Term Debt (continued)

Assets of the Company pledged at March 31, 2018 and 2017 as collateral for loans ofaffiliates engaged in the PFI business are summarized as follows:
Millions of yen
2017
2018
¥ 105
¥ 93
121
113
¥ 218
¥ 214

Investments in securities
Long-term loans receivableThousands of
U.S. dollars
2018
$ 988
1,064
$ 2,052

In order to achieve more efficient financing, the Company has concluded line-of-credit
agreements with certain financial institutions. The status of these lines of credit at March
31, 2018 and 2017 is as follows:

Lines of credit
Credit utilized
Available credit

9.

Millions of yen
2018
2017
¥ 10,000¥ 10,000––¥ 10,000¥ 10,000Thousands of
U.S. dollars
2018$ 94,127–$ 94,127

Income Taxes

Income taxes applicable to the Company and its consolidated subsidiaries comprise
corporation, inhabitants’ and enterprise taxes which, in the aggregate, resulted in astatutory tax rate of approximately 30.7% for the years ended March 31, 2018 and 2017,
respectively.
A reconciliation of the statutory tax rate and the effective tax rates for the years ended
March 31, 2018 and 2017 as a percentage of profit before income taxes is summarized asfollows:

Statutory tax rates
Permanently non-tax-deductible expenses
Permanently non-taxable income
Per capita portion of inhabitants’ taxes
Tax credit for corporation tax
Valuation allowance
Other
Effective tax rates

201830.7 %
0.9
(0.2)
1.5
(1.8)
(0.2)
0.2
31.1%

2017
30.7 %
1.1
(0.3)
1.9
(1.8)
(46.0)
0.4(14.0) %18

Asanuma Corporation
Notes to Consolidated Financial Statements (continued)

9.

Income Taxes (continued)

The significant components of deferred tax assets and liabilities of the Company and its
consolidated subsidiaries at March 31, 2018 and 2017 are summarized as follows:
Thousands of
U.S. dollars
2018

Millions of yen
2017
2018
Deferred tax assets:
Allowance for doubtful accounts
Provision for compensation forcompleted construction
Inventories
Provision for loss on construction
contracts
Liability for retirement benefits
Assets transferred to defined
contribution pension plans
Loss on impairment of fixed assets
Loss on revaluation of investments insecurities
Tax loss carryforwards
Other
Gross deferred tax assets
Less valuation allowance
Total deferred tax assets
Deferred tax liabilities:
Unrealized holding gain on investments
in securities
Deferred capital gains on property
Other
Total deferred tax liabilities
Net deferred tax assets

¥

219

222

$ 2,062

162
23

138
106

1,525
216

17
1,314

78
1,331

160
12,368

–

64
460

4,405

468
95

–
882
3,180
(939)
2,241

(1,218)(178)(0)(1,396)
¥ 845

¥

95
1,020
760
4,274
(956)
3,318

(1,062)(181)–(1,243)¥ 2,075

–
894

–
8,302
29,932(8,838)21,094(11,465)(1,675)(0)(13,140)$ 7,954

10. Retirement Benefits
1.

Outline of retirement benefits for employees

The Company has funded or unfunded defined benefit pension plans and defined
contribution plans in order to allocate for employees’ retirement benefits. In addition tothese retirement benefit plans, the Company may pay additional retirement benefits whenemployees retire. All employees of Asanuma Tatemono K.K., a consolidated subsidiaryof the Company, have been composed of secondees from the Company, consequently, theretirement benefit plan of Asanuma Tatemono K.K. is incorporated in those of theCompany. The other consolidated subsidiaries do not have any retirement pension plans.
Under the defined benefit plans, the Company pays lump-sum or pension payments, theamounts of which are determined by reference to employees’ ranks and length of service.
19

Asanuma Corporation
Notes to Consolidated Financial Statements (continued)

10. Retirement Benefits (continued)
2.

Defined benefit plans(1) The changes in retirement benefit obligation for the years ended March 31, 2018and 2017 are as follows:

Balance at the beginning of the year
Service cost
Interest cost
Actuarial loss
Benefit paid
Balance at the end of the year

Millions of yen
2017
2018
¥ 10,692¥ 10,707
390
395
107
107
8
20
(543)
(520)
¥ 10,671¥ 10,692

Thousands of
U.S. dollars
2018$ 100,640
3,718
1,007
188
(5,111)$ 100,442(2) The changes in plan assets for the years ended March 31, 2018 and 2017 are as
follows:

Balance at the beginning of the year
Expected return on plan assets
Actuarial gain (loss)
Contributions by the employer
Benefit paid
Balance at the end of the year

Millions of yen
2017
2018
¥
6,438
¥ 6,316
129
126
(145)
19
269
273
(382)
(375)
¥ 6,352¥ 6,316

Thousands of
U.S. dollars
2018$ 59,450
1,186
179
2,570
(3,596)$ 59,789(3) The following table sets forth the funded status of the plans and the amounts
recognized in the consolidated balance sheets as of March 31, 2018 and 2017 for
the Company’s and the consolidated subsidiary’s defined benefit plans:

Funded retirement benefit obligation
Plan assets at fair value
Unfunded retirement benefit obligation
Liability recognized in the consolidatedbalance sheet

Millions of yen
2017
2018
¥ 6,462¥ 6,364(6,352)(6,316)
146
12
4,307
4,230
¥ 4,319¥ 4,376

Thousands of
U.S. dollars
2018$ 59,902(59,789)
113
40,540$ 40,653

20

Asanuma Corporation
Notes to Consolidated Financial Statements (continued)

10. Retirement Benefits (continued)
2.

Defined benefit plans (continued)(4) The components of retirement benefit expense for the years ended March 31,2018 and 2017 are as follows:

Service cost
Interest cost
Expected return on plan assets
Amortization of actuarial gain and loss
Retirement benefit expense

Millions of yen
2017
2018
¥ 395
¥ 390
107
107
(126)
(129)
588
461
¥ 964
¥ 829

Thousands of
U.S. dollars
2018$ 3,718
1,007(1,186)
5,535$ 9,074(5) The components of retirement benefits liability adjustments included in othercomprehensive income (before tax effect) for the years ended March 31, 2018and 2017 are as follows:

Actuarial gain

Millions of yen
2017
2018
¥ 587
¥ 308

Thousands of
U.S. dollars
2018$ 5,525(6) The components of retirement benefits liability adjustments included inaccumulated other comprehensive income (before tax effect) as of March 31,2018 and 2017 are as follows:
Millions of yen
2017
2018
Unrecognized actuarial gain
(loss)¥ 540¥ (1,127)

Thousands of
U.S. dollars
2018$ 5,08321

Asanuma Corporation
Notes to Consolidated Financial Statements (continued)

10. Retirement Benefits (continued)
2.

Defined benefit plans (continued)(7) The fair value of plan assets, by major category, as a percentage of total plan
assets as of March 31, 2018 and 2017 are as follows:
2017
84%
15
1
0
100%

2018
84%
15
1
0
100%

Debt securities
Equity securities
Cash and cash deposits
Other
Total

The expected long-term rate of return on plan assets is determined as a result ofconsideration of both the portfolio allocation at present and in the future, and the
expected long-term rate of return from multiple plan assets at present and in the
future.
(8) The assumptions used in accounting for the defined benefit plans are as follows:

Discount rate
Expected long-term rate of return onplan assets
Estimated rate of salary increase

2018
1.0%

2017
1.0%

2.0%
9.1%

2.0%
9.1%

(Note) Estimated rate of salary increase is an expected rate of the increase of theretirement benefit points.
3.

Defined contribution pension plan
Information on contributions to the defined contribution pension plan for the years
ended March 31, 2018 and 2017 is as follows:
Millions of yen
2017
2018
Contributions to the defined
contribution pension plan

¥ 166

¥ 166

Thousands of
U.S. dollars
2018$ 1,56322

Asanuma Corporation
Notes to Consolidated Financial Statements (continued)

11. Asset Retirement Obligations
The Company and its domestic consolidated subsidiaries estimated the cost of restoration
obligations based on property lease agreements of the headquarters in Osaka and Tokyo
office. As the cost of the restoration obligations is immaterial, the information on asset
retirement obligations is omitted.
Regarding certain restoration obligations, the Company estimated non-recoverable
amounts of deposits for those premises and charged the portion attributable to the year
ended March 31, 2018 and 2017, instead of recording asset retirement obligations.

12. Contingent Liabilities
The contingent liabilities of the Company at March 31, 2018 and 2017 are summarized asfollows:

Millions of yen
At March 31,
2017
2018
Down payment guarantee for
condominium-purchaser

¥ –

¥ 101

Thousands of
U.S. dollars
2018
$ –

13. Shareholders’ Equity
The Companies Act (the “Act”) provides that an amount equal to 10% of the amount to be
disbursed as distributions of capital surplus (other than the capital reserve) and retained
earnings (other than the legal reserve) be transferred to the capital reserve and the legal
reserve, respectively, until the sum of the capital reserve and the legal reserve equals 25%of the capital stock account. Such distributions can be made at any time by resolution of
the shareholders, or by the Board of Directors if certain conditions are met.
Under the Act, upon the issuance and sale of new shares of common stock, the entire
amount of the proceeds is required to be accounted for as common stock, although a
company may, by resolution of the Board of Directors, account for an amount notexceeding one-half of the proceeds of the sale of new shares as additional paid-in capital
included in capital surplus.

23

Asanuma Corporation
Notes to Consolidated Financial Statements (continued)

13. Shareholders’ Equity (continued)
Movements in shares of common stock in issue and treasury stock during the years ended
March 31, 2018 and 2017 are summarized as follows:

April 1, 2017
Shares ofcommon stockin issue
Treasury stock

85,086,293
1,309,647

Number of shares
2018
Increase
Decrease–
8,848

March 31, 2018

–
2,412

85,086,293
1,316,083

March 31, 20172017
Shares ofcommon stockin issue
Treasury stock

April 1, 2016

Increase

Decrease

77,386,293
1,303,462

7,700,000
6,835

–
650

85,086,293
1,309,647

The increases of common stock were due to the issuance of 6,700,000 new shares throughpublic offering and 1,000,000 new shares through third-party allotments for the year ended
March 31, 2017.
The increases and decrease of treasury stock were due to purchases of shares of less than
one voting unit and sales of shares at requests of shareholders owning less than one voting
unit for the year ended March 31, 2018 and 2017.

14. Provision for Loss on Construction Contracts
Provision for loss on construction contracts included in cost of sales for the years ended
March 31, 2018 and 2017 amounted to ¥57 million ($537 thousand) and ¥254 million,
respectively.

15. Loss on Valuation of Inventories
Inventories are stated at the lower of the cost or net selling value. Loss on valuation of
inventories included in cost of sales for the years ended March 31, 2018 and 2017
amounted to nil and ¥60 million, respectively.

24

Asanuma Corporation
Notes to Consolidated Financial Statements (continued)

16. Research and Development Costs
Research and development costs included in selling, general and administrative expenses
for the years ended March 31, 2018 and 2017 amounted to ¥230 million ($2,165 thousand)and ¥251 million, respectively.

17. Other Comprehensive Income
The following table presents reclassification adjustments and tax effects allocated tocomponents of other comprehensive income for the years ended March 31, 2018 and2017:

Millions of yen
2017
2018
Net unrealized holding gain on
investments in securities:
Amount arising during the year
Before tax effectTax effectNet unrealized holding gain on
investments in securities, net
Retirement benefits liability adjustments:
Amount arising during the year
Reclassification adjustments for loss
realized in the statement of income
Before tax effectTax effect
Retirement benefits liability adjustments,
net
Total other comprehensive income

Thousands of
U.S. dollars

2018

¥ 512
512
(156)

¥ 255
255
(58)

$ 4,819
4,819(1,468)

356

197

3,351

1

(152)

9

586
587
(179)

460
308
343

5,516
5,525
(1,685)

408
¥ 764

651
¥ 848

3,840
$ 7,191

18. Leases
Future minimum lease payments subsequent to March 31, 2018 under non-cancellable
operating leases are summarized as follows:

Years ending March 31,
20192020 and thereafter

Millions of yen

Thousands of
U.S. dollars

¥ 231
231
¥ 462

$ 2,174
2,174$ 4,348
25

Asanuma Corporation
Notes to Consolidated Financial Statements (continued)

19. Financial Instruments(1) Policy for financial instruments
The Company and its consolidated subsidiaries (collectively, the “Group”) manage
their funds by investing only in short-term deposits, and primarily raise funds byborrowings from banks. The purpose of entering into derivative transactions is to
mitigate fluctuation risk related to interest rates with respect to borrowings frombanks, and derivative transactions are not carried out for speculative purposes.
(2) Types of financial instruments, related risk and risk management for financial
instruments
Notes receivable and accounts receivable on completed construction contracts are
subject to the credit risk of customers. Regarding this risk, the Company and its
consolidated subsidiaries monitor due dates and outstanding balances by individual
customer, and the credit worthiness of their main customers regularly.
Investments in securities are mainly composed of stocks and are exposed tofluctuation risk of market prices and the Group review the fair values of such listed
stocks every quarter.
Notes payable, accounts payable on construction contracts and other accounts payable
are mostly due within one year.
Short-term bank loans and long-term debt are mainly utilized for business operations.
Certain long-term debt is hedged by derivative transactions (interest rate swaps) as ahedging instrument per individual agreement in order to reduce fluctuation risk ofinterest rate and fix interest expense.
In addition, the Company follows internal policies which include authorizedprocedures and processes governing derivatives within the actual demand.
(3) Supplementary explanation of fair value of financial instruments
The fair value of financial instruments is based on their quoted market price, if
available. When there is no quoted market price available, fair value is reasonably
estimated. Since various assumption factors are reflected in estimating the fair value,
different premises and factors could result in a different fair value.

26

Asanuma Corporation
Notes to Consolidated Financial Statements (continued)

19. Financial Instruments (continued)
The carrying value, estimated fair value and the difference between them as of March 31,2018 and 2017 are as follows. Financial instruments for which fair value is deemed
extremely difficult to determine are not included.
Millions of yen
2018

Cash and cash deposits
Notes receivable and accounts
receivable on completed
construction contracts
Investments in securities
Total assets
Notes payable and accounts
payable on construction contracts
Short-term bank loans and current
portion of long-term debt
Long-term debt
Total liabilities

Carrying value¥ 39,914

Estimated fairvalue
¥ 39,914

Difference¥ –42,5108,258¥ 90,682

42,8988,259¥ 91,071

388
1
¥ 389

¥ 30,147¥ 30,147

–

5,452
7,955
¥ 43,554

5,452
8,274
¥ 43,873

–
319
¥ 319

Millions of yen
2017

Cash and cash deposits
Notes receivable and accounts
receivable on completed
construction contracts
Investments in securities
Total assets
Notes payable and accounts
payable on construction contracts
Short-term bank loans and current
portion of long-term debt
Other accounts payable
Long-term debt
Total liabilities

Carrying value¥ 39,720

Estimated fairvalue
¥ 39,720

Difference¥ –42,561
7,738¥ 90,019

42,985
7,739¥ 90,444

424
1
¥ 425

¥ 31,885¥ 31,885

¥

8,717
8,805
6,124
¥ 55,531

8,717
8,805
6,491
¥ 55,898

–
–
367
¥ 367

–

27

Asanuma Corporation
Notes to Consolidated Financial Statements (continued)

19. Financial Instruments (continued)
Thousands of U.S. dollars
2018

Cash and cash deposits
Notes receivable and accounts
receivable on completed
construction contracts
Investments in securities
Total assets
Notes payable and accounts
payable on construction contracts
Short-term bank loans and current
portion of long-term debt
Long-term debt
Total liabilities

Carrying value

Estimated fairvalue

$ 375,697$ 375,697$

400,132
77,729$ 853,558

403,784
77,739$ 857,220

3,652
10$ 3,662$ 283,763$ 283,763$

51,31874,878$ 409,959

51,31877,880$ 412,961–
3,002$ 3,002

Difference––

Methods to determine the estimated fair value of financial instruments and other mattersrelated to securities and derivative transactions:
Cash and cash deposits
Since these items are settled in a short period of time, their carrying values approximate
the fair value.
Notes receivable and accounts receivable on completed construction contracts
The estimated fair value of notes receivable and accounts receivable on completed
construction contracts are based on the present value discounted by the interest rates inconsidering the collection term of each receivable and each credit risk.
Investments in securities
The estimated fair values of equity securities are based on quoted market prices. The
estimated fair value of debt securities are based on prices provided by the financial
institutions.
Notes payable, accounts payable on construction contracts and short-term bank loans
Since these items are settled in a short period of time, their carrying values approximate
the fair value.

28

Asanuma Corporation
Notes to Consolidated Financial Statements (continued)

19. Financial Instruments (continued)
Long-term debt
The estimated fair values of long-term debt are based on present value of the total amountincluding principal and interest, discounted by the expected interest rate in the case of new
borrowings of the same loan as in the amount of the balance as of the end of the period.
Floating interest rates for long-term loans were hedged by interest-rate swap agreements
and accounted for as loans with fixed interest rates. The estimated fair value of thoselong-term loans is based on the present value of the total of principals, interests and net
cash flows of swap agreements discounted by the interest rates, estimated reasonably,
applicable to loans made under similar circumstances.
Derivatives transactions
Refer to the Note 20 “Derivatives” for fair value information at March 31, 2018 and 2017of derivative transactions.
Financial instruments for which it is extremely difficult to determine the fair value:
Unlisted equity securities of ¥910 million ($8,566 thousand) and ¥897 million included in“Investments in securities” and “Investments in an unconsolidated subsidiary and affiliates”
in the consolidated balance sheets at March 31, 2018 and 2017, respectively, are basedneither on market value nor estimated future cash flow, and it is difficult to determine theestimated fair value. Therefore, they are not included in the above table.
The redemption schedule for cash deposits, receivables and marketable securities withmaturity dates at March 31, 2018 is summarized as follows:

Cash deposits
Notes receivable and accounts
receivable on completed
construction contracts
Investments in securities:
Held-to-maturity debt securities
Total

Cash deposits
Notes receivable and accounts
receivable on completed
construction contracts
Investments in securities:
Held-to-maturity debt securities
Total

Within 1 year
¥ 39,911

Millions of yen
Over 1 year
Over 5 years
within 5 years
within 10 years¥–¥–

Over 10 years¥ ––38,950

1,288

2,272

–
¥ 78,861

15¥ 1,303–¥ 2,272

Within 1 year
$ 375,668

Thousands of U.S. dollars
Over 1 year
Over 5 years
within 5 years
within 10 years
$
–
$
–

–
¥ –

Over 10 years$–

366,623

12,123

21,386––$ 742,291

141$ 12,264–$ 21,386

–
$ –

29

Asanuma Corporation
Notes to Consolidated Financial Statements (continued)

20. Derivatives
Derivative transactions to which hedge accounting is applied
Interest-rate related transactions

Method of hedge
accounting
Transaction
Interest-rate
Interest rate swap:
swaps
Receive /(special
floating and pay
treatment)/ fixed

Method of hedge
accounting
Transaction
Interest-rate
Interest rate swap:
swaps
Receive /(special
floating and pay
treatment)/ fixedHedged item

Long-term debt
Total

Hedged item

Long-term debt
Total

Millions of yen
2018(Including portion in
Notional amount excess of one year)¥ 1,239¥ 1,239

¥–
¥–

(*)
(*)

Millions of yen
2017(Including portion in
Notional amount excess of one year)¥ 1,979¥ 1,979

Estimated
fair value¥ 1,239¥ 1,239

Estimated
fair value

(*)
(*)

Thousands of U.S. dollars
Method of hedge
accounting
Transaction
Interest-rate
Interest rate swap:
swaps
Receive /(special
floating and pay
treatment)/ fixedHedged item

Long-term debt
Total

2018
(Including portion in
Notional amount excess of one year)$ 11,662$ 11,662$–$–

Estimated
fair value

(*)
(*)

*Because interest rate swap agreements are accounted for as if the interest rates applied tothe swaps had originally applied to the underlying long-term loans payable, their fairvalues were included in long-term debt.

30

Asanuma Corporation
Notes to Consolidated Financial Statements (continued)

21. Amounts per Share
Amounts per share at March 31, 2018 and 2017 and for the years then ended were as
follows:
2018

2017

U.S. dollars
2018¥ 419.10¥ 357.65$ 3.94

62.33
16.00

95.14
10.00

0.59
0.15

Yen
Net assets
Profit attributable toowners of parent
Cash dividends

Information used in the computation of profit attributable to owners of parent per share forthe years ended March 31, 2018 and 2017 is presented as follows:

2018

2017

Thousands of
U.S. dollars
2018¥ 5,222¥ 7,295$ 49,153–––¥ 5,222¥ 7,295$ 49,153

Millions of yen
Profit attributable to owners of parent
Profit not attributable to commonshareholders
Profit attributable to owners of parent
applicable to common shareholders

Thousands of shares
2017
2018
Weighted-average number of shares of common stock used in
the calculation

83,77376,672

Net assets per share are computed based on the net assets and the number of shares ofcommon stock outstanding at the year end.
Profit attributable to owners of parent per share is computed based on the profit
attributable to owners of parent available for distribution to shareholders of common stockand the weighted average number of shares of common stock outstanding during the year.
Cash dividends per share represent the cash dividends proposed by the Board of Directors
as applicable to the respective years.

31Asanuma Corporation
Notes to Consolidated Financial Statements (continued)

22. Segment Informationa.

Segment Information(1) Overview of reporting segments
The reporting segments of the Company and its consolidated subsidiaries arecomponents for which discrete financial information is available and whose operating
results are regularly reviewed by the Company’s Board of Directors to make decisions
about resource allocation and assess their performance.
The Company and its consolidated subsidiaries mainly operate in the construction
business and have two reporting segments, which are the Building Construction
Segment and the Civil Engineering Segment.
(2) Method of calculating sales and income in reporting segments
The method of accounting for reporting segments is, in principle, the same as stated in
Note 4 “Summary of Significant Accounting Policies.” The income of reporting
segments is calculated on the basis of operating income. Intersegment sales arerecorded based on current market prices.
Millions of yen
2018
Reporting Segments
Civil
Building
Construction Engineering
Net sales and income:Sales to third parties
Intersegment sales
Net sales
Segment income

Total

Others

Sub total

Adjustments

Total¥119,135–
119,135¥ 23,047–
23,047¥ 142,182–
142,182¥ 1,253
6
1,259¥ 143,435
6
143,441

¥

–
(6)
(6)

¥143,435–
143,435¥ 11,276¥ 3,571¥ 14,847¥ 131¥ 14,978¥ (7,025)¥ 7,953

Total

Millions of yen
2017
Reporting Segments
Building
Civil
Construction Engineering
Net sales and income:Sales to third parties
Intersegment sales
Net sales
Segment income

Total

Others

Sub total

Adjustments¥ 104,232–
104,232¥ 27,387–
27,387¥ 131,619–
131,619¥ 1,0816
1,087¥ 132,700
6
132,706¥¥¥ 3,235¥ 13,115¥¥ 13,160¥ (6,495)

9,880

45

–
(6)
(6)

32

¥ 132,700–
132,700¥

6,665

Asanuma Corporation
Notes to Consolidated Financial Statements (continued)

22. Segment Information (continued)a.

Segment Information (continued)(2) Method of calculating sales and income in reporting segments (continued)
Thousands of U.S. dollars
2018
Reporting Segments
Building
Construction

Civil
Engineering

Total

Others

Sub total

Adjustments$ 1,121,376–$ 216,933–$1,338,309–$ 11,795
57$ 1,350,104
57

$

–
(57)

$1,350,104–

Net sales$ 1,121,376$ 216,933$1,338,309$ 11,852$ 1,350,161

$

(57)

$1,350,104

Segment income$ 106,137$ 33,613$ 139,750$ 1,233$$ (66,124)

Net sales and income:Sales to third parties
Intersegment sales

140,983“Others” is a business segment which is not included in the reporting segments, andincludes real estate and other businesses.
Adjustments for segment income in the amounts of ¥7,025 million ($66,124
thousand) and ¥6,495 million for the years ended March 31, 2018 and 2017 include
eliminations of intersegment transactions of ¥1 million ($9 thousand) and ¥1 million
and corporate expenses of ¥7,024 million ($66,115 thousand) and ¥6,494 million
recorded as selling, general and administrative expenses not attributable to any
business segments, respectively.
The total amount of segment income is adjusted to operating income on the
consolidated statement of income.
Assets, liabilities and others are not allocated to business segments.
b.

Related information(1) Information by products and services
Disclosure of information by products and services for the years ended March 31,2018 and 2017 has been omitted as the Company classifies such information in thesame way as it does its reporting segments.
(2) Information by geographical segment
Disclosure of sales and property and equipment by geographical area for the years
ended and as of March 31, 2018 and 2017 has been omitted as sales to domestic
customers were in excess of 90% of consolidated net sales, and the balance ofproperty and equipment in Japan was in excess of 90% of consolidated property andequipment.
33

Total

$

74,859

Asanuma Corporation
Notes to Consolidated Financial Statements (continued)

34

Asanuma Corporation
Notes to Consolidated Financial Statements (continued)

22. Segment Information (continued)b.

Related information (continued)(3) Information by major customers
Disclosure of information by major customers for years ended March 31, 2018 and2017 has been omitted as sales to each customer were less than 10% of consolidated
net sales.
c.

Loss on impairment of property and equipment by reporting segment
Millions of yen
2018
Reporting Segments

Loss on impairmentof property andequipment

Building
Construction

Civil
Engineering

Total

¥–

¥–

¥–

Other

Elimination
andcorporate

Total

¥ 23

¥–

¥ 23

Total

Millions of yen
2017
Reporting Segments

Loss on impairmentof property andequipment

Building
Construction

Civil
Engineering

Total

Other

Elimination
andcorporate

¥–

¥–

¥–

¥–

¥8

¥8

Total
$ 216

Thousands of U.S. dollars
2018
Reporting Segments

Loss on impairmentof property andequipment

Building
Construction

Civil
Engineering

Total

Other

Elimination
andcorporate

$–

$–

$–

$ 216

$–

35

Asanuma Corporation
Notes to Consolidated Financial Statements (continued)

23. Subsequent Events
1.

Appropriation of retained earnings

The following distribution of retained earnings of the Company, which has not beenreflected in the accompanying consolidated financial statements for the year ended March
31, 2018, was approved at the annual general meeting of the shareholders of the Company
held on June 27, 2018.

Cash dividends of ¥16 ($0.15) per share
2.

Millions of yen¥ 1,340

Thousands of
U.S. dollars$ 12,613

Share consolidation and change in number of shares constituting one share unit

The Company resolved at the board of directors’ meeting held on May 23, 2018 to submit
a proposal for consolidating the Company’s shares and changing the number of sharesconstituting one unit to the 83rd annual general meeting of shareholders held on June 27,
2018. It was approved at this shareholders’ meeting.
(1) Reason for share consolidation and the change in the number of shares constituting
one share unit
The Japanese Stock Exchanges are promoting an action plan to unify the number ofshares constituting one trading unit as 100 shares. In light of this, the number ofshares constituting one share unit of the Company were changed from the current
1,000 shares to 100 shares and a share consolidation was also implemented in order tomaintain a preferable price range per investment unit from ¥50 thousand to less than¥500 thousand as announced by the stock exchanges.
(2) Method and ratio share consolidation
As of October 1, 2018, 10 shares will be consolidated into 1 share based on theshareholders’ share numbers recorded in the shareholder register as of September 30,
2018.
(3) Decrease in number of shares due to share consolidation
Total number of outstanding shares before share consolidation (As of March 31, 2018)85,086,293 shares
Decrease in number of shares due to share consolidation
76,577,664 shares
Total number of outstanding shares after share consolidation
8,508,629 shares

36

Asanuma Corporation
Notes to Consolidated Financial Statements (continued)

23. Subsequent Event (continued)
Share consolidation and change in number of shares constituting one share unit(continued)(4) Treatment for any fractional shares less than one share
In case the share consolidation results in any fractional shares less than one share, thefractional shares are collectively sold or purchased in accordance with the Companies
Act, and the proceeds from the transactions will be properly allocated to theshareholders of fractional shares at the ratio of ownership.
(5) Schedule of the share consolidation and change in the number of shares constituting
share unit
Resolution at the Board of Directors’ meeting
Resolution at the general shareholders’ meeting
Effective date for the share consolidation and change innumber of shares constituting one share unit

May 23, 2018
June 27, 2018
October 1, 2018(6) Impacts of this change on per share information
Per share information, which was calculated as if the share consolidation had been
implemented as of April, 2016 for the years ended March 31, 2018 and 2017 was asfollows:
Yen
Net assets
Profit attributable to owners of the parent

2018¥ 4,191.01
623.312017¥ 3,576.49
951.42

U.S. dollars
2018$ 39.45
5.87

As there no dilutive shares, the disclosure of diluted profit attributable to owners of
the parent per share has been omitted.

37