Consolidated Financial Statements
Asanuma Corporation
Year ended March 31, 2022with Independent Auditor’s ReportAsanuma Corporation
Consolidated Financial Statements
Year ended March 31, 2022

Contents

Consolidated Financial Statements

Consolidated Balance Sheet ............................................................................................. 1
Consolidated Statement of Income................................................................................... 3
Consolidated Statement of Comprehensive Income.......................................................... 4
Consolidated Statement of Changes in Net Assets ............................................................ 5
Consolidated Statement of Cash Flows .......................................................................... 7
Notes to Consolidated Financial Statements ..................................................................... 9

Asanuma Corporation
Consolidated Balance Sheet
March 31, 2022

Millions of yen
2022
2021
AssetsCurrent assets:
Cash and cash deposits (Note 7)
Receivables:
Notes receivable (Note 19)
Accounts receivable on completed construction
contracts (Note 19 and 22)
Other accounts receivable (Note 19)
Allowance for doubtful accounts

Thousands of
U.S. dollars(Note 2)2022

¥ 13,194¥ 15,761$ 107,803

2,596

2,388

21,211

52,2372,661(27)
57,467

48,9737,113(22)
58,452426,807
21,742(221)
469,539

2,202
37
40
2,279

2,047
34
14
2,095

17,992327
302
18,621Other current assets
Total current assets

560
73,500253
76,561

4,576
600,539

Property and equipment, at cost:
Land (Notes 8 and 10)
Buildings and structures (Note 10)
Machinery, equipment and vehicles
Tools, furniture and fixtures
Lease assets
Less accumulated depreciation
Construction in progress
Property and equipment, net

1,609
7,188
670
1,650
130
(5,593)
–
5,654

1,609
6,187
458
1,505
81
(5,227)406
5,019

13,14758,7305,474
13,482
1,062(45,698)–
46,197

Intangible assets:
Goodwill (Note 21)
Other intangible assets
Total intangible assets

1,870
1,139
3,009

136
1,216
1,352

15,2799,306
24,585

4,466

6,276

36,490

144
–
1,277
1,002
1,633
(553)
10,978

120
105
1,022
966
1,446
(691)
10,597

1,177–
10,434
8,187
13,342(4,518)89,697¥ 90,132¥ 103,044$ 736,433

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

Investments and other assets:
Investments in securities (Notes 9，10 and 19)
Investments in an unconsolidated subsidiary
and affiliates (Notes 9 and 19)
Long-term loans receivable (Note 10)
Retirement benefit asset (Note 12)
Deferred income taxes (Note 11)
Other assets
Allowance for doubtful accounts
Total investments and other assets
Total assets

1Asanuma Corporation
Consolidated Balance Sheet (continued)
March 31, 2022

Millions of yen
2022
2021
Liabilities
Current liabilities:
Short-term bank loans (Notes 10 and 19)
Current portion of long-term debt (Notes 10 and 19)
Payables:Accounts payable on construction contracts
Other accounts payable (Note 19)
Advances received on uncompleted construction
contracts
Deposits received
Suspense receipt of consumption taxes
Income taxes payable (Note 11)
Provision for compensation for completed
construction
Provision for loss on construction contracts (Note 15)
Other current liabilities
Total current liabilities
Long-term liabilities:
Long-term debt (Notes 10 and 19)
Liability for retirement benefits (Note 12)
Deferred income taxes (Note 11)
Other long-term liabilities
Total long-term liabilities
Total liabilities

Net assets
Shareholders’ equity (Note 14):
Common stock:
Authorized – 29,356,500 shares
Issued– 8,078,629 shares in 2021 and 2022
Capital surplus
Retained earnings
Less treasury stock, at cost
Total shareholders’ equity
Accumulated other comprehensive income:Net unrealized holding gain on investments insecurities
Foreign currency translation adjustments
Retirement benefits liability adjustments (Note 12)
Total accumulated other comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets¥ 1,460
1,047

1,470
337

$ 11,929
8,555

17,174787
17,961

15,423634
16,057140,3226,430
146,752

4,404
1,657
5,613
1,401

7,783
1,977
5,115
1,860

35,983
13,53945,862
11,447535
99
470
34,647

543
119
1,384
36,645

4,371
809
3,840
283,087

8,173
4,442
5
191
12,81147,458

9,219
4,505
2
95
13,82150,466

66,77936,29441
1,560
104,674
387,761

9,615
2,179
29,648(27)
41,415

9,615
2,166
27,974(67)
39,68878,56017,804242,242(221)
338,385

996
(24)
(187)
785
474
42,674¥ 90,132

1,959
(26)
(112)
1,821
202
41,711¥ 92,177

8,138
(196)
(1,528)6,414
3,873
348,672$ 736,433

See accompanying notes to consolidated financial statements.

¥

Thousands of
U.S. dollars(Note 2)2022

2

Asanuma Corporation
Consolidated Statement of Income
Year ended March 31, 2022

Millions of yen
2022
2021
Net sales (Note 23):
Construction contracts
Other¥ 134,408
1,071
135,479¥ 137,847
1,088
138,935$ 1,098,194
8,751
1,106,945

121,272763
122,035

124,266
724
124,990

990,8656,234
997,099

13,136308
13,444

13,581364
13,945

107,3292,517
109,846

8,609
4,835

8,654
5,291

70,34239,504

116
131
(104)
(47)
(107)
540

154
26
(106)
(46)
(107)
998

948
1,070
(850)
(383)
(874)
4,413

–
–
67
5,431

(88)
58
(81)
6,099

–
–
547
44,375

1,239
421
1,660
3,771

1,880
64
1,944
4,155

10,123
3,440
13,56330,811

22
3,749

17
4,138

180
30,632

Cost of sales (Note 15):
Construction contracts
Other
Gross profit:
Construction contracts
Other

Selling, general and administrative expenses (Note 16)
Operating income (Note 23)
Other income (expenses):
Interest and dividends income
Foreign exchange gain loss, net
Interest expenses
Guarantee fees
Commission fees
Gain on sales of investments in securities (Note 9)
Loss on impairment of property and equipment(Notes 8 and 23)
Outsourcing service income
Other, net (Note 9)
Profit before income taxes
Income taxes (Note 11):
Current
DeferredProfitProfit attributable to:Non-controlling interests
Owners of parent

Thousands of
U.S. dollars(Note 2)2022¥

See accompanying notes to consolidated financial statements.

¥

$

3

Asanuma Corporation
Consolidated Statement of Comprehensive Income
Year ended March 31, 2022

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

Millions of yen
2022
2021
¥ 3,771¥ 4,155

Thousands of
U.S. dollars(Note 2)2022
$ 30,811

(963)
2
(75)
(1,036)¥ 2,735

(237)
(19)
249
(7)
¥ 4,148(7,868)16(613)(8,465)$ 22,347¥ 2,70629¥ 4,13414$ 22,110237

See accompanying notes to consolidated financial statements.

4

Asanuma Corporation
Consolidated Statement of Changes in Net Assets
Year ended March 31, 2022

Millions of yen

Balance at April 1, 2020
Profit attributable to owners ofparentCash dividends
Purchases of treasury stock
Net change in items other thanshareholders’ equity
Balance at April 1, 2021
Cumulative effects of change inaccounting policy
Profit attributable to owners ofparentCash dividends
Purchases of treasury stock
Restricted stock compensation
Net change in items other thanshareholders’ equity
Balance at March 31, 2022

Commonstock¥ 9,615

Capitalsurplus¥ 2,166

Retainedearnings¥ 25,577

Treasurystock,
at cost¥ (60)

Total
shareholders’equity¥ 37,298

–
–
–

–
–
–

4,138
(1,741)
–

–
–
(7)

4,138
(1,741)
(7)

–
9,615

–
2,166

–
27,974–(67)–
39,688

–

–

(3)

–
–
–
–

–
–
–
13

3,749
(2,072)

–
–
(6)
46

3,749
(2,072)(6)
59–¥ 9,615–¥ 2,179–¥ 29,648–¥ (27)–¥ 41,415(3)

Millions of yen

Balance at April 1, 2020
Profit attributable to owners ofparentCash dividends
Purchases of treasury stock
Net change in items other thanshareholders’ equity
Balance at April 1, 2021
Cumulative effects of change inaccounting policy
Profit attributable to owners ofparentCash dividends
Purchases of treasury stock
Restricted stock compensation
Net change in items other thanshareholders’ equity
Balance at March 31, 2022

Net
unrealized
holding
loss oninvestments
in securities¥ 2,196

Foreigncurrencytranslation
adjustments¥ (7)Retirement
benefits
liability
adjustments¥ (361)

Total
accumulated
othercomprehensive
income¥ 1,828

Noncontrollinginterests¥ 188

Total net
assets¥ 39,314

–
–
–

–
–
–

–
–
–

–
–
–

–
–
–

4,138
(1,741)
(7)

(237)
1,959

(19)
(26)

249
(112)

(7)
1,821

14
202

7
41,711

–

–

–

–

(1)

(4)

–
–
–
–

–
–
–
–

–
–
–
–

–
–
–
–

–
–
–
–

3,749
(2,072)
(6)
59

(963)
¥ 996

2
¥ (24)(75)¥ (187)(1,036)
¥ 785

273
¥ 474

(763)
¥ 42,6745

Asanuma Corporation
Consolidated Statement of Changes in Net Assets (continued)
Year ended March 31, 2022

Balance at April 1, 2021
Cumulative effects of change inaccounting policy
Profit attributable to owners ofparentCash dividends
Purchases of treasury stock
Restricted stock compensation
Net change in items other thanshareholders’ equity
Balance at March 31, 2022

Commonstock$ 78,560

Thousands of U.S. dollars (Note 2)
Treasury
CapitalRetainedstock,
surplusearnings
at cost$ 17,698$ 228,564$ (547)

Total
shareholders’equity$ 324,275

–

–

(25)

–

(25)

–
–
–
–

–
–
–
106

30,632(16,929)
–
–

–
–
(49)
375

30,632(16,929)
(49)
481

–
$ 78,560–$ 17,804–$ 242,242–$ (221)–$ 338,385

Thousands of U.S. dollars (Note 2)

Balance at April 1, 2021
Cumulative effects of change inaccounting policy
Profit attributable to owners ofparentCash dividends
Purchases of treasury stock
Restricted stock compensation
Net change in items other thanshareholders’ equity
Balance at March 31, 2022

Net
unrealized
holding
loss oninvestments
in securities$ 16,006

Foreigncurrencytranslation
adjustments$ (212)Retirement
benefits
liability
adjustments$ (915)

Total
accumulated
othercomprehensive
income$ 14,879

Noncontrollinginterests$ 1,650

Total net
assets$ 340,804

–

–

–

–

(8)

(33)

–
–
–
–

–
–
–
–

–
–
–
–

–
–
–
–

–
–
–
–

30,632(16,929)(49)
481(7,868)$ 8,13816$ (196)(613)$ (1,528)(8,465)$ 6,4142,231$ 3,873(6,234)$ 348,672

See accompanying notes to consolidated financial statements.

6

Asanuma Corporation
Consolidated Statement of Cash Flows
Year ended March 31, 2022
Thousands of
U.S. dollars(Note 2)
2022

Millions of yen
2022
2021
Cash flows from operating activities:
Profit before income taxes
Adjustments for:
Depreciation and amortization
Loss on impairment of property and equipment(Decrease) increase in allowance for doubtful
accounts
Decrease in provision for loss on construction
contracts
Decrease in net defined benefit asset and liability
Interest and dividends income
Interest expenses
Foreign exchange gain, net
Gain on sales of investments in securities
Loss on valuation of investments in securities
Loss on sales of property, plant and equipment(Increase) decrease in notes receivable and accounts
receivable on completed construction contracts(Increase) decrease in inventories
Decrease (increase) in other accounts receivable
Increase (decrease) in notes payable and accounts
payable on construction contracts
Increase in other accounts payable
Decrease in advances received on uncompleted
construction contracts
Other, net
SubtotalInterest and dividends received
Interest paid
Income taxes paid
Net cash provided by (used in) operating activities
Cash flows from investing activities:
Increase in time deposits
Purchases of property and equipment
Proceeds from sales of property, plant and equipment
and intangible assets
Purchases of intangible assets
Purchases of investments in securities
Proceeds from sales and redemption of investments insecurities
Purchase of shares of subsidiaries resulting in change
in scope of consolidation (Note 7)
Proceeds from collection of loans receivable
Payments for guarantee deposits
Proceeds from collection of guarantee deposits
Other, net
Net cash (used in) provided by investing activities¥ 5,431¥ 6,099$ 44,375

647
–

598
88

5,286
–

(132)

1

(1,079)

(20)
(425)
(116)
104
(94)
(540)
–
1

(95)
(285)
(154)
106
(25)
(978)
58
5

(163)
(3,473)
(948)
850
(768)
(4,412)–8(1,965)
(184)
4,152

705
41
(4,040)(16,055)(1,503)33,924

1,361
42(11,547)
3

11,121343(3,773)(1,062)
3,427
115
(104)
(1,875)
1,563(1,355)(638)(11,413)152(106)(1,535)(12,902)(30,828)(8,677)28,001940(850)(15,320)
12,771(40)(1,003)

–
(627)

(327)
(8,195)

9
(196)
(24)

0
(462)
(9)

74
(1,601)
(196)

970

1,965

7,925

(2,168)
105
(98)
109
72
¥ (2,264)

–
3
(71)
60
(44)
815

(17,714)
858
(801)
891
588
$ (18,498)¥

7

Asanuma Corporation
Consolidated Statement of Cash Flows (continued)
Year ended March 31, 2022

Millions of yen
2022
2021
Cash flows from financing activities:
Decrease in short-term bank loans, net
Repayment of long-term debt
Cash dividends paid
Other, net
Net cash used in financing activities
Effect of exchange rate changes on cash and cash
equivalents
Net decrease in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year (Note 7)

¥

(17)
(337)
(1,908)(6)(2,268)106(2,863)
15,761¥ 12,898

See accompanying notes to consolidated financial statements.

¥

–
(337)
(1,605)(7)(1,949)19(14,017)
29,778¥ 15,761

Thousands of
U.S. dollars(Note 2)
2022
$

(139)
(2,753)(15,590)（49）(18,531)866(23,392)
128,776$ 105,384

8

Asanuma Corporation
Notes to Consolidated Financial Statements
March 31, 2022

1.

Basis of Preparation of Consolidated Financial Statements

The accompanying consolidated financial statements of Asanuma Corporation (the“Company”) and its consolidated subsidiaries (the “Group”) are prepared on the basis ofaccounting principles generally accepted in Japan, which are different in certain respects as
to the application and disclosure requirements of International Financial ReportingStandards, and have been compiled from the consolidated financial statements prepared by
the Company 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.
Certain reclassifications of previously reported amounts have been made to conform theaccompanying consolidated financial statements for the year ended March 31, 2021 to the2022 presentation. Such reclassifications had no effect on consolidated net assets.

2.

U.S. Dollar Amounts

The accompanying consolidated financial statements are stated in yen, the currency of thecountry in which the company is incorporated and operate. The translation of yen amounts
into U.S. dollar amounts is included solely for the convenience of readers outside Japan andhas been made at ¥122.39 = U.S.$1.00, the exchange rate prevailing on March 31, 2022.
This translation should not be construed as a representation that yen can be converted into
U.S. dollars at the above or any other rate.

3.

Principles of Consolidation

At March 31, 2022 and 2021, the Company had 9 subsidiaries and 6 subsidiaries,
respectively. The consolidated financial statements for the years ended March 31, 2022 and2021 include the accounts of the Company and its 6 subsidiaries and 5 subsidiaries,
respectively.
At January 6, 2022, the Company acquired equity shares of EVERGREEN ENGINEERING& CONSTRUCTION PTE. LTD., which was newly included in the scope of consolidation
during the fiscal year ended March 31, 2022. As the acquisition date is deemed to be January
31, 2022, and as the intervening period does not exceed three months from the Company’s
fiscal year end, solely the acquiree’s balance sheet is consolidated. Necessary adjustments
were made to the subsidiary’s balance sheets to reflect any significant intercompany
transactions during the period from February 1 through March 31.

9Asanuma Corporation
Notes to Consolidated Financial Statements (continued)
3.

Principles of Consolidation (continued)

The Company applied the equity method to its investments in 2 affiliates, at March 31, 2022
and 2021 for the purpose of consolidated financial statements for the years then ended.
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.
The balance sheet date of SINGAPORE PAINTS & CONTRACTOR PTE. LTD. isDecember 31. Necessary adjustments were made to the subsidiary’s balance sheet to reflect
any significant intercompany transactions during the period from January 1 through March
31.

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 toan insignificant risk of any changes in their value and which were purchased with an
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. Quoted securities classified as other securities, the Company uses the marketvalue method based on the market price, etc. at the consolidated closing date. Valuationdifferences are included directly in net assets and costs of securities sold are determinedby the moving-average method. Unquoted securities classified as other securities arecarried at cost determined by the moving average method.
(c) Allowance for doubtful accounts
The Group provides an allowance for doubtful accounts at an amount calculated basedon their historical experience of bad debts on ordinary receivables plus an additional
estimate of probable specific bad debts from customers experiencing financial
difficulties.

10

Asanuma Corporation
Notes to Consolidated Financial Statements (continued)
4.

Summary of Significant Accounting Policies (continued)(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 andsupplies are stated at the lower of cost or net selling value, cost being determined by
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.
(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) Bonds issuance expenses
Issuance expenses of bonds are charged to income as incurred.
(i) Provision for compensation for completed construction
A provision for compensation for completed construction is provided for anticipatedfuture costs arising from compensations on completed construction based on thehistorical data on the compensation cost.

11Asanuma Corporation
Notes to Consolidated Financial Statements (continued)
4.

Summary of Significant Accounting Policies (continued)(j) 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 the amount can bemade at the end of the current fiscal year.
(k) Retirement benefits
The retirement benefit obligation for employees is attributed to each period by thebenefit formula method.
Actuarial gain or loss is amortized commencing in the year following the year in which
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 the eligible
employees.
Prior service cost is charged to income when incurred.
(l) 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 basesof the assets and liabilities, and were measured using the enacted tax rates and laws
which will be in effect when the differences are expected to reverse.
(m) 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. Hedging
instruments and hedged items are interest-rate swaps and interest rates on loans fromfinancial institutions, respectively. The Company omits the evaluation of hedging
effectiveness due to meet certain conditions for interest-rate swaps.
(n) Goodwill
Goodwill is being amortized on a straight-line basis over the estimated period of benefit.
The goodwill resulting from the acquisition of SINGAPORE PAINTS &CONTRACTOR PTE. LTD. is being amortized over 7 years.

12Asanuma Corporation
Notes to Consolidated Financial Statements (continued)
4.

Summary of Significant Accounting Policies (continued)(o) Significant revenue and expenses
Regarding the construction business in which the Group is mainly engaged, the Group
has a performance obligation to complete construction and transfer objects based on aconstruction contract with a customer. In such a contract, when control of goods orservices is transferred to customers over time, revenue is recognized as the Groupsatisfies the performance obligation over time. Progress toward satisfaction of aperformance obligation is measured based on the percentage of construction cost
incurred up to the end of the reporting period to the estimated total construction cost
since the amount of construction cost incurred is considered to represent the degree ofprogress toward satisfaction of a performance obligation. If progress towardsatisfaction of a performance obligation cannot be reasonably estimated, but the Group
expects to recover all costs incurred, revenue is recognized on a cost recovery basis.
For construction contracts with a very short period of time between the commencement
date of the transaction and the point in time when the Group expects the performanceobligation to be fully satisfied, an alternative approach applies, whereby revenue isrecognized at the point in time when a performance obligation is fully satisfied rather
than over time.
(p) Applicable accounting principles and procedures in cases where directly relevant
accounting standards are not available
Accounting for construction involving joint ventures, the Company recognizes its shareof the jointly controlled assets, the jointly responsible liabilities, the income andexpenses resulting from the joint venture.

13

Asanuma Corporation
Notes to Consolidated Financial Statements (continued)
5.

Significant Accounting Estimates

Estimate of total construction costs when revenue is recognized as the Group satisfies its
performance obligation over time(1) Amounts recorded in the consolidated financial statements
Net sales of construction contracts accounted for as the Group satisfies its performanceobligation over time amounted to ¥132,235 million ($1,080,440 thousand) and¥135,717 million for the years ended March 31, 2022 and 2021, respectively.
(2) Information on the components of identified significant accounting estimatei)

Calculation method
For construction contracts in which control of goods or service is transferred tocustomers over time, revenue is recognized as the Group satisfies the performanceobligation over time. Progress toward satisfaction of the performance obligation ismeasured based on the percentage of construction cost incurred up to the end of
the reporting period to the estimated total construction cost.

ii) Significant assumptions
Significant assumptions used for estimation of total construction cost are such asunit price of building material and labor unit price, which are calculated based oneach project condition such as scale, specification and construction period.
iii) Effect on consolidated financial statements for the following fiscal year
Significant assumptions expect to have effect on net sales of construction contracts
for each reporting period due to uncertainty in estimates. The amount of net salesof construction contracts in the consolidated financial statements for the following
fiscal year may fluctuate when there are fluctuations in significant assumptions
such as unit price of building material or labor unit price, which were used for
estimating total construction cost and which are calculated based on each project
condition such as scale, specifications and construction period.

14

Asanuma Corporation
Notes to Consolidated Financial Statements (continued)
6.

Changes in Accounting Standards(Application of Accounting Standard for Revenue Recognition)“Accounting Standard for Revenue Recognition” ((Accounting Standard Board of Japan(ASBJ) Statement No. 29, March 31, 2020), hereinafter “Revenue Recognition Standard”)
has been adopted from the beginning of the fiscal year ended March 31, 2022, and revenue
is recognized in the amount expected to be received in exchange for applicable goods orservices when control of the promised good or service is transferred to the customer. As aresult, the Company previously used the percentage-of-completion accounting method forconstruction contracts where the outcome of the construction activity for the portion of workin progress could be reliably estimated. However, where control of a good or service istransferred to the customer over time, the Company has changed its method of accounting
to recognize revenue over time as the performance obligation to transfer the good or service
to the customer is satisfied. Progress toward satisfaction of a performance obligation ismeasured based on the percentage of construction costs incurred by the end of eachreporting period against the total estimated construction costs. If progress towardsatisfaction of a performance obligation cannot be reasonably estimated, but the Company
expects to recover all costs incurred, revenue is recognized on a cost recovery basis. For
construction contracts with a very short period of time between the commencement date of
the transaction and the point in time when the Company expects the performance obligation
to be fully satisfied, an alternative approach applies, whereby revenue is recognized at the
point in time when the performance obligation is fully satisfied rather than over time.
The Revenue Recognition Standard has been applied effective from the beginning of the
fiscal year ended March 31, 2022 in accordance with the transitional treatment prescribedin Paragraph 84 of the Revenue Recognition Standard, and the cumulative effects ofretroactively applying new accounting policies have been reflected in the beginning balanceof retained earnings for the fiscal year ended March 31, 2022. However, as provided for in
Paragraph 86 of the Revenue Recognition Standard, the new accounting policies have notbeen retroactively adopted for contracts in which substantially all revenue amounts havebeen recognized prior to the beginning of the fiscal year ended March 31, 2022 inaccordance with the previous treatment. In addition, as provided for in Paragraph 86 (1) of
the Revenue Recognition Standard, contract changes made prior to the beginning of the
fiscal year ended March 31, 2022 have been accounted for based on the contract terms afterreflecting all contract changes, and the cumulative effects have been reflected in retained
earnings at the beginning of the fiscal year ended March 31, 2022.
The impact on the consolidated financial statements for the year ended March 31, 2022 asa result of the application is immaterial.
In addition, in accordance with transitional treatment stipulated in Paragraph 89-3 of the
Revenue Recognition Standard, related notes on revenue recognition for the fiscal year
ended March 31,2021 have been omitted.

15

Asanuma Corporation
Notes to Consolidated Financial Statements (continued)
6.

Changes in Accounting Standards (continued)(Application of Accounting Standard for Fair Value Measurement)“Accounting Standard for Fair Value Measurement”( (ASBJ Statement No. 30, July 4, 2019),
hereinafter “Fair Value Measurement Standard”) has been adopted from the beginning of
the fiscal year ended March 31, 2022, and new accounting policies prescribed by the Fair
Value Measurement Standard will be adopted prospectively in accordance with thetransitional treatment prescribed in Paragraph 19 of the Fair Value Measurement Standard
and Paragraph 44-2 of the Accounting Standard for Financial Instruments (ASBJ Statement
No. 10, July 4, 2019).
There is no impact on the consolidated financial statements for the fiscal year ended March
31, 2022 as a result of this application.
In addition, notes regarding the breakdown of fair value of financial instruments by level
have been included in Note 19 “Financial Instruments.” However, notes for the fiscal year
ended March 31, 2021 have been omitted in accordance with the transitional treatmentprescribed in Paragraph 7-4 of the Implementation Guidance on Disclosures about Fair
Value of Financial Instruments (ASBJ Guidance No. 19, July 4, 2019).

7.

Cash and Cash Equivalents

A reconciliation of cash and deposits in the accompanying consolidated balance sheets at
March 31, 2022 and 2021 and cash and cash equivalents in the accompanying consolidated
statements of cash flows for the years then ended are as follows:

Cash and cash deposits
Time deposits pledged as collateral
Cash and cash equivalents

Millions of yen
At March 31,
2022
2021
¥ 13,194¥ 15,761(296)–¥ 12,898¥ 15,761

Thousands of
U.S. dollars
2022$ 107,803(2,419)$ 105,384

16

Asanuma Corporation
Notes to Consolidated Financial Statements (continued)
7.

Cash and Cash Equivalents (continued)

Assets and liabilities of newly consolidated subsidiaries through acquisition of shares
Assets and liabilities of acquired companies (EVERGREEN ENGINEERING &CONSTRUCTION PTE. LTD.) and net cash outflow for such acquisition is as follows:

Current assets
Investments and other assets
Goodwill
Current liabilities
Long-term liabilities
Foreign currency translation adjustments
Non-controlling interests
Acquisition cost of shares
Cash and cash equivalents
Net cash outflow for acquisition

8.

Millions of yen
2022¥ 2,141
93
1,750
(997)
(19)
38
(243)
2,762
(594)
¥ 2,168

Thousands of
U.S. dollars
2022$ 17,493
760
14,299(8,146)(155)
310(1,985)22,567(4,853)$ 17,714

Loss on Impairment of Property and Equipment

Loss on impairment of property and equipment for the year ended March 31, 2021 is asfollows:
Location
Saitama Prefecture

Main use
Leased properties

Class
Land

Millions of yen
2021
¥ 88

The Group principally group the assets in association with the business operations at eachregional office whereas leased properties and idle assets are grouped individually and fixed
assets of the Group and investments for which the equity method is applied are grouped per
subsidiary or investment
Carrying value of land for leased properties were written down to recoverable amounts andthe write down amounts were recognized ¥88 million in impairment loss because investment
amounts were no longer expected to be recovered due to a decrease in profitability for theyear ended March 31, 2021. The recoverable amount is measured at net selling value which
was reasonably estimated based on the appraisal vale calculated by road price rating method
under the Japanese inheritance tax law

17

Asanuma Corporation
Notes to Consolidated Financial Statements (continued)
9.

Investments in Securities

At March 31, 2022 and 2021, marketable securities classified as held-to-maturity debt
securities are as follows:

Carryingvalue
Held-to-maturity debt
securities whose estimatedfair value exceeds theircarrying value:
Government andmunicipal bonds

¥ 15
¥ 15

Millions of yen
2022
Estimated Unrealized Carrying
fair value
gain
value

¥ 15
¥ 15

¥0
¥0

¥ 15
¥ 15

2021
Estimated
fair value

Unrealized
gain

¥ 15
¥ 15

¥0
¥0

Thousands of U.S. dollars
2022
Carrying Estimated Unrealizedvalue
fair value
gain
Held-to-maturity debt
securities whose estimatedfair value exceeds theircarrying value:
Government andmunicipal bonds

$ 123
$ 123

$ 123
$ 123

$0
$0

18

Asanuma Corporation
Notes to Consolidated Financial Statements (continued)
9.

Investments in Securities (continued)

At March 31, 2022 and 2021, marketable securities classified as other securities are 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

2022
Acquisition
costs

Carrying
value

2021
Acquisition
costs

Unrealized
gain (loss)

Unrealized
gain (loss)¥ 3,711¥ 2,290¥ 1,421¥ 5,431¥ 2,631¥ 2,80043¥ 3,75448¥ 2,338(5)¥ 1,416126¥ 5,557

126¥ 2,757–¥ 2,800

Thousands of U.S. dollars
2022
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$ 30,321$ 18,711$ 11,610

351$ 30,672

392$ 19,103(41)$ 11,569

The proceeds from sales of, and gross realized gain on investments in securities for the years
ended March 31, 2022 and 2021 are summarized as follows:

Proceeds from sales
Gross realized gain

Millions of yen
2022
2021
¥ 970
¥ 1,962
540
998

Thousands of
U.S. dollars
2022$ 7,925
4,412

Refer to Note 19 “Financial Instruments” for the redemption schedule at March 31, 2022
for held-to-maturity debt securities.

19

Asanuma Corporation
Notes to Consolidated Financial Statements (continued)
9.

Investments in Securities (continued)

For the year ended March 31, 2021, the Company has recognized loss on impairment ofequity securities classified as other securities of ¥58 million.
The Group recognize loss on impairment of marketable securities classified as othersecurities if the market value of a security at year end declines by more than 30% comparedwith its carrying value.

10. Short-Term Bank Loans and Long-Term Debt
Short-term bank loans had average interest rates of 0.94% and 0.99% at March 31, 2022
and 2021, respectively.
Long-term debt at March 31, 2022 and 2021 are summarized as follows:

Millions of yen
2022
2021
Unsecured loans due through 2034 at rates ranging
from 1.12% to 1.58%
Secured loans due through 2034 at rates ranging
from 0.58% to 0.78%
1.37% unsecured bond due March 31, 2025
0.84% unsecured bond due July 25, 2025
0.81% unsecured bond due September 10, 2024
Total
Less current portion included in current liabilities

Thousands of
U.S. dollars
2022¥ 5,030¥ 5,034$ 41,098

2,549
650
600
390
9,219
(1,046)¥ 8,173

2,882
650
600
390
9,556
(337)
¥ 9,219

20,827
5,311
4,902
3,187
75,325(8,547)$ 66,778

The aggregate annual maturities of long-term debt subsequent to March 31, 2022 aresummarized as follows:

Years ending March 31,
2023
2024
2025
2026
2027 and thereafter

Millions of yen¥ 1047
348
4,626
336
1,222
¥ 7,579

Thousands of
U.S. dollars$ 8,555
2,843
37,7972,745
9,985$ 61,925

20

Asanuma Corporation
Notes to Consolidated Financial Statements (continued)
10. Short-Term Bank Loans and Long-Term Debt (continued)
Assets pledged at March 31, 2022 and 2021 as collateral for lines of credit of the Company
are summarized as follows:

Buildings and structures
Land

Millions of yen
2022
2021
¥ 583
¥ 598
890
890
¥ 1,473¥ 1,488

Thousands of
U.S. dollars
2022$ 4,763
7,272$ 12,035

All assets of the consolidated subsidiaries engaged in the Private Finance Initiative businesswere pledged as collateral for their loans under the project finance agreements. Assets
pledged at March 31, 2022 and 2021 amounted to ¥3,200 million ($26,146 thousand) and¥3,357 million as collateral for loans of ¥2,549 million ($20,827 thousand) and ¥2,882
million, respectively.
Assets of the Company pledged at March 31, 2022 and 2021 as collateral for loans ofaffiliates engaged in the PFI business are summarized as follows:

Investments in securities
Long-term loans receivable

Millions of yen
2022
2021
¥ 105
¥ 103
–
102
¥ 105
¥ 205

Thousands of
U.S. dollars
2022
$ 858
–
$ 858

The following asset is pledged as collateral for construction performance guarantees anddeposit guarantees based on real estate sales contracts.

Time deposits

Millions of yen
2022
2021
¥ 295
¥–

Thousands of
U.S. dollars
2022$ 2,410In 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, 2022 and 2021 are as follows:

Lines of credit
Credit utilized
Available credit

Millions of yen
2022
2021
¥ 10,000¥ 10,000––¥ 10,000¥ 10,000Thousands of
U.S. dollars
2022$ 81,706–$ 81,706
21

Asanuma Corporation
Notes to Consolidated Financial Statements (continued)
11. Income Taxes
Income taxes applicable to the Company and the Group comprise corporation, inhabitants’and enterprise taxes which, in the aggregate, resulted in a statutory tax rate of approximately
30.4% for the years ended March 31, 2022 and 2021.
A reconciliation of the statutory tax rate and the effective tax rates for the years ended March
31, 2022 and 2021 as a percentage of profit before income taxes are summarized as follows:
2022
30.4%
0.9
(0.1)
2.0
(2.7)
(0.5)
0.6
30.6%

Statutory tax rate
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

2021
30.4%
0.8
(0.1)
2.0
(1.1)
(0.2)
0.1
31.9%

The significant components of deferred tax assets and liabilities of the Group at March 31,
2022 and 2021 are summarized as follows:
Millions of yen
2022
2021
Deferred tax assets:
Allowance for doubtful accounts
Provision for compensation forcompleted construction
Loss on devaluation of inventories
Provision for loss on construction
contracts
Liability for retirement benefits
Loss on impairment of property andequipment
Loss on valuation of investments insecurities
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

Thousands of
U.S. dollars
2022

¥ 175

¥ 217

$ 1,430

163
22

165
23

1,332
180

30
963

36
1,059

245
7,868

480

481

3,922

35
600
2,468
(922)
1,546

35
816
2,832
(898)
1,934

286
4,902
20,165(7,533)
12,632

(420)
(124)
(5)
(549)
¥ 997

(841)
(127)
(2)
(970)
¥ 964

(3,432)(1,013)(41)(4,486)$ 8,146

22

Asanuma Corporation
Notes to Consolidated Financial Statements (continued)
12. 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
when employees retire. All employees of Asanuma Tatemono K.K., a consolidated
subsidiary of the Company, have been composed of secondees from the Company,
consequently, the retirement benefit plan of Asanuma Tatemono K.K. is incorporated
in those of the Company. 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 ofservice.

2.

Defined benefit plans(1) The changes in retirement benefit obligation for the years ended March 31, 2022
and 2021 are as follows:

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

Millions of yen
2022
2021
¥ 10,483¥ 10,453
370
377
105
106
65
101
(765)
(554)
¥ 10,258¥ 10,483

Thousands of
U.S. dollars
2022$ 85,652
3,023
859
531
(6,251)$ 83,814(2) The changes in plan assets for the years ended March 31, 2022 and 2021 are as
follows:

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

Millions of yen
2022
2021
¥ 7,000¥ 6,328
139
126
(94)
258
499
675
(452)
(387)
¥ 7,092¥ 7,000

Thousands of
U.S. dollars
2022$ 57,194
1,136
(768)
4,077
(3,693)$ 57,946

23

Asanuma Corporation
Notes to Consolidated Financial Statements (continued)
12. Retirement Benefits (continued)
2.

Defined benefit plans (continued)(3) The following table sets forth the funded status of the plans and the amounts
recognized in the consolidated balance sheets at March 31, 2022 and 2021 for theCompany’s and the consolidated subsidiary’s defined benefit plans:

Funded retirement benefit obligation
Plan assets at fair value
Unfunded retirement benefit obligation
Net assets and liabilities recognized on
the consolidated balance sheet

Millions of yen
2022
2021
¥ 5,815¥ 5,978(7,092)(7,000)(1,277)(1,022)
4,505
4,442¥ 3,165¥ 3,483

Thousands of
U.S. dollars
2022$ 47,512(57,946)(10,434)
36,294$ 25,860(4) The components of retirement benefit expense for the years ended March 31, 2022
and 2021 are as follows:

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

Millions of yen
2022
2021
¥ 370
¥ 377
105
106
(140)
(127)
52
201
¥ 387
¥ 557

Thousands of
U.S. dollars
2022$ 3,023858(1,144)425$ 3,162(5) The components of retirement benefits liability and asset adjustments included inother comprehensive income (before tax effect) for the years ended March 31, 2022
and 2021 are as follows:

Actuarial (loss) gain

Millions of yen
2022
2021
¥ (107)¥ 357

Thousands of
U.S. dollars2022$ (874)24

Asanuma Corporation
Notes to Consolidated Financial Statements (continued)
12. Retirement Benefits (continued)
2.

Defined benefit plans (continued)(6) The components of retirement benefits liability and asset adjustments included inaccumulated other comprehensive income (before tax effect) at March 31, 2022
and 2021 are as follows:

Unrecognized actuarial gain

Thousands of
U.S. dollars
2022$ 2,198

Millions of yen
2022
2021
¥ 269
¥ 162

(7) The fair value of plan assets, by major category, as a percentage of total plan assets
at March 31, 2022 and 2021 are as follows:

Debt securities
Equity securities
Multi-asset
Cash and cash deposits
Total

2022
54%
20
24
2
100%

2021
82%
17
–

1
100%

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

2022
1.0%

2021
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.

25

Asanuma Corporation
Notes to Consolidated Financial Statements (continued)
12. Retirement Benefits (continued)
3.

Defined contribution pension plan
Information on contributions to the defined contribution pension plan for the years
ended March 31, 2022 and 2021 are as follows:

Millions of yen
2022
2021
Contributions to the defined
contribution pension plan

¥ 158

¥ 162

Thousands of
U.S. dollars
2022$ 1,291

13. Asset Retirement Obligations
The Company estimates the cost of restoration obligations based on property leaseagreements of the headquarters in Osaka, Tokyo office and Kyushu office. As the cost of therestoration obligations is immaterial, the information on asset retirement obligations isomitted.
Regarding certain restoration obligations, the Company estimated non-recoverable amountsof deposits for those premises and charged the portion attributable to the years ended March
31, 2022 and 2021, instead of recording asset retirement obligations.

14. 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 amountof 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 not exceeding one-half ofthe proceeds of the sale of new shares as additional paid-in capital included in capital surplus.

26

Asanuma Corporation
Notes to Consolidated Financial Statements (continued)
14. Shareholders’ Equity (continued)
Movements in shares of common stock in issue and treasury stock during the years ended
March 31, 2022 and 2021 are summarized as follows:

April 1, 2021
Shares ofcommon stockin issue
Treasury stock

8,078,629
21,893

Number of shares
2022
Increase
Decrease–
1,175

March 31, 2022–
14,815

8,078,629
8,253

The increase in treasury stock of 1,175 was due to the acquisition of fractional shares of lessthan one unit. The decrease in treasury shares was due to the disposal of treasury shares
under restricted stock remuneration plan.

Shares ofcommon stockin issue
Treasury stock

April 1, 2020

Number of shares
2021
Increase
Decrease

8,078,629
20,321

–
1,572

–
–

March 31, 2021
8,078,629
21,893The increase in treasury stock of 1,572 was due to the acquisition of fractional shares of lessthan one unit.
Restricted stock awards
1.

Outline, scale and movement(1) Outline
Restricted stock awards
Individuals covered by the plan
Type of shares
Number of shares
Granted date
Vesting period

2021 plan
6 directors
Common stock
7,130 shares
July 20, 2021
From July 20, 2021 (allocation date) tothe date when an individual ceases to bea director of the Company

27

Asanuma Corporation
Notes to Consolidated Financial Statements (continued)
14. Shareholders’ Equity (continued)
Restricted stock awards (continued)
1.

Outline, scale and movement (continued)(1) Outline
Conditions for release of transfer restriction are as follows:
The Company shall release transfer restriction for all of the allocated shares upon
the end of the vesting period provided that a covered person continues to be directorof the Company during the “Service Period” (from July 20, 2021 (allocation date)to the end of the ordinary general meeting of shareholders for the fiscal year ended
March 31, 2022). However, in the event that a covered person ceases to be adirector during the Service Period due to death or other reasons that the Board of
Directors deem as justifiable, the Company shall release transfer restrictions forthe specified number of allocated shares at the end of the vesting period. The
specified number of allocated shares is calculated by multiplying the number ofmonths from July 2021 to the month when a covered person ceases to be a director
divided by 12 (if the number exceeds 1, it shall be deemed to be 1) by the numberof allocated shares (it shall be rounded down).
(2) Scale and movement
Scale and movement of restricted stocks that have not yet been released for the
fiscal year ended March 31, 2022 are as follows.
i)

Amount of expenses and account name

Stock compensation expense ingeneral and administrative expenses

Thousands of yen
2022

U.S. dollars
2022¥ 24,010$ 196,176ii) Number of shares

Unvested at the end of prior fiscal period
GrantedForfeited
VestedUnvested at the end of the current fiscal period

2021 plan
–
7,130
–
–
7,130

28

Asanuma Corporation
Notes to Consolidated Financial Statements (continued)
14. Shareholders’ Equity (continued)
Restricted stock awards (continued)
1.

Outline, scale and movement (continued)(2) Scale and movement (continued)iii) Unit price information

Fair value per share2.

Yen2021 plan¥ 4,490

Method of determining fair value
It is the closing price of the Company’s common stock in the Tokyo Stock Exchangeon the business day before the day of the meeting of the Board of Directors.

3.

Method of estimating the number of vested shares
The actual number of forfeited stock options is shown as it is difficult to reasonably
estimate the number of stock options that will be forfeited in the future.

15. Provision for Loss on Construction Contracts
Provision for loss on construction contracts included in cost of sales for the years ended
March 31, 2022 and 2021 amounted to ¥99 million ($809 thousand) and ¥119 million,
respectively.

16 Research and Development Costs
Research and development costs included in selling, general and administrative expenses
for the years ended March 31, 2022 and 2021 amounted to ¥575 million ($4,698 thousand)and ¥489 million, respectively.

29

Asanuma Corporation
Notes to Consolidated Financial Statements (continued)
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, 2022 and 2021:

Millions of yen
2022
2021
Net unrealized holding (loss) gain on
investments in securities:
Amount arising during the year
Reclassification adjustments for loss
realized in the statement of income
Before tax effectTax effectNet unrealized holding loss on investments insecurities, net
Foreign currency translation adjustments, net
Retirement benefits liability adjustments:
Amount arising during the year
Reclassification adjustments for gain
realized in the statement of income
Before tax effectTax effect
Retirement benefits liability adjustments, net
Total other comprehensive loss

Thousands of
U.S. dollars2022¥ (846)¥ 612$ (6,912)(538)(1,384)
421

(921)
(309)
72

(4,396)(11,308)
3,440

(963)
2

(237)
(19)

(7,868)
16

(159)

157

(1,299)

52
(107)
32
(75)
¥ (1,036)

201
358
(109)
249
¥ (7)

425
(874)
261
(613)
$ (8,465)

18. Leases
Operating lease transactions(Lessee)
Future lease payments for the non-cancelable portion of the Company’s operating leases at
March 31, 2022 and 2021, are as follows:

Due within 1 year
Due after 1 year

Millions of yen
2022
2021
¥ 30
¥–
105
–
¥ 135
¥–

Thousands of
U.S. dollars
2022
$ 245
858
$ 1,10330

Asanuma Corporation
Notes to Consolidated Financial Statements (continued)
19. Financial Instruments
Status of financial instruments(1) Policy for financial instruments
The Group manage their funds by investing only in short-term deposits, and primarilyraise funds by borrowings from banks and issuing bonds. The purpose of entering into
derivative transactions is to mitigate fluctuation risk related to interest rates with respect
to borrowings from banks, 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 Group monitor due dates
and outstanding balances by individual customer, and the credit worthiness of theirmain customers regularly.
Investments in securities are mainly composed of stocks and are exposed to fluctuation
risk of market prices and the Group review the fair values of such listed stocks every
quarter.
Accounts payable on construction contracts and other accounts payable are mostly due
within one year.
Short-term bank loans, long-term debt and bonds are mainly utilized for business
operations. Certain long-term debt is hedged by derivative transactions (interest rate
swaps) as a hedging instrument per individual agreement in order to reduce fluctuation
risk of interest rate and fix interest expense.
In addition, the Company follows internal policies which include authorized proceduresand processes governing derivatives within the actual demand.
(3) Supplementary explanation of fair value of financial instruments
The fair value of financial instruments can fluctuate because different assumptions may
be adopted for calculations of fair value considering various factors.

31

Asanuma Corporation
Notes to Consolidated Financial Statements (continued)
19. Financial Instruments (continued)
Estimated fair value of financial instruments
Carrying value of financial instruments on the consolidated balance sheets at March 31,
2021 and 2022, the estimated fair value and the difference between them are shown in thefollowing table. Cash and deposits and notes, accounts receivable and contract assets are
not included in the table below as they are mainly settled within a short term and their fairvalue approximates carrying value.

Carrying value

Millions of yen
2022
Estimated
fair value

Difference

Notes receivable and accounts
receivable on completed
construction contracts
Investments in securities (*)
Total assets¥ 54,833
3,769¥ 58,602¥ 54,909
3,769¥ 58,678

¥ 76
0
¥ 76

Bonds
Long-term loans
Total liabilities¥ 1,640
6,533¥ 8,173¥ 1,618
6,494¥ 8,112¥ (22)(39)¥ (61)

Carrying value

Millions of yen
2021
Estimated fairvalue

Difference

Notes receivable and accounts
receivable on completed
construction contracts
Investments in securities (**)
Total assets¥ 51,361
5,571¥ 56,932¥ 51,473
5,572¥ 57,045

¥ 112
0
¥ 112

Long-term debt:
Bonds
Long-term loans
Total liabilities¥ 1,640
7,579¥ 9,219¥ 1,617
7,591¥ 9,270¥ (23)
12¥ (11)

32

Asanuma Corporation
Notes to Consolidated Financial Statements (continued)
19. Financial Instruments (continued)
Estimated fair value of financial instruments (continued)
Thousands of U.S. dollars
2022

Notes receivable and accounts
receivable on completed
construction contracts
Investments in securities (*)
Total assets
Bonds
Long-term loans
Total liabilities

Carrying value

Estimated
fair value

Difference$ 448,018
30,795$ 478,813$ 448,640
30,795$ 479,435

$ 622
0
$ 622

$ 13,400
53,379$ 66,779$ 13,22053,060$ 66,280$ (180)(319)$ (499)(*) Unquoted securities as of March 31, 2022 are as follows. They are not included in thetable above.

Unlisted stocks

Millions of yen
2022
¥ 841

Thousands of
U.S. dollars
2022$ 6,871(**) Since there is no market price for unlisted equity securities and it is difficult todetermine the fair value, they are not included in marketable securities and investments
in securities in the preceding table estimated fair value.

Unlisted equity securities

Millions of yen
2021
¥ 824

33

Asanuma Corporation
Notes to Consolidated Financial Statements (continued)
19. Financial Instruments (continued)
Redemption schedule
The redemption schedule for cash deposits, receivables and marketable securities withmaturity dates at March 31, 2022 are 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
¥ 13,189

Millions of yen
2022
Over 1 year
Over 5 years
within 5 years within 10 years¥–¥ –52,541

1,391

901

–
¥ 65,730

15¥ 1,406–¥ 901

Thousands of U.S. dollars
2022
Over 1 year
Over 5 years
Within 1 year
within 5 years within 10 years$ 107,762$–$–

429,292

11,3657,361–$ 537,054

123$ 11,488–$ 7,361

Breakdown of fair value of financial instruments by level
Fair values of financial instruments are categorized into three levels as described below on
the basis of the observability and the materiality of the inputs used in the fair value
measurement.
Level 1： Fair values measured using quoted prices of identical assets or liabilities in active
markets among observable valuation inputs
Level 2： Fair values measured using inputs other than inputs included within Level 1
among observable valuation inputs
Level 3： Fair values measured using unobservable valuation inputs

34

Asanuma Corporation
Notes to Consolidated Financial Statements (continued)
19. Financial Instruments (continued)
Breakdown of fair value of financial instruments by level (continued)
When multiple inputs that have a significant impact on the calculation of fair value are used,
fair value is classified to the level with the lowest priority in the calculation of fair value
among the levels to which each of those inputs belongs.
Financial instruments measured at fair value at March 31, 2022
Millions of yen
2022
Fair value

Investments in securities:
StocksTotal assets

Level 1

Level 2

Level 3Total

¥ 3,754¥ 3,754

¥–
¥–

¥–
¥–

¥ 3,754¥ 3,754

Thousands of U.S. dollars
2022
Fair value

Investments in securities:
StocksTotal assets

Level 1

Level 2

Level 3

Total

$ 30,672$ 30,672

$–
$–

$–
$–

$ 30,672$ 30,672

Financial instruments other than those measured at fair value at March 31, 2022
Millions of yen
2022
Fair value

Notes receivable and accounts
receivable on completed
construction contracts
Investments in securities:
Government bonds
Total assets
Bonds
Long-term loans
Total liabilities

Level 1

Level 2

Level 3

Total

¥ –

¥ 54,909¥ –¥ 54,909

15
¥ 15
¥ –
–
¥ –

–
¥ 54,909¥ 1,618
6,494¥ 8,112

–
¥ –
¥ –
–
¥ –

15
¥ 54,924¥ 1,618
6,494¥ 8,11235

Asanuma Corporation
Notes to Consolidated Financial Statements (continued)
19. Financial Instruments (continued)
Breakdown of fair value of financial instruments by level (continued)
Thousands of U.S. dollars
2022
Fair value

Notes receivable and accounts
receivable on completed
construction contracts
Investments in securities:
Government bonds
Total assets
Bonds
Long-term loans
Total liabilities

Level 1

Level 2

Level 3

Total

$

–

$ 448,640$ –$ 448,640

123
$ 123
$ –
–
$ –

–
$ 448,640$ 13,22053,060$ 66,280

–
$–
$ –
–
$–

123
$ 54,924$ 13,22053,060$ 66,280

Note: Description of valuation techniques used and inputs related to the calculation of fairvalue
Notes receivable and accounts receivable on completed construction contracts
Fair values are measured using the discounted present value method based on theamounts receivable, maturity, and interest rates taking into account credit risk foreach receivable classified by a certain period, and are categorized as Level 2.
Investments in securities
Fair values of listed stocks and national bonds are determined by using quoted prices.
Fair values of listed stocks and government bonds are categorized as Level 1 since
they are traded in active markets.
Bonds
Fair value of bonds with fixed rate issued by the Company is determined bydiscounting the total amount of principal with the expected interest rate in the caseof issuing a new bond in same condition, and is categorized as Level 2.
Long-term debt
Fair value of long-term debt with fixed rates is determined by discounting the total
amount of principal with the expected interest rate in the case of undertaking new
borrowings in same condition, and is categorized as Level 2.

36

Asanuma Corporation
Notes to Consolidated Financial Statements (continued)
20. Amounts per Share
Amounts per share at March 31, 2022 and 2021 and for the years then ended are as follows:Yen
Net assets
Profit attributable to owners of parent
Cash dividends

2022¥5.229.01
464.72257.002021¥ 5,152.02
513.55216.00U.S. dollars
2022$ 42.72
3.82
2.10

Information used in the computation of profit attributable to owners of parent per share forthe years ended March 31, 2022 and 2021 are presented as follows:

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
U.S. dollars
2022$ 30,632

2022¥ 3,7492021¥ 4,138–––¥ 3,749¥ 4,138$ 30,632

Thousands of shares
2022
2021
Weighted-average number of shares ofcommon stock used in the calculation

8,067

8,057

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 attributableto owners of parent available for distribution to shareholders of common stock and theweighted 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.

37Asanuma Corporation
Notes to Consolidated Financial Statements (continued)
21 Business Combination through Acquisitiona.

Outline of the business combination
1) Name and business description of acquiree
Name: EVERGREEN ENGINEERING & CONSTRUCTION PTE. LTD.
Business description: Building construction, mechanical and electrical engineering
services, maintenance services
2) Primary reasons for business combination
Evergreen Engineering & Construction Pte. Ltd. is mainly engaged in the businessof building construction, including integrated building services, M&E engineering
services and maintenance services in Singapore. The acquisition of Evergreen
Engineering & Construction Pte. Ltd. as a subsidiary of the Company, is part ofour efforts to “strengthen our overseas business and renewal business in the
ASEAN region”, which is set forth in The Three-Year Medium-Term Plan (FY2021-FY2023)
3) Date of the business combination
Acquisition date: January 6, 2022
4) Legal form of the business combination
Acquisition of shares
5) Company name after the business combination
No change
6) Voting rights acquired through the business combination
80%7) Principal basis for determination of the acquiring company
The Company acquired shares of
CONSTRUCTION PTE. LTD. for cash.

EVERGREEN

ENGINEERING&

38

Asanuma Corporation
Notes to Consolidated Financial Statements (continued)
21 Business Combination through Acquisition (continued)b.

Period of the operating results of the acquired company included in the accompanying
consolidated financial statements.
As the acquisition date is deemed to be January 31, 2022, solely the acquiree’s balance
sheet is consolidated, and the acquiree’s operating results are not included in the
consolidated statement of income for the fiscal year ended March 31, 2022.

c.

Acquisition cost of the acquired company and details of the type of consideration
Not disclosed due to a non-disclosure agreementd.

Major acquisition-related costs and nature

Advisory fees and otherse.

Millions of yen
2022
¥ 169

Thousands of
U.S. dollars
2022$ 1,381

Amount of goodwill generated, reason for generation of goodwill, method ofamortization and amortization period(1) Goodwill

Goodwill

Millions of yen
2022¥ 1,750

Thousands of
U.S. dollars
2022$ 14,299

The amount of goodwill is provisional since the purchase price allocation has notbeen finalized.
(2) Reason for generation of goodwill
Goodwill resulted from the acquiree’s excess earning power that the Company
expects to realize in business operations in the future.
(3) Method of amortization and amortization period
Method of amortization: Straight-line method
Amortization period: Not determined at this time39

Asanuma Corporation
Notes to Consolidated Financial Statements (continued)
21 Business Combination through Acquisition (continued)f.

Amount of assets acquired and liabilities assumed at the date of business combinationand major breakdown

Current assets
Non-current assets
Total assets
Current liabilities
Long-term liabilities
Total liabilitiesg.

Millions of yen
2022¥ 2,14194¥ 2,235¥998
19¥ 1,017

Thousands of
U.S. dollars
2022$ 17,493
768$ 18,261$ 8,154156$ 8,310

Estimated impact on the consolidated statement of income for the year ended March 31,
2022 assuming the business combination was completed at the beginning of the year
ended March 31, 2022 and the calculation method
The impact and calculation method have been omitted as immaterial.

22. Revenue Recognitiona.

Information on disaggregated revenue arising contracts with customers
Information on disaggregated revenue arising contracts with customers for the years
ended March 31, 2022 is described in Note 23 “Segment Information.”b.

Information providing a basis for understanding revenue arising from contracts withcustomers
Information providing a basis for understanding revenue arising from contracts withcustomers is described in Note 4 “Summary of Significant Accounting Policies”“Revenue and expense recognition.”c.

Information about the relationship between the satisfaction of performance obligations
under contracts with customers and cash flows from these contracts, and the amountand timing of revenue from contracts with existing customers at the end of the fiscal
year that are expected to be recognized in the following fiscal year or beyond

40

Asanuma Corporation
Notes to Consolidated Financial Statements (continued)
22. Revenue Recognition (continued)(1) Balances of contract assets and contract liabilities

Millions of yen
2022

Thousands of
U.S. dollars
2022¥ 21,379$ 174,679

23,730193,888

Contract assets (balance at the beginning of the year)
Contract assets (balance at the end of the year)

33,454
27,631

273,339
225,762

Contract liabilities (balance at the beginning of the year)
Contract liabilities (balance at the end of the year)

4,404
7,783

35,98363,592

Receivables arising from contracts with customers(balance at the beginning of the year)
Receivables arising from contracts with customers(balance at the end of the year)

Contract assets mainly relate to the rights of the Group to the consideration for
unbilled amount of construction contracts, which the Group have satisfied aperformance obligation at the end of the fiscal year. Contract assets are reclassified
to accounts receivable arising from contracts with customers when the rights of theGroup become unconditional.
Contract liabilities mainly relate to consideration received from customers prior toperformance based on construction contracts. Contract liabilities are reversed inline with revenue recognition. The revenue recognized during the fiscal year thatwas included in the balance of contract liabilities at the beginning of the year was¥7,628 million ($62,325 thousand).
(2) Transaction price allocated to remaining performance obligations
The amounts of the transaction price allocated to remaining performanceobligations by segment are as follows. These amounts are expected to berecognized as revenue within approximately two years.

Building construction
Civil engineering
Total

Millions of yen
2022¥ 119,396
32,931¥ 152,327

Thousands of
U.S. dollars
2022$ 975,537
269,066$ 1,244,603

41

Asanuma Corporation
Notes to Consolidated Financial Statements (continued)
23. Segment Informationa.

Segment Information(1) Overview of reporting segments
The reporting segments of the Group are components for which discrete financial
information is available and whose operating results are regularly reviewed by theCompany’s Board of Directors to make decisions about resource allocation andassess their performance.
The Group mainly operates in the construction business and has 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 statedin 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
2022
Reporting Segments
Building
Civil
Construction Engineering

Net sales and income:Authorities
Private sales
Overseas
Revenue fromcontracts withcustomers
Sales to third parties
Intersegment sales
Net sales
Segment income

Total

Others

Sub total

Adjustments

Total¥ 23,442
83,9882,420¥ 18,983
5,067
508¥ 42,425
89,055
2,928

¥

522
549
–

¥ 42,947
89,604
2,928

¥

–
–
–

¥ 42,947
89,6042,928¥ 109,850¥ 109,850–¥ 109,850¥ 24,558¥ 24,558–¥ 24,558¥ 134,408¥ 134,408–¥ 134,408¥ 1,071¥ 1,0715¥ 1,076¥ 135,479¥ 135,479
5¥ 135,483

¥
¥
¥

–
–
(5)
(5)

¥ 135,479¥ 135,479–¥ 135,479¥ 10,127¥ 3,009¥ 13,136¥¥ 13,236¥ (8,401)

100

¥

4,835

Millions of yen
2021
Reporting Segments
Building
Civil
Construction Engineering
Net sales and income:Sales to third parties
Intersegment sales
Net sales
Segment income¥ 110,146–¥ 110,146¥ 10,967¥ 27,701–¥ 27,701¥ 2,614

Total

Others

Sub total

Adjustments¥ 137,847–¥ 137,847¥ 13,581¥ 1,0885¥ 1,093¥ 143¥ 138,935
5¥ 138,940¥ 13,724

¥

–
(5)
¥
(5)
¥ (8,433)

Total¥138,935–¥ 138,935¥ 5,29142

Asanuma Corporation
Notes to Consolidated Financial Statements (continued)
23. Segment Information (continued)a.

Segment Information (continued)(2) Method of calculating sales and income in reporting segments (continued)
Thousands of U.S. dollars
2022
Reporting Segments
Building
Civil
Construction Engineering

Net sales and income:Authorities
Private sales
Overseas
Revenue fromcontracts withcustomers

Total

Others

Sub total

Adjustments
$

–
–
–

$

$

–

$ 1,106,945$ 191,534
686,233
19,773$ 155,103
41,4014,150$ 346,637
727,634
23,923$ 4,266
4,485–$ 350,903
732,119
23,924$ 897,540$ 200,654$ 1,089,194$ 8,751$
1,106,945

Intersegment sales$ 897,540–$ 200,654–$ 1,089,194–$ 8,751
41

Net sales$ 897,540$ 200,654$ 1,089,194$ 8,792$
1,106,945
41$
1,106,986

Segment income$ 82,744$ 24,585$ 107,329$$ 108,146

Sales to third parties

817

Total
350,903732,119
23,924$–(41)$ 1,106,945
–

$

(41)

$ 1,106,945$ (68,642)“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 ¥8,401 million ($68,642
thousand) and ¥8,433 million for the years ended March 31, 2022 and 2021 include
eliminations of intersegment transactions of ¥1 million ($8 thousand) and ¥1
million and corporate expenses of ¥8,400 million ($68,634 thousand) and¥8,432million 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.

43$

39,504

Asanuma Corporation
Notes to Consolidated Financial Statements (continued)
23. Segment Information (continued)b.

Related information(1) Information by products and services
Disclosure of information by products and services for the years ended March 31,
2022 and 2021 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 at March 31, 2022 and 2021 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
and equipment.
(3) Information by major customers
Disclosure of information by major customers for years ended March 31, 2022 and2021 has been omitted as sales to each customer were less than 10% ofconsolidated net sales.

c.

Loss on impairment of property and equipment by reporting segment
Millions of yen
2021
Reporting Segments

Loss on impairmentof property andequipmentd.

Building
Construction

Civil
Engineering

Total

Other

Elimination
andcorporate

¥–

¥–

¥–

¥ 88

¥–

Total

¥ 88

Information on amortization of goodwill and remaining unamortized balance
Goodwill is not allocated to reporting segments. Amortization of goodwill was ¥30
million ($245 thousand) and ¥27 million as at March 31, 2022 and 2021, respectively.
Remaining unamortized balance included in “Intangible assets” was ¥1,870 million($15,279 thousand) and ¥136 million as at March 31, 2022 and 2021, respectively.

44

Asanuma Corporation
Notes to Consolidated Financial Statements (continued)
24. Subsequent Events
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, 2022, was approved at the annual general meeting of the shareholders of the Company
held on June 23, 2022.

Cash dividends of ¥363 ($2.97) per share

Millions of yen¥ 2,930

Thousands of
U.S. dollars$ 23,940

25. Additional Information
Common Stock Split
At a meeting of its Board of Directors held on March 31, 2022, a stock split of shares of its
common stock and a partial amendment to the Articles of Incorporation due to the stock
split were approved.
a.

Purpose of the Stock Split
The purpose of the stock split is to reduce the minimum investment price thereby
creating an environment where it is easier to invest in the Company’s shares andexpanding the Company’s investor base.

b.

Outline of the Stock Split(1) Stock Split Method
The record date for the stock split will be July 31, 2022. Each share of theCompany's common stock held by shareholders listed or recorded in theshareholder registry at the end of the record date will be split into two shares.
(2) Increase in Number of Shares as a Result of the Stock Split
Total number of issued shares prior to the stock split: 8,078,629 shares
Increase in the number of shares upon the stock split: 8,078,629 shares
Total number of issued shares after the stock split: 16,157,258 shares
Number of authorized shares after the stock split: 58,713,000 shares(3) Schedule
Date of public notice of the record date: July 15, 2022
Record date: July 31, 2022
Effective date: August 1, 2022
45

Asanuma Corporation
Notes to Consolidated Financial Statements (continued)
25. Additional Information(continued)
Common Stock Split (continued)b.

Outline of the Stock Split (continued)(4) Impact on Per Share Information
Per share information assuming that the stock split was performed at the beginningof the year ended March 31, 2021 is as follows.
Yen
Net assets
Profit attributable to ownersof the parent

c.

2022
¥ 2,614.50

2021¥ 2,576.01

232.36

256,78

U.S. dollars
2022$ 21.36
1.90

Partial Amendment to Articles of Incorporation(1) Reason for the amendment
Due to the stock split, the Company will amend a part of the Article of
Incorporation effective from August 1, 2022 in accordance with Article 184,
Paragraph 2 of the Companies Act.
(2) Details of the amendment
Changes are underlined.
Present

After the amendment(Total number of authorized shares)
Article 6
Total number of authorized sharesof Company shall be 29,356,500
shares.

(Total number of authorized shares)
Article 6
Total number of authorized sharesof the Company shall be
58,713,000 shares.

(3) Schedule
Effective date: August 1, 2022d.

Share capital
The amount of the Company’s share capital will not change as a result of the stock split.

46