Consolidated Financial Statements
Asanuma Corporation
Years ended March 31, 2009 and 2008
with Report of Independent Auditors

Asanuma Corporation
Consolidated Financial Statements
Years ended March 31, 2009 and 2008

Contents

Consolidated Financial Statements
Report of Independent Auditors .......................................................................................... 1
Consolidated Balance Sheets............................................................................................... 2
Consolidated Statements of Operations............................................................................... 4
Consolidated Statements of Changes in Net Assets ............................................................ 5
Consolidated Statements of Cash Flows ........................................................................... 6
Notes to Consolidated Financial Statements ....................................................................... 8

Report of Independent Auditors
The Board of Directors
Asanuma Corporation

We have audited the accompanying consolidated balance sheets of Asanuma Corporationand consolidated subsidiaries as of March 31, 2009 and 2008, and the related consolidated
statements of operations, changes in net assets and cash flows for the years then ended, allexpressed in yen. These financial statements are the responsibility of the Company’s
management. Our responsibility is to express an opinion on these financial statements
based on our audits.
We conducted our audits in accordance with auditing standards generally accepted inJapan. Those standards require that we plan and perform the audit to obtain reasonableassurance about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and disclosuresin the financial statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material
respects, the consolidated financial position of Asanuma Corporation and consolidated
subsidiaries at March 31, 2009 and 2008, and the consolidated results of their operations
and their cash flows for the years then ended in conformity with accounting principles
generally accepted in Japan.
The U.S. dollar amounts in the accompanying consolidated financial statements withrespect to the year ended March 31, 2009 are presented solely for convenience. Our
audit also included the translation of yen amounts into U.S. dollar amounts and, in our
opinion, such translation has been made on the basis described in Note 2.

Osaka, Japan
June 26, 20091

Asanuma Corporation
Consolidated Balance Sheets
March 31, 2009 and 2008

Millions of yen
2008
2009
AssetsCurrent assets:
Cash and cash deposits (Note 6)
Receivables:
Notes receivable
Accounts receivable on completed construction
contracts (Note 17)
Other accounts receivable
Allowance for doubtful accounts

Thousands of
U.S. dollars(Note 2)2009

¥ 42,007¥ 30,041$ 427,639

6,990

9,392

71,16040,8692,357(460)
49,75663,8875,207(251)
78,235416,054
23,995(4,683)
506,526

1,195
32,879161
34,235

1,257
34,790235
36,282

12,165
334,715
1,639
348,519

Deferred income taxes (Note 10)
Other current assets
Total current assets

1
592
126,591

1
398
144,957

10
6,026
1,288,720

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

6,453
14,890
2,354
1,645
25
–
(13,282)
12,085

6,599
15,047
2,388
1,649
–
1
(13,094)
12,59065,693
151,583
23,964
16,746255–(135,213)
123,028

5,735

12,61558,383

69
768
489
566
1,609
(74)
9,162

63
754
547
491
1,739
(88)
16,121

703
7,818
4,978
5,762
16,380(753)
93,271¥ 147,838¥ 173,668$ 1,505,019

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

Investments and other assets:
Investments in securities (Notes 7 and 9)
Investments in unconsolidated subsidiaries andaffiliates
Long-term loans receivable (Note 9)
Membership rights
Intangible assets
Other assets
Allowance for doubtful accounts
Total investments and other assets

Total assets

2Millions of yen
2008
2009
Liabilities
Current liabilities:
Short-term bank loans (Note 9)
Current portion of long-term debt (Note 9)
Payables:Notes payable
Accounts payable on construction contracts
Other accounts payable

Thousands of
U.S. dollars(Note 2)2009

¥ 29,630
1,230¥ 33,290
1,530$

301,639
12,522

5,045
30,642
19,09054,77723

4,389
48,463
18,40871,26020

51,359311,941
194,340
557,640
234

Deferred income taxes (Note 10)
Advances received on uncompleted construction
contracts
Deposits received
Consumption taxes on advances received
Accrued income taxes (Note 10)
Accrued expenses
Provision for compensation for completed
construction
Provision for bonuses
Provision for loss on construction contracts
Other current liabilities
Total current liabilities

20,604
3,111
1,785
482
1,417

22,137
1,689
1,904
279
889

209,752
31,671
18,172
4,907
14,425

619
275
918
7
114,878

581
448
573
1
134,601

6,302
2,800
9,345
71
1,169,480

Long-term liabilities:
Long-term debt (Note 9)
Accrued retirement benefits for employees (Note 11)
Deferred income taxes (Note 10)
Other
Total long-term liabilities

3,925
7,165
1,489
1,324
13,903

5,155
7,158
3,421
1,671
17,40539,957
72,941
15,15813,479141,535

8,419
4,641
5,522
(134)
18,448

8,419
4,641
5,249
(133)
18,17685,70747,24656,215(1,364)
187,804

609
609
19,057¥ 147,838

3,486
3,486
21,662¥ 173,668

6,200
6,200
194,004$ 1,505,019

Contingent liabilities (Note 12)
Net assets
Shareholders’ equity (Note 13):
Common stock:
Authorized – 293,565,000 shares
Issued– 77,386,293 shares in 2009 and2008
Capital surplus
Retained earnings
Less treasury stock, at cost
Total shareholders’ equity
Valuation:
Net unrealized holding gain on securities (Note 7)
Total valuation
Total net assets
Total liabilities and net assets

See accompanying notes to consolidated financial statements.
3

Asanuma Corporation
Consolidated Statements of Operations
Years ended March 31, 2009 and 2008

Millions of yen
2009
2008
Net sales:
Completed construction contracts
Other

2009

¥ 180,637
1,237
181,874¥ 194,886
2,297
197,183$ 1,838,919
12,593
1,851,512

172,197804
173,001

186,348
1,508
187,856

1,752,998
8,185
1,761,183

8,440
433
8,873

8,538
789
9,327

85,921
4,408
90,329

7,899
974

9,024
303

80,413
9,916

298
(673)
(23)
1,330
(339)

297
(686)
(31)
1,662
(799)

3,033
(6,851)(234)
13,539(3,451)

(1)
(942)
624

(69)
(946)
(269)

(10)
(9,590)
6,352

358
(7)
351
273

174
2,032
2,206
(2,475)

3,644
(71)
3,573
2,779

Cost of sales:
Completed construction contracts
Other
Gross profit:
Completed construction contracts
Other

Selling, general and administrative
expenses (Note 14)
Operating income
Other income (expenses):
Interest and dividend income
Interest expense
Guarantee fees
Gain on sales of investments in securities, net
Loss on repairs of completed construction
Loss on impairment of tangible fixed assets(Note 8)Other, net
Income (loss) before income taxes
Income taxes (Note 10):
Current
Deferred
Net income (loss)

Thousands of
U.S. dollars(Note 2)¥¥$

See accompanying notes to consolidated financial statements.
4

Asanuma Corporation
Consolidated Statements of Changes in Net Assets
Years ended March 31, 2009 and 2008

Millions of yen

Balance at March 31, 2007
Net loss for the year
Cash dividends
Sales of treasury stock
Increase in treasury stock
Net change in items other thanshareholders’ equity
Balance at March 31, 2008
Net income for the year
Cash dividends
Sales of treasury stock
Increase in treasury stock
Net change in items other thanshareholders’ equity
Balance at March 31, 2009

Balance at March 31, 2008
Net income for the year
Cash dividends
Sales of treasury stock
Increase in treasury stock
Net change in items other thanshareholders’ equity
Balance at March 31, 2009

Treasury
Retained stock, atearnings
cost¥ 7,915 ¥ (129)(2,475)
–
(191)
–
–
0
–
(4)

Net
unrealized
holding
gain onTotal netsecurities
assets¥ 9,145 ¥ 29,991–(2,475)
–
(191)
–
0
–
(4)

Commonstock¥ 8,419––––

Capitalsurplus¥ 4,641––0––¥ 8,419
–
–
–
–

–
–
¥ 4,641 ¥ 5,249
–
273
–
(0)
–
–
–

–
¥ (133)––1(2)(5,659)(5,659)¥ 3,486 ¥ 21,662
–
273
–
–
1
–
(2)

–
¥ 8,419–¥ 4,641–¥ (134)(2,877)(2,877)¥609 ¥ 19,057

Commonstock$ 85,707––––

Thousands of U.S. dollars (Note 2)Netunrealized
holding
Treasurygain onCapital Retained stock, at
Total netsecurities
surplus earnings
cost
assets$47,246 $ 53,436 $ (1,354)$ 35,488 $ 220,523
–
2,779
–
–
2,779
–
–
–
–
–
(0)
–
10
–
10
–
–
(20)
–
(20)

–
$ 85,707–$47,246–¥ 5,522–$ 56,215–$ (1,364)(29,288) (29,288)$ 6,200 $ 194,004

See accompanying notes to consolidated financial statements.
5

Asanuma Corporation
Consolidated Statements of Cash Flows
Years ended March 31, 2009 and 2008

Millions of yen
2009
2008
Cash flows from operating activities:
Income (loss) before income taxes
Adjustments for:
Depreciation and amortization
Increase in allowance for doubtful accounts
Decrease in provision for bonuses
Increase (decrease) in accrued retirement benefits
for employees
Interest and dividend income
Interest expense
Gain on sales of investments in securities, net
Decrease in receivables
Decrease in inventories(Decrease) increase in payables
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:
Purchases of property, plant and equipment
Proceeds from sales of property, plant andequipment
Purchases of investments in securities
Proceeds from sales of investments in securities
Increase in loans receivable
Other, net
Net cash provided by investing activities

¥

¥

624

¥

(269)

Thousands
ofU.S. dollars(Note 2)
2009
$

6,352

543
215
(173)

734
190
(55)

5,528
2,189
(1,761)

8
(298)
673
(1,330)25,4202,046(17,164)

(725)
(297)
686
(1,662)
5,443
21
1,808

81
(3,033)
6,851(13,539)258,780
20,828(174,733)(1,533)
5,628
14,659
283
(701)
(152)
14,089(3,686)(1,699)
489
290
(744)
(203)
(168)

(15,606)
57,294
149,2312,881(7,136)(1,547)
143,429

(69)

(94)

(702)

497
(3)
3,120
(22)
(125)
3,398

473
(312)
2,503
(310)
(93)
¥ 2,167

5,060(31)
31,762(224)(1,273)$ 34,592

6

Asanuma Corporation
Consolidated Statements of Cash Flows (continued)
Years ended March 31, 2009 and 2008

Millions of yen
2009
2008
Cash flows from financing activities:
Decrease in short-term bank loans, net
Repayment of long-term debt
Repayment of a bondCash dividends paid
Repayments of lease obligations
Repayments for deposits received frommembership
Other, net
Net cash used in financing activities
Effect of exchange rate changes on cash and cash
equivalents
Net increase (decrease) in cash and cash
equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year (Note 6)¥ (3,960)(1,230)––(3)¥

Thousands
ofU.S. dollars(Note 2)
2009

(110)
(1,530)(5,000)(190)–$ (40,313)(12,522)
–
–
(31)

(263)
(1)
(5,457)–(5)(6,835)(2,677)(10)(55,553)

(10)

(52)

(103)

12,02029,938¥ 41,958(4,888)34,826¥ 29,938

122,365304,775$ 427,140

See accompanying notes to consolidated financial statements.
7

Asanuma Corporation
Notes to Consolidated Financial Statements
Years ended March 31, 2009 and 2008

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.
Certain reclassifications of previously reported amounts have been made to conform theconsolidated financial statements for the year ended March 31, 2008 to the 2009presentation. Such reclassifications had no effect on consolidated net income (loss) or
net assets.

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 ¥98.23 = U.S.$1.00, theexchange rate prevailing on March 31, 2009. This translation should not be construed asa representation that yen can be converted into U.S. dollars at the above or any other rate.

8Asanuma Corporation
Notes to Consolidated Financial Statements (continued)

3.

Principles of Consolidation

At March 31, 2009 and 2008, the Company had 5 subsidiaries. The consolidated
financial statements for the years ended March 31, 2009 and 2008 include the accounts of
the Company and its 2 significant subsidiaries. The accounts of the remaining
subsidiaries were not consolidated with those of the Company at March 31, 2009 and 2008
because their assets, retained earnings, net sales and net income (loss) in the aggregate
were not material to the consolidated financial statements.
At March 31, 2009 and 2008, the Company applied the equity method to its investments in
2 unconsolidated subsidiaries and 2 affiliates for the purpose of the consolidated financial
statements for the years then ended.
The assets and liabilities of the consolidated subsidiaries have been revalued at fair value
as of the respective dates of acquisition of control.

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 three categories: trading securities,
held-to-maturity debt securities or other securities. Trading securities are stated atfair value. Gain and loss, both realized and unrealized, are credited and charged toincome. Held-to-maturity debt securities are stated at amortized cost. Marketablesecurities classified as other securities are carried at fair value with any changes in
unrealized holding gain or loss, net of the applicable income taxes, reported as aseparate component of net assets. Non-marketable securities classified as othersecurities are carried at cost determined by 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.

9

Asanuma Corporation
Notes to Consolidated Financial Statements (continued)

4.

Summary of Significant Accounting Policies (continued)(d) Inventories
Real estate held for sale is stated at the lower of cost or net selling value, cost being
determined on an individual project basis. Uncompleted construction contracts arestated at cost determined on an individual project basis. Raw materials and supplies
are stated at the lower of cost or market value, cost being determined by the period
average method.
(e) Property, plant and equipment (Other than leased assets)
Property, plant and equipment is stated on the basis of cost. Depreciation is
calculated by the declining-balance method over the estimated useful lives of therespective assets; however, the straight-line method is applied to buildings (except forstructures attached to the buildings) acquired on or after April 1, 1998.
Supplementary information
Effective the year ended March 31, 2009, based on the revision of the Corporation
Tax Law of Japan, the Company and its consolidated subsidiaries have changed theuseful life of machinery to reflect more realistic useful lives.
The effect of this change on operating results for the year ended March 31, 2009 was
immaterial.
In addition, effective the year ended March 31, 2008, depreciation expense forproperty, plant and equipment acquired before April 1, 2007 is computed based on thesalvage value of 5% of acquisition cost, and the amount between the salvage value(5% of acquisition cost) and memorandum value is depreciated from the year
following the year in which the book value of an asset reaches 5% of its acquisition
cost by the straight-line method over a period of 5 years. This change was madebased on an amendment to the Corporation Tax Law. The effect of the change wasto decrease operating income by ¥29 million and increase loss before income taxes by
the same amount for the year ended March 31, 2008 as compared to thecorresponding amounts which would have been recorded under the previous method.
(f) Computer software (Other than leased 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 by the straight-line method over an estimated useful life of 5
years.

10

Asanuma Corporation
Notes to Consolidated Financial Statements (continued)

4.

Summary of Significant Accounting Policies (continued)(g) Leases
Leased assets held under finance leases that transfer ownership are depreciated byusing the economic useful lives of leased assets. For finance leases that do nottransfer ownership, depreciation expense is calculated based on the straight-line
method over the leased period of the lease with a residual value of zero. In addition,
finance lease transactions commencing on or before March 31, 2008 other than thosein which the ownership of the leased assets is transferred to the Company or its
consolidated subsidiaries are accounted for in the same manner as operating leases.
(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.
(i) Provision for bonuses
A provision for bonuses is provided at the estimated amount of bonuses to be paid
based on the annual bonus agreement which the Company and its consolidated
subsidiaries entered into with their employees as allocated to the current fiscal year.
(j) Provision for loss on construction contracts
A provision for loss on construction contracts is provided for anticipated future losses
on uncompleted construction projects.
(k) Accrued retirement benefits
Accrued retirement benefits for employees are provided at the retirement benefit
obligation less the fair value of the pension plan assets as adjusted for unrecognizedactuarial gain or loss. The retirement benefit obligation is attributed to each periodby the straight-line method over the estimated average remaining years of service ofthe eligible employees.
Prior service cost is credited or charged to income in the year in which the gain or loss
is recognized.
Actuarial gain or loss is amortized commencing the year following the year in which
the gain or loss is recognized by the straight-line method principally over a ten-year
period, which is shorter than the average remaining years of service of the eligible
employees.

11Asanuma Corporation
Notes to Consolidated Financial Statements (continued)

4.

Summary of Significant Accounting Policies (continued)(l) Income taxes
Deferred income taxes are calculated based on taxable income and charged to incomeon an accrual basis. Deferred tax assets and liabilities are computed based on thetemporary differences between financial reporting and the tax bases of the assets andliabilities which will result in taxable or deductible amounts in the future. The
calculation of deferred tax assets and liabilities is based on the enacted tax laws.
Valuation allowances are utilized to reduce deferred tax assets to the amount thatmanagement believes is more likely than not to be realized. In assessing the likelihoodof realization, the Company considers all currently available evidence for future years,
both positive and negative, supplemented by information regarding historical resultsfor each tax jurisdiction.
(m) Hedge accounting
Gain or loss on derivatives positions designated as hedges is deferred until the loss orgain on the respective underlying hedged items is recognized. Interest-rate swaps
which meet certain conditions are accounted for as if the interest rates applied to theswaps had originally applied to the underlying debt.
(n) Revenue recognition
Revenue from, and the related cost of, construction contracts are generally recordedby the completed-contract method. During the construction period, the accumulated
costs of uncompleted construction contracts are represented as inventories, and theadvances received for such contracts are included in current liabilities. If a
construction project takes longer than one year and its contract amount exceeds¥1,000 million ($10,180 thousand), however, the percentage-of-completion method isapplied. Net sales of construction contracts accounted for by thepercentage-of-completion method totaled ¥80,370 million ($818,182 thousand) and¥89,035 million for the years ended March 31, 2009 and 2008, respectively.

12

Asanuma Corporation
Notes to Consolidated Financial Statements (continued)

5.

Changes in Method of Accounting(1) Changes in method of measuring of inventories
Effective the year ended March 31, 2009, the Company and its consolidated
subsidiaries have adopted “Accounting Standard for Measurement of Inventories”(Accounting Standards Board of Japan (ASBJ) Statement No.9 issued on July 5,2006). The effect of this change on operating results was immaterial for the year
ended March 31, 2009.
(2) Property, Plant and Equipment and Depreciation
Effective the year ended March 31, 2008, the Company and its consolidated
subsidiaries changed their method of accounting for depreciation of property, plantand equipment acquired on or after April 1, 2007. This change was made based on
an amendment to the Corporation Tax Law. The effect of this change on operating
results was immaterial for the year ended March 31, 2008.
(3) Accounting for leases
Effective the year ended March 31, 2009, the Company and its consolidated
subsidiaries have adopted “Accounting Standard for Lease Transactions” (ASBJ
Statement No. 13 originally issued by the First Committee of the Business Accounting
Council on June 17, 1993 and revised by the ASBJ on March 30, 2007) and“Guidance on Accounting Standard for Lease Transactions” (ASBJ Guidance No. 16
originally issued by the Accounting System Committee of the Japanese Institute ofCertified Public Accountants on January 18, 1994 and revised by the ASBJ on March
30, 2007). According to the new accounting standard, lease transactions areaccounted for as finance leases if substantially all of the benefits and risks ofownership have been transferred to the lessee. The effect of this change on
operating results was immaterial for the year ended March 31, 2009.

13

Asanuma Corporation
Notes to Consolidated Financial Statements (continued)

6.

Cash and Cash Equivalents

The balances of cash and cash deposits in the accompanying consolidated balance sheetsat March 31, 2009 and 2008 are reconciled to the balances of cash and cash equivalents aspresented in the accompanying consolidated statements of cash flows for the years thenended as follows:

Millions of yen
2009
2008
Cash and cash deposits
Time deposits with original
maturities in excess of threemonthsCash and cash equivalents

Thousands of
U.S. dollars
2009¥ 42,007¥ 30,041$ 427,639(49)¥ 41,958(103)¥ 29,938(499)$ 427,140

14

Asanuma Corporation
Notes to Consolidated Financial Statements (continued)

7.

Investments in Securities

At March 31, 2009 and 2008, marketable securities classified as held-to-maturity debt
securities were as follows:
Millions of yen
2009
2008
Carrying Estimated Unrealized Carrying Estimated Unrealizedvalue
fair value
gain
value
fair value
gain
Held-to-maturity
debt securities
whose estimatedfair value exceeds
their carrying
value:
Government andmunicipal bonds

¥ 30

¥ 31

¥1

¥ 30

¥ 31

¥1

Thousands of U.S. dollars
2009
Carrying Estimated Unrealizedvalue
fair value
gain
Held-to-maturity
debt securities
whose estimatedfair value exceeds
their carrying
value:
Government andmunicipal bonds

$ 305

$ 316

$11

At March 31, 2009 and 2008, marketable securities classified as other securities were as
follows:
Millions of yen
2009

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

2008

Acquisition
costs

Carrying
value

Unrealized
Unrealized
holding Acquisition Carrying holding
gain (loss)
gain (loss)
costs
value

¥ 2,318¥ 3,461¥ 1,143¥ 5,345¥ 11,127¥ 5,782

1,600¥ 3,918

1,418¥ 4,879

(182)
¥ 961

639
¥ 5,984615¥ 11,742(24)¥ 5,758

15

Asanuma Corporation
Notes to Consolidated Financial Statements (continued)

7.

Investments in Securities (continued)
Thousands of U.S. dollars
2009
Acquisition
costs

Carrying
value

Unrealized
holding
gain (loss)$ 23,598$ 35,234$ 11,636

16,288$ 39,886

14,435$ 49,669(1,853)$ 9,783

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

The proceeds from sales of, and gross realized gain on, other securities for the years ended
March 31, 2009 and 2008 are summarized as follows:

Proceeds from sales
Gross realized gain

Millions of yen
2009
2008
¥ 3,120¥ 2,503
1,330
1,662

Thousands of
U.S. dollars
2009$ 31,762
13,539Non-marketable securities classified as other securities at March 31, 2009 and 2008 wereas follows:
Millions of yen
2009
2008
Other securities:
Unlisted equity securities

¥ 826

¥ 843

Thousands of U.S.
dollars2009$ 8,409

The redemption schedule at March 31, 2009 for held-to-maturity debt securities was asfollows:

Government and municipal bonds

Millions of yen
Due after one year
through five years¥ 30

Thousands of
U.S. dollars
Due after one year
through five years
$ 305

16

Asanuma Corporation
Notes to Consolidated Financial Statements (continued)

8.

Loss on Impairment of Tangible Fixed Assets

Aggregate losses on impairment of tangible fixed assets of ¥1 million ($10 thousand) and¥69 million were recognized for the years ended March 31, 2009 and 2008, respectively.
Impairment losses of ¥43 million for land and ¥26 million for buildings for the year ended
March 31, 2008 and are outlined as follows:

Location
Siga Prefecture and others
Total

Use
Idle property

Classification
Buildings and landMillions of yen
2008
¥ 69
¥ 69

The Company and its consolidated subsidiaries group their fixed assets for operating
purposes at each office but group leased assets and idle assets individually. The affiliates
group their fixed assets at each company. As a result of having idle buildings, structuresand land during the year ended March 31, 2008, the Company and its consolidated
subsidiaries have reduced the carrying value of such assets to their respective estimatedrecoverable amounts and recorded a related loss on impairment of tangible fixed assets of¥69 million in the accompanying consolidated statement of operations for the year thenended. The recoverable amounts of idle assets have been measured at their estimated net
selling prices.
The impairment loss of ¥1 million ($10 thousand) for the year ended March 31, 2009 was
related to land and was measured at the estimated net selling price. The details of theimpaired land have been omitted because the related amounts of impairment of fixed
assets were immaterial.

17

Asanuma Corporation
Notes to Consolidated Financial Statements (continued)

9.

Short-Term Bank Loans and Long-Term Debt

Short-term bank loans from banks had an average interest rate of 1.7% at March 31, 2009
and 2008.
Long-term debt at March 31, 2009 and 2008 is summarized as follows:
Thousands of
U.S. dollars
2009

Millions of yen
2009
2008
Unsecured loans from banks, payable inyen, at rates ranging from 1.34% to
2.45%
Total
Less current portion included in current
liabilities¥ 5,155¥ 6,685$ 52,479

5,155

6,685

52,479(1,230)(1,530)(12,522)¥ 3,925¥ 5,155$ 39,957

The aggregate annual maturities of long-term debt subsequent to March 31, 2009 aresummarized as follows:Year ending March 31,
2010
2011
2012

Millions of yen¥ 1,230
2,305
1,620¥ 5,155

Thousands of
U.S. dollars$ 12,522
23,465
16,492$ 52,479

Assets pledged at March 31, 2009 as collateral for the loan of an affiliate which is engaged
in a Private Finance Initiative (“PFI”) business are summarized as follows:

Investments in securities
Long-term loans receivable

Millions of yen
¥ 46
475
¥ 521

Thousands of
U.S. dollars
$

468
4,836
$ 5,304

18

Asanuma Corporation
Notes to Consolidated Financial Statements (continued)

10. 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 40.8% for the years ended March 31, 2009 and 2008.
A reconciliation of the statutory tax rate and the effective tax rates for the years ended
March 31, 2009 and 2008 as a percentage of income (loss) before income taxes issummarized as follows:

Statutory tax rate
Permanently non-tax-deductible expenses
Permanently non-taxable income
Per capita portion of inhabitants’ taxes
Valuation allowance
Unrecognized deferred income tax
relating to excess of cost over equity in
net assets of subsidiaries and other
Other
Effective tax rates

2009
40.8%
22.5
(5.8)
23.9
(18.2)

2008
40.8%(107.3)19.5(60.6)(718.2)

(6.6)
(0.4)
56.2%

6.8
(0.3)
(819.3%)19

Asanuma Corporation
Notes to Consolidated Financial Statements (continued)

10. Income Taxes (continued)
The significant components of deferred tax assets and liabilities of the Company and its
consolidated subsidiaries at March 31, 2009 and 2008 are summarized as follows:

Millions of yen
2009
2008
Deferred tax assets:
Allowance for doubtful accounts
Provision for bonuses
Provision for compensation forcompleted construction
Inventories
Provision for loss on construction
contracts
Accrued retirement benefits for
employees
Loss on impairment of tangible
fixed assets
Loss on revaluation of fixed assets
and other
Loss on revaluation of investments
Additional retirement benefits
Tax loss carryforwards
Unrealized profit on intercompany
transactions
Other
Gross deferred tax assets
Less valuation allowance
Total deferred tax assets
Deferred tax liabilities:
Unrealized holding gain on
securities
Deferred capital gains on property
Other
Total deferred tax liabilities
Net deferred tax liabilities

¥

699
99

¥

580
170

Thousands of
U.S. dollars
2009
$

7,116
1,008

253
158

237
159

2,576
1,608

375

234

3,818

2,813

2,833

28,637

382

383

3,889

1,367
223
245
42

1,411
209
–
560

13,916
2,270
2,494
428

52
553
7,261
(7,209)
52

52
559
7,387
(7,334)
53

529
5,629
73,918(73,389)
529(352)(1,197)(15)(1,564)¥ (1,512)(2,273)(1,209)(11)(3,493)¥ (3,440)(3,583)(12,186)(153)(15,922)$ (15,393)

20

Asanuma Corporation
Notes to Consolidated Financial Statements (continued)

11. Retirement Benefits
The Company and its consolidated subsidiaries have defined benefit pension planscovering substantially all employees who are entitled to lump-sum or annuity payments,
the amounts of which are determined by reference to their basic rates of pay, length ofservice, and the conditions under which termination occurs. In addition to the retirement
benefit plans described above, the Company and its consolidated subsidiaries pay
additional retirement benefits under certain conditions.
The following table sets forth the funded and accrued status of the plans and the amounts
recognized in the accompanying consolidated balance sheets at March 31, 2009 and 2008
for the Company’s and its consolidated subsidiaries’ defined benefit pension plans:Millions of yen
2009
2008
Retirement benefit obligation
Plan assets at fair value
Unfunded retirement benefit obligation
Unrecognized actuarial loss
Accrued retirement benefits for
employees

Thousands of
U.S. dollars
2009¥ (30,113)
16,677(13,436)
6,271¥ (32,148)
22,404(9,744)2,586$ (306,556)
169,775(136,781)
63,840¥ (7,165)¥ (7,158)$ (72,941)

As permitted under the accounting standard for retirement benefits, one consolidated
subsidiary calculates its retirement benefit obligation for employees by a simplified
method.
The components of retirement benefit expenses for the years ended March 31, 2009 and2008 are outlined as follows:

Millions of yen
2009
2008
Service cost
Interest cost
Expected return on plan assets
Amortization of unrecognized actuarial
loss
Retirement benefit expenses

Thousands of
U.S. dollars
2009

¥ 694
632
(448)

¥ 774
659
(517)

$ 7,065
6,434(4,561)610¥ 1,488295¥ 1,211

6,210$ 15,148

21

Asanuma Corporation
Notes to Consolidated Financial Statements (continued)

11. Retirement Benefits (continued)
The assumptions used in accounting for the defined benefit pension plans for the years
ended March 31, 2009 and 2008 were as follows:

Discount rate
Expected rate of return on plan assets

2009

2008

2.0%
2.0%

2.0%
2.0%

12. Contingent Liabilities
At March 31, 2008, the Company was contingently liable for guarantees of deposits forcondominium purchase agreements held by condominium sales companies in theaggregate amount of ¥498 million.

13. Shareholders’ Equity
The Corporation Law of Japan (the “Law”) provides that an amount equal to 10% of theamount 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 andthe 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 byresolution of the shareholders, or by the Board of Directors if certain conditions are met.
The Company’s legal reserve included in retained earnings at March 31, 2009 and 2008
amounted to ¥2,104 million ($21,419 thousand).
Under the Law, 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.

22

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, 2009 and 2008 are summarized as follows:

March 31, 2008
Shares ofcommon stockin issue
Treasury stock

77,386,293
1,234,310

March 31, 2007
Shares ofcommon stockin issue
Treasury stock

77,386,293
1,213,134

Number of shares
2009
Increase
Decrease–
27,850–
7,236

Number of shares
2008
Increase
Decrease–
24,895–
3,719

March 31, 2009

77,386,293
1,254,924

March 31, 2008

77,386,293
1,234,310

14. Research and Development Costs
Research and development costs included in selling, general and administrative expenses
for the years ended March 31, 2009 and 2008 amounted to ¥202 million ($2,056 thousand)and ¥227 million, respectively.

15. Leases
Finance lease transactions commencing on or before March 31, 2008 other than those inwhich the ownership of the leased assets is transferred to the Company and its
consolidated subsidiaries are accounted for in the same manner as operating leases.

23

Asanuma Corporation
Notes to Consolidated Financial Statements (continued)

15. Leases (continued)
The following pro forma amounts represent the acquisition costs, accumulated
depreciation and net book value of the leased property as of March 31, 2009 and 2008,
which would have been reflected in the accompanying consolidated balance sheets if
finance lease accounting had been applied to the finance leases under which the Company
and its consolidated subsidiaries are lessees and which are currently accounted for as
operating leases:
Millions of yen
2009
2008
Acquisition Accumulated Net book Acquisition Accumulated Net bookcosts
depreciation
value
costs
depreciation
value
Tools, furniture andfixtures

¥ 27

¥ 12

¥ 15

¥ 36

¥ 15

¥ 21

Thousands of U.S. dollars
2009
Acquisition Accumulated Net bookcosts
depreciation
value
Tools, furniture andfixtures

$ 275

$ 122

$ 153

Lease payments related to finance leases accounted for as operating leases, depreciationand interest expense, which have not been reflected in the accompanying consolidated
statements of operations for the years ended March 31, 2009 and 2008, were as follows:

Millions of yen
2008
2009
Lease payments
Depreciation
Interest expense

¥7
6
1

¥8
8
1

Thousands of
U.S. dollars
2009
$ 71
61
10

Future minimum lease payments (including the interest portion thereon) subsequent toMarch 31, 2009 under finance leases other than those which transfer ownership of theleased property to the Company and its consolidated subsidiaries are summarized asfollows:

Year ending March 31,
20102011 and thereafter

Millions of yen
¥ 5
10
¥ 15

Thousands of
U.S. dollars
$ 51

102
$ 153
24

Asanuma Corporation
Notes to Consolidated Financial Statements (continued)

16. Derivatives
The Company utilizes interest-rate swaps to hedge the risk of fluctuation in interest rates
on its borrowings. The Company does not enter into derivatives transactions for
speculative or short-term trading purposes.
The Company is exposed to certain market risk arising from interest-rate swap agreements.
It is also exposed to the risk of credit loss in the event of nonperformance by thecounterparties with respect to interest-rate swap agreements; however, the Company does
not anticipate nonperformance by any of the counterparties, all of whom are financial
institutions with high credit ratings. In addition, the Company has established internal
policies which include procedures and authorization processes governing derivatives andcomplies fully with these guidelines.
At March 31, 2009 and 2008, all open derivatives positions held by the Company met thecriteria for deferral hedge accounting; accordingly, disclosure of fair value information
with respect to these positions has been omitted.

17. Transaction with Related Party
Effective the year ended March 31, 2009, the Company has adopted a new accounting
standard, “Accounting Standard for Related Party Disclosures” (ASBJ, Statement No.11)
and “Guidance on Accounting Standard for Related Party Disclosures” (ASBJ, GuidanceNo. 13). The accounting standard requires disclosure of related party transactions.
Transactions and balances with related parties as of and for the year ended March 31, 2009were as follows.
The Company owns 49.0% of voting rights of JOHOKU SYMPHONIA., Co. Ltd, which
operates a PFI business.
2009
Transactions

Balances

Type oftransaction

Millions ofyen

Thousandsof U.S.
dollars

JOHOKU
Construction
SYMPHONIA., order
Co. Ltd.

¥ 2,527$ 25,725

Name ofaffiliatedcompany

Account nameAccounts
receivable oncompleted
construction
contracts

Millions ofyen

Thousandsof U.S.
dollars¥ 2,463$ 25,07425

Asanuma Corporation
Notes to Consolidated Financial Statements (continued)

18. Amounts per Share
Amounts per share at March 31, 2009 and 2008 and for the years then ended were as
follows:
2009

2008

U.S. dollars
2009¥ 250.32
3.59¥ 284.46(32.50)$ 2.550.04

Yen
Net assets
Net income (loss)

Information used in the computation of net income (loss) per share for the years ended
March 31, 2009 and 2008 is presented as follows.
Thousands of
U.S. dollars
2009

Millions of yen
2008
2009
Net income (loss)
Net income (loss) not applicable tocommon shareholders
Net income (loss) used in thecalculation of net income (loss)
per share¥ 273¥ (2,475)$ 2,779

–

–

–

¥ 273

¥ (2,475)$ 2,779

Thousands of shares
Weighted-average number of shares used in
the calculation of net income (loss) per share

2009

2008

76,14676,160Net assets per share are based on the number of shares of common stock outstanding at theyear end.
Net income (loss) per share is computed based on the net income (loss) attributable toshareholders of common stock and the weighted-average number of shares of common
stock outstanding during the year. Diluted amounts per share have not been presented forthe years ended March 31, 2009 and 2008 since neither the Company nor any of theconsolidated subsidiaries had any potentially dilutive shares at March 31, 2009 and 2008.

26