Consolidated Financial Statements
Asanuma Corporation
Years ended March 31, 2014 and 2013
with Independent Auditor’s ReportAsanuma Corporation
Consolidated Financial Statements
Years ended March 31, 2014 and 2013

Contents

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

Independent Auditor’s Report
The Board of Directors
Asanuma Corporation
We have audited the accompanying consolidated financial statements of Asanuma Corporationand its consolidated subsidiaries, which comprise the consolidated balance sheet as at March 31,
2014, and the consolidated statements of operations, comprehensive income, changes in net
assets, and cash flows for the year then ended and a summary of significant accounting policies
and other explanatory information, all expressed in Japanese yen.
Management’s Responsibility for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of these consolidated
financial statements in accordance with accounting principles generally accepted in Japan, andfor designing and operating such internal control as management determines is necessary toenable the preparation and fair presentation of the consolidated financial statements that are freefrom material misstatement, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on these consolidated financial statements based on
our audit. We conducted our audit in accordance with auditing standards generally accepted inJapan. Those standards require that we plan and perform the audit to obtain reasonableassurance about whether the consolidated financial statements are free from material
misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the consolidated financial statements. The procedures selected depend on theauditor’s judgment, including the assessment of the risks of material misstatement of theconsolidated financial statements, whether due to fraud or error. The purpose of an audit of theconsolidated financial statements is not to express an opinion on the effectiveness of the entity’s
internal control, but in making these risk assessments the auditor considers internal controls
relevant to the entity’s preparation and fair presentation of the consolidated financial statements
in order to design audit procedures that are appropriate in the circumstances. An audit also
includes evaluating the appropriateness of accounting policies used and the reasonableness ofaccounting estimates made by management, as well as evaluating the overall presentation of theconsolidated financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide abasis for our audit opinion.
OpinionIn our opinion, the consolidated financial statements referred to above present fairly, in allmaterial respects, the consolidated financial position of Asanuma Corporation and its
consolidated subsidiaries as at March 31, 2014, and their consolidated financial performance andcash flows for the year then ended in conformity with accounting principles generally accepted inJapan.
Convenience Translation
We have reviewed the translation of these consolidated financial statements into U.S. dollars,presented for the convenience of readers, and, in our opinion, the accompanying consolidated
financial statements have been properly translated on the basis described in Note 2.

June 26, 2014
Osaka, Japan1

Asanuma Corporation
Consolidated Balance Sheets
March 31, 2014 and 2013

Millions of yen
2013
2014
AssetsCurrent assets:
Cash and cash deposits (Notes 10 and 18)
Receivables:
Notes receivable (Notes 7 and 18)
Accounts receivable on completed construction
contracts (Note 18)
Other accounts receivable
Allowance for doubtful accounts¥ 32,943¥

28,905

Thousands of
U.S. dollars(Note 2)
2014$

320,084

3,506

1,806

34,065

46,993
1,860(242)
52,11745,897
3,766(336)
51,133456,597
18,072(2,351)
506,383

6,009
251
42
6,302

6,851
625
43
7,519

58,3852,439
408
61,232

Deferred income taxes (Note 11)
Other current assets
Total current assets

0386
91,7481968
88,52603,750
891,449

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

2,807
6,547
1,153
1,060
–
(5,455)
–
6,112

5,267
10,680870
1,063
3(8,378)72
9,577

27,274
63,612
11,203
10,299–(53,002)–59,386

6,528

6,535

63,428

91
340
424
2,178
(1,080)
8,481

86
366
444
2,758
(1,182)
9,007

884
3,304
4,120
21,162(10,494)
82,404¥ 106,341¥ 107,110$ 1,033,239

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 18)
Investments in an unconsolidated subsidiary andaffiliates (Note 18)
Long-term loans receivable (Note 10)
Intangible assets
Other assets
Allowance for doubtful accounts
Total investments and other assets

Total assets

2Millions of yen
2013
2014
Liabilities
Current liabilities:
Short-term bank loans (Notes 10 and 18)
Current portion of long-term debt (Notes 10 and 18)
Payables (Note 18):
Notes payable (Note 7)
Accounts payable on construction contracts
Other accounts payable
Advances received on uncompleted construction
contracts
Deposits received
Accrued expenses
Consumption taxes on advances received
Accrued income taxes (Note 11)
Consumption taxes payable
Deferred income taxes (Note 11)
Provision for compensation for completed
construction
Provision for bonuses
Provision for loss on construction contracts
Other current liabilities
Total current liabilities
Long-term liabilities:
Long-term debt (Notes 10 and 18)
Accrued retirement benefits for employees(Note 12)
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 13):
Common stock:
Authorized –293,565,000 shares
Issued–77,386,293 shares in 2014 and 2013
Capital surplus
Retained earnings (Deficit)
Less treasury stock, at cost
Total shareholders’ equity
Accumulated other comprehensive (loss) income:Net unrealized holding gain on securities (Note 9)
Retirement benefits liability adjustments
Total accumulated other comprehensive (loss) income
Minority interests
Total net assets
Total liabilities and net assets

Thousands of
U.S. dollars(Note 2)
2014

¥ 16,146
5,028¥ 20,701
1,695$

156,879
48,853

5,183
24,496
10,15339,832

5,961
22,6358,580
37,17650,359238,010
98,649387,018

10,919
3,335
1,553
1,961
183
315
6

10,908
1,436
2,390
1,795
102
219
7

106,092
32,40415,08919,054
1,778
3,061
59

970
159
1,749
1
82,157

826
–
1,623
3
78,881

9,425
1,545
16,994
9798,260

7,922

12,95076,972

–
5,482
1,320
978
15,70297,859

3,703
–
1,508
1,395
19,55698,437–53,265
12,825
9,503
152,565
950,825

8,419
970
(319)
(137)
8,933

8,419
970
(2,080)
(136)
7,173

81,801
9,425(3,099)(1,331)86,796

1,457(1,991)
(534)
83
8,482
¥106,341

1,429
－
1,429
71
8,673
¥107,110

14,157(19,345)(5,188)806
82,414$1,033,239

See accompanying notes to consolidated financial statements.
3

Asanuma Corporation
Consolidated Statements of Operations
Years ended March 31, 2014 and 2013

Millions of yen
2013
2014
Net sales (Note 22):
Completed construction contracts
Other¥ 134,547
1,764
136,311¥ 118,978
2,215
121,193$ 1,307,297
17,1401,324,437

128,340
1,492
129,832

117,082
1,899
118,9811,246,988
14,497
1,261,485

6,207
272
6,479

1,896
316
2,212

60,3092,643
62,952

5,076
1,403

6,065
(3,853)49,32013,632

295
46
(634)
(46)
1,005
–
(220)
–
–
(33)

323
56
(685)
(34)
846
(240)
(236)
213
472
(330)

2,866
447
(6,160)
(446)
9,765
–
(2,138)
–
–
(321)

1,816

(3,468)17,645

209
(166)
43
1,773
12
1,761

142
(210)
(68)
(3,400)20(3,420)2,032(1,613)419
17,226116
17,110

Cost of sales (Note 14):Completed construction contracts
Other
Gross profit:
Completed construction contracts
Other
Selling, general and administrative
expenses (Note 15)
Operating income (loss) (Note 22)
Other income (expenses):
Interest and dividends income
Foreign exchange gain, net
Interest expenses
Guarantee fees
Gain on sales of property, plant and equipment, net
Special retirement benefits
Loss on impairment of fixed assets (Notes 8 and 22)
Gain on sales of investments in securities
Gain on sales of investments in a subsidiary
Other, net
Income (loss) before income taxes and minority
interests
Income taxes (Note 11):
Current
DeferredIncome (loss) before minority interests
Minority interests
Net income (loss)

Thousands of
U.S. dollars(Note 2)
2014

¥

¥

$

See accompanying notes to consolidated financial statements.
4

Asanuma Corporation
Consolidated Statements of Comprehensive Income (loss)
Years ended March 31, 2014 and 2013

Income (loss) before minority interests
Other comprehensive income (Note 16):
Net unrealized holding gain on securities
Total other comprehensive income
Comprehensive income (loss)
Comprehensive income (loss) attributable to:Shareholders of the Company
Minority interests

Millions of yen
2013
2014
¥ 1,773¥ (3,400)

Thousands of
U.S. dollars(Note 2)
2014
$ 17,22628
28¥ 1,801757
757¥ (2,643)

272
272$ 17,498¥ 1,78912¥ (2,662)
19$ 17,382
116

See accompanying notes to consolidated financial statements.
5

Asanuma Corporation
Consolidated Statements of Changes in Net Assets
Years ended March 31, 2014 and 2013

Millions of yen

Balance at April 1, 2012
Net loss
Deficit disposition
Sales of treasury stock
Increase in treasury stock
Transfers of loss on sales oftreasury stock
Net change in items otherthan shareholders’ equity
Balance at April 1, 2013
Net income
Deficit disposition
Sales of treasury stock
Increase in treasury stock
Net change in items otherthan shareholders’ equity
Balance at March 31, 2014

Commonstock¥ 8,419––––

Capitalsurplus¥ 4,641–(3,671)0–

Retainedearnings(Deficit)¥ (2,331)(3,420)
3,671
–
–

–

0

0

–

–

–
¥ 8,419
–
–
–
–

–
970
–
–
–
–

–
¥ (2,080)
1,761
–
–
–

–
¥ (136)
–
–
0
(1)

–
7,173
1,761
–
0
(1)

–
970

–
¥ (319)–¥ (137)–¥ 8,419¥¥

Treasurystock at cost
¥ (136)
–
–
0
(0)

Total
shareholders’equity¥ 10,593(3,420)
–
0
(0)

¥

¥

–
8,933

Millions of yen

Balance at April 1, 2012
Net loss
Sales of treasury stock
Increase in treasury stock
Transfers of loss on sales oftreasury stock
Net change in items otherthan shareholders’ equity
Balance at April 1, 2013
Net income
Deficit disposition
Sales of treasury stock
Increase in treasury stock
Net change in items otherthan shareholders’ equity
Balance at March 31, 2014

Net
unrealized
holding gain
on securities
¥ 672
–
–
–

Retirement
benefits
liability
adjustments
¥
–
–
–
–

Total
accumulated
othercomprehensive
income¥ 672–––

Minority
interests
¥ 51
–
–
–

Total net
assets¥ 11,316
3,420
0
(0)

–

–

–

–

–

757
¥ 1,429
–
–
–
–

–
–
–
–
–
–

757
¥ 1,429
–
–
–
–

20
71
–
–
–
–

777
8,673
1761
–
0
(1)

28
¥ 1,457¥(1,991)¥ (1,991)¥(1963)
(534)

¥

¥

12
83

¥

¥

(1,950)8,482

See accompanying notes to consolidated financial statements.
6

Asanuma Corporation
Consolidated Statements of Changes in Net Assets
Years ended March 31, 2014 and 2013

Thousands of U.S. dollars (Note 2)

Balance at April 1, 2013
Net income
Sales of treasury stock
Increase in treasury stock
Net change in items otherthan shareholders’ equity
Balance at March 31, 2014

Balance at April 1, 2013
Net income
Sales of treasury stock
Increase in treasury stock
Net change in items otherthan shareholders’ equity
Balance at March 31, 2014

Commonstock

CapitalsurplusRetainedearnings(Deficit)

Treasurystock, at cost

Total
shareholders’equity$ 81,801–––$ 9,425–0–$ (20,209)
17,110––$ (1,321)–
0(10)$ 69,696
17,1100(10)–$ 81,801–$ 9,425$–(3,099)–$ (1,331)–$ 86,796

Net
unrealized
holding gain
on securities$ 13,885–––

Thousands of U.S. dollars (Note 2)
Total
accumulated
Retirement
other
benefits
comprehensive
liability
Minority
incomeadjustmentsinterests$0$ 13,885
$ 690
–
–
–
–
–
–
–
–
–

Total net
assets$ 84,271
17,1100(10)272$ 14,157(19,345)$ (19,345)(18,957)$ 82,414(19,073)$ (5,188)

116
$ 806

See accompanying notes to consolidated financial statements.
7

Asanuma Corporation
Consolidated Statements of Cash Flows
Years ended March 31, 2014 and 2013

Cash flows from operating activities:
Income (loss) before income taxes and minority interests
Adjustments for:
Depreciation and amortization
Loss on impairment of fixed assets
Increase in allowance for doubtful accounts
Increase (decrease) in provision for bonuses
Increase (decrease) in provision for loss on
construction contracts
Decrease in retirement benefits for employees
Increase in liability for retirement benefits
Interest and dividends income
Interest expenses
Foreign exchange gain, net
Gain on sales of investments in securities, net
Gain on sales of investments in a subsidiary
Gain on sales of property, plant and equipment, net(Increase) decrease in notes and accounts receivable oncompleted construction contracts
Decrease in inventories
Increase (decrease) in notes and accounts payable on
construction contracts
Increase (decrease) in other accounts payable
Increase 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, plant and equipment
Proceeds from sales of property, plant andequipment
Purchases of intangible assets
Purchases of investments in securities
Proceeds from sales of investments in securities
Loans receivable madeCollection of loans receivable
Proceeds from sales of a subsidiary’s stock resulting inchange in scope of consolidation (Note 21)
Other, net
Net cash provided by investing activities

Millions of yen
2013
2014

Thousands of
U.S. dollars(Note 2)2014

¥ 1,816¥ (3,468)

$

405
220
61
159

499
236
372
(6)

3,935
2,138
592
1,545

126
(3,703)
3,491
(295)
634
(46)
–
–
(1,005)

(648)
(408)
–
(323)
685
(56)
(209)
(472)
(846)

1,224
(35,979)
33,920(2,866)
6,160
(447)
–
–
(9,765)(2,797)1,206

14,3603,036(27,176)
11,718

1,083
1,590

(7,273)(6,800)10,523
15,449

11
3,784
6,740
291
(623)
(145)
6,263

1,868
(4,119)(3,572)
318
(687)
(226)
(4,167)

107
36,76565,4882,827(6,053)(1,409)60,853(837)(1,139)–(247)(8,132)(11,067)

5,114
(111)
(17)
30
–
30

2,102
(137)
(3)
754
(17)
82

49,689(1,078)
(165)
291
–
291

–
74
¥ 3,144628
27¥ 3,189–719
30,548$17,6458

Asanuma Corporation
Consolidated Statements of Cash Flows (continued)
Years ended March 31, 2014 and 2013

Millions of yen
2013
2014
Cash flows from financing activities:
Decrease in short-term bank loans, net
Proceeds from long-term debt
Repayment of long-term debt
Cash dividends paid
Repayments of lease obligations
Other, net
Net cash used in financing activities
Effect of exchange rate changes on cash and cash
equivalents
Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year

Thousands of
U.S. dollars(Note 2)2014

¥ (6,251)
–
–
(0)
(0)
(1)
(6,252)¥ (1,432)
7,156(4,415)
(0)
(12)
(0)
(1,297)$ (60,736)
–
–
(0)
(0)
(10)
60,74646
3,201
28,905¥ 32,10656
375
28,530¥ 28,905

447
31,102
280,849$ 311,951

See accompanying notes to consolidated financial statements.
9Asanuma Corporation
Notes to Consolidated Financial Statements
Years ended March 31, 2014 and 2013

1.

Basis of Preparation of Consolidated Financial Statements

The accompanying consolidated financial statements of Asanuma Corporation (the“Company”) and consolidated subsidiaries are prepared on the basis of accounting
principles generally accepted in Japan, which are different in certain respects as to theapplication and disclosure requirements of International Financial Reporting Standards,
and have been compiled from the consolidated financial statements prepared by theCompany as required by the Financial Instruments and Exchange Act of Japan.
In preparing the accompanying consolidated financial statements, certain reclassifications
and rearrangements have been made to the consolidated financial statements issued
domestically in order to present them in a format which is more familiar to readers outside
Japan.

2.

U.S. Dollar Amounts

The accompanying consolidated financial statements are stated in yen, the currency of thecountry in which the Company and its consolidated subsidiaries are incorporated andoperate. The translation of yen amounts into U.S. dollar amounts is included solely forthe convenience of readers outside Japan and has been made at ¥102.92 = U.S.$1.00, theexchange rate prevailing on March 31, 2014. This translation should not be construed asa representation that yen can be converted into U.S. dollars at the above or any other rate.

3.

Principles of Consolidation

At March 31, 2014 and 2013, the Company had 5 subsidiaries. The consolidated
financial statements for the years ended March 31, 2014 and 2013 include the accounts of
the Company and its 4 subsidiaries.
The Company applied the equity method to its investments in 3 affiliates, at March 31,
2014 and 2013 for the purpose of consolidated financial statements for the years thenended.
The accounts of the remaining subsidiary were not consolidated nor the equity method
applied because its assets, retained earnings (deficit), net sales and net income in theaggregate were not material to the consolidated financial statements.

10Asanuma Corporation
Notes to Consolidated Financial Statements (continued)

4.

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

11

Asanuma Corporation
Notes to Consolidated Financial Statements (continued)

4.

Summary of Significant Accounting Policies (continued)(f) Intangible assets (Other than leased assets)
Amortization of intangible assets is calculated by the straight-line method over theestimated useful lives of the respective assets.
Expenditures related to computer software developed for internal use are charged toincome when incurred, except if they are deemed to contribute to the generation ofincome or to future cost savings. Such expenditures are capitalized as intangible
assets and amortized over an estimated useful life of 5 years.
(g) Leases
Leased assets held under finance leases that transfer ownership are depreciated by thesame methods used for owned fixed assets. For finance leases that do not transfer
ownership, depreciation expense is calculated based on the straight-line method overthe leased period of the lease with a residual value of zero.

(h) Provision for compensation for completed construction
A provision for compensation for completed construction is provided for anticipatedfuture costs arising from warranties on completed construction based on the historical
data on the compensation cost.
(i) Provision for bonuses
A provision for bonuses is provided at the estimated amount of bonuses to be paid asallocated to the current fiscal year.
(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 theamount can be made at the fiscal year end.

12

Asanuma Corporation
Notes to Consolidated Financial Statements (continued)

4.

Summary of Significant Accounting Policies (continued)(k) Retirement benefits
Liability for retirement benefits for employees has been provided at an amountcalculated based on the retirement benefit obligation after the fair value of the pension
plan assets are deducted. Retirement benefit obligation is attributed to each periodby the straight-line method over the estimated years of service of the 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 in the year following the year inwhich the gain or loss is recognized by the straight-line method over a period of
principally 10 years, which is within the average remaining years of service of theeligible employees.
(l) Income taxes
Income taxes are calculated based on taxable income and charged to income on 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
likelihood of realization, the Company considers all currently available evidence for
future years, both positive and negative, supplemented by information regarding
historical results for 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.

13

Asanuma Corporation
Notes to Consolidated Financial Statements (continued)

4.

Summary of Significant Accounting Policies (continued)(n) Revenue recognition
The Company recognizes revenue by applying the percentage-of-completion method
for the construction projects for which the outcome of the construction activity isdeemed certain at the end of the reporting period. To estimate the progress of such
construction projects, the Company measures the percentage of completion bycomparing costs incurred to date with the most recent estimate of total costs required
to complete the project (cost to cost basis). For other construction projects where theoutcome cannot be reliably measured, the completed-contract method is applied.
Net sales related to construction contracts accounted for by the percentage-ofcompletion method totaled ¥129,136 million ($1,254,722 thousand) and ¥114,150
million for the years ended March 31, 2014 and 2013, respectively.
5.

Accounting Change
Accounting Standards for Retirement Benefits
Effective March 31, 2014, the Company and its domestic consolidated subsidiaries
adopted “Accounting Standard for Retirement Benefits” (Accounting Standards Boardof Japan (“ASBJ”) Statement No.26 issued on May 17, 2012) and “Guidance on
Accounting Standard for Retirement Benefits” (ASBJ Guidance No.25 issued on May
17, 2012), except provisions set forth in Paragraph 35 of ASBJ Statement No.26 andParagraph 67 of ASBJ Guidance No.25.
In accordance with the adoption, the retirement benefit obligations after the fair valueof the pension plan assets are deducted and actuarial gains and losses that have yet tobe recognized in profit or loss are recorded as “Liability for retirement benefits.”
The adoption of these standards follows transitional provisions set forth in Paragraph
37 of ASBJ Statement No.26, and the effect of this change is included in accumulated
other comprehensive (loss) income as “Retirement benefits liability adjustments.”
As a result, “Liability for retirement benefits” was recorded in the amount of ¥5,482
million ($53,265 thousand), and accumulated other comprehensive income decreasedby ¥1,991 million ($19,345 thousand) as of March 31, 2014 from the corresponding
amounts which would have been recorded under the previous method. Further
information regarding the impact on per share amounts can be found in Note 20.

14

Asanuma Corporation
Notes to Consolidated Financial Statements (continued)

6.

Accounting Standards Issued but Not Yet Effective

Accounting standards for retirement benefits
On May 17, 2012, the ASBJ issued “Accounting Standard for Retirement Benefits” (ASBJ
Statement No.26) and “Guidance on Accounting Standard for Retirement Benefits” (ASBJ
Guidance No.25), which replaced the Accounting Standard for Retirement Benefits that
had been issued by the Business Accounting Council in 1998 with an effective date ofApril 1, 2000 and the other related practical guidance, being followed by partial
amendments from time to time through 2009.
The standard provides guidance for the accounting for unrecognized actuarial differences
and unrecognized prior service costs, the calculation methods for retirement benefit
obligation and service costs, and enhancement of disclosures taking into consideration
improvements to financial reporting and international trends.
The revised accounting standard and guidance for the accounting for unrecognized actual
differences and unrecognized prior service costs and enhancement of disclosures wereadopted as of the end of the fiscal year ended March 31, 2014. However, revisions to thecalculation methods for the retirement benefit obligation and service costs are scheduled tobe adopted from the beginning of the fiscal year ending March 31, 2015. In addition, thestandard and guidance will not be applied retrospectively to the financial statements inprior years.
The Company and its domestic consolidated subsidiaries are currently evaluating theeffect of adopting these revised standards on its consolidated financial statements.

7.

Notes Receivable and Notes Payable

The balance sheet date for the year ended March 31, 2013 fell on a bank holiday.
Consequently, notes receivable of ¥282 million with due dates of March 31, 2013 wasincluded in the balances in the consolidated balance sheet at March 31, 2013 and wassettled on the next business day. In addition, notes payable of ¥102 million with a due
date of March 31, 2013 was included in the balance in the consolidated balance sheet atMarch 31, 2013 and was settled on the next business day.

15

Asanuma Corporation
Notes to Consolidated Financial Statements (continued)

8.

Loss on Impairment of Fixed Assets

Aggregate losses on impairment of fixed assets of ¥220 million ($2,138 thousand) and¥236 million were recorded for the years ended March 31, 2014 and 2013, respectively.
Losses on impairment corresponding to land and buildings for the years ended March 31,
2014 and 2013 are outlined follows:

Location
ShizuokaPrefecture
and other
Hiroshima
Prefecture
and other
Hokkaido
Prefecture
and other
Wakayama
Prefecture
and otherMain use

Millions of yen
2014

Welfare facilities

Buildings
and land¥ 97

Idle properties

Buildings
and land75

729

Leasing

Buildings

48

466

Investment

Land

0
¥ 220

0
$ 2,138

Location
Hokkaido
Prefecture
Nara
Prefecture
and other
Mie
PrefectureClass

Thousands of
U.S. dollars
2014

Main use

Class

$

943

Millions of yen
2013

Leasing

Buildings
and land¥ 217

Idle properties

Buildings
and land

19

Investment

Land

0
¥ 236

The Company and its consolidated subsidiaries, in principle, group their fixed assets for
operating purposes at each office but group their fixed assets for leasing purposes and idle
properties individually. The affiliates group their fixed assets at each company. Due toa decline in market price of real estate during the years ended March 31, 2014 and 2013,
the Company and its consolidated subsidiaries have reduced the carrying value of assets
outlined above to their respective estimated recoverable amount.
The estimated recoverable amounts of the fixed assets for leasing purposes and idle
properties have been measured at their estimated net selling prices based on the figures
presented by government authorities and others.

16

Asanuma Corporation
Notes to Consolidated Financial Statements (continued)

9.

Investments in Securities

At March 31, 2014 and 2013, marketable securities classified as held-to-maturity debt
securities were as follows:
Millions of yen
Carryingvalue
Held-to-maturity debt
securities whose
estimated fair value
exceeds their carrying
value:
Government andmunicipal bonds

¥ 15
¥ 15

2014
Estimated Unrealized
fair value
gain

¥ 15
¥ 15

¥ 0
¥ 0

Carrying
value

2013
Estimated
fair value

Unrealized
gain

¥ 30
¥ 30

¥ 30
¥ 30

¥0
¥0

Thousands of U.S. dollars
2014
Carrying Estimated Unrealizedvalue
fair value
gain
Held-to-maturity debt
securities whose
estimated fair value
exceeds their carrying
value:
Government andmunicipal bonds

$ 146
$ 146

$ 146
$ 146

$ 0
$ 0

17

Asanuma Corporation
Notes to Consolidated Financial Statements (continued)

9.

Investments in Securities (continued)

At March 31, 2014 and 2013, marketable securities classified as other securities were as
follows:
Millions of yen

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

Acquisition
costs

2014
Carrying
value

Unrealized
gain (loss)

Acquisition
costs

2013
Carrying
value

Unrealized
gain (loss)¥ 3,573¥ 5,706¥ 2,133¥ 3,253¥ 5,403¥ 2,15028¥ 3,60125¥ 5,731(3)¥ 2,130346¥ 3,599321¥ 5,724(25)¥ 2,125

Thousands of U.S. dollars
2014
Acquisition
Carrying
Unrealized
costs
value
gain (loss)
Other securities whosecarrying value exceeds
their acquisition costs:
Equity securities
Other securities whosecarrying value does notexceed their acquisition
costs:
Equity securities$ 34,716$ 55,441$ 20,725

272$ 34,988

243$ 55,684(29）$ 20,696

Refer to Note 18 for the redemption schedule at March 31, 2014 for held-to-maturity debt
securities.
For the year ended March 31, 2013, the Company has recognized loss on impairment ofequity securities classified as other securities of ¥18 million.
The Company recognizes loss on impairment of marketable securities classified as othersecurities if the market value of a security at year end declines by more than 30%
compared with its carrying value.

18

Asanuma Corporation
Notes to Consolidated Financial Statements (continued)

9.

Investments in Securities (continued)

Proceeds from and realized gain (loss) on sales of other securities for the year ended
March 31, 2013 are summarized as follows:
Millions of yen
2013
Proceeds
Realized gain
Realized loss

¥ 754
213
(4)

There were no proceeds from or realized gain (loss) on sales of other securities for theyear ended March 31, 2014.

19

Asanuma Corporation
Notes to Consolidated Financial Statements (continued)

10. Short-Term Bank Loans and Long-Term Debt
Short-term bank loans from banks had average interest rates of 1.96% at March 31, 2014
and 1.97% at March 31, 2013.
Long-term debt at March 31, 2014 and 2013 is summarized as follows:
Millions of yen
2013
2014
Unsecured loans from banks, payable inyen, at rates ranging from 2.44% to 3.56%
Secured loans from insurance companies,
payable in yen at rates ranging from
1.53% to 2.56%
Total
Less current portion included¥

75

12,875
12,950(5,028)¥ 7,922¥82

14,563
14,645(1,695)¥ 12,950

Thousands of
U.S. dollars
2014
$

738

125,087
125,825(48,853)$ 76,972

The aggregate annual maturities of long-term debt subsequent to March 31, 2014 aresummarized as follows:
Years ending March 31,
2015
2016
2017
2018 and thereafter

Millions of yen¥ 5,028
1,710
1,053
5,159
¥ 12,950

Thousands of
U.S. dollars$ 48,853
16,615
10,231
50,126$ 125,825

Assets pledged at March 31, 2014 and 2013 as collateral for loans of the Company aresummarized as follows:

Cash and cash deposits
Buildings and structures
Land
Investments in securities

Millions of yen
2014
2013
¥ 837
¥
438
1,734
3,349
2,479
4,013
4,935
4,871
¥ 9,985¥ 12,671

Thousands of
U.S. dollars
2014$ 8,133
16,84824,08647,950$ 97,017

All assets of the consolidated subsidiaries engaged in the PFI business were pledged ascollateral for their loans under the project finance agreements. Assets pledged at March
31, 2014 amounted to ¥10,293 million ($100,010 thousand) as collateral for loans of¥9,539 million ($92,684 thousand).

20

Asanuma Corporation
Notes to Consolidated Financial Statements (continued)

10. Short-Term Bank Loans and Long-Term Debt (continued)
Assets pledged at March 31, 2014 and 2013 as collateral for loans of affiliates engaged in
the PFI business are summarized as follows:

Investments in securities
Long-term loans receivable

Millions of yen
2013
2014
¥ 68
¥
63
136
130
¥ 198
¥ 199

Thousands of
U.S. dollars
2014
$ 661
1,263
$ 1,924

In order to achieve more efficient financing, the Company has concluded line-of-credit
agreements with certain financial institutions. The status of these lines of credit at March
31, 2014 and 2013 was as follows:

Lines of credit
Credit utilized
Available credit

Millions of yen
2014
2013
¥ 5,000¥ 5,000–—¥ 5,000¥ 5,000

Thousands of
U.S. dollars
2014$ 48,581–$ 48,581

11. Income Taxes
Income taxes applicable to the Company and its consolidated subsidiaries comprise
corporation, inhabitants’ and enterprise taxes which, in the aggregate, resulted in statutorya tax rate of approximately 38.3% for the years ended March 31, 2014 and 2013.
A reconciliation of the statutory tax rate and the effective tax rates for the years ended
March 31, 2014 and 2013 as a percentage of income (loss) before income taxes andminority interests is summarized as follows:

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
Unrecognized deferred income taxes relating toexcess of cost over equity in net assets ofsubsidiaries and other
Other
Effective tax rates

2014
38.3 %
5.2
(0.7)
7.5
(1.0)
(46.9)

2013
38.3 %
(1.9)
0.5
(3.8)
–
(31.5)

(0.5)
0.5
2.4 %

0.1
0.3
2.0 %

21

Asanuma Corporation
Notes to Consolidated Financial Statements (continued)

11. Income Taxes (continued)
The significant components of deferred tax assets and liabilities of the Company and its
consolidated subsidiaries at March 31, 2014 and 2013 are summarized as follows:
Millions of yen
2013
2014
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
Liability for retirement benefits
Assets transferred to defined
contribution pension plans
Loss on impairment of fixed assets
Loss on revaluation of investments insecurities
Tax loss carryforwards
Other
Gross deferred tax assets
Less valuation allowance
Total deferred tax assets
Deferred tax liabilities:
Unrealized holding gain on securities
Deferred capital gains on property
Other
Total deferred tax liabilities
Net deferred tax liabilities

¥

412
63

¥

549
–

Thousands of
U.S. dollars
2014
$

4,003
612

349
81

316
93

3,391
787

628

621

6,102

–
1,966

1,321
–

–
19,102

395
1,207

574
1,327

3,838
11,728

112
3,853
732
9,798
(9,798)
0

112
4,339
1,024
10,276(10,275)
1

1,088
37,437
7,112
95,200(95,200)
–

(677)
(648)
(1)
(1,326)¥ (1,326)

(699)
(814)
(2)
(1,515)¥ (1,514)(6,578)(6,296)(10)(12,884)$ (12,884)

The “Act for Partial Amendment of the Income Tax Act, etc.” (Act No. 10 of 2014) was
promulgated on March 31, 2014 and, as a result, the Company is no longer subject to theSpecial Reconstruction Corporation Tax effective for fiscal years beginning on or after
April 1, 2014.
In line with these revisions, the Company changed the statutory tax rate to calculatedeferred tax assets and liabilities from 38.3% to 35.9% for temporary differences expected
to be realized from April 1, 2014.
As a result of this change, net deferred tax liabilities (after netting deferred tax assets)
decreased by ¥0 million ($0 thousand), and income taxes – deferred decreased by ¥0
million ($0 thousand) as of and for the year ended March 31, 2014, respectively.

22

Asanuma Corporation
Notes to Consolidated Financial Statements (continued)

12. Retirement Benefits
1. Outline of retirement benefits for employees
The Company and its certain consolidated subsidiary have defined benefit pension planscovering substantially all employees who are entitled to lump-sum or pension 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 certain consolidated subsidiary pay
additional retirement benefits under certain conditions. In addition, the Company
transferred a certain portion of defined benefit plans to a defined contribution plan on
October 1, 2010.

2.

Defined benefit plans for the year ended March 31, 2014
(1) The change in retirement benefit obligation is outlined as follows:

Retirement benefit obligation at April 1, 2013
Service cost
Interest cost
Actuarial loss
Benefit paid
Retirement benefit obligation at March 31, 2014

Thousands of
U.S. dollars
Millions of yen
2014¥ 12,593$ 122,357
373
3,624
127
1,234
103
1,001
(1,160)(11,271)¥ 12,036$ 116,945(2) The change in plan assets at fair value is outlined as follows:

Plan assets at fair value at April 1, 2013
Expected return on plan assets
Actuarial gainContributions by the employer
Benefit paid
Plan assets at fair value at March 31, 2014

Thousands ofMillions of yen
U.S. dollars
2014¥ 6,727$ 65,361
134
1,302
152
1,477
280
2,721
(739)
(7,180)¥ 6,554$ 63,681

23

Asanuma Corporation
Notes to Consolidated Financial Statements (continued)

12. Retirement Benefits (continued)
2.

Defined benefit plans for the year ended March 31, 2014 (continued)(3) The balance of retirement benefit obligation and plan assets at fair value, liability
for retirement benefits recognized in consolidated balance sheet are outlined asfollows:

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

Thousands of
U.S. dollars
Millions of yen
2014¥ 7,454$ 72,425(63,671)(6,553)
901
8,754
4,581
44,511¥ 5,482$ 53,265(4) The components of retirement benefit expenses for the year ended March 31,
2014 are outlined as follows:

Service cost
Interest cost
Expected return on plan assets
Amortization of actuarial loss
Retirement benefit expenses

Thousands ofMillions of yen
U.S. dollars
2014
¥ 373
$ 3,624
127
1,234
(135)
(1,311)
1,195
123
¥ 488
$ 4,74224

Asanuma Corporation
Notes to Consolidated Financial Statements (continued)

12. Retirement Benefits (continued)
2.

Defined benefit plans for the year ended March 31, 2014 (continued)(5) The balance of actuarial loss recognized in accumulated other comprehensive(loss) income (before tax effect) is outlined as follows:

Unrecognized actuarial loss

Thousands of
U.S. dollars
Millions of yen
2014¥ (1,991)$ (19,345)(6) The plan assets by major category consist of the following:

Bonds
Equities
Cash and deposits
Other
Total

2014
68%
23%
9%
0%
100.0%The expected long-term rate of return on plan assets is determined as a result of aconsideration of both the portfolio allocation at present and in the future, and thelong-term expected rate of return from multiple plan assets at present and in the
future.
(7) The assumptions used in accounting for the defined benefit plans for the year
ended March 31, 2014 are as follows:

Discount rate
Expected long-term rate of return on plan assets
3.

2014
1.0%
2.0%

Defined contribution pension plans for the year ended March 31, 2014

Contributions to defined contribution pension plans

Thousands of
U.S. dollars
Millions of yen
2014
¥ 170
$ 1,65225

Asanuma Corporation
Notes to Consolidated Financial Statements (continued)

12. Retirement Benefits (continued)
4.

Accrued retirement benefits for employees for the year ended March 31, 2013

The following table sets forth the funded and accrued status and the amounts recognized in
the accompanying consolidated balance sheet at March 31, 2013 for the Company’s and its
consolidated subsidiaries’ defined benefit pension plans:

Retirement benefit obligation
Plan assets at fair value
Unfunded retirement benefit obligation
Unrecognized actuarial loss
Accrued retirement benefits for employees

Millions of yen
2013¥ (12,593)
6,727(5,866)2,163¥ (3,703)

The components of retirement benefit expenses for the year ended March 31, 2013 areoutlined as follows:

Service cost
Interest cost
Expected return on plan assets
Amortization of actuarial loss
Contributions to defined contribution pension plans
Retirement benefit expenses

Millions of yen
2013
¥ 431
139
(134)
427
192
¥ 1,055

In addition, the Company recorded special retirement benefits of ¥240 million in theaccompanying consolidated statement of operations for the year ended March 31, 2013,
which includes ¥198 million of early retirement premium expenses.
The assumptions used in accounting for the defined benefit plans for the year ended March
31, 2013 are as follows:

Discount rate (*)
Expected rate of return on plan assets

2013
1.0%
2.0%

(*) As a result of reviewing the appropriateness of discount rate, it was determined thatthe movement of the discount rate has a significant impact on the projected benefit
obligation. Therefore, the discount rate as at March 31, 2013 has been changed to
1.0%, while the discount rate as at April 1, 2012 was 2.0%.

26

Asanuma Corporation
Notes to Consolidated Financial Statements (continued)

13. Shareholders’ Equity
The Companies Act (the “Act”) provides that an amount equal to 10% of the amount to be
disbursed as distributions of capital surplus (other than the capital reserve) and retained
earnings (other than the legal reserve) be transferred to the capital reserve and the legal
reserve, respectively, until the sum of the capital reserve and the legal reserve equals 25%of the capital stock account. Such distributions can be made at any time by resolution of
the shareholders, or by the Board of Directors if certain conditions are met.
The Company’s legal reserve included in retained earnings amounted to ¥970 million($9,425 thousand) at March 31, 2014 and 2013.
Under the Act, upon the issuance and s0ale 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.
Movements in shares of common stock in issue and treasury stock during the years ended
March 31, 2014 and 2013 are summarized as follows:

April 1, 2013
Shares ofcommon stockin issue
Treasury stock

77,386,293
1,279,903

April 1, 2012
Shares ofcommon stockin issue
Treasury stock

77,386,293
1,276,525

Number of shares
2014
Increase
Decrease

–
8,532

–
860

Number of shares
2013
Increase
Decrease

–
6,219

–
2,841

March 31, 2014

77,386,293
1,287,575

March 31, 2013

77,386,293
1,279,903

The increases of treasury stock were due to purchases of shares of less than one voting
unit and the decreases of treasury stock were due to sales of shares at requests ofshareholders owning less than one voting unit for the years ended March 31, 2014 and
2013.

27

Asanuma Corporation
Notes to Consolidated Financial Statements (continued)

14. Provision for Loss on Construction Contracts
Provision for loss on construction contracts included in cost of sales for the years ended
March 31, 2014 and 2013 amounted to ¥1,749 million ($16,994 thousand) and ¥1,623
million, respectively.

15. Research and Development Costs
Research and development costs included in selling, general and administrative expenses
for the years ended March 31, 2014 and 2013 amounted to ¥129 million ($1,253 thousand)and ¥126 million, respectively.

16. Other Comprehensive Income
The following table presents reclassification adjustments and tax effects allocated tocomponents of other comprehensive income for the years ended March 31, 2014 and2013:
Millions of yen
2013
2014
Unrealized holding gain on investments
in securities:
Gains arising during the year
Reclassification adjustments for gain
realized in the statement of operations
Before tax effectTax effectUnrealized holding gain on investments
in securities, net
Total other comprehensive income

Thousands of
U.S. dollars

2014

¥ 6

¥ 1,345

$ 58

–
6
22

(204)
1,141
(384)

–
58
214

28
¥ 28

757
757

272
$ 272

¥

17. Leases
Future minimum lease payments subsequent to March 31, 2014 for finance leases
accounted for as operating leases are summarized as follows:

Years ending March 31,
20152016 and thereafter

Millions of yen

Thousands of U.S.
dollars

¥ 320
117
¥ 437

$ 3,109
1,137$ 4,246
28

Asanuma Corporation
Notes to Consolidated Financial Statements (continued)

18. Financial Instruments(1) Policy for financial instruments
The Company and its consolidated subsidiaries manage their funds by investing onlyin short-term deposits, and primarily raise funds by borrowings from banks. 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 and accounts receivable on completed construction contracts are subject to thecredit risk of customers. Regarding this risk, the Company and its consolidated
subsidiaries monitor due dates and outstanding balances by individual customer, andthe credit worthiness of their main customers regularly.
For investments in securities, the Company and consolidated subsidiaries review thefair values of such financial instruments every quarter.
Notes and accounts payable on construction contracts are operating obligations andmostly are payable within one year.
Short-term bank loans and long-term debt are mainly utilized for business operations.
Long-term debt with variable interest rates is exposed to interest rate fluctuation risk.
However, to reduce such risk and fix interest expense for a certain long-term debt
bearing interest at variable rates, the Company utilizes interest rate swaps as ahedging instrument. In addition, the Company has established internal policies
which include procedures and authorization processes governing derivatives andcomplies fully with these guidelines.
(3) Supplementary explanation of the market value of financial instruments
The market value of financial instruments is based on the market price, and when no
market price exists, a rationally calculated amount is used. These calculations
include variable factors, so the resulting amount may change if different underlying
assumptions are applied.

29

Asanuma Corporation
Notes to Consolidated Financial Statements (continued)

18. Financial Instruments (continued)
The carrying value, estimated fair value and resulting differences as of March 31, 2014
and 2013 are as follows. Financial instruments for which fair value is deemed extremely
difficult to determine are not included.
Millions of yen
2014

Cash and cash deposits
Notes and accounts receivable oncompleted construction contracts
Investments in securities
Total assets
Short-term bank loans
Notes and accounts payable on
construction contracts
Other accounts payable
Long-term debt
Total liabilities
Derivatives transactions

Carrying value¥ 32,943

Estimated fairvalue
¥ 32,943

Difference¥ –50,4995,747¥ 89,189

51,0095,747¥ 89,699

510
0
¥ 510

¥ 21,174¥ 21,174¥

29,67910,153
7,922¥ 68,928–

29,67910,1538,204¥ 69,210
–

–
–
282
¥282

–

–

Millions of yen
2013

Cash and cash deposits
Notes and accounts receivable oncompleted construction contracts
Investments in securities
Total assets
Short-term bank loans
Notes and accounts payable on
construction contracts
Other accounts payable
Long-term debt
Total liabilities
Derivatives transactions

Carrying value¥ 28,905

Estimated fairvalue
¥ 28,905

Difference¥ –47,702
5,754¥ 82,361

48,3605,754¥ 83,019

658
0
¥ 658

¥ 22,396¥ 22,396

¥

28596
8,580
12,950¥ 72,522–

28,596
8,580
13,282¥ 72,854
–

–
–
332
¥ 332
–

–

30

Asanuma Corporation
Notes to Consolidated Financial Statements (continued)

18. Financial Instruments (continued)
Thousands of U.S. dollars
2014
Carrying value

Estimated fairvalue

Cash and cash deposits
Notes and accounts receivable oncompleted construction contracts
Investments in securities
Total assets$ 320,084$ 320,084$

490,662
55,839$ 866,585

495,61755,839$ 871,540

4,955
0$ 4,955

Short-term bank loans
Notes and accounts payable on
construction contracts
Other accounts payable
Long-term debt
Total liabilities
Derivatives transactions$ 205,732$ 205,732$

288,369
98,64976,972$ 669,722–

288,369
98,64979,712$ 672,462
–

–
–
2,740
$ 2,740–

Difference––

Methods to determine the estimated fair value of financial instruments and other mattersrelated to securities and derivative transactions:
Cash and cash deposits
Since these items are settled in a short period of time, their carrying values approximate
the fair value.
Notes and accounts receivable on completed construction contracts
For the valuation of notes and accounts receivable on completed construction contracts,
the Company and its consolidated subsidiaries use the present value based on assumptions
such as the collection term of each receivable and discount rates reflected in each credit
risk.
Investments in securities
The estimated fair values of equity securities are based on quoted market prices. The
estimated fair value of debt securities are based on the price provided by the financial
institutions making markets in these securities.
Notes and accounts payable on construction contracts, other accounts payable andshort-term bank loans
Since these items are settled in a short period of time, their carrying values approximate
the fair value.

31

Asanuma Corporation
Notes to Consolidated Financial Statements (continued)

18. Financial Instruments (continued)
Long-term debt
The estimated fair values of long-term debt are based on present value of the total amountincluding principal and interest, discounted by the expected interest rate in the case of new
borrowings of the same loan as in the amount of the balance as of the end of the period.
Floating interest rates for long-term loans were hedged by interest-rate swap agreements
and accounted for as loans with fixed interest rates. The estimated fair value of thoselong-term loans is reasonably based on the present value of the total of principals, interests
and net cash flows of swap agreements discounted by the interest rates, estimatedreasonably, applicable to loans made under similar circumstances.
Derivatives transactions
Refer to the Note 19 for fair value information at March 31, 2014 and 2013 of derivativetransactions.
Financial instruments for which it is extremely difficult to determine the fair value:
Unlisted equity securities of ¥873 million ($8,482 thousand) and ¥867 million reflected in
the consolidated balance sheets at March 31, 2014 and 2013, respectively, are basedneither on market value nor estimated future cash flow, and it is difficult to determine theestimated fair value. Therefore, they are not included in the above table.
The redemption schedule for cash deposits, receivables and marketable securities withmaturity dates at March 31, 2014 is summarized as follows:

Cash deposits
Notes and accounts receivable oncompleted construction contracts
Investments in securities
Held-to-maturity debt securities
Total assets

Cash deposits
Notes and accounts receivable oncompleted construction contracts
Investments in securities
Held-to-maturity debt securities
Total assets

Within 1 year
¥ 32,589

Millions of yen
Over 1 year
within 5 years¥–

Over 5 years¥–

42,554

4,929

3,016

–
¥ 75,143–¥ 4,92915¥ 3,031

Thousands of U.S. dollars
Over 1 year
Over 5 years
Within 1 year
within 5 years$ 316,644$–$–
413,467

47,892

29,304–$ 730,111–$ 47,892

146$ 29,45032

Asanuma Corporation
Notes to Consolidated Financial Statements (continued)

18. Financial Instruments (continued)
The redemption schedule for short term bank loans, long-term debt and lease obligationsat March 31, 2014.

Within 1
year
Short-term bank loans
Long-term debt
Lease obligations
Total¥ 21,174–0¥ 21,174

Within 1
year
Short-term bank loans
Long-term debt
Lease obligations
Total

Over 1 year
within 2years$ 205,732–0$ 205,732

¥

–
1,710
0
¥ 1,710

Millions of yen
Over 2 year Over 3 year
within 3
within 4
years
years
–
1,053
0
¥ 1,053–
1,047
0¥ 1,047

¥

¥

–
3,025
0
¥ 3,025

Over 1 year
within 2
years

Thousands of U.S. dollars
Over 2 year Over 3 year
within 3
within 4
years
years

Over 4 year
within 5
years

Over 5
years

$

$

$

$

–
10,2310$ 10,231¥

Over 5
years

–
1,087
0
¥ 1,087–
16,6150$ 16,615¥

Over 4 year
within 5
years

$

–
10,1730$ 10,173–
10,5620$ 10,562–
29,3910$ 29,391

33

Asanuma Corporation
Notes to Consolidated Financial Statements (continued)

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

Method of hedge
accounting
Swap rate applied
to underlying
debt

Method of hedge
accounting
Swap rate applied
to underlying
debt

Transaction
Interest rate swap:
Receive / floating
and pay / fixed
Total

Transaction
Interest rate swap:
Receive / floating
and pay / fixed
Total

Millions of yen
2014(Including portion in
Notional amount excess of one year)¥ 3,696¥ 3,696¥ 2,957¥ 2,957

Millions of yen
2013(Including portion in
Notional amount excess of one year)¥ 4,436¥ 4,436¥ 3,697¥ 3,697

Estimated
fair value

(*)
(*)

Estimated
fair value

(*)
(*)

Thousands of U.S. dollars
Method of hedge
accounting
Swap rate applied
to underlying
debt

Transaction
Interest rate swap:
Receive / floating
and pay / fixed
Total

2014
(Including portion in
Notional amount excess of one year)$ 35,921$ 35,921$ 28,731$ 28,731

Estimated
fair value

(*)
(*)

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

34

Asanuma Corporation
Notes to Consolidated Financial Statements (continued)

20. Amounts per Share
Amounts per share at March 31, 2014 and 2013 and for the years then ended were as
follows:

2014

2013

U.S. dollars
2014¥ 110.36
23.13¥ 113.03(44.92)$ 1.070.22

Yen
Net assets
Net income (loss)

Information used in the computation of net income (loss) per share for the years ended
March 31, 2014 and 2013 is presented as follows:
Thousands of
U.S. dollars
2014

Millions of yen
2013
2014
Net income (loss)
Net income (loss) not applicable tocommon shareholders
Net income (loss) used in the calculationof net income (loss) per share¥ 1,761¥ (3,420)$ 17,110–––¥ 1,761¥ (3,420)$ 17,110

Thousands of shares
2013
2014
Weighted-average number of shares ofcommon stock used in
the calculation of net income per share

76,103

76,107

Net 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 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, 2014 and 2013 since neither the Company nor any of theconsolidated subsidiaries had any potentially dilutive shares at March 31, 2014 and 2013.
As described in Note 5 concerning the application of the Accounting Standard for
Retirement Benefits, based on the provisional treatment set out in Clause 37 of thestandard, the effects of such changes in the year ended March 31, 2014 have beenrecorded in retirement benefits liability adjustments through accumulated othercomprehension income (loss). As a result, net assets per share decreased by ¥26.17($0.25).

35

Asanuma Corporation
Notes to Consolidated Financial Statements (continued)

21. Supplementary Cash Flow Information
In February 2013, the assets and liabilities of Nara Manyo Country Club were excluded
from consolidation due to the sale of its shares. The following table summarizes theassets and liabilities excluded from consolidation and the proceeds from the sale of sharesfor the year ended March 31, 2013:
Millions of yen
2013
Current assets
Property, plant and equipment, net andinvestments and other assets
Current liabilities
Long-term liabilities
Gain on sales of investments of securities
Gross proceeds from sale of shares
Cash and equivalents
Net proceeds from sale of shares

¥

86

1,557
(77)
(1,340)
472
698
(70)
¥ 628

22. Segment Informationa.

Segment Information(1) Overview of reporting segments
The reporting segments of the Company and its consolidated subsidiaries arecomponents for which discrete financial information is available and whose operating
results are regularly reviewed by the Company’s Board of Directors to make decisions
about resource allocation and assess their performance.
The Company and its consolidated subsidiaries mainly operate in the construction
business and have two reporting segments, which are the Building Construction
Segment and the Civil Engineering Segment.

36

Asanuma Corporation
Notes to Consolidated Financial Statements (continued)

22. Segment Information (continued)(2) Method of calculating sales and income in reporting segments
The method of accounting for reporting segments is, in principle, the same as stated in
Note 4 “Summary of Significant Accounting Policies.” The income (loss) ofreporting segments are calculated on the basis of operating income. Intersegment
sales are recorded based on current market prices.
Millions of yen
2014

Net sales and income:Sales to third parties
Intersegment sales
Net sales
Segment income

Reporting Segments
Building
Civil
Total
Construction Engineering

Others

Sub total¥ 112,389
5
112,394¥ 4,474¥ 1,764
127
1,891
¥ 199

¥ 136,311
132
136,443¥ 6,364¥ 22,158–
22,158¥ 1,691¥ 134,547
5
134,552¥ 6,165

Adjustments
¥

Total

–
(132)
(132)
¥ (4,961)¥136,311–
136,311¥ 1,403

Total

Millions of yen
2013

Net sales and income:Sales to third parties
Intersegment sales
Net sales
Segment income (loss)

Reporting Segments
Building
Civil
Total
Construction Engineering

Others

Sub total

Adjustments¥ 98,859
7
98,866¥743¥ 2,215
113
2,328
¥
93

¥ 121,193
120
121,313¥ 1,953¥¥ 20,119–
20,119¥ 1,117¥ 118,978
7
118,985¥ 1,860

–
(120)
(120)
¥ (5,806)¥ 121,193–
121,193¥ (3,853)

Adjustments

Total

Thousands of U.S. dollars
2014
Reporting Segments
Building
Civil
Construction Engineering
Net sales and income (loss):
Sales to third parties
Intersegment sales$ 1,092,004
49$ 215,293–$1,307,297
49

1,092,053

215,293

1,307,346

43,471$ 16,430$

Net sales
Segment income

Total

$

59,901Others

Sub total$ 17,140 $ 1,324,437
1,234
1,283

$

–
(1,283)$ 1,324,437–
1,324,437

18,374

1,325,720(1,283)$ 1,934 $

61,835$ (48,203)

37$

13,632

Asanuma Corporation
Notes to Consolidated Financial Statements (continued)

22. 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, 2014
and 2013 has been omitted as the Company classifies such information in the same way as
it does its reporting segments.
(2) Information by geographical segment
Disclosure of sales and property, plant and equipment by geographical area for the years
ended and as of March 31, 2014 and 2013 has been omitted as sales to domestic customers
were in excess of 90% of consolidated net sales, and the balance of property, plant andequipment in Japan was in excess of 90% of consolidated property, plant and equipment.
(3) Information by major customers
Disclosure of information by major customers for years ended March 31, 2014 and 2013
has been omitted as sales to each customer were less than 10% of consolidated net sales.
c.

Loss on impairment of fixed assets by reporting segment
Millions of yen
2014
Reporting Segments

Loss on impairmentof fixed assets

Building
Construction

Civil
Engineering

Total

¥–

¥–

¥–

Other

Elimination
andcorporate

Total

¥ 32

¥ 188

¥ 220

Total

Millions of yen
2013
Reporting Segments

Loss on impairmentof fixed assets

Building
Construction

Civil
Engineering

Total

Other

Elimination
andcorporate

¥–

¥–

¥–

¥ 217

¥ 19

¥ 236

Total
$ 2,138

Thousands of U.S. dollars
2014
Reporting Segments

Loss on impairmentof fixed assets

Building
Construction

Civil
Engineering

Total

Other

Elimination
andcorporate

$–

$–

$–

$ 311

$ 1,82738