Consolidated Financial Statements
Asanuma Corporation
Year ended March 31, 2019with Independent Auditor’s ReportAsanuma Corporation
Consolidated Financial Statements
Year ended March 31, 2019

Contents

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

Independent Auditor’s Report
The Board of Directors
Asanuma Corporation
We have audited the accompanying consolidated financial statements of Asanuma Corporationand its consolidated subsidiaries, which comprise the consolidated balance sheet as at March 31,
2019, and the consolidated statements of income, comprehensive income, changes in net assets,
and cash flows for the year then ended and a summary of significant accounting policies andother explanatory information, all expressed in Japanese yen.
Management’s Responsibility for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of these consolidated
financial statements in accordance with accounting principles generally accepted in Japan, andfor designing and operating such internal control as management determines is necessary toenable the preparation and fair presentation of the consolidated financial statements that are freefrom material misstatement, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on these consolidated financial statements based on
our audit. We conducted our audit in accordance with auditing standards generally accepted inJapan. Those standards require that we plan and perform the audit to obtain reasonableassurance about whether the consolidated financial statements are free from material
misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the consolidated financial statements. The procedures selected depend on theauditor’s judgment, including the assessment of the risks of material misstatement of theconsolidated financial statements, whether due to fraud or error. The purpose of an audit of theconsolidated financial statements is not to express an opinion on the effectiveness of the entity’s
internal control, but in making these risk assessments the auditor considers internal controls
relevant to the entity’s preparation and fair presentation of the consolidated financial statements
in order to design audit procedures that are appropriate in the circumstances. An audit also
includes evaluating the appropriateness of accounting policies used and the reasonableness ofaccounting estimates made by management, as well as evaluating the overall presentation of theconsolidated financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide abasis for our audit opinion.
OpinionIn our opinion, the consolidated financial statements referred to above present fairly, in allmaterial respects, the consolidated financial position of Asanuma Corporation and its
consolidated subsidiaries as at March 31, 2019, and their consolidated financial performanceand cash flows for the year then ended in conformity with accounting principles generally
accepted in Japan.
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.

1

June 27, 2019
Osaka, Japan

Asanuma Corporation
Consolidated Balance Sheet
March 31, 2019

Millions of yen
2019
2018
AssetsCurrent assets:
Cash and cash deposits (Notes 6, 10 and 19)
Receivables:
Notes receivable (Note 19)
Accounts receivable on completed construction
contracts (Note 7 and 19)
Other accounts receivable
Allowance for doubtful accounts

Thousands of
U.S. dollars(Note 2)
2019

¥ 23,545¥ 39,914$ 212,136

4,484

2,500

40,40049,7884,878(21)
59,12940,0103,481(39)45,952448,581
43,950(189)
532,742

1,942
34
15
1,991

924
34
15
973

17,497307
135
17,939Other current assets
Total current assets

260
84,925411
87,2502,343
765,160

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

1,808
6,701
617
1,426
4
(5,222)
–
5,334

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

16,28960,375
5,559
12,84836(47,049)–
48,058

8,660

9,040

78,025

783
113
886
567
1,413
(681)
11,741

128
121
471
851
1,400
(681)
11,330

7,055
1,018
7,983
5,109
12,730(6,136)
105,784¥ 102,000¥ 103,369$ 919,002

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

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

Total assets

3Millions of yen
2019
2018
Liabilities
Current liabilities:
Short-term bank loans (Notes 10 and 19)
Current portion of long-term debt (Notes 10 and 19)
Payables:Notes payable (Note 19)
Accounts payable on construction contracts(Note 19)
Other accounts payable (Note 19)
Advances received on uncompleted construction
contracts
Deposits received
Income taxes payable (Note 11)
Provision for compensation for completed
construction
Provision for loss on construction contracts (Note 15)
Other current liabilities
Total current liabilities
Long-term liabilities:
Long-term debt (Notes 10 and 19)
Liability for retirement benefits (Note 12)
Deferred income taxes (Note 11)
Other long-term liabilities
Total long-term liabilities
Total liabilities

Net assets
Shareholders’ equity (Note 14):
Common stock:
Authorized – 29,356,500 shares
Issued– 8,508,629 and 85,086,293 shares in2019 and 2018
Capital surplus
Retained earnings
Less treasury stock, at cost
Total shareholders’ equity
Accumulated other comprehensive income:Net unrealized holding gain on investments insecurities
Foreign currency translation adjustments
Retirement benefits liability adjustments (Note 12)
Total accumulated other comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets

¥

2,460
331

¥

Thousands of
U.S. dollars(Note 2)
2019

3,828
1,624

$ 22,164
2,982

893
29,232

4,089
26,0588,046
263,375

2,029
32,154

3,015
33,162

18,281
289,702

6,904
1,280
1,790

8,465
1,326
902

62,204
11,533
16,128501
55,722
51,147

532
57
5,775
55,6714,514
45
51,554
460,826

8,904
4,343
13
126
13,38664,533

7,955
4,319
7
193
12,474
68,14580,22339,130117
1,135
120,605
581,431

9,615
2,167
23,616(1,149)34,2499,615
2,167
20,778(146)
32,414

86,62919,524
212,776(10,352)
308,577

3,334
(8)
(293)
3,033
185
37,467¥ 102,000

3,070
–
(376)
2,694
116
35,224¥ 103,369

30,039(72)(2,640)27,327
1,667
337,571$ 919,002

See accompanying notes to consolidated financial statements.
4

Asanuma Corporation
Consolidated Statement of Income
Year ended March 31, 2019

Millions of yen
2019
2018
Net sales (Note 23):
Construction contracts
Other¥ 134,195
1,518
135,713¥ 142,182
1,253
143,435$ 1,209,073
13,677
1,222,750

121,090
1,298
122,388

127,334
942
128,276

1,090,999
11,695
1,102,694

13,105220
13,325

14,848311
15,159118,074
1,982
120,056

7,624
5,701

7,206
7,953

68,691
51,365

217
29
(190)
(42)
(127)
469

231
(58)
(235)
(39)
(279)
–

1,955
261
(1,712)(378)(1,144)
4,226

(57)
25
6,025

(23)
36
7,586

(514)
225
54,284

1,797
60
1,857
4,168

1,462
895
2,357
5,229

16,191
540
16,731
37,553

(10)
4,178

7
5,222

(90)
37,643

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

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

Thousands of
U.S. dollars(Note 2)
2019

¥

¥

$

See accompanying notes to consolidated financial statements.
5

Asanuma Corporation
Consolidated Statement of Comprehensive Income
Year ended March 31, 2019

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

Millions of yen
2018
2019
¥ 4,168¥ 5,229

Thousands of
U.S. dollars(Note 2)
2019
$ 37,553

264
(8)
83
339
¥ 4,507

356
–
408
764
¥ 5,993

2,379
(72)
748
3,055
$ 40,608¥ 4,517(10)¥ 5,9858$ 40,698(90)

See accompanying notes to consolidated financial statements.
6

Asanuma Corporation
Consolidated Statement of Changes in Net Assets
Year ended March 31, 2019

Millions of yen

Balance at April 1, 2017
Profit attributable to owners ofparentCash dividends
Purchases of treasury stock
Sales of treasury stock
Net change in items other thanshareholders’ equity
Balance at April 1, 2018
Profit attributable to owners ofparentCash dividends
Purchases of treasury stock
Sales of treasury stock
Net change in items other thanshareholders’ equity
Balance at March 31, 2019

Commonstock¥ 9,615

Capitalsurplus¥ 2,166

Retainedearnings¥ 16,394

Treasurystock,
at cost¥ (142)

Total
shareholders’equity¥ 28,033

–
–
–
–

–
–
–
1

5,222
(838)
–
–

–
–
(4)
0

5,222
(838)
(4)
1

–
9,615

–
2,167

–
20,778–(146)–
32,414

–
–
–
–

–
–
–
0

4,178
(1,340)––––(1,003)0

4,178(1,340)(1,003)0–¥ 9,615–¥ 2,167–¥ 23,616–¥ (1,149)–¥ 34,249

Millions of yen

Balance at April 1, 2017
Profit attributable to owners ofparentCash dividends
Purchases of treasury stock
Sales of treasury stock
Net change in items other thanshareholders’ equity
Balance at April 1, 2018
Profit attributable to owners ofparentCash dividends
Purchases of treasury stock
Sales of treasury stock
Net change in items other thanshareholders’ equity
Balance at March 31, 2019

Net
unrealized
holding
gain oninvestments
in securities¥ 2,714

Foreigncurrencytranslation
adjustments¥ –Retirement
benefits
liability
adjustments¥ (784)

Total
accumulated
othercomprehensive
income¥ 1,930

Noncontrollinginterests¥ 108

Total net
assets¥ 30,071

–
–
–
–

–
–
–
–

–
–
–
–

–
–
–
–

–
–
–
–

5,222
(838)
(4)
1

356
3,070

－
–

408
(376)

764
2,694

8
116

772
35,224

–
–
–
–

–
–
–
–

–
–
–
–

–
–
–
–

–
–
–
–

4,178
(1,340)(1,003)0264¥ 3,334

(8)
¥ (8)

83
¥ (293)339¥ 3,033

69
¥ 185

408
¥ 37,467

7

Asanuma Corporation
Consolidated Statement of Changes in Net Assets (Continued)
Year ended March 31, 2019

Thousands of U.S. dollars (Note 2)

Balance at April 1, 2018
Profit attributable to owners ofparentCash dividends
Purchases of treasury stock
Sales of treasury stock
Net change in items other thanshareholders’ equity
Balance at March 31, 2019

Commonstock

CapitalsurplusRetainedearnings

Treasurystock,
at costTotal
shareholders’equity$ 86,629$ 19,524$ 187,206$ (1,315)$ 292,044

–
–
–
–

–
–
–
0

37,643(12,073)––––(9,037)037,643(12,073)(9,037)0–$ 86,629–$ 19,524–$ 212,776–$ (10,352)–$ 308,577

Thousands of U.S. dollars (Note 2)Netunrealized
holding
gain oninvestments
in securities
Balance at April 1, 2018
Profit attributable to owners ofparentCash dividends
Purchases of treasury stock
Sales of treasury stock
Net change in items other thanshareholders’ equity
Balance at March 31, 2019

Foreigncurrencytranslation
adjustments

Retirement
benefits
liability
adjustments

Total
accumulated
othercomprehensive
incomeNoncontrollinginterests

Total net
assets–$ (3,388)$ 24,272$ 1,046$ 317,362

–
–
–
–

–
–
–
–

–
–
–
–

–
–
–
–

–
–
–
–

37,643(12,073)(9,037)02,379$ 30,039(72)$ (72)748$ (2,640)

3,055$ 27,327

621$ 1,6673,676$ 337,571$ 27,660$

See accompanying notes to consolidated financial statements.
8

Asanuma Corporation
Consolidated Statement of Cash Flows
Year ended March 31, 2019

Millions of yen
2019
2018
Cash flows from operating activities:
Profit before income taxes
Adjustments for:
Depreciation and amortization
Loss on impairment of property and equipment
Decrease in allowance for doubtful accounts
Decrease in provision for loss on construction contracts
Increase in liability for retirement benefits
Interest and dividends income
Interest expenses
Foreign exchange (gains) losses, net
Gain on sales of investments in securities(Increase) decrease in notes receivable and accounts
receivable on completed construction contracts(Increase) decrease in inventories(Increase) decrease in other accounts receivable(Decrease) increase in notes payable and accounts
payable on construction contracts(Decrease) increase in other accounts payable
Increase (decrease) in advances received on
uncompleted construction contracts
Other, net
SubtotalInterest and dividends received
Interest paid
Income taxes paid
Net cash (used in) provided by operating activities
Cash flows from investing activities:
Purchases of property and equipment
Payments for purchase of shares of subsidiary resulting inchange in scope of consolidation (Note 6)
Purchases of intangible assets
Purchases of investments in securities
Proceeds from sales of investment securities
Collection of loans receivable
Payments for guarantee deposits
Proceeds from collection of guarantee deposits
Other, net
Net cash used in investing activities

Thousands of
U.S. dollars(Note 2)2019

¥ 6,025¥ 7,586$ 54,284

464
57
(17)
(52)
142
(217)
190
(29)
(469)

405
23
(9)
(197)
530
(231)
235
58
–

4,181
514
(153)
(469)
1,279
(1,955)
1,712(261)(4,226)(11,248)(1,019)(1,380)52
1,764(1,246)(101,342)(9,181)(12,434)(224)(1,113)(1,738)(5,712)(2,018)(10,028)(1,561)
178(10,273)214(202)(1,159)(11,420)

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

(14,064)
1,603(92,558)
1,928(1,820)(10,442)(102,892)

(848)

(533)

(7,640)

(499)
(342)
(419)
1,078
11
(22)
9
(5)
¥ (1,037)

–
(193)
(9)
–
11
(15)
40
1
¥ (698)(4,496)(3,081)(3,775)
9,712
99
(198)
81
(45)
(9,343)$9

Asanuma Corporation
Consolidated Statement of Cash Flows (continued)
Year ended March 31, 2019

Millions of yen
2019
2018
Cash flows from financing activities:
Decrease in short-term bank loans, net
Proceeds from long-term debt
Repayment of long-term debt
Proceeds from issuance of bonds
Cash dividends paid
Other, net
Net cash used in financing activities
Effect of exchange rate changes on cash and cash
equivalents
Net (decrease) increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year (Note 6)

Thousands of
U.S. dollars(Note 2)2019

¥ (1,368)
700(1,694)634(1,209)(1,004)(3,941)¥ (3,840)
5,963(3,558)–(754)(2)(2,191)$ (12,325)
6,307(15,263)
5,712(10,893)(9,046)(35,508)29(16,369)
39,914¥ 23,545(57)
194
39,720¥ 39,914

261(147,482)
359,618$ 212,136

See accompanying notes to consolidated financial statements.
10Asanuma Corporation
Notes to Consolidated Financial Statements
March 31, 20191.

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 theaccompanying consolidated financial statements for the year ended March 31, 2018 to the2019 presentation. Such reclassifications had no effect on consolidated profit or cash
flow.

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 ¥110.99 = U.S.$1.00, theexchange rate prevailing on March 31, 2019. This translation should not be construed asa representation that yen can be converted into U.S. dollars at the above or any other rate.

11

Asanuma Corporation
Notes to Consolidated Financial Statements (continued)

3.

Principles of Consolidation

At March 31, 2019 and 2018, the Company had 7 and 6 subsidiaries, respectively. The
consolidated financial statements for the years ended March 31, 2019 and 2018 include theaccounts of the Company and its 6 and 5 subsidiaries, respectively.
At October 19, 2018, the Company acquired equity shares of SINGAPORE PAINTS &CONTRACTOR PTE. LTD., which was newly included in the scope of consolidation
during the fiscal year ended March 31, 2019. As the acquisition date is deemed to be
December 31, 2019, and as the intervening period does not exceed three months from theCompany’s fiscal year end, solely the acquiree’s balance sheet is consolidated.
The Company applied the equity method to its investments in 3 affiliates, at March 31,
2019 and 2018 for the purpose of consolidated financial statements for the years thenended.
The accounts of the remaining subsidiary were not consolidated nor the equity method
applied because its total assets, net sales, profit or loss and retained earnings were notmaterial to the consolidated financial statements.
The balance sheet date of SINGAPORE PAINTS & CONTRACTOR PTE. LTD. isDecember 31. Necessary adjustments were made to the subsidiary’s balance sheet toreflect any significant intercompany transactions during the period from January 1 throughMarch 31.

4.

Summary of Significant Accounting Policies(a) Cash and cash equivalents
Cash and cash equivalents consist of cash on hand, deposits with banks withdrawable
on demand, and short-term investments which are readily convertible to cash subject
to an insignificant risk of any changes in their value and which were purchased withan original maturity of three months or less.
(b) Investments in securities
Investments in securities are classified into two categories: held-to-maturity debt
securities or other securities. Held-to-maturity debt securities are stated at amortizedcost. Marketable securities classified as other securities are carried at fair value withany changes in unrealized holding gain or loss, net of the applicable income taxes,
reported as a separate component of accumulated other comprehensive income.
Non-marketable securities classified as other securities are carried at cost determinedby the moving average method.

12

Asanuma Corporation
Notes to Consolidated Financial Statements (continued)

4.

Summary of Significant Accounting Policies (continued)(c) Allowance for doubtful accounts
The Company and its consolidated subsidiaries provide an allowance for doubtful
accounts at an amount calculated based on their historical experience of bad debts on
ordinary receivables plus an additional estimate of probable specific bad debts from
customers experiencing financial difficulties.
(d) Inventories
Cost of uncompleted construction contracts are stated at cost determined on an
individual project basis. Real estate held for sale is stated at the lower of cost or net
selling value, cost being determined on an individual project basis. Raw materials
and supplies are stated at the lower of cost or net selling value, cost being determinedby the period average method.
(e) Property and equipment (Other than leased assets)
Property and equipment is stated on the basis of cost. Depreciation is calculated by
the declining-balance method over the estimated useful lives of the respective assets;
however, the straight-line method is applied to buildings (except for facilities attachedto the buildings) acquired on or after April 1, 1998 and facilities attached to buildings
and other non-building structures acquired on or after April 1, 2016.
(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.

13

Asanuma Corporation
Notes to Consolidated Financial Statements (continued)

4.

Summary of Significant Accounting Policies (continued)(h) Bonds issuance expenses
Issuance expenses of bonds are charged to income as incurred.
(i) Provision for compensation for completed construction
A provision for compensation for completed construction is provided for anticipatedfuture costs arising from warranties on completed construction based on the historical
data on the compensation cost.
(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.
(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. The retirement benefit obligation for employees is
attributed to each period by the benefit formula method.
Actuarial gain or loss is amortized commencing in the year following the year inwhich the gain or loss is recognized by the straight-line method over a period of
principally 10 years, which is within the average remaining years of service of theeligible employees.
Prior service cost is charged to income when incurred.
(l) Income taxes
Deferred tax assets and liabilities have been recognized in the consolidated financial
statements with respect to the differences between the financial reporting and tax
bases of the assets and liabilities, and were measured using the enacted tax rates andlaws which will be in effect when the differences are expected to reverse.

14Asanuma Corporation
Notes to Consolidated Financial Statements (continued)

4.

Summary of Significant Accounting Policies (continued)(m) Hedge accounting
Interest-rate swaps which meet certain conditions are accounted for as if the interest
rates applied to the swaps had originally applied to the underlying loans. Hedging
instruments and hedged items are interest-rate swaps and interest rates on loans fromfinancial institutions, respectively. The Company omit the evaluation of hedging
effectiveness due to meet certain conditions for interest-rate swaps.
(n) Goodwill
Goodwill is being amortized on a straight-line basis over the estimated period of
benefit. The goodwill resulting from the acquisition of SINGAPORE PAINTS &CONTRACTOR PTE. LTD. is being amortized over seven years.
(o) Revenue recognition
The Company recognizes revenue by applying the percentage-of-completion method
for the construction projects for which the outcome of the construction activity isdeemed certain at the end of the reporting period. To estimate the progress of such
construction projects, the Company measures the percentage of completion bycomparing costs incurred to date with the most recent estimate of total costs required
to complete the project (cost to cost basis). For other construction projects, thecompleted-contract method is applied.
Net sales related to construction contracts accounted for by the percentage-ofcompletion method totaled ¥131,810 million ($1,187,584 thousand) and ¥139,690
million for the years ended March 31, 2019 and 2018, respectively.

5.

Change in Method of Presentation(Partial Amendments to Accounting Standard for Tax Effect Accounting)
Effective April 1, 2018, “Partial Amendments to Accounting Standard for Tax EffectAccounting” (ASBJ Statement No.28 issued on February 16, 2018) has been adopted.
Under ASBJ Statement No.28, deferred income taxes, which had been previouslyclassified as current assets and current liabilities, are classified as investments andother assets and long-term liabilities, respectively.
As a result, deferred income taxes of ¥ 896 million and ¥ 47 million, which werepreviously presented under current assets and long-term liabilities, respectively, as ofMarch 31, 2018, were included in deferred income taxes of ¥ 851 million underinvestments and other assets. Furthermore, deferred income taxes of ¥7 million were
presented under long-term liabilities as of March 31, 2018.
15

Asanuma Corporation
Notes to Consolidated Financial Statements (continued)

6.

Cash and Cash Equivalents

A reconciliation of cash and deposits in the accompanying consolidated balance sheets at
March 31, 2019 and 2018 and cash and cash equivalents in the accompanying
consolidated statements of cash flows for the years then ended is as follows:

Cash and cash deposits
Cash and cash equivalents

Millions of yen
At March 31,
2019
2018
¥ 23,545¥ 39,914¥ 23,545¥ 39,914

Thousands of
U.S. dollars
2019$ 212,136$ 212,136

Assets acquired and liabilities assumed of SINGAPORE PAINTS & CONTRACTOR PTE.
LTD. as of deemed acquisition date, acquisition cost of shares and payment for acquisitionof shares are summarized as follows:

Current assets
Property and equipment, at cost
Investments and other assets
Goodwill
Current liabilities
Long-term liabilities
Translation adjustments
Non-controlling interests
Acquisition cost of shares
Cash and cash equivalents
Payment for acquisition of shares

7.

Millions of yen
2019
¥ 562
102
7
198
(235)
(36)
7
(79)
526
(27)
¥ 499

Thousands of
U.S. dollars
2019$ 5,064
919
63
1,784
(2,118)
(324)
63
(712)
4,739
(243)
$ 4,496

Notes Receivables

The balance sheet date for the year ended March 31, 2019 fell on a bank holiday.
Consequently, notes receivable of ¥1 million ($9 thousand) with a due date of March 31,
2019 were included in the balance in the consolidated balance sheet at March 31, 2019 andwere settled on the next business day.

16

Asanuma Corporation
Notes to Consolidated Financial Statements (continued)

8.

Loss on Impairment of Property and Equipment

Loss on impairment of property and equipment for the years ended March 31, 2019 and2018 are as follows:

Location
Saitama Prefecture
Saitama Prefecture

Location
Osaka Prefecture

Main use
Business assets
Business assets

Main use
Leasing

Class
Buildings
Land

Thousands ofMillions of yen
U.S. dollars
2019
¥ 34
$ 306
23
208

Class
Buildings

Millions of yen
2018
¥ 23

The Company principally groups the assets in association with the business operations at
each regional office whereas leased properties and idle assets are grouped individually and
fixed assets of its consolidated subsidiaries and investments for which the equity method
is applied are grouped per subsidiary or investment.
For the years ended March 31, 2019 and 2018, the Company decided to sell the above
assets that have been grouped as leased properties and assets in association with thebusiness operations at each regional office, respectively. As a result, the Company andits consolidated subsidiaries wrote down the carrying values of these assets to therecoverable amounts and recognized losses on impairment of property and equipment of¥57 million ($514 thousand) and ¥23 million respectively.
The recoverable amounts were measured at net selling value based on estimated sales
value.

17

Asanuma Corporation
Notes to Consolidated Financial Statements (continued)

9.

Investments in Securities

At March 31, 2019 and 2018, 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

2019
Estimated Unrealized
fair value
gain

¥ 16
¥ 16

¥1
¥1

Carrying
value

2018
Estimated
fair value

Unrealized
gain

¥ 15
¥ 15

¥ 16
¥ 16

¥1
¥1

Thousands of U.S. dollars
2019
Carrying Estimated Unrealizedvalue
fair value
gain
Held-to-maturity debt
securities whose
estimated fair value
exceeds their carrying
value:
Government andmunicipal bonds

$ 135
$ 135

$ 144
$ 144

$9
$9

18

Asanuma Corporation
Notes to Consolidated Financial Statements (continued)

9.

Investments in Securities (continued)

At March 31, 2019 and 2018, marketable securities classified as other securities were as
follows:
Millions of yen

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

Carrying
value

2019
Acquisition
costs

Unrealized
gain (loss)

Carrying
value

2018
Acquisition
costs

Unrealized
gain (loss)¥ 8,379¥ 3,574¥ 4,805¥ 8,037¥ 3,751¥ 4,286206¥ 8,585274¥ 3,848(68)¥ 4,737206¥ 8,243207¥ 3,958(1)¥ 4,285

Thousands of U.S. dollars
2019
Carrying Acquisition Unrealized
value
costs
gain (loss)
Other securities whosecarrying value exceeds
their acquisition costs:
Equity securities
Other securities whosecarrying value does notexceed their acquisition
costs:
Equity securities$ 75,494$ 32,201$ 43,293

1,856$ 77,350

2,469$ 34,670(613)$ 42,680

The proceeds from sales of, and gross realized gain on investments in securities for theyear ended March 31, 2019 are summarized as follows:

Proceeds from sales
Gross realized gain

Millions of
yen
2019

Thousands of
U.S. dollars
2019¥ 1,000
469$ 9,010
4,226

Refer to Note 19 “Financial Instruments” for the redemption schedule at March 31, 2019
for held-to-maturity debt securities.
19

Asanuma Corporation
Notes to Consolidated Financial Statements (continued)

10. Short-Term Bank Loans and Long-Term Debt
Short-term bank loans had average interest rates of 1.66% and 1.73% at March 31, 2019and 2018, respectively.
Long-term debt at March 31, 2019 and 2018 is summarized as follows:

Unsecured loans due through 2034 at rates ranging
from 1.51% to 2.59%
Secured loans due through 2034 at rates ranging
from 0.33% to 1.59%
1.37% unsecured bond due March 31, 2025
Total
Less current portion included in current liabilities

Millions of yen
2019
2018

Thousands of
U.S. dollars
2019

¥

$

42

8,543
650
9,235
(331)
¥ 8,904

¥

48

9,531
9,579
(1,624)¥ 7,955

378

76,971
5,856
83,205(2,982)$ 80,223

The aggregate annual maturities of long-term debt subsequent to March 31, 2019 aresummarized as follows:
Years ending March 31,
2020
2021
2022
2023
2024 and thereafter

Millions of yen
¥ 331
338
337
1,047
7,182
¥ 9,235

Thousands of
U.S. dollars$ 2,982
3,045
3,036
9,433
64,709$ 83,205

Assets pledged at March 31, 2019 and 2018 as collateral for lines of credit of theCompany and bank overdraft are summarized as follows:

Cash and cash deposits
Buildings and structures
Land
Investments in securities

Millions of yen
2019
2018
¥
4
¥ 218
648
1,679
957
1,451
7,345
6,969
¥ 8,954¥ 10,317

Thousands of
U.S. dollars
2019
$
36
5,838
8,623
66,177$ 80,674

All assets of the consolidated subsidiaries engaged in the Private Finance Initiative
business were pledged as collateral for their loans under the project finance agreements.
Assets pledged at March 31, 2019 and 2018 amounted to ¥4,091 million ($36,859
thousand) and ¥6,350 million as collateral for loans of ¥3,543 million ($31,922 thousand)and ¥4,731 million, respectively.
20

Asanuma Corporation
Notes to Consolidated Financial Statements (continued)

10. Short-Term Bank Loans and Long-Term Debt (continued)
Assets of the Company pledged at March 31, 2019 and 2018 as collateral for loans ofaffiliates engaged in the PFI business are summarized as follows:
Millions of yen
2019
2018
¥ 118
¥ 105
105
113
¥ 223
¥ 218

Investments in securities
Long-term loans receivableThousands of
U.S. dollars
2019$ 1,063946$ 2,009

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, 2019 and 2018 is as follows:

Lines of credit
Credit utilized
Available credit

Millions of yen
2019
2018
¥ 10,000¥ 10,000––¥ 10,000¥ 10,000Thousands of
U.S. dollars
2019$ 90,098–$ 90,098

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 astatutory tax rates of approximately 30.4% and 30.7% for the years ended March 31, 2019and 2018, respectively.
A reconciliation of the statutory tax rate and the effective tax rates for the years ended
March 31, 2019 and 2018 as a percentage of profit before income taxes is summarized asfollows:

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

2019
30.4%
1.4
(0.1)
1.8
(1.9)
(0.5)
(0.3)
30.8%

2018
30.7%
0.9
(0.2)
1.5
(1.8)
(0.2)
0.2
31.1%

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, 2019 and 2018 are summarized as follows:

Millions of yen
2019
2018
Deferred tax assets:
Allowance for doubtful accounts
Provision for compensation forcompleted construction
Inventories
Provision for loss on construction
contracts
Liability for retirement benefits
Loss on impairment of fixed assets
Loss on revaluation of investments insecurities
Tax loss carryforwards
Other
Gross deferred tax assets
Less valuation allowance
Total deferred tax assets
Deferred tax liabilities:
Unrealized holding gain on investments
in securities
Deferred capital gains on property
Other
Total deferred tax liabilities
Net deferred tax assets

¥

214

¥

Thousands of
U.S. dollars
2019

219

$ 1,928

152
23

162
23

1,370
207

1
1,321
484

17
1,314
468

9
11,902
4,361

45
15
793
3,048
(907)
2,141

95
–
882
3,180
(939)
2,241

405
135
7,145
27,462(8,172)
19,290(1,406)(174)(7)(1,587)¥ 554(1,218)(178)(1)(1,397)¥ 844(12,668)(1,568)(62)(14,298)$ 4,99222

Asanuma Corporation
Notes to Consolidated Financial Statements (continued)

12. Retirement Benefits
1.

Outline of retirement benefits for employees
The Company has funded or unfunded defined benefit pension plans and defined
contribution plans in order to allocate for employees’ retirement benefits. In
addition to these retirement benefit plans, the Company may pay additional retirement
benefits when employees retire. All employees of Asanuma Tatemono K.K., aconsolidated subsidiary of the Company, have been composed of secondees from theCompany, consequently, the retirement benefit plan of Asanuma Tatemono K.K. isincorporated in those of the Company. The other consolidated subsidiaries do nothave any retirement pension plans.
Under the defined benefit plans, the Company pays lump-sum or pension payments,
the amounts of which are determined by reference to employees’ ranks and length ofservice.

2.

Defined benefit plans(1) The changes in retirement benefit obligation for the years ended March 31, 2019and 2018 are as follows:

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

Millions of yen
2018
2019
¥ 10,671¥ 10,692
395
402
107
108
20
154
(627)
(543)
¥ 10,708¥ 10,671

Thousands of
U.S. dollars
2019$ 96,144
3,622
973
1,387
(5,649)$ 96,477(2) The changes in plan assets for the years ended March 31, 2019 and 2018 are as
follows:

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

Millions of yen
2018
2019
¥ 6,316¥ 6,351
126
127
19
(62)
272
342
(393)
(381)
¥ 6,365¥ 6,352

Thousands of
U.S. dollars
2019$ 57,221
1,144
(558)
3,081
(3,541)$ 57,347

23

Asanuma Corporation
Notes to Consolidated Financial Statements (continued)

12. Retirement Benefits (continued)
2.

Defined benefit plans (continued)(3) The following table sets forth the funded status of the plans and the amounts
recognized in the consolidated balance sheets as of March 31, 2019 and 2018 for
the Company’s and the consolidated subsidiary’s defined benefit plans:

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

Millions of yen
2018
2019
¥ 6,364¥ 6,349(6,352)(6,365)
12
(16)
4,307
4,359
¥ 4,343¥ 4,319

Thousands of
U.S. dollars
2019$ 57,203(57,347)(144)
39,274$ 39,130(4) The components of retirement benefit expense for the years ended March 31,
2019 and 2018 are as follows:

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

Millions of yen
2018
2019
¥ 395
¥ 402
107
108
(126)
(127)
588
335
¥ 964
¥ 718

Thousands of
U.S. dollars
2019$ 3,622973(1,144)
3,018$ 6,469(5) The components of retirement benefits liability adjustments included in othercomprehensive income (before tax effect) for the years ended March 31, 2019and 2018 are as follows:

Actuarial gain

Millions of yen
2018
2019
¥ 587
¥ 118

Thousands of
U.S. dollars
2019$ 1,06324

Asanuma Corporation
Notes to Consolidated Financial Statements (continued)

12. Retirement Benefits (continued)
2.

Defined benefit plans (continued)(6) The components of retirement benefits liability adjustments included inaccumulated other comprehensive income (before tax effect) as of March 31,
2019 and 2018 are as follows:

Unrecognized actuarial gain

Millions of yen
2019
2018
¥ 422
¥ 540

Thousands of
U.S. dollars
2019$ 3,802(7) The fair value of plan assets, by major category, as a percentage of total plan
assets as of March 31, 2019 and 2018 are as follows:

Debt securities
Equity securities
Cash and cash deposits
Total

2019
84%
15
1
100%

2018
84%
15
1
100%

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

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

2019
1.0%

2018
1.0%

2.0%
9.1%

2.0%
9.1%

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

25

Asanuma Corporation
Notes to Consolidated Financial Statements (continued)

12. Retirement Benefits (continued)
3.

Defined contribution pension plan
Information on contributions to the defined contribution pension plan for the years
ended March 31, 2019 and 2018 is as follows:

Millions of yen
2019
2018
Contributions to the defined
contribution pension plan

¥ 167

¥ 166

Thousands of
U.S. dollars
2019$ 1,505

13. Asset Retirement Obligations
The Company and its domestic consolidated subsidiaries estimated the cost of restoration
obligations based on property lease agreements of the headquarters in Osaka and Tokyo
office. As the cost of the restoration obligations is immaterial, the information on asset
retirement obligations is omitted.
Regarding certain restoration obligations, the Company estimated non-recoverable
amounts of deposits for those premises and charged the portion attributable to the years
ended March 31, 2019 and 2018, instead of recording asset retirement obligations.
14. Shareholders’ Equity
The Companies Act (the “Act”) provides that an amount equal to 10% of the amount to be
disbursed as distributions of capital surplus (other than the capital reserve) and retained
earnings (other than the legal reserve) be transferred to the capital reserve and the legal
reserve, respectively, until the sum of the capital reserve and the legal reserve equals 25%of the capital stock account. Such distributions can be made at any time by resolution of
the shareholders, or by the Board of Directors if certain conditions are met.
Under the Act, upon the issuance and sale of new shares of common stock, the entire
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.

26

Asanuma Corporation
Notes to Consolidated Financial Statements (continued)

14. Shareholders’ Equity (continued)
Movements in shares of common stock in issue and treasury stock during the years ended
March 31, 2019 and 2018 are summarized as follows:

Shares ofcommon stockin issue
Treasury stock

April 1, 2018

Number of shares
2019
Increase
Decrease

85,086,293
1,316,083–
318,045

76,577,664
1,187,746

March 31, 2019

8,508,629
446,382

The decrease in common stock of 76,577,664 shares is due to the consolidation of ten
shares into one share on October 1, 2018.
The increase in treasury stock consists of 313,600 shares due to purchase of shares basedon the resolution of the Board of Directors’ meeting, 467 shares due to the purchase of
fractional shares of less than one voting unit resulting from the consolidation of shares and3,978 shares due to purchase of shareholders owning less than one voting unit.
The decrease in treasury stock of 1,187,708.4 shares is due to the consolidation of shares,
0.6 shares due to disposal of fractional shares of less than one voting unit resulting fromthe consolidation of shares and 37 shares due to sales of shares at requests of shareholders
owning less than one voting unit.
As the Company resolved at the Board of Directors’ meeting held on May 10, 2019, toretire a portion of its treasury stock in the carrying amount of ¥1,107 million ($9,974
thousand) corresponding to 430,000 shares of common stock pursuant to Article 178 of
the Companies Act of Japan, its cancellation procedures have not yet been completed by
the end of the fiscal year ended March 31, 2019.

April 1, 2017
Shares ofcommon stockin issue
Treasury stock

85,086,293
1,309,647

Number of shares
2018
Increase
Decrease
–
8,848

–
2,412

March 31, 201885,086,293
1,316,083

The increase and decrease of treasury stock were due to purchases of shares of less than
one voting unit and sales of shares at requests of shareholders owning less than one voting
unit for the year ended March 31, 2018.

27

Asanuma Corporation
Notes to Consolidated Financial Statements (continued)

15. Provision for Loss on Construction Contracts
Provision for loss on construction contracts included in cost of sales for the years ended
March 31, 2019 and 2018 amounted to ¥5 million ($45 thousand) and ¥57 million,
respectively.

16. Research and Development Costs
Research and development costs included in selling, general and administrative expenses
for the years ended March 31, 2019 and 2018 amounted to ¥320 million ($2,883 thousand)and ¥230 million, respectively.

17. Other Comprehensive Income
The following table presents reclassification adjustments and tax effects allocated tocomponents of other comprehensive income for the years ended March 31, 2019 and2018:

Millions of yen
2018
2019
Net unrealized holding gain on investments insecurities:
Amount arising during the year
Reclassification adjustments for loss
realized in the statement of income
Before tax effectTax effectNet unrealized holding gain on investments insecurities, net
Foreign currency translation adjustments, net
Retirement benefits liability adjustments:
Amount arising during the year
Reclassification adjustments for loss realized
in the statement of income
Before tax effectTax effect
Retirement benefits liability adjustments, net
Total other comprehensive income

Thousands of
U.S. dollars

2019

¥ 925

¥ 512

$ 8,334

(468)
457
(193)

–
512
(156)

(4,217)
4,117(1,738)

264
(8)

356
–

2,379
(72)

(201)

1

(1,811)

319
118
(35)
83
¥ 339

586
587
(179)
408
¥ 764

2,874
1,063
(315)
748
$ 3,055

28

Asanuma Corporation
Notes to Consolidated Financial Statements (continued)

18. Leases
Future minimum lease payments subsequent to March 31, 2019 under non-cancellable
operating leases are summarized as follows:

Years ending March 31,

Millions of yen

Thousands of
U.S. dollars¥ 231$ 2,0812020

19. Financial Instruments(1) Policy for financial instruments
The Company and its consolidated subsidiaries (collectively, the “Group”) manage
their funds by investing only in short-term deposits, and primarily raise funds byborrowings from banks and issuing bonds. The purpose of entering into derivativetransactions is to mitigate fluctuation risk related to interest rates with respect toborrowings from banks, and derivative transactions are not carried out for speculative
purposes.
(2) Types of financial instruments, related risk and risk management for financial
instruments
Notes receivable and accounts receivable on completed construction contracts are
subject to the credit risk of customers. Regarding this risk, the Company and its
consolidated subsidiaries monitor due dates and outstanding balances by individual
customer, and the credit worthiness of their main customers regularly.
Investments in securities are mainly composed of stocks and are exposed tofluctuation risk of market prices and the Group review the fair values of such listed
stocks every quarter.
Notes payable, accounts payable on construction contracts and other accounts payable
are mostly due within one year.
Short-term bank loans, long-term debt and bonds are mainly utilized for business
operations. Certain long-term debt is hedged by derivative transactions (interest rate
swaps) as a hedging instrument per individual agreement in order to reduce
fluctuation risk of interest rate and fix interest expense.
In addition, the Company follows internal policies which include authorizedprocedures and processes governing derivatives within the actual demand.

29

Asanuma Corporation
Notes to Consolidated Financial Statements (continued)

19. Financial Instruments (continued)(3) Supplementary explanation of fair value of financial instruments
The fair value of financial instruments is based on their quoted market price, if
available. When there is no quoted market price available, fair value is reasonably
estimated. Since various assumption factors are reflected in estimating the fair value,
different premises and factors could result in a different fair value.
The carrying value, estimated fair value and the difference between them as of March
31, 2019 and 2018 are as follows. Financial instruments for which fair value isdeemed extremely difficult to determine are not included.
Millions of yen
2019

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

Carrying value¥ 23,545

Estimated fairvalue
¥ 23,545

Difference¥ –54,2728,600¥ 86,417

54,6298,601¥ 86,775

357
1
¥ 358

¥ 30,125¥ 30,125

¥ –

2,791

2,790

(1)

650
8,254
¥ 41,820

650
8,265¥ 41,830

–
11
¥ 10

30

Asanuma Corporation
Notes to Consolidated Financial Statements (continued)

19. Financial Instruments (continued)(3) Supplementary explanation of fair value of financial instruments (continued)
Millions of yen
2018

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

Carrying value¥ 39,914

Estimated fairvalue
¥ 39,914

Difference¥ –42,5108,258¥ 90,682

42,8988,259¥ 91,071

388
1
¥ 389

¥ 30,147¥ 30,147

¥

5,452
7,955
¥ 43,554

5,452
8,274
¥ 43,873

–
319
¥ 319

–

Thousands of U.S. dollars
2019

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

Carrying value

Estimated fairvalue

$ 212,136$ 212,136$

488,981
77,485$ 778,602

492,197
77,494$ 781,827

3,216
9$ 3,225$ 271,421$ 271,421$

25,14625,137(9)

5,856
74,367$ 376,790

5,856
74,466$ 376,880

–
99
$ 90

Difference
–

–

31

Asanuma Corporation
Notes to Consolidated Financial Statements (continued)

19. Financial Instruments (continued)(3) Supplementary explanation of fair value of financial instruments (continued)
Methods to determine the estimated fair value of financial instruments and othermatters related to securities and derivative transactions:
Cash and cash deposits
Since these items are settled in a short period of time, their carrying values
approximate the fair value.
Notes receivable and accounts receivable on completed construction contracts
The estimated fair value of notes receivable and accounts receivable on completed
construction contracts are based on the present value discounted by the interest rates
in considering the collection term of each receivable and each credit risk.
Investments in securities
The estimated fair values of equity securities are based on quoted market prices.
The estimated fair value of debt securities are based on prices provided by thefinancial institutions.
Notes payable, accounts payable on construction contracts and short-term bank loans
Since these items are settled in a short period of time, their carrying values
approximate the fair value.
Bonds
The estimated fair value of bonds issued by the Company is based on present value
determined by discounting the principal and interest amount with the interest rate
expected in the case of a new bond issuance.
Long-term debt
The estimated fair values of long-term debt are based on present value determined bydiscounting the principal and interest amount with the interest rate expected case of
new bond issuance. Floating interest rates for long-term loans were hedged byinterest-rate swap agreements and accounted for as loans with fixed interest rates.
The estimated fair value of those long-term loans is based on the present value of thetotal of principals, interests and net cash flows of swap agreements discounted by theinterest rates, estimated reasonably, applicable to loans made under similar
circumstances.
Derivatives transactions
Refer to Note 20 “Derivatives” for fair value information at March 31, 2019 and 2018of derivative transactions.
32Asanuma Corporation
Notes to Consolidated Financial Statements (continued)

33

Asanuma Corporation
Notes to Consolidated Financial Statements (continued)

19. Financial Instruments (continued)(3) Supplementary explanation of fair value of financial instruments (continued)
Financial instruments for which it is extremely difficult to determine the fair value:
Unlisted equity securities of ¥843 million ($7,595 thousand) and ¥910 million
included in “Investments in securities” and “Investments in an unconsolidated
subsidiary and affiliates” in the consolidated balance sheets at March 31, 2019 and2018, respectively, are based neither on market value nor estimated future cash flow,
and it is difficult to determine the estimated fair value. Therefore, they are notincluded in the above table.
The redemption schedule for cash deposits, receivables and marketable securities withmaturity dates at March 31, 2019 is summarized as follows:

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

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

Within 1 year
¥ 23,541

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

Over 10 years¥ ––51,027

1,309

1,936

–
¥ 74,568–¥ 1,30915¥ 1,951

Within 1 year
$ 212,100

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

–
¥ –

Over 10 years$–

459,744

11,794

17,443––$ 671,844–$ 111,794

135$ 17,578–$–

34

Asanuma Corporation
Notes to Consolidated Financial Statements (continued)

20. Derivatives
There were no derivative contracts outstanding at March 31, 2019.
The estimated fair value of the derivative contracts outstanding qualified for deferral
hedge accounting at March 31, 2018 is summarized as follows:
Interest-rate related transactions

Method of hedge
accounting
Interest-rate
swaps(special
treatment)

Transaction
Interest rate swap:
Receive /floating and pay /fixedHedged item

Notional
amountMillions of yen
2018(Including portion inexcess of one year)

Long-term debt
Total

¥ 1,239¥ 1,239¥–¥–

Estimated
fair value

(*)
(*)

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

35

Asanuma Corporation
Notes to Consolidated Financial Statements (continued)

21. Amounts per Share
Amounts per share at March 31, 2019 and 2018 and for the years then ended were as
follows:
Yen
2019

2018

U.S. dollars
2019¥ 4,624.16¥ 4,191.01$ 41.66

Profit attributable to owners of parent

504.87623.31

4.55

Cash dividends

16.00

10.00

0.14

Net assets

Information used in the computation of profit attributable to owners of parent per share forthe years ended March 31, 2019 and 2018 is presented as follows:

2019

2018

Thousands of
U.S. dollars
2019¥ 4,178¥ 5,222$ 37,643–––¥ 4,178¥ 5,222$ 37,643

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

Thousands of shares
2019
2018
Weighted-average number of shares ofcommon stock used in the calculation

8,276

8,377

Net assets per share are computed based on the net assets and the number of shares ofcommon stock outstanding at the year end.
Profit attributable to owners of parent per share is computed based on the profit
attributable to owners of parent available for distribution to shareholders of common stockand the weighted average number of shares of common stock outstanding during the year.
Cash dividends per share represent the cash dividends proposed by the Board of Directors
as applicable to the respective years.
Effective on October 1, 2018, the Company executed the consolidation of ten shares into
one share. Per share information was calculated under the assumption that the stock
consolidation had taken effect at the beginning of the previous fiscal year.

36Asanuma Corporation
Notes to Consolidated Financial Statements (continued)

22. Business Combination through Acquisitiona.

Outline of the business combination
1) Name and business description of acquiree
Name: SINGAPORE PAINTS & CONTRACTOR PTE. LTD.
Business description: Building painting and repair contracting
2) Primary reasons for business combination
SINGAPORE PAINTS & CONTRACTOR PTE. LTD. is a building painting andrepair contracting company in Singapore. As the three-year medium-term planstated to strive to strengthen its overseas business and to expand its business,
including mergers and acquisitions as an option, with the aim of developing arenovation business in the ASEAN region, the Company made SINGAPOREPAINTS & CONTRACTOR PTE. LTD. into a subsidiary as the first step.
3) Date of the business combination
Acquisition date:
October 19, 2018
Deemed acquisition date:
December 31, 20184) Legal form of the business combination
Acquisition of shares
5) Company name after the business combination
No change
6) Voting rights acquired through the business combination
80%7) Principal basis for determination of the acquiring company
The Company acquired shares of SINGAPORE PAINTS & CONTRACTOR PTE.
LTD. for cash.

b.

Period of the operating results of the acquired company included in the accompanying
consolidated financial statements.
The Company uses the financial statements as of the acquiree’s latest fiscal year end
for consolidation purposes since the intervening period form the deemed acquisition
date does not exceed three months from the Company’s fiscal year end. As theacquisition date is deemed to be December 31, 2018, solely the acquiree’s balance
sheet is consolidated, and the acquiree’s operating results are not included in the
consolidated statement of income for the fiscal year ended March 31, 2019.
37

Asanuma Corporation
Notes to Consolidated Financial Statements (continued)

22. Business Combination through acquisition (continued)c.

Acquisition cost of the acquired company and details of the type of consideration
Acquisition cost consists of cash and cash deposit in the amounts of ¥526 million($4,739 thousand)d.

Major acquisition-related costs and nature
Advisory fees and other: ¥55 million ($496 thousand)e.

Amount of assets acquired and liabilities assumed as of the date of businesscombination and major breakdown

Current assets
Property and equipment, at cost
Investments and other assets

Total assets

Millions of yen
2019
¥ 562
102
7
¥ 671

Thousands of
U.S. dollars
2019$ 5,064
919
63$ 6,046

¥ 235
36
¥ 271

$ 2,118324$ 2,442

Current liabilities
Long-term liabilities
Total liabilities

While provisional accounting treatment for the business combination based onreasonably available information was applied up to the end of third quarter, thefinalization of the acquisition cost allocation was completed during the fiscal year
ended March 31, 2019.
f.

Amount of goodwill generated, reason for generation of goodwill, method ofamortization and amortization period(1) Amount of goodwill
As the allocation of the acquisition cost was completed, the amount of goodwill
was determined in the amount of ¥ 198 million ($1,784 thousand) which isincluded in the other assets.
(2) Reason for generation of goodwill
Goodwill resulted from the acquiree’s excess earning power that the Company
expects to realize in business operations in the future.

38

Asanuma Corporation
Notes to Consolidated Financial Statements (continued)

22. Business Combination through acquisition (continued)f.

Amount of goodwill generated, reason for generation of goodwill, method ofamortization and amortization period (continued)(3) Method of amortization and amortization period
Straight-line method over 7 yearsg.

Estimated impact on the consolidated statement of income for the year ended March
31, 2019 assuming the business combination was completed at the beginning of theyear ended March 31, 2019 and the calculation method
The impact and calculation method have been omitted as immaterial

39Asanuma Corporation
Notes to Consolidated Financial Statements (continued)

23. Segment Informationa.

Segment Information(1) Overview of reporting segments
The reporting segments of the Company and its consolidated subsidiaries arecomponents for which discrete financial information is available and whose operating
results are regularly reviewed by the Company’s Board of Directors to make decisions
about resource allocation and assess their performance.
The Company and its consolidated subsidiaries mainly operate in the construction
business and have two reporting segments, which are the Building Construction
Segment and the Civil Engineering Segment.
(2) Method of calculating sales and income in reporting segments
The method of accounting for reporting segments is, in principle, the same as stated in
Note 4 “Summary of Significant Accounting Policies.” The income of reporting
segments is calculated on the basis of operating income. Intersegment sales arerecorded based on current market prices.
Millions of yen
2019
Reporting Segments
Building
Civil
Construction Engineering
Net sales and income:Sales to third parties
Intersegment sales
Net sales
Segment income

Total

Others

Sub total

Adjustments

Total¥ 109,116–
109,116¥ 25,079–
25,079¥ 134,195–
134,195¥ 1,5185
1,523¥ 135,713
5
135,718

¥

–
(5)
(5)

¥135,713–
135,713¥ 10,436¥ 2,669¥ 13,105¥¥ 13,135¥ (7,434)¥ 5,701

Total

30

Millions of yen
2018
Reporting Segments
Building
Civil
Construction Engineering
Net sales and income:Sales to third parties
Intersegment sales
Net sales
Segment income

Total

Others

Sub total

Adjustments
–
(6)
(6)

¥ 119,135–
119,135¥ 23,047–
23,047¥ 142,182–
142,182¥ 1,253
6
1,259¥ 143,435
6
143,441¥¥ 11,276¥ 3,571¥ 14,847¥¥ 14,978¥ (7,025)131¥ 143,435–
143,435
¥

40

7,953

Asanuma Corporation
Notes to Consolidated Financial Statements (continued)

23. Segment Information (continued)a.

Segment Information (continued)(2) Method of calculating sales and income in reporting segments (continued)
Thousands of U.S. dollars
2019
Reporting Segments
Building
Construction

Civil
Engineering

Total

Others

Sub total

Adjustments$ 983,116–$ 225,957–$1,209,073–$ 13,67745$ 1,222,750
45

$

–
(45)

$1,222,750–

Net sales$ 983,116$ 225,957$1,209,073$ 13,722$ 1,22,795

$

(45)

$1,222,750

Segment income$ 94,027$ 24,047$ 118,074$$$ (66,979)

Net sales and income:Sales to third parties
Intersegment sales

270

118,344$“Others” is a business segment which is not included in the reporting segments, andincludes real estate and other businesses.
Adjustments for segment income in the amounts of ¥7,434 million ($66,979
thousand) and ¥7,025 million for the years ended March 31, 2019 and 2018 include
eliminations of intersegment transactions of ¥1 million ($9 thousand) and ¥1 million
and corporate expenses of ¥7,433 million ($66,970 thousand) and ¥7,024 million
recorded as selling, general and administrative expenses not attributable to any
business segments, respectively.
The total amount of segment income is adjusted to operating income on the
consolidated statement of income.
Assets, liabilities and others are not allocated to business segments.
b.

Total

Related information(1) Information by products and services
Disclosure of information by products and services for the years ended March 31,
2019 and 2018 has been omitted as the Company classifies such information in thesame way as it does its reporting segments.
(2) Information by geographical segment
Disclosure of sales and property and equipment by geographical area for the years
ended and as of March 31, 2019 and 2018 has been omitted as sales to domestic
customers were in excess of 90% of consolidated net sales, and the balance ofproperty and equipment in Japan was in excess of 90% of consolidated property andequipment.
41

51,365

Asanuma Corporation
Notes to Consolidated Financial Statements (continued)

42

Asanuma Corporation
Notes to Consolidated Financial Statements (continued)

23. Segment Information (continued)b.

Related information (continued)(3) Information by major customers
Disclosure of information by major customers for years ended March 31, 2019 and2018 has been omitted as sales to each customer were less than 10% of consolidated
net sales.
c.

Loss on impairment of property and equipment by reporting segment
Millions of yen
2019
Reporting Segments

Loss on impairmentof property andequipment

Building
Construction

Civil
Engineering

Total

¥–

¥–

¥–

Other

Elimination
andcorporate

Total

¥–

¥ 57

¥ 57

Total

Millions of yen
2018
Reporting Segments

Loss on impairmentof property andequipment

Building
Construction

Civil
Engineering

Total

Other

Elimination
andcorporate

¥–

¥–

¥–

¥ 23

¥–

¥ 23

Total

$ 514

Thousands of U.S. dollars
2019
Reporting Segments

Loss on impairmentof property andequipmentd.

Building
Construction

Civil
Engineering

Total

Other

Elimination
andcorporate

$–

$–

$–

$–

$ 514

Information on amortization of goodwill and remaining unamortized balance
Goodwill is not allocated to reporting segments. Amortization of goodwill andremaining unamortized balance as at March 31, 2019 and for the year then ended wasnil and ¥198 million ($1,784 thousand), respectively.
43

Asanuma Corporation
Notes to Consolidated Financial Statements (continued)

24. Subsequent Events
1.

Appropriation of retained earnings
The following distribution of retained earnings of the Company, which has not beenreflected in the accompanying consolidated financial statements for the year ended
March 31, 2019, was approved at the annual general meeting of the shareholders of
the Company held on June 26, 2019.

Cash dividends of ¥153 ($1.38) per share

Millions of yen¥ 1,234

Thousands of
U.S. dollars$ 11,118

2. Retirement of treasury stock
The Company resolved at the Board of Directors’ meeting held on May 10, 2019, toretire a portion of its treasury stock as stated below pursuant to Article 178 of theCompanies Act of Japan.
Reason for retirement of the Company’s treasury stock:
To return profit to shareholders
Outline of retirement:(1) Type of shares
Common stock of the Company(2) Number of shares to be retired
430,000 shares (The ratio to the aggregate number of issued shares (including
treasury stock) before cancellation: 5.05%)(3) Scheduled retirement date
May 31, 2019
Aggregate number of the Company’s issued shares
Before retirement: 8,508,629 shares
After retirement: 8,078,629 shares

44