Fujita Corporation
Nonconsolidated Financial Statements for the
Year Ended March 31, 2018, and
Independent Auditor's Report
- 2 -
Fujita Corporation
Nonconsolidated Balance Sheet
March 31, 2018
ASSETS
Millions
of Yen
Thousands of
U.S. Dollars
(Note 1)
CURRENT ASSETS:
Cash and deposits ¥ 26,647 $ 250,816
Notes receivable - trade 1,484 13,965
Electronically-recorded monetary claims - operating 5,555 52,289
Accounts receivable from completed construction contracts 125,931 1,185,343
Accounts receivable from development and other 872 8,205
Real estate for sale 37,221 350,351
Construction projects in progress 27,920 262,797
Development projects in progress and other 18,216 171,463
Raw materials and supplies 187 1,764
Short-term loans receivable 2,097 19,739
Deferred tax assets 4,366 41,099
Accounts receivable - other 12,450 117,192
Other 2,862 26,924
Allowance for doubtful accounts (835 ) (7,857 )
Total current assets 264,973 2,494,090
NON-CURRENT ASSETS:
Property, plant and equipment:
Buildings and structures 4,984 46,911
Machinery and equipment 708 6,661
Furniture and fixtures 631 5,940
Land 21,459 201,983
Other 103 982
Total property, plant and equipment 27,885 262,477
Intangible assets 1,203 11,320
Investments and other assets:
Investment securities 13,626 128,256
Shares of subsidiaries and associated companies 9,665 90,974
Investments in other securities of subsidiaries and associated companies 7,345 69,134
Investments in capital 41 391
Long-term loans receivable 2,680 25,222
Long-term loans receivable from employees 32 302
Claims provable in bankruptcy, claims provable in rehabilitation and
other 554 5,216
Deferred tax assets 3,589 33,784
Lease deposits 2,060 19,386
Other 1,084 10,202
Allowance for doubtful accounts (739 ) (6,952 )
Total investments and other assets 39,937 375,915
Total non-current assets 69,025 649,712
TOTAL ¥ 333,998 $ 3,143,802
See notes to nonconsolidated financial statements.
LIABILITIES
Millions
of Yen
Thousands of
U.S. Dollars
(Note 1)
CURRENT LIABILITIES:
Notes payable - trade ¥ 7,674 $ 72,237
Electronically-recorded obligations - operating 47,781 449,743
Accounts payable for construction contracts 76,184 717,093
Accounts payable for development and other 479 4,513
Short-term loans 14,393 135,476
Current portion of long-term loans 35 329
Lease obligations 39 363
Accounts payable - other 3,406 32,057
Accrued expenses 585 5,509
Income taxes payable 4,401 41,430
Accrued consumption taxes 11,220 105,606
Advances received on construction projects in progress 29,786 280,365
Advances received on development projects in progress and other 5,083 47,841
Deposits received 12,276 115,548
Provision for loss on construction contracts 1,860 17,511
Provision for warranties for completed construction 1,391 13,095
Accrued bonuses 4,589 43,195
Other 203 1,912
Total current liabilities 221,385 2,083,823
LONG-TERM LIABILITIES:
Long-term loans 13,000 122,364
Long-term lease obligations 57 532
Deferred tax liabilities for land revaluation 577 5,428
Liability for employees' retirement benefits 17,814 167,679
Provision for loss on guarantees 6 57
Other 1,137 10,706
Total long-term liabilities 32,591 306,766
Total liabilities 253,976 2,390,589
NET ASSETS:
Equity:
Capital stock:
Authorized: Common stock, 545,000,000 shares in 2018
Issued: Common stock, 18,888,889 shares in 2018 14,002 131,798
Capital surplus 5,213 49,068
Legal capital surplus 1,525 14,354
Other capital surplus 3,688 34,714
Retained earnings 57,386 540,148
Legal reserve 1,562 14,706
Reserve for reduction entry 3,908 36,788
General reserve 4,050 38,121
Unappropriated 47,866 450,533
Total equity 76,601 721,014
Valuation and translation adjustments:
Unrealized gain on available-for-sale securities 2,733 25,721
Deferred gains on hedges 26 244
Revaluation reserve for land 662 6,234
Total valuation and translation adjustments 3,421 32,199
Total net assets 80,022 753,213
TOTAL ¥ 333,998 $ 3,143,802
- 3 -
Fujita Corporation
Nonconsolidated Statement of Income
Year Ended March 31, 2018
Millions
of Yen
Thousands of
U.S. Dollars
(Note 1)
NET SALES:
Completed construction projects ¥ 415,802 $ 3,913,801
Development business and other 14,838 139,661
Total net sales 430,640 4,053,462
COST OF SALES:
Completed construction projects 365,475 3,440,092
Development business and other 11,661 109,751
Total cost of sales 377,136 3,549,843
GROSS PROFIT:
Completed construction projects 50,327 473,709
Development business and other 3,177 29,910
Total gross profit 53,504 503,619
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 31,704 298,419
Operating profit 21,800 205,200
OTHER INCOME:
Interest income 94 887
Dividends income 425 4,003
Reversal of provision for loss on guarantees 12 114
Other 46 428
Total other income 577 5,432
OTHER EXPENSES:
Interest expenses (144 ) (1,357 )
Construction guarantee commission (96 ) (908 )
Foreign exchange losses (805 ) (7,578 )
Provision of allowance for doubtful accounts (153 ) (1,437 )
Loss on disposal of property, plant and equipment (29 ) (274 )
Loss on valuation of investment securities (11 ) (106 )
Write-down of shares of subsidiaries and associated companies (39 ) (370 )
Other (41 ) (383 )
Total other expenses (1,318 ) (12,413 )
PROFIT BEFORE INCOME TAXES 21,059 198,219
INCOME TAXES:
Current 5,889 55,432
Deferred 239 2,244
NET INCOME ¥ 14,931 $ 140,543
See notes to nonconsolidated financial statements.
- 4 -
Fujita Corporation
Nonconsolidated Statement of Changes in Equity
Year Ended March 31, 2018
Millions of Yen
Capital Surplus Retained Earnings Valuation and Translation Adjustments
Capital
Stock
Legal
Capital
Surplus
Other
Capital
Surplus
Legal
Reserve
Reserve
for
Reduction
Entry
General
Reserve Unappropriated
Total
Equity
Unrealized
Gain on
Available-for-
sale Securities
Deferred
Gains
(Losses) on
Hedges
Revaluation
Reserve for
Land
Total Valuation
and Translation
Adjustments
Total Net
Assets
BALANCE, APRIL 1, 2017 ¥ 14,002 ¥ 1,525 ¥ 3,688 ¥ 1,118 ¥ 3,939 ¥ 4,050 ¥ 37,738 ¥ 66,060 ¥ 2,703 ¥ 36 ¥ 717 ¥ 3,456 ¥ 69,516
Provision for legal reserve 444 (444 )
Cash dividends, ¥235.36 per share (4,446 ) (4,446 ) (4,446 )
Reversal of reserve for reduction entry (31 ) 31
Reversal of revaluation reserve for land 56 56 56
Net income 14,931 14,931 14,931
Net change in the year 30 (10 ) (55 ) (35 ) (35 )
BALANCE, MARCH 31, 2018 ¥ 14,002 ¥ 1,525 ¥ 3,688 ¥ 1,562 ¥ 3,908 ¥ 4,050 ¥ 47,866 ¥ 76,601 ¥ 2,733 ¥ 26 ¥ 662 ¥ 3,421 ¥ 80,022
Thousands of U.S. Dollars (Note 1)
Capital Surplus Retained Earnings Valuation and Translation Adjustments
Capital
Stock
Legal
Capital
Surplus
Other
Capital
Surplus
Legal
Reserve
Reserve
for
Reduction
Entry
General
Reserve Unappropriated
Total
Equity
Unrealized
Gain on
Available-for-
sale Securities
Deferred
Gains
(Losses) on
Hedges
Revaluation
Reserve for
Land
Total Valuation
and Translation
Adjustments
Total Net
Assets
BALANCE, APRIL 1, 2017 $ 131,798 $ 14,354 $ 34,714 $ 10,521 $ 37,073 $ 38,121 $ 355,218 $ 621,799 $ 25,443 $ 337 $ 6,752 $ 32,532 $ 654,331
Provision for legal reserve 4,185 (4,185 )
Cash dividends, $2.22 per share (41,846 ) (41,846 ) (41,846 )
Reversal of reserve for reduction entry (285 ) 285
Reversal of revaluation reserve for land 518 518 518
Net income 140,543 140,543 140,543
Net change in the year 278 (93 ) (518 ) (333 ) (333 )
BALANCE, MARCH 31, 2018 $ 131,798 $ 14,354 $ 34,714 $ 14,706 $ 36,788 $ 38,121 $ 450,533 $ 721,014 $ 25,721 $ 244 $ 6,234 $ 32,199 $ 753,213
See notes to nonconsolidated financial statements.
- 5 -
Fujita Corporation
Notes to Nonconsolidated Financial Statements
Year Ended March 31, 2018
1. BASIS OF PRESENTING NONCONSOLIDATED FINANCIAL STATEMENTS
The accompanying nonconsolidated financial statements have been prepared from the
accounts maintained by Fujita Corporation (the "Company"), in accordance with the
provisions set forth in the Companies Act of Japan and applicable regulations and in
accordance with the accounting principles generally accepted in Japan. The information
provided in the notes to the nonconsolidated financial statements is limited to that required
by the Companies Act of Japan and applicable regulations. Statements of comprehensive
income and cash flows are not required as a part of the basic financial statements under the
Companies Act of Japan and applicable regulations and, accordingly, are not presented herein.
The nonconsolidated financial statements are stated in Japanese yen, the currency of the
country in which the Company is incorporated and operates. The translations of Japanese yen
amounts into U.S. dollar amounts are included solely for the convenience of readers outside
Japan and have been made at the rate of ¥106.24 to $1, the approximate rate of exchange at
March 31, 2018. Such translations should not be construed as representations that the
Japanese yen amounts could be converted into U.S. dollars at that or any other rate.
2. SIGNIFICANT ACCOUNTING POLICIES
(a) Valuation methods of certain assets
Marketable and investment securities - Shares of subsidiaries and associated companies,
and investments in other securities of subsidiaries and associated companies are stated at
cost, determined by the moving-average method.
Marketable available-for-sale securities are reported at fair value, with unrealized gains and
losses, net of applicable taxes, reported in a separate component of equity.
Nonmarketable available-for-sale securities are stated at cost, determined by the moving-
average method. For other-than-temporary declines in fair value, investment securities are
reduced to net realizable value by a charge to income.
Derivatives - Derivatives are recognized as either assets or liabilities and measured at fair
value, and gains or losses on derivative transactions are recognized in the nonconsolidated
statement of income.
Inventory - Real estate for sale is stated at the lower of cost, determined by the specific
identified cost method, or net selling value.
Construction projects in progress are stated at the specific identified cost method.
Development projects in progress and other are stated at the lower of cost, determined by
the specific identified cost method, or net selling value.
Raw materials and supplies are stated at the lower of cost, determined by the moving-
average method, or net selling value.
(b) Depreciation and amortization
Property, plant and equipment (except for leased assets) - Depreciation of property, plant
and equipment is computed by the declining-balance method, while the straight-line
method is applied to buildings acquired after April 1, 1998 and building improvements
and structures acquired after April 1, 2016.
- 6 -
Estimated useful lives are as follows:
Years
Buildings 5 to 50
Structures 6 to 30
Machinery 4 to 50
Equipment 2 to 6
Furniture and fixtures 2 to 20
Intangible assets (except for leased assets) - Amortization of intangible assets is computed
by the straight-line method. In addition, amortization of software for internal use is
computed by the straight-line method based on the estimated useful lives (five years).
Leased assets - Leased assets under finance lease contracts without ownership transfer of
the leased property to the lessee are depreciated by the straight-line method over the term
of the lease and using a residual value of zero.
(c) Accounting policies for provisions
Allowance for doubtful accounts - The allowance for doubtful accounts is stated in
amounts considered to be appropriate based on the Company's past credit loss experience
and an evaluation of potential losses in the receivables outstanding.
Provision for loss on construction contracts - Provision for losses on construction
contracts is provided with respect to construction projects for which eventual losses are
reasonably expected and estimated.
Provision for warranties for completed construction - The provision for warranty cost for
completed work is provided at the amount of warranty costs based on past loss experience.
Accrued bonuses - Accrued bonuses are provided at the estimated amount of bonuses to be
paid.
Liability for employees' retirement benefits - Liability for employees' retirement benefits
and plan assets are provided for the retirement benefits payable to the employees as of the
balance sheet date based on the projected benefit obligation.
Actuarial gains or losses are charged to profit or loss as incurred.
Provision for loss on guarantees - Provision for loss on guarantees is determined based on
estimated losses by considering the financial position of the guaranteed party.
(d) Recognition of revenue and costs of construction contracts
Construction revenue and construction costs are recognized by the percentage-of-
completion method if the outcome of a construction contract can be estimated reliably.
When total construction revenue, total construction costs and the stage of completion of
the contract at the balance sheet date can be reliably measured, the outcome of a
construction contract is deemed to be estimated reliably. If the outcome of a construction
contract cannot be reliably estimated, the completed-contract method is applied. When it
is probable that the total construction costs will exceed total construction revenue, an
estimated loss on the contract is immediately recognized by providing for a loss on
construction contracts. Revenue recognized by the percentage-of-completion method for
the year ended March 31, 2018, was ¥392,561 million ($3,695,039 thousand).
- 7 -
(e) Other significant accounting policies as the basis of preparing the nonconsolidated
financial statements
Method of hedge accounting - The Company enters into foreign currency forward
contracts and foreign currency loan agreements to hedge exchange rate risk associated
with assets and liabilities denominated in foreign currencies or investments and lending in
foreign currencies. The assets and liabilities denominated in foreign currencies are
translated at the contracted rates, if the forward contracts qualify for hedge accounting for
the year ended March 31, 2018.
Accounting for consumption taxes - Consumption taxes withheld and paid are not
included in any amounts in the accompanying nonconsolidated statement of income.
3. NOTES TO NONCONSOLIDATED BALANCE SHEET
(a) Accumulated depreciation of property, plant and equipment
Millions
of Yen
Thousands of
U.S. Dollars
2018 2018
Accumulated depreciation of property, plant and
equipment ¥14,844 $139,722
(b) Assets pledged as collateral and the collateralized liabilities
The following assets were pledged as collateral for bank guarantees and other liabilities:
Millions
of Yen
Thousands of
U.S. Dollars
2018 2018
Short-term loans receivable ¥ 2 $ 21
Investment securities 10 97
Shares of subsidiaries and associated companies 24 221
Investments in capital 28 260
Long-term loans receivable 14 134
Total assets pledged as collateral ¥ 78 $ 733
(c) Contingent liabilities
The Company had the following contingent liabilities:
Millions
of Yen
Thousands of
U.S. Dollars
2018 2018
Guarantees of loans; for subsidiaries and associated
companies:
F.T.C. Ohita Inc. ¥ 872 $ 8,205
FUJITA (CHINA) CONSTRUCTION Co., Ltd. 83 786
Fujita Corporation (Thailand) Ltd. 35 326
KOKANKYO Engineering Corp. 5 49
Total contingent liabilities ¥ 995 $ 9,366
- 8 -
(d) Receivables and payables due from and to associated companies
Millions
of Yen
Thousands of
U.S. Dollars
2018 2018
Short-term receivables from associated companies ¥ 4,494 $ 42,303
Long-term receivables from associated companies 8 71
Short-term payables to associated companies 20,715 194,979
Long-term payables to associated companies 13,000 122,364
(e) Land revaluation
Under the "Law of Land Revaluation," the Company elected a one-time revaluation of its
own-use land to a value based on real estate appraisal information as of March 31, 2002.
The resulting revaluation reserve for land represents unrealized depreciation of land and is
stated, net of income taxes, as a component of net assets. There was no effect on the
nonconsolidated statement of income. Continuous readjustment is not permitted, unless
the land value subsequently declines significantly such that the amount of the decline in
value should be removed from the revaluation reserve for land account and related
deferred tax liabilities.
(f) Construction projects in progress expected to incur a loss and provision for loss on
construction contracts were presented on a gross basis in the nonconsolidated balance
sheet without offsetting either amount. The amount of construction projects in progress
expected to incur a loss related to the provision for loss on construction contracts was
¥913 million ($8,597 thousand).
4. NOTES TO NONCONSOLIDATED STATEMENT OF INCOME
(a) Amount of provision for loss on construction contracts
The amount of provision for loss on construction contracts included in the costs of the
completed construction contracts for the year ended March 31, 2018 was as follows:
Millions
of Yen
Thousands of
U.S. Dollars
Amount of provision for loss on construction
contracts ¥1,058 $9,962
(b) Transactions with associated companies
Millions
of Yen
Thousands of
U.S. Dollars
2018 2018
Revenues ¥11,753 $110,627
Purchases 38,778 365,005
Selling, general and administrative expenses 1,030 9,693
Other 395 3,713
- 9 -
(c) Research and development expenses
Millions
of Yen
Thousands of
U.S. Dollars
2018 2018
Research and development expenses ¥1,929 $18,153
5. NOTES TO NONCONSOLIDATED STATEMENT OF CHANGES IN NET ASSETS
(a) Number of issued and outstanding shares
Number of Issued
and Outstanding
Shares at the End of
the Year
Common stock 18,888,889
(b) Information regarding dividends
(1) Dividends paid to shareholders for the year ended March 31, 2018
Total Amount of Dividends Dividends per Share
Resolution Type of Stock
Millions
of Yen
Thousands of
U.S. Dollars Yen Dollars Record Date Effective Date Paid From
General shareholders' meeting held on
June 27, 2017
Common stock ¥4,446 $41,846 ¥235.36 $2.22 March 31, 2017 June 30, 2017 Retained earnings
(2) Dividends whose record date was included in the year ended March 31, 2018 and whose effective date came after March 31, 2018
Total Amount of Dividends Dividends per Share
Resolution Type of Stock
Millions
of Yen
Thousands of
U.S. Dollars Yen Dollars Record Date Effective Date Paid From
General shareholders' meeting held on
June 25, 2018
Common stock ¥4,644 $43,714 ¥245.87 $2.31 March 31, 2018 June 29, 2018 Retained earnings
- 10 -
6. NOTE TO DEFERRED INCOME TAXES
Significant components of net deferred tax assets
Millions
of Yen
Thousands of
U.S. Dollars
2018 2018
Deferred tax assets:
Allowance for doubtful accounts ¥ 482 $ 4,535
Impairment loss on property, plant and equipment 1,092 10,279
Write-down of investment securities 1,458 13,720
Accrued bonuses 1,405 13,226
Liability for employees' retirement benefits 5,455 51,343
Provision for loss on construction contracts 570 5,362
Provision for warranties for completed construction 426 4,010
Other 3,320 31,265
Gross deferred tax assets 14,208 133,740
Valuation allowance (3,303 ) (31,092 )
Total deferred tax assets ¥ 10,905 $ 102,648
Deferred tax liabilities:
Reserve for reduction entry ¥ 1,725 $ 16,236
Unrealized gain on available-for-sale securities 1,064 10,012
Other 161 1,517
Total deferred tax liabilities ¥ 2,950 $ 27,765
Net deferred tax assets ¥ 7,955 $ 74,883
7. FINANCIAL INSTRUMENTS
(a) Overview
(1) Company policy for financial instruments
The Company uses financial instruments, mainly loans from the parent company and
banks. Cash surpluses, if any, are invested in low-risk financial assets. Derivatives are
used, not for speculative purposes, but to manage exposure to risks of exchange rate
fluctuation on foreign currency receivables, payables and other.
(2) Nature and extent of risks arising from financial instruments, and risk
management for financial instruments
Trade receivables, such as notes receivable - trade, electronically-recorded monetary
claims - operating and accounts receivable from completed construction contracts, are
exposed to customer credit risk. The Company manages its credit risk on the basis of
internal guidelines by conducting credit research to identify and reduce default risk in
the event of non-performance at the early stage.
Investment securities, mainly equity instruments of customers and suppliers of the
Company, are exposed to the risk of market price fluctuations. The Company
manages its risk by monitoring market values and the financial position of issuers on a
regular basis and reviewing its portfolio.
The payment terms of trade payables, such as notes payable - trade, electronically-
recorded obligations - operating and accounts payable for construction contracts, are
mainly less than one year.
Short-term loans whose maturities are less than one year after the balance sheet date
are used for procurement of working capital.
- 11 -
Long-term loans whose maturities are less than five years at fixed interest rates, are
mainly used for investment properties.
With respect to derivative transactions, the Company enters into foreign currency
forward contracts and foreign currencies loans to hedge exchange rate risk associated
with assets and liabilities denominated in foreign currencies for investment and
lending in foreign currencies. The Company utilizes derivative transactions in
accordance with internal policies that prescribe the authority. The counterparties to
those derivatives are limited to major international financial institutions to reduce the
credit risk.
Trade payables and loans are exposed to liquidity risk. The Company manages its
liquidity risk by making cash flow management plans and by other means.
(b) Fair values of financial instruments
Fair values of financial instruments are based on quoted prices in active markets. If a
quoted price is not available, another rational valuation technique is used instead.
As of March 31, 2018
Millions of Yen
Carrying
Amount Fair Value
Unrealized
Gain/Loss
Cash and deposits ¥ 26,647 ¥ 26,647
Notes receivable - trade 1,484
Allowance for doubtful accounts (*1) (5 )
1,479 1,479
Electronically-recorded monetary claims -
operating 5,555
Allowance for doubtful accounts (*1) (16 )
5,539 5,539
Accounts receivable from completed
construction contracts 125,931
Allowance for doubtful accounts (*1) (378 )
125,553 125,553
Investment securities 11,693 11,693
Total assets ¥ 170,911 ¥ 170,911
Notes payable - trade ¥ 7,674 ¥ 7,674
Electronically-recorded obligations - operating 47,781 47,781
Accounts payable for construction contracts 76,184 76,184
Short-term loans 14,393 14,393
Long-term loans (including current portion of
long-term loans) 13,035 13,054 ¥ 19
Total liabilities ¥ 159,067 ¥ 159,086 ¥ 19
Derivatives (*2) ¥ 26 ¥ 26
- 12 -
Thousands of U.S. Dollars
Carrying
Amount Fair Value
Unrealized
Gain/Loss
Cash and deposits $ 250,816 $ 250,816
Notes receivable - trade 13,965
Allowance for doubtful accounts (*1) (42 )
13,923 13,923
Electronically-recorded monetary claims -
operating 52,289
Allowance for doubtful accounts (*1) (157 )
52,132 52,132
Accounts receivable from completed
construction contracts 1,185,343
Allowance for doubtful accounts (*1) (3,555 )
1,181,788 1,181,788
Investment securities 110,062 110,062
Total assets $ 1,608,721 $ 1,608,721
Notes payable - trade $ 72,237 $ 72,237
Electronically-recorded obligations - operating 449,743 449,743
Accounts payable for construction contracts 717,093 717,093
Short-term loans 135,476 135,476
Long-term loans (including current portion of
long-term loans) 122,693 122,870 $ 177
Total liabilities $ 1,497,242 $ 1,497,419 $ 177
Derivatives (*2) $ 244 $ 244
Note (*1) The values of notes receivable - trade, electronically-recorded monetary
claims - operating and accounts receivable from completed construction
contracts are shown at net values, after deducting the allowance for doubtful
accounts.
Note (*2) The value of assets and liabilities arising from derivatives is shown at net
value, and the amounts in parentheses represent a net liability position.
Notes
1. Methods of measuring the fair value of financial instruments
(1) Assets
(a) Cash and deposits, notes receivable - trade and electronically-recorded
monetary claims - operating
The carrying values of cash and deposits, notes receivable - trade and
electronically-recorded monetary claims - operating approximate fair value
because of their short maturities.
(b) Accounts receivable from completed construction contracts
The fair values of accounts receivable from completed construction contracts
are measured at the amount to be received at maturity, discounted at the
Company's assumed corporate discount rate.
- 13 -
(c) Investment securities
The fair values of investment securities are measured at the quoted market
price of the stock exchange for the equity instruments.
(2) Liabilities
(a) Notes payable - trade, electronically-recorded obligations - operating and
accounts payable for construction contracts, short-term loans
The carrying values of notes payable - trade, electronically-recorded
obligations - operating, accounts payable for construction contracts and
short-term loans approximate fair value because of their short maturities.
(b) Long-term loans
The fair values of long-term loans are measured by discounting the total
amount of principal and interest at an interest rate applied for the
introduction of similar new debt.
(3) Derivatives
(a) The fair values of derivative transactions are measured at the quoted price
obtained from the financial institutions.
2. Financial instruments whose fair value cannot be reliably determined
Millions
of Yen
Thousands of
U.S. Dollars
2018 2018
Unlisted stocks (*1) ¥1,933 $18,194
Shares of subsidiaries and associated companies (*2) 9,665 90,974
Investments in other securities of subsidiaries
and associated companies (*2) 7,345 69,134
Note (*1) Unlisted stocks do not have a quoted market price, cannot be estimated
by future cash flow and cannot be reliably determined by fair value.
Thus, these stocks are not included in "Investment securities" above.
Note (*2) Shares of subsidiaries and associated companies and investments in
other securities of subsidiaries and associated companies do not have a
quoted market price, cannot be estimated by future cash flow and
cannot be reliably determined by fair value. Thus, these stocks are not
included in the table above.
- 14 -
8. INVESTMENT PROPERTIES
The Company owns rental properties such as rental apartments and commercial buildings, mainly located in Tokyo. The carrying amounts and market prices of such properties were as follows.
As of March 31, 2018
Millions of Yen
Thousands of
U.S. Dollars
Carrying
Amount
Fair
Value
Carrying
Amount
Fair
Value
Investment properties ¥12,381 ¥13,436 $116,541 $126,466
Notes
1. The carrying amount recognized in the nonconsolidated balance sheet is net of accumulated depreciation and accumulated impairment losses, if any.
2. The fair values of properties for the year ended March 31, 2018 are primarily measured by the Company in accordance with its Real Estate Appraisal Standard, including the fair value adjusted by indices.
9. RELATED-PARTY TRANSACTIONS
Percentage of
Voting Rights
Held by the Company
(Held by Others)
Amount of
Transaction
Balance at the End of
the Year
Classification Related Party Relationship Nature of Transaction
Millions
of Yen
Thousands of
U.S. Dollars Account
Millions
of Yen
Thousands of
U.S. Dollars
Parent
company
Daiwa House Industry
Co., Ltd.
(Direct 100.0%) Borrowing of funds Borrowing of funds (*1)
Payment of interest
¥23,993
48
$225,841
452
Short-term loans
Long-term loans
¥10,993
13,000
$103,476
122,364
Notes
Note (*1) Interest rate was determined based on market rates, and repayment period was five-years.
Percentage of
Voting Rights
Held by the Company
(Held by Others)
Amount of
Transaction (*2)
Balance at the End of
the Year (*2)
Classification Related Party Relationship Nature of Transaction
Millions
of Yen
Thousands of
U.S. Dollars Account
Millions
of Yen
Thousands of
U.S. Dollars
Subsidiary Fujita Shoji Co., Ltd. Direct 100.0% Purchase of construction
materials for the
Company
Purchase of materials (*1) ¥18,870 $177,620 Electronically-recorded obligations -
operating
Accounts payable for construction
contracts
¥5,066
1,903
$47,680
17,909
Notes
Note (*1) Purchase of materials was determined based on arm's length transaction.
Note (*2) The above transaction amount is exclusive of consumption taxes, while the above balance at the end of the year is inclusive of consumption taxes.
10. NOTE TO PER SHARE INFORMATION
Yen U.S. Dollars
2018 2018
Net assets per share ¥4,236.42 $39.88
Net profit per share 790.48 7.44
- 15 -
11. SUBSEQUENT EVENT
Not applicable (except for appropriations of retained earnings).
12. DETAILS OF PROPERTY, PLANT AND EQUIPMENT AND INTANGIBLE ASSETS
Millions of Yen
Account
Net Book Value
at the
Beginning Date
Amount of
Increase for
the Year
Amount of
Decrease for
the Year
Depreciation/
Amortization
Net Book Value
at the
Closing Date
Accumulated
Depreciation/
Amortization
Acquisition
Cost at the
Closing Date
Property, plant and equipment:
Buildings and structures ¥ 4,885 ¥ 402 ¥ 14 ¥ 289 ¥ 4,984 ¥ 6,729 ¥ 11,713
Machinery and equipment 503 385 11 169 708 5,322 6,030
Furniture and fixtures 433 424 1 225 631 2,654 3,285
Land 21,460 1 21,459 21,459
Other 124 314 292 43 103 139 242
Total property, plant and equipment ¥ 27,405 ¥ 1,525 ¥ 319 ¥ 726 ¥ 27,885 ¥ 14,844 ¥ 42,729
Intangible assets ¥499 ¥839 ¥17 ¥118 ¥1,203
Thousands of U.S. Dollars
Account
Net Book Value
at the
Beginning Date
Amount of
Increase for
the Year
Amount of
Decrease for
the Year
Depreciation/
Amortization
Net Book Value
at the
Closing Date
Accumulated
Depreciation/
Amortization
Acquisition
Cost at the
Closing Date
Property, plant and equipment:
Buildings and structures $ 45,981 $ 3,787 $ 128 $ 2,729 $ 46,911 $ 63,338 $ 110,249
Machinery and equipment 4,734 3,621 104 1,590 6,661 50,091 56,752
Furniture and fixtures 4,078 3,991 11 2,118 5,940 24,985 30,925
Land 201,991 8 201,983 201,983
Other 1,170 2,951 2,749 390 982 1,308 2,290
Total property, plant and equipment $ 257,954 $ 14,350 $ 3,000 $ 6,827 $ 262,477 $ 139,722 $ 402,199
Intangible assets $4,693 $7,901 $162 $1,112 $11,320
Note (*1) Amount of increase for the year in machinery and equipment includes increase by purchase of machinery of ¥332 million ($3,129 thousand).
Note (*2) Amount of increase for the year in furniture and fixtures includes increase by purchase of research instrument of ¥150 million ($1,414 thousand)
and server system of ¥119 million ($1,115 thousand).
Note (*3) Amount of increase for the year in intangible assets includes increase by software development cost of ¥563 million ($5,298 thousand).
- 16 -
13. DETAILS OF ALLOWANCES
Millions of Yen
Amount of Decrease
for the Year
Account
Beginning
Balance
Amount of
Increase for
the Year
Intended
Use Other
Closing
Balance
Allowance for doubtful accounts ¥ 1,291 ¥ 846 ¥ 182 ¥ 381 ¥ 1,574
Provision for loss on construction
contracts 2,292 1,058 1,201 289 1,860
Provision for warranties for completed
construction 1,302 1,391 956 346 1,391
Accrued bonuses 4,273 4,589 4,273 4,589
Liability for employees' retirement
benefits 18,366 1,519 2,071 17,814
Provision for loss on guarantees 18 12 6
Thousands of U.S. Dollars
Amount of Decrease
for the Year
Account
Beginning
Balance
Amount of
Increase for
the Year
Intended
Use Other
Closing
Balance
Allowance for doubtful accounts $ 12,151 $ 7,959 $ 1,714 $ 3,587 $ 14,809
Provision for loss on construction
contracts 21,570 9,962 11,307 2,714 17,511
Provision for warranties for completed
construction 12,259 13,095 8,997 3,262 13,095
Accrued bonuses 40,224 43,195 40,224 43,195
Liability for employees' retirement
benefits 172,871 14,294 19,485 167,679
Provision for loss on guarantees 171 114 57
Note (*1) "Other" under decrease in allowance for doubtful accounts includes reversals of the
beginning balance calculated based on the Company's past credit loss experience
and from collections of receivables.
Note (*2) "Other" under decrease in provision for loss on construction contracts includes
reversals of the decrease in estimated loss.
Note (*3) "Other" under decrease in provision for warranties for completed construction
includes reversals of the partial amount of the beginning balance.
Note (*4) "Other" under decrease in provision for loss on guarantees includes reversals of the
decrease in estimated debt loss.
- 17 -
14. DETAILS OF SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Amount
Account
Millions
of Yen
Thousands of
U.S. Dollars
Compensation to directors and audit & supervisory
board members ¥ 414 $ 3,899
Salaries 13,049 122,824
Bonuses 2,762 26,001
Retirement benefit expenses 972 9,146
Legal welfare expenses 2,189 20,601
Welfare expenses 410 3,858
Repair and maintenance 165 1,557
Stationery expenses 3,171 29,850
Correspondence and transportation expenses 2,206 20,763
Power utilities expenses 109 1,025
Research and development expenses 1,929 18,153
Advertising expenses 162 1,528
Provision of allowance for doubtful accounts 73 685
Entertainment expenses 336 3,160
Contribution 77 726
Rents 1,761 16,576
Depreciation 233 2,189
Taxes and dues 877 8,251
Insurance expenses 57 539
Miscellaneous expenses 752 7,088
Total ¥ 31,704 $ 298,419
* * * * * *