Copy of Latest Audit Report_20-21_Principle Company

45 46 47 48 49 50 18 Millions of Japanese Yen Thousands of U.S. Dollars (Note 1) ASSETS 31 March 2020 31 March 2021 31 March 2021 Current assets: Cash and bank deposits (Note 12) ¥ 43,767 ¥ 32,331 $ 293,919 Notes and accounts receivable, trade (Note 12) 83,275 87,702 797,295 Cost on construction contracts in progress and other (Note 6) 7,310 5,197 47,248 Real estate for sale 2,116 1,843 16,755 Advanced money (Note 12) 12,068 15,285 138,960 Other current assets (Note 6) 5,372 9,535 86,690 Allowance for doubtful accounts (319) (275) (2,508) Total current assets 153,591 151,619 1,378,362 Investments and other assets: Investments in securities (Notes 6, 12 and 13) 10,642 11,324 102,948 Long-term loans receivable (Note 6) 149 131 1,197 Deferred tax assets (Note 16) 6,674 4,238 38,532 Other 1,757 1,637 14,887 Allowance for doubtful accounts (553) (546) (4,972) Total investments and other assets 18,670 16,785 152,593 Total fixed assets 49,066 52,580 478,007 Fixed assets: Property, plant and equipment: Buildings and structures 14,954 15,454 140,492 Machinery, vehicles and equipment 19,571 20,039 182,175 Land (Note 6) 18,683 19,050 173,190 Leased assets 298 2,627 23,889 Construction in progress 3,678 6,197 56,340 Less accumulated depreciation (27,782) (28,624) (260,220) Total property, plant and equipment-net 29,405 34,745 315,868 Intangible assets: 990 1,050 9,545 Total assets ¥ 202,657 ¥ 204,200 $ 1,856,369 The accompanying notes are an integral part of these financial statements. CONSOLIDATED BALANCE SHEET TOA CORPORATION and its consolidated subsidiaries As of 31 March 2020 and 2021 19 Millions of Japanese Yen Thousands of U.S. Dollars (Note 1) LIABILITIES 31 March 2020 31 March 2021 31 March 2021 Current liabilities: Notes and accounts payable, trade (Note 12) ¥ 34,796 ¥ 32,005 $ 290,960 Electronically recorded obligations, operating (Note 12) 11,894 11,929 108,445 Short-term borrowings (Notes 6 and 12) 14,736 9,865 89,682 Accrued income taxes 1,051 2,226 20,239 Advances received on construction contracts in progress 10,105 13,176 119,782 Deposits received (Note 12) 21,161 23,546 214,056 Reserve for indemnity on completed contracts 586 941 8,560 Reserve for loss on construction works (Note 6) 2,630 1,705 15,507 Reserve for loss on construction defects 1,500 192 1,749 Other current liabilities 6,237 5,325 48,417 Total current liabilities 104,699 100,914 917,403 Long-term liabilities: Convertible bonds with share options (Note 12) 7,000 6,990 63,545 Long-term debt (Notes 6 and 12) 12,734 11,885 108,049 Deferred tax liabilities on revaluation of land (Notes 6 and 16) 2,320 2,320 21,095 Liability for retirement benefits (Note 15) 5,351 2,504 22,771 Provision for board benefit trust (Note 5) 36 72 661 Other long-term liabilities (Note 12) 1,348 3,337 30,340 Total long-term liabilities 28,791 27,111 246,464 Total liabilities 133,491 128,025 1,163,867 Net assets: Shareholders' equity: Common stock 18,976 18,976 172,515 Capital surplus 18,121 18,124 164,766 Retained earnings 31,773 37,647 342,249 Treasury stock (4,066) (5,247) (47,707) Total shareholders' equity 64,805 69,500 631,823 Accumulated other comprehensive income: Net unrealized gains (losses) on securities (Note 13) 2,571 2,700 24,547 Net deferred gains (losses) on hedges (Notes 12 and 14) (27) (8) (77) Revaluation reserve for land (Note 6) 3,659 3,659 33,271 Retirement benefits liability adjustments (Note 15) (2,547) (405) (3,687) Total accumulated other comprehensive income 3,656 5,945 54,054 Non-controlling interests 703 728 6,624 Total net assets 69,166 76,175 692,502 Total liabilities and net assets ¥ 202,657 ¥ 204,200 $ 1,856,369 The accompanying notes are an integral part of these financial statements. 20 Millions of Japanese Yen Thousands of U.S. Dollars (Note 1) 31 March 2020 31 March 2021 31 March 2021 Net sales (Note 7) ¥ 190,278 ¥ 189,712 $ 1,724,655 Cost of sales (Note 7) 170,863 169,983 1,545,302 Gross profit 19,415 19,728 179,353 Selling, general and administrative expenses (Note 7) 11,458 11,013 100,126 Operating income 7,957 8,714 79,226 Non-operating income: Interest income 57 21 197 Dividend income 289 340 3,094 Gain on insurance claims (Note 3) 8 521 4,741 Other (Note 3) 29 122 1,111 Total non-operating income 384 1,005 9,145 Non-operating expenses: Interest expense 294 228 2,076 Guarantee fee 79 162 1,478 Provision for doubtful accounts, non-trade (4) (49) (450) Commission fee (Note 3) 43 128 1,170 Other (Note 3) 324 3 32 Total non-operating expenses 737 473 4,306 Ordinary profit 7,604 9,247 84,065 Extraordinary income: Gain on sale of fixed assets (Note 7) 28 0 8 Gain on sale of investment in securities 197 1,448 13,169 Other 113 — — Total extraordinary income 338 1,449 13,177 Extraordinary losses: Loss on sale of fixed assets (Note 7) 0 7 72 Loss on disposal of fixed assets (Note 7) 58 227 2,068 Loss on sale of investment in securities 72 24 225 Loss on impairment of fixed assets (Note 7) 2 239 2,180 Other 232 18 170 Total extraordinary losses 366 518 4,717 Profit before income taxes 7,575 10,177 92,525 Income taxes: Current 944 1,994 18,127 Deferred 1,548 1,299 11,811 Total income taxes 2,493 3,293 29,939 Profit 5,082 6,884 62,585 Profit attributable to: Non-controlling interests ¥ 74 ¥ 24 $ 226 Owners of parent ¥ 5,007 ¥ 6,859 $ 62,359 CONSOLIDATED STATEMENT OF INCOME TOA CORPORATION and its consolidated subsidiaries For the year ended 31 March 2020 and 2021 The accompanying notes are an integral part of these financial statements. 23 The accompanying notes are an integral part of these financial statements. Millions of Japanese Yen Thousands of U.S. Dollars (Note 1) 31 March 2020 31 March 2021 31 March 2021 Cash flows from operating activities: Profit before income taxes ¥ 7,575 ¥ 10,177 $ 92,525 Adjustments to reconcile income before income taxes and Non-controlling interests to net cash (used in) provided by operating activities: Depreciation and amortization 1,560 1,635 14,871 Loss on impairment of fixed assets 2 239 2,180 Increase (decrease) in allowance for doubtful accounts (4) (49) (453) Increase (decrease) in liability for retirement benefits (450) (694) (6,316) Increase (decrease) in provision for loss on construction defects (3,241) (1,307) (11,887) Interest and dividend income (346) (362) (3,291) Interest expenses 294 228 2,076 Exchange (gain) loss, net 85 (94) (862) (Gain) loss on valuation of marketable securities and investment in securities 198 10 90 (Gain) loss on sale of investment in securities (124) (1,423) (12,943) (Gain) loss on sale of fixed assets and intangible assets (27) 7 64 (Gain) loss on disposal of fixed assets and intangible assets 17 212 1,931 Decrease (increase) in notes and accounts receivable, trade 5,869 (4,426) (40,242) Decrease (increase) in cost on construction contracts in progress and other (397) 2,112 19,207 Decrease (increase) in real estate for sale 454 273 2,488 Decrease (increase) in advanced money 3,348 (3,217) (29,246) Increase (decrease) in notes and accounts payable, trade (12,723) (2,756) (25,058) Increase (decrease) in advances received on construction contracts in progress 37 3,070 27,917 Increase (decrease) in deposits received 5,710 2,384 21,681 Other, net 4,094 (3,827) (34,792) Sub-total 11,933 2,193 19,940 Interest and dividend income received 346 362 3,293 Interest paid (290) (229) (2,085) Income taxes paid (492) (854) (7,766) Net cash (used in) provided by operating activities 11,496 1,471 13,381 Cash flows from investing activities: Payments for acquisition of property, plant and equipment (3,407) (5,684) (51,679) Proceeds from sale of property, plant and equipment 352 70 644 Payments for acquisition of intangible assets (390) (274) (2,495) Payments for acquisition of investment in securities (114) (1,080) (9,824) Proceeds from sale of investment in securities 559 2,133 19,392 Payments of loans receivable (338) (261) (2,376) Collection of loans receivable 468 342 3,111 Other, net 18 24 219 Net cash (used in) provided by investing activities (2,851) (4,731) (43,009) Cash flows from financing activities: Net increase (decrease) in short-term borrowings (122) (4,520) (41,090) Proceeds from long-term debt 4,580 4,900 44,545 Repayment of long-term debt (5,238) (6,100) (55,458) Net increase (decrease) in redemption of bonds 7,000 — — Sale of treasury stock 129 — — Acquisition of treasury stock (2,130) (1,194) (10,856) Cash dividends paid (624) (981) (8,922) Other, net (220) (358) (3,261) Net cash (used in) provided by financing activities 3,373 (8,254) (75,043) Effect of exchange rate changes on cash and cash equivalents (71) 77 706 Net increase (decrease) in cash and cash equivalents 11,946 (11,436) (103,964) Cash and cash equivalents at beginning of year 31,799 43,746 397,698 Cash and cash equivalents at end of year ¥ 43,746 ¥ 32,310 $ 293,733 CONSOLIDATED STATEMENT OF CASH FLOWS TOA CORPORATION and its consolidated subsidiaries For the year ended 31 March 2020 and 2021 21 Millions of Japanese Yen Thousands of U.S. Dollars (Note 1) 31 March 2020 31 March 2021 31 March 2021 Profit ¥ 5,082 ¥ 6,884 $ 62,585 Other comprehensive income: Net unrealized gains (losses) on securities (762) 128 1,168 Net deferred gains (losses) on hedges 8 18 170 Retirement benefits liability adjustments ( Note 15) (1,381) 2,141 19,471 Total other comprehensive income ( Note 8) (2,134) 2,289 20,810 Comprehensive income ¥ 2,947 ¥ 9,173 $ 83,396 Total comprehensive income attributable to: ( Note 8) Owners of parent ¥ 2,872 ¥ 9,148 $ 83,169 Non-controlling interests ¥ 74 ¥ 24 $ 226 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME TOA CORPORATION and its consolidated subsidiaries For the year ended 31 March 2020 and 2021 The accompanying notes are an integral part of these financial statements. 22 The accompanying notes are an integral part of these financial statements. The accompanying notes are an integral part of these financial statements. CONSOLIDATED STATEMENT OF CHANGES IN NET ASSETS TOA CORPORATION and its consolidated subsidiaries For the year ended 31 March 2020 and 2021 Millions of Japanese Yen Shareholders' equity Accumulated other comprehensive income Non-controlling interests Total net assets Common stock Capital surplus Retained earnings Treasury stock, at cost Net unrealized gains (losses) on securities (Note 13) Net deferred gains (losses) on hedges Revaluation reserve for land (Note 6) Retirement benefits liability adjustments (Note 15) Balance at March 31, 2019 ¥ 18,976 ¥ 18,115 ¥27,390 ¥ (2,059) ¥ 3,334 ¥ (36) ¥ 3,661 ¥ (1,166) ¥ 628 ¥ 68,845 Cash dividends (626) (626) Profit attributable to owners of parent for the period 5,007 5,007 Acquisition of treasury stock (2,130) (2,130) Sale of treasury stock 6 123 129 Reversal of revaluation reserve for land 1 1 Net changes in items other than shareholders' equity (762) 8 (1) (1,381) 74 (2,061) Balance at March 31, 2020 ¥ 18,976 ¥ 18,121 ¥31,773 ¥ (4,066) ¥ 2,571 ¥ (27) ¥ 3,659 ¥ (2,547) ¥ 703 ¥ 69,166 Cash dividends (985) (985) Profit attributable to owners of parent for the period 6,859 6,859 Acquisition of treasury stock (1,194) (1,194) Sale of treasury stock 5 5 Reversal of revaluation reserve for land — Conversion of convertible bond 2 7 10 Net changes in items other than shareholders' equity 128 18 — 2,141 24 2,314 Balance at March 31, 2021 ¥ 18,976 ¥ 18,124 ¥37,647 ¥ (5,247) ¥ 2,700 ¥ (8) ¥ 3,659 ¥ (405) ¥ 728 ¥ 76,175 Thousands of U.S. Dollars (Note 1) Shareholders' equity Accumulated other comprehensive income Non-controlling interests Total net assets Common stock Capital surplus Retained earnings Treasury stock, at cost Net unrealized gains (losses) on securities (Note 13) Net deferred gains (losses) on hedges Revaluation reserve for land (Note 6) Retirement benefits liability adjustments (Note 15) Balance at March 31, 2020 $172,515 $164,742 $288,846 $ (36,964) $ 23,378 $ (247) $ 33,271 $ (23,158) $ 6,398 $628,781 Cash dividends (8,956) (8,956) Profit attributable to owners of parent for the period 62,359 62,359 Acquisition of treasury stock (10,856) (10,856) Sale of treasury stock 45 45 Reversal of revaluation reserve for land 0 Conversion of convertible bond 23 66 90 Net changes in items other than shareholders' equity 1,168 170 0 19,471 226 21,037 Balance at March 31, 2021 $172,515 $164,766 $342,249 $ (47,709) $ 24,547 $ (77) $ 33,271 $ (3,687) $ 6,624 $692,502 24 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS TOA CORPORATION and its consolidated subsidiaries 1.Significant Items that Form the Basis of Preparing Consolidated Financial Statements: The accompanying consolidated financial statements of TOA CORPORATION (the "Company") and its consolidated subsidiaries. (the "Companies") are prepared on the basis of accounting principles generally accepted in Japan, which are different in certain respects as to application and disclosure requirements of International Financial Reporting Standards, and are compiled from the consolidated financial statements prepared by the Company as required by the Financial Instruments and Exchange Law of Japan. Certain reclassifications and rearrangements were made for the convenience of readers outside of Japan. As permitted by the Financial Instruments and Exchange Law of Japan, amounts of less than one million yen have been rounded down to the nearest million Japanese yen. Ⅰ . Basis of consolidation The Company has 16 majority-owned subsidiaries as of March 31, 2021. The consolidated financial statements for the year ended March 31, 2021 include the accounts of the Company and 10 majority-owned subsidiaries. Principal consolidated subsidiaries were TOA Agency Co., Ltd., Shinko Corporation, TOA Kikai Kogyo Co., Ltd. Consolidated subsidiaries have the same financial period as the Company that ends on March 31. Other 6 subsidiaries are not consolidated as they are at small scale and not significant in terms of total assets, net sales, retained earnings or net income in aggregate. Investments in unconsolidated subsidiaries (Human Affair Co., Ltd. and others) and affiliates (Sengenyama Developing Co., Ltd. and others) are excluded from application of the equity method as they are not significant in terms of net income or retained earnings in aggregate. Ⅱ . Basis of accounting treatment (1) Basis of valuation for significant assets a) Securities Securities held by the Companies are classified into two categories; Held-to-maturity debt securities are carried at amortized cost. Other securities for which market quotations are available are stated at fair value. Net unrealized gains or losses on these securities are included directly in the net assets and cost of securities sold is computed by the moving average method. Other securities for which market quotations are unavailable are stated at moving average cost method. b) Derivatives With changes in fair value included in net income or loss for the period in which they arise, derivatives are stated at fair value. c) Inventories Cost on construction contracts in progress, PFI projects and real estate for sale are stated at specific cost method for each contract. Materials and supplies are stated at moving average cost method. However, in the case that net selling value falls below the acquisition cost at the end of the period, inventories except for cost on construction contracts in progress are carried at the net selling value on the balance sheet, regarded as decreased profitability of assets. (2) Depreciation for property, plant and equipment and other Except for leased assets, depreciation is principally computed by the declining-balance method at rates based on the estimated useful lives. However, depreciation of buildings which the Companies acquired on or after April 1, 1998, and facilities attached to buildings and other non- building structures acquired on or after April 1, 2016 are computed on a straight-line basis over the estimated period. Useful lives and residual value are in conformity with the provisions of the Corporation Tax Law of Japan. As for intangible fixed assets excluding leased assets and long-term prepaid expenses, amortization is computed by the straight-line method and the useful lives are in conformity with the provisions of the Corporation Tax Law of Japan. As for leased assets related to finance lease, other than those which are deemed to transfer ownership of the leased assets to the lessee, depreciation is principally computed by the straight- line method over the useful lives equivalent to lease term and residual value is equal to zero. (3) Reserve and allowance a) Allowance for doubtful accounts A l l o w a n c e f o r g e n e r a l r e c e i v a b l e s a r e established in amounts considered to be appropriate based upon credit loss experience. For specific receivables such as doubtful accounts, allowance for these are established in amounts considered to be uncollectible based upon an evaluation of possibility of collection in each outstanding receivable. b) Reserve for indemnity on completed contracts Reserve for indemnity on completed contracts is provided for the future defect expenses based upon the estimated indemnity amount for net sales for the year. c) Reserve for loss on construction works Reserve for loss on construction works is provided for the amount equivalent to cover future loss by evaluating individual construction form which loss is assumed and estimated. d) Reserve for loss on construction defects Reserve for loss on construction defects is provided for the amount equivalent to cover future defect expenses based upon the estimated repair costs for construction defects for soil investment projects. e) Provision for board benefit trust Provision for board benefit trust is provided for the amount equivalent to cover future benefit obligations for members of the Board of Directors and the Executive Officers in accordance with the regulations of the board benefit trust. (4) Retirement benefits Liabilities for retirement benefits has been provided on an accrual basis as of the balance sheet date based on an estimate of the projected benefit obligation and the employees' pension plan assets. To calculate projected benefit obligation, the benefit formula method is used to allocate expected retirement benefit payments to the each period through current fiscal year-end. Actuarial gain or loss is amortized by the straight- line method over a defined period (12 years), not exceeding the average remaining service period of the employees from the next fiscal year after the incurrence. Certain consolidated subsidiaries apply the simplified method which assumes retirement benefit obligation to be equal to the benefits payable assuming voluntary retirement of all employees at fiscal year-end. (5) Recognition of contract revenue and cost The Companies adopt the percentage-of- completion method for revenue recognition for the construction-type contracts where the outcome of the construction activities by the end of this year can be reliably estimated. Completion method is adopted otherwise. The percentage of completion is measured by the ratio of the costs incurred to the estimated total costs for each contract. (6) Deferred assets Bond issuance costs are expensed in full when incurred. (7) Hedge accounting Gains or losses arising from changes in fair value of the derivatives designated as "hedging instruments" are deferred as a component of net assets and included in net income or loss in the same period during which the gains and losses on the hedged items or transactions are recognized. For interest rate swaps, if certain hedging criteria are met, interest rate swaps are not recognized at their fair values but an alternative (short-cut) method under Japanese accounting standards is applied by which the amounts received or paid for such interest swap arrangements are recognized as interest over the life of each of the arrangements. T h e d e r i v a t i v e s d e s i g n a t e d a s h e d g i n g instruments by the Companies are principally interest swaps and forward exchange contracts. The related hedged items are bank loans, foreign currency monetary liabilities and forecasted transactions. The Companies have a policy to utilize the above hedging instruments in order to reduce the Company's exposure to the risk of interest rate fluctuation and foreign exchange fluctuation. Thus, the Company's purchases of the hedging instruments are limited to, at maximum, the amounts of the hedged items. The Companies evaluate effectiveness of its hedging activities by reference to the accumulated gains or losses on the hedging instruments and the related hedged items from the commencement of the hedges. (8) Scope of cash and cash equivalents Cash and cash equivalents in the consolidated statement of cash flows and composed of cash on hand, bank deposits which are able to be withdrawn on demand and short-term investment with an original maturity of three months or less and which represent a minor risk of fluctuation in value. (9) Other important items for the preparation of consolidated financial statements 1) Accounting principles and procedures adopted when the relevant accounting standards are not clearly defined. Accounting methods used for joint ventures (JV) in construction projects. The Companies recognize assets, liabilities, income and expenses mainly in proportion to the percentage of investment by the JV members. (Additional information) The Companies apply the "Accounting Standard for Accounting Policy Disclosures, Accounting Changes and Error Corrections" (ASBJ Statement No. 24, March 31, 2020) from the fiscal year ended March 31,2021. 2) Consumption taxes Transactions subject to consumption taxes are recorded at amounts exclusive of consumption taxes. (10) U.S. Dollar amounts The dollar amounts included in the financial s t a t e m e n t s a n d n o t e s t h e r e t o r e p r e s e n t t h e arithmetical results of translating yen to dollars at rate of ¥110=US$1, the approximated rate of exchange prevailing on March 31, 2021. The inclusion of such dollar amounts is solely for the convenience of readers outside of Japan and is not intended to imply that yen and assets and liabilities originating in Yen have been or could be readily converted, realized or settled in dollars at this or any other rates. Amounts less than one thousand have been rounded down to the nearest thousand dollars. Significant accounting estimates 1 Percentage-of-completion method (1) Amount recorded in the consolidated financial statements for the fiscal year ended March 31, 2021 The amounts of contract revenue accounted for by the percentage-of-completion method ¥172,265 million (US$1,566,046 thousand) (2) Information on the nature of significant accounting estimates for identified items The Companies apply the percentage-of- completion method (the construction-cost- percentage method for estimating the degree of completion) to construction contracts whose outcome at the end of the current fiscal year is deemed certain. The percentage of completion based on the percentage-of-completion method is calculated by making a reliable estimate of total construction revenue and total construction cost for each construction project, and multiplying the percentage of construction cost incurred up to the end of the fiscal year by the total construction revenue calculated as of the end of the fiscal year. Estimates of the total cost of construction are made using an implementation budget, and the assumptions used includes/various factors such as unit prices of construction materials, unit prices of labor, and the number of man-hours. Since these key assumptions are subject to estimation uncertainty, changes in key assumptions due to future changes in economic conditions may result in an increase or decrease in the amount of work completed in the following fiscal year. 2 Impairment loss on fixed assets (1) Amount recorded in the consolidated financial statements for the current fiscal year Impairment loss ¥239 million (US$2,180 thousand) 25 (2) Information on significant accounting estimates for identified items The Companies recognizes impairment losses when the total amount of undiscounted future cash flows from an asset or asset group is less than its carrying amount, after grouping business assets by business location while rental assets and idle assets are grouped individually. Assets or asset groups for which it has been determined that an impairment loss should be recognized are written down to their recoverable amount, and the amount of the reduction is presented as an impairment loss. The recoverable amount is the higher of the net selling price or the value in use of the asset or asset group. Future cash flows are calculated based on major assumptions such as future estimates of the amount of contract awards and the amount of construction value and the construction profit ratio. Since these major assumptions are subject to estimation uncertainly, if the major assumptions change due to future changes in economic c o n d i t i o n s o r t h e C o m p a n i e s ' b u s i n e s s environment, it may be necessary to record additional impairment losses in the following fiscal year. 3 Recoverability of deferred tax assets (1) Amounts recognized in the consolidated financial statements for the year ended March 31, 2021. Deferred tax assets ¥4,238 million (US$38,532 thousand) (2) Information on significant accounting estimates for identified items The Companies recognize deferred tax assets for net operating loss carryforwards and deductible temporary differences when the Companies believe that future taxable income will be sufficient to utilize the carryforwards and deductible temporary differences. In determining the recoverability, the Companies estimate future taxable income based on major assumptions such as the expected amount of contract awards and the amount of construction work performed and the profit ratio on construction work and calculate the recoverable amount through the scheduling of loss carryforwards and deductible temporary differences. Since these major assumptions are subject to estimation uncertainly, if the major assumptions change due to future changes in economic c o n d i t i o n s o r t h e C o m p a n i e s ' b u s i n e s s environment, it may be necessary to reverse the deferred tax assets in the following fiscal year. 2.Issued but not yet adopted accounting standard and others Accounting Standard and Implementation Guidance on Revenue Recognition. On March 31, 2020, the ASBJ issued "Accounting Standard for Revenue Recognition" (ASBJ Statement No. 29) and "Implementation Guidance on Accounting Standard for Revenue Recognition" (ASBJ Guidance No. 30). (1) Overview This is a comprehensive accounting standard for revenue recognition. Specifically, the accounting standard establishes the 'following five-step model that will apply to revenue from customers: 1. Identify the contract(s) with a customer 2. Identify the performance obligations in the contract 3. Determine the transaction price 4. Allocate the transaction price to the performance obligations in the contract 5. Recognize revenue when (or as) the entity satisfies a performance obligation (2) Scheduled date of adoption The Company expects to adopt the accounting standard and implementation guidance from the beginning of the fiscal year ending 'March 31, 2022. (3) Impact of the adoption of accounting standard and implementation guidance The Company is currently evaluating the effect of the adoption of this accounting standard and implementation guidance on its consolidated financial statements. A c c o u n t i n g S t a n d a r d f o r F a i r V a l u e Measurement and Related Implementation Guidance On July 4, 2019, the ASBJ issued "Accounting Standard for Fair Value Measurement" (ASBJ Statement No. 30), and "Implementation Guidance on Accounting Standard for Fair Value Measurement" (ASBJ Guidance No. 31), along with related updates to "Accounting Standard for Measurement of Inventories" (ASBJ Statement No. 9), and "Accounting Standard for Financial Instruments" (ASBJ Statement No. 10). (1) Overview The ASBJ has developed an "Accounting S t a n d a r d f o r F a i r V a l u e M e a s u r e m e n t " a n d "Implementation Guidance on Accounting Standard for Fair Value Measurement" (hereinafter collectively, the "Fair Value Measurement Standard"), which provide guidance for fair value measurement in order to improve comparability with internationally recognized accounting standards. The Fair Value Measurement Standard is applied with respect to the fair value of the following items; ∙ Financial instruments defined in "Accounting Standard for Financial Instruments" ∙ Inventories held for trading purposes defined in "Accounting Standard for Measurement of Inventories" (2) Scheduled date of adoption The Company expects to adopt the accounting standards and related implementation guidance from the beginning of the fiscal year ending March 31, 2022. (3) Impact of the adoption of accounting standard and implementation guidance The Company is currently evaluating the effect of the adoption of the accounting standards and related implementation guidance on its consolidated financial statements. 3.Changes in Presentation Adoption of Accounting Standard for Disclosure of Accounting Estimates. The Companies have adopted the "Accounting Standard for Disclosure of Accounting Estimates" (ASBJ Statement No. 31, March 31,2020) in preparing the consolidated financial statements for the year ended March 31, 2021, and notes regarding significant accounting estimates are included in the consolidated financial statements. However, in the notes, comparative information for the previous fiscal year is not included in accordance with the transitional treatment prescribed in the proviso of paragraph 11 of this accounting standard. The Companies have changed the presentation of items in the consolidated statement of income as follows: The items that had been presented as "Other income (expenses)" in the consolidated statements of income until the fiscal year ended March 31, 2020 are presented separately as "Non-operating income", Non-operating expenses", Extraordinary income" and "Extraordinary loss" from the fiscal year ended March 31, 2021. Gain on insurance claims included in Other, net of Other income (expenses) in the consolidated statement of income is presented separately from the fiscal year ended March 31, 2021. To reflect this change in presentation, the Companies reclassified this item in the consolidated financial statements. Consequently, the amount of ¥(36) million shown as Other, net of Other income(expenses) in the consolidated statement of income for the previous fiscal year was reclassified as Gain on insurance claims in the amount of ¥8 and Other of ¥29 million in Non-operating income. Commission fee included in Other, net of Other income (expenses) in the consolidated statement of income is presented separately from the fiscal year ended March 31, 2021. In addition, Exchange loss, presented separately in the previous year, is included in Other in Non-operating loss in the current year. To reflect this change in presentation, the Companies reclassified this item in the consolidated financial statements. Consequently, the amount of ¥(298) million shown as Exchange loss and the amounts of ¥(36) million shown Other, net of Other income(expenses) in the consolidated statement of income for the previous fiscal year were reclassified as Commission fee in the amount of ¥43 and Other of ¥324 million in Non- operating income. Gain on redemption of golf club membership, presented separately in the previous year, is included in Other in Extraordinary income in the current year. To reflect this change in presentation, the Companies reclassified this item in the consolidated financial statements. Consequently, the amount of ¥84 million shown Gain on redemption of golf club membership o f ¥ ( 3 6 ) m i l l i o n s h o w n O t h e r , n e t o f O t h e r income(expenses) in the consolidated statement of income for the previous fiscal year was reclassified as Other in the amount of ¥113 in Extraordinary income. Loss on valuation of investment in securities, presented separately in the previous year, is included in Other in Extraordinary loss in the current year. To reflect this change in presentation, the Companies reclassified this item in the consolidated financial statements. Consequently, the amount of ¥(198) million shown Loss on valuation of investment in securities of ¥(36) million shown Other, net of Other income(expenses) in the consolidated statement of income for the previous fiscal year was reclassified as Other in the amount of ¥232 in Extraordinary loss. 4.Changes in accounting estimates Change in the number of years for accounting treatment of retirement benefits Previously, the Company had amortized the cost of retirement benefits over 13 years, which is a certain number of years within the average remaining years of service of employees, but as the average remaining years of service has fallen below this number, the Company has changed the number of years over which costs are amortized to 12 years from the fiscal year ended March 31, 2021. The effect of this change on profit or loss for the current fiscal year was immaterial. 5.Additional information (Performance-linked stock compensation plan for directors and executive officers) 1 Transaction summary The Company approved a resolution at the 129th Annual General Meeting of Shareholders held on June 27, 2019 to introduce the Board Benefit Trust (the "BBT"), a performance-linked stock compensation plan for its directors and executive officers (the Directors). The BBT plan clarifies how the Company's performance and its stock value influence the Directors' compensation, which enables the Directors to share with stockholders the benefits from the improvement of the Company's performance and corporate value over the medium to long-term period. The Shares are acquired through the trust funded by the Company and established based on the BBT (the "Trust"). Under the BBT plan, Directors are granted shares in the Company and the amount of cash equivalent to the market price of the Company's shares (the "Shares") through the Trust in accordance with the Director's Stock Compensation Rules stipulated by the Company. In principle, the Directors are to receive the such compensation upon their retirement from the position. 2 The Company's own stock in the Trust The Company's outstanding shares in the Trust are included in treasury stock under net assets based on the book value in the Trust. The book value of such treasury stock was ¥124 million (US$1,135 thousand), and the number of shares was 96,300 as of March 31, 2021. (Impact of the spread of COVID-19 on Accounting Estimates) As a result of the global spread of COVID-19, t h e C o m p a n i e s h a v e b e e n a f f e c t e d b y t h e suspension of construction work on some overseas projects. Almost all of the interrupted works have been resumed, and assuming that these works can be continued, the Companies have made accounting estimates for the recoverability of deferred tax assets, the determination of impairment of fixed assets, and the total cost of construction works. However, since it is difficult to predict the impact of the spread of COVID-19 and the timing of its convergence, the Companies' financial position and operating results in the future may differ from these estimates and assumptions. (Acquisition of treasury stock) By resolution of the Board of Directors meeting held on February 22, 2021, the Company acquired 698,600 shares of treasury stock by May 31, 2021, in accordance with the provisions of Article 156 of the Companies Act as applied pursuant to Article 165, Paragraph 3 of the same act. Consequently, treasury stock increased by ¥1,696 million (US$15,425 thousand). 26 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS TOA CORPORATION and its consolidated subsidiaries 6.Notes to Consolidated Balance Sheet Ⅰ .Cost on construction contracts in progress and other Cost on construction contracts in progress and other as of March 31, 2020 and 2021 consisted of: Millions of Japanese Yen Thousands of U.S. Dollars 2020 2021 2021 Cost on construction contracts in progress ¥5,646 ¥3,817 $34,701 PFI projects 773 619 5,633 Other inventories 890 760 6,913 Cost on construction contracts in progress and other ¥7,310 ¥5,197 $47,248 Ⅱ .Reserve for loss on construction works Cost on construction contracts in progress and reserve account in relation to the construction works, which loss is assumed, are represented in current assets and liabilities, respectively without setoff. Among cost on construction contracts in progress, the aggregate amounts corresponding to reserve for loss on construction works as of March 31, 2020 and 2021 are as follows: Millions of Japanese Yen Thousands of U.S. Dollars 2020 2021 2021 ¥192 ¥563 $5,123 Ⅲ .Investments in securities Among investments in securities, the aggregate amounts corresponding to unconsolidated subsidiaries and affiliates as of March 31, 2020 and 2021 are as follows: Millions of Japanese Yen Thousands of U.S. Dollars 2020 2021 2021 Investments in affiliates ¥303 ¥339 $3,088 Ⅳ .Revaluation of land In accordance with the "Act on Revaluation of Land" (Act No.34 promulgated on March 31, 1998) and the "Act on Partial Revision of the Act on Revaluation of Land" (Act No.19 promulgated on March 31, 2001), the Company revalued its land held for the business purpose and accounted for the amount equivalent to tax related to this differences on revaluation as "deferred tax liabilities on revaluation of land" in liabilities and accounted for the amount that tax amount were deducted from the differences on revaluation as "revaluation reserve for land" in net assets. Furthermore, reviewing a collectability of "deferred tax assets for land revaluation" individually, among the amount equivalent to tax related to the differences on revaluation of land, the amount that were difficult to anticipate collectability were reduced from "revaluation reserve for land". Revalued method The Company revalued its land held for business purposes based on the value appraised by an appraiser, as regulated by Article No.2-4 of the "Enforcement Ordinance of the Law Concerning Land Revaluation (Article No.119 issued on March 31, 1998) with certain necessary adjustments. Revalued date March 31, 2002 Millions of Japanese Yen Thousands of U.S. Dollars 2020 2021 2021 Differences of the land after revaluation exceeded its fair value ¥3,802 ¥3,618 $32,895 Ⅴ .Assets pledged as collateral and secured liabilities Assets pledged as collateral and secured liabilities as of March 31, 2020 and 2021 were as follows: Millions of Japanese Yen Thousands of U.S. Dollars Assets pledged as collateral: 2020 2021 2021 Current assets Other current assets ¥19 ¥17 $159 Investment and other assets Investment in securities 2,301 2,327 21,160 Long-term loans 147 130 1,189 Total ¥2,468 ¥2,476 $22,510 As of March 31, 2021, the assets listed above are pledged as collateral to secure contingent liabilities amounting to ¥1,959 million (US$17,817 thousand) and liabilities based on the loan agreements with credit line between 12 PFI companies and financial institutions. 27 As of March 31, 2020, secured liabilities were in the amount of ¥1,768 million and liabilities were for 12 PFI companies. Ⅵ .Securities lent Among investments in securities, securities lent to financial institution under the security lending agreement at March 31, 2020 and 2021 were as follows: Millions of Japanese Yen Thousands of U.S. Dollars 2020 2021 2021 ¥164 ¥195 $1,779 Ⅶ .Commitments and contingent liabilities (a)The Companies are contingently liable for the following as of March 31, 2020 and 2021: Millions of Japanese Yen Thousands of U.S. Dollars 2020 2021 2021 Employees (Loan guarantee to bank) ¥13 ¥14 $131 National Federation of Promotion for Fishing Ports and Villages 44 33 303 Fisheries Cooperative Association (Loan guarantee) MORIMOTO CO., LTD (Deposit Money Guarantee) 325 155 1,417 Others 5 — — Total ¥389 ¥203 $1,852 Ⅷ .Short-term borrowings The Company had commitment lines for efficient financing from 7 banks at March 31, 2020 and 2021 as follows: Millions of Japanese Yen Thousands of U.S. Dollars 2020 2021 2021 Total amount of contracts of commitment lines ¥20,000 ¥25,000 $227,272 Outstanding borrowings — — — Balance ¥20,000 ¥25,000 $227,272 Ⅸ .Non-recourse debt The following non-recourse debts are included in current portion of long-term debt and long-term debt with PFI business pledged as collateral. The amount of non-recourse debts as of March 31, 2020 and 2021 are as follows: Millions of Japanese Yen Thousands of U.S. Dollars 2020 2021 2021 Non-recourse debt included in current portion of long-term debt ¥542 ¥455 $4,138 Non-recourse debt included in long-term debt 658 203 1,846 Total ¥1,201 ¥658 $5,985 The amount of PFI assets pledged as collateral for non-recourse debt as of March 31, 2020 and 2021 are as follows: Millions of Japanese Yen Thousands of U.S. Dollars 2020 2021 2021 ¥3,583 ¥3,074 $27,950 7.Notes to Consolidated Statement of Income Ⅰ .Net sales The amounts of contract revenue which are accounted for by the percentage-of-completion method were as follows: Millions of Japanese Yen Thousands of U.S. Dollars 2020 2021 2021 ¥172,431 ¥172,265 $1,566,046 Ⅱ .Loss on valuation of inventory The ending inventory was the carrying value after writing down due to the decreased profitability. Among the cost of sales, the aggregate amounts corresponding to loss on valuation of inventory were as follows: Millions of Japanese Yen Thousands of U.S. Dollars 2020 2021 2021 ¥212 ¥14 $131 28 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS TOA CORPORATION and its consolidated subsidiaries Ⅲ .Reserve for loss on construction works Among the cost of sales, the aggregate amount corresponding to reserve for loss on construction works were as follows: Millions of Japanese Yen Thousands of U.S. Dollars 2020 2021 2021 ¥1,968 ¥767 $6,980 Ⅳ .Selling, general and administrative expenses The significant items of selling, general and administrative expenses were as follows: Millions of Japanese Yen Thousands of U.S. Dollars 2020 2021 2021 Salaries to employees ¥4,804 ¥4,564 $41,492 Expenses for retirement benefits for employees 332 496 4,509 Research expenses 982 911 8,285 Provision for doubtful accounts, trade (0) (0) (2) Ⅴ .Research and development expenses Among the general and administrative expenses and the cost on contract, the aggregate amounts corresponding to research and development expenses were as follows: Millions of Japanese Yen Thousands of U.S. Dollars 2020 2021 2021 ¥1,058 ¥1,225 $11,139 Ⅵ .Gain on sale of fixed assets The breakdown of the gain on sale of fixed assets was as follows: Millions of Japanese Yen Thousands of U.S. Dollars 2020 2021 2021 Land ¥22 ¥0 $6 Building and structures 4 — — Vessels 1 0 0 Others 0 0 0 Total ¥28 ¥0 $8 Ⅶ .Loss on sale of fixed assets The breakdown of the loss on disposition of fixed assets was as follows: Millions of Japanese Yen Thousands of U.S. Dollars 2020 2021 2021 Land ¥0 ¥6 $58 Building and structures 0 1 14 Others — 0 0 Total ¥0 ¥7 $72 Ⅷ .Loss on disposal of fixed assets The breakdown of the loss on retirement of fixed assets was as follows: Millions of Japanese Yen Thousands of U.S. Dollars 2020 2021 2021 Machinery, vehicles and equipment ¥2 ¥203 $1,847 Buildings and structures 56 16 153 Others — 7 67 Total ¥58 ¥227 $2,068 29 Ⅸ .Impairment of fixed assets For the year ended March 31, 2020, the Companies recognized losses on impairment of the following assets: Use Type of assets Location Number of groups Idle properties Land Kanagawa Pref and other 2 The construction business assets were grouped by each branch unit, the real estate leasing assets and the idle properties were grouped individually. The carrying amount of the relevant assets was written down to the recoverable value due to the drop in fair value and ¥2 million (US$20 thousand) was accounted for as loss on impairment of fixed assets, which consisted of ¥2 million (US$20 thousand) for Land. Meanwhile, the recoverable value of the relevant assets was based on the anticipated net sale value. Furthermore, the anticipated net sale value of land whose carrying amount was significant was based on the appraisal value by the licensed real-estate appraiser. For the year ended March 31, 2021, the Companies recognized losses on impairment of the following assets: Use Type of assets Location Number of groups Business assets Builidngs and structures Kanagawa Pref 1 The construction business assets were grouped by each branch unit, the real estate leasing assets and the idle properties were grouped individually. Some business assets in Kanagawa Prefecture are no longer expected to be used in the future due to the decision to partially demolish buildings and structures in the current fiscal year, and the book value has been reduced to the recoverable amount. An impairment loss of ¥239 million (US$2,180 thousand) has been recorded. 8.Notes to Consolidated Statement of Comprehensive Income Reclassifications adjustments and tax effects in relation to the other comprehensive income were as follows: Millions of Japanese Yen Thousands of U.S. Dollars 2020 2021 2021 Unrealized gains (losses) on securities: Amount arising during the year (¥1,197) ¥1,641 $14,924 Amount of reclassification adjustments 73 (1,420) (12,910) Amount before tax effect (1,123) 221 2,014 Tax effect 360 (93) (845) Unrealized gains (losses) on securities (762) 128 1,168 Deferred gains (losses) on hedges: Amount arising during the year 12 27 245 Amount of reclassification adjustments — — — Amount before tax effect 12 27 245 Tax effect (3) (8) (75) Deferred gains (losses) on hedges 8 18 170 Revaluation reserve for land: Tax effect — — — Revaluation reserve for land — — — Retirement benefits liability adjustments: Amount arising during the year (2,555) 1,831 16,645 Amount of reclassification adjustments 565 1,256 11,418 Amount before tax effect (1,990) 3,087 28,064 Tax effect 609 (945) (8,593) Retirement benefits liability adjustments (1,381) 2,141 19,471 Total other comprehensive income (¥2,134) ¥2,289 $20,810 30 9.Notes to Consolidated Statement of Changes in Net Assets Ⅰ. Type and number of shares For the year ended March 31, 2020 Thousands of shares Type of shares Number of shares at beginning of year Increase Decrease Number of shares at end of year Issued stock Common stock 22,494 — — 22,494 Treasury stock Common stock 1,594 1,396 100 2,891 Notes: 1. The number of common shares of treasury stock includes 100 thousand shares acquired by the BBT. 2. The principal reasons for the increase and decrease in treasury stock were as follows: Increase due to acquisition of common stock under BBT 100 thousand shares Increase due to acquisition of treasury stock under the board resolution on Nov 27, 2019 1,296 Increase due to purchase of odd lot shares 0 Decrease due to disposition of treasury stock by third party allotment resulting from the introduction of the BBT 100 For the year ended March 31, 2021 Thousands of shares Type of shares Number of shares at beginning of year Increase Decrease Number of shares at end of year Issued stock Common stock 22,494 — — 22,494 Treasury stock Common stock 2,891 493 9 3,375 Notes: 1. The number of common shares of treasury stock includes 96 thousand shares acquired by the BBT. 2. The principal reasons for the increase and decrease in treasury stock were as follows: Increase due to acquisition of treasury stock under the board resolution on Feb 22, 2021 493 thousand shares Increase due to purchase of odd lot shares 0 Decrease due to the issuance of treasury stock with exercising of stock acquisition rights of yen-denominated convertible corporate bonds with stock acquisition rights maturing in 2021 5 Decrease due to the BBT benefits 3 Ⅱ. Dividend payment For the year ended March 31, 2020 Millions of Japanese Yen Resolution Type of share Dividend resource Total amount of dividends Cash dividends per share (Yen) Record date Effective date Annual Shareholders' Meeting held on June 26, 2020 Common stock Retained earnings ¥1,002 ¥50 March 31, 2020 June 29, 2020 Notes: Total amount of dividends (¥1,002 million) based on the resolution adopted at the Ordinary General Shareholder's Meeting on Jun 26, 2020 is also included in the dividend payment of ¥5 million for the shares acquired by the BBT. Ⅲ. Among dividends whose record date belong in the current fiscal year, dividends which become effective in the following fiscal year was as follows: For the year ended March 31, 2021 Millions of Japanese Yen Thousands of U.S. Dollars Resolution Type of share Dividend resource Total amount of dividends Cash dividends per share (Yen) Total amount of dividends Cash dividends per share (Dollars) Record date Effective date Annual Shareholders' Meeting held on June 29, 2021 Common stock Retained earnings ¥1,537 ¥80 $13,974 $0.72 March 31, 2021 June 30, 2021 Notes: Total amount of dividends (¥1,537 million) based on the resolution adopted at the Ordinary General Shareholder's Meeting on Jun 29, 2021 is also included in the dividend payment of ¥7 million for the shares acquired by the BBT. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS TOA CORPORATION and its consolidated subsidiaries 31 Ⅳ .Stock acquisition rights For the year ended March 31, 2021 Number of shares to be issued (Thousands of shares) Company name Description Type of Share Beginning of year Increase Decrease End of year Balance at end of year Issuing Company Stock acquisition rights, yen-denominated convertible corporate bonds with stock acquisition rights maturing in 2024 Issue date : December 13, 2019 Common stock 3,719 22 5 3,736 See Note Notes: 1. Convertible corporate bonds with stock acquisition rights are accounted for based on the lump-sum reporting method. 2. The principal reasons for the increase and decrease in stock acquisition rights were as follows: Increase due to adjustment of conversion price 22 thousand shares Decrease due to the issuance of treasury stock with exercising of stock acquisition rights of yen-denominated convertible corporate bonds with stock acquisition rights maturing in 2021 5 10.Notes to Consolidated Statement of Cash Flows Cash and cash equivalents consisted of: Millions of Japanese Yen Thousands of U.S. Dollars 2020 2021 2021 Cash and bank deposits ¥43,767 ¥32,331 $293,919 Time deposits due over three months (20) (20) (185) Cash and cash equivalents ¥43,746 ¥32,310 $293,733 11.Leases Operating lease The scheduled maturities of future operating lease payments, including an interest portion on such lease contracts as of March 31, 2020 and 2021, are as follows: Millions of Japanese Yen Thousands of U.S. Dollars 2020 2021 2021 Due within one year ¥153 ¥140 $1,278 Due over one year 181 68 619 Total ¥334 ¥208 $1,898 12.Financial Instruments Ⅰ. Summary of financial instruments a) Policy for financial instruments The Companies limit its fund management to low-risk financial instruments, such as bank deposits in a short period and have a policy to raise low-interest funds through bank borrowings flexibly. The Companies utilize derivatives in order to reduce the risk of fluctuation in interest rates and foreign exchange rates for debts and credits in foreign currencies. The Companies, furthermore, utilize the hedging instruments for the purpose of stabilizing the cost on contracts and do not enter into derivatives for speculative purpose. b) Contents of financial instruments, related risk and risk management Notes and accounts receivable which categorized into operating receivables are exposed to credit risk of customers. These risks are reviewed at entering into a contract and the concerned counterparts are managed by the administration headquarters in each case. Investments in securities are exposed to fluctuation risks of market price. Those securities are mainly shares of other companies with which the Company has business relationships and the Company monitors the monthly fair value. Among the debt, short-term borrowings are principally applicable to funds for business activities and long-term debt (maturities are within five years in principle) are funds for capital investments. Long-term debt with variable interest rates are exposed to the risk of interest rate fluctuation. The Company utilizes derivatives which are the interest swaps in each contracts in order to avoid fluctuation 32 risk of interest expenses and stabilize interest cost. In addition, the Company utilizes foreign currency exchange contracts to hedge foreign currency exposure of certain transactions related to construction work denominated in foreign currencies. Conducting of derivative transactions is managed by gaining approval by directors and derivatives provided by the highly-rated financial institutions are utilized in order to avoid credit risk. c) Supplemental explanation for fair value of financial instruments Notional amounts of derivatives are not indicative of the actual market risk involved in derivative transactions. Ⅱ. Fair value of financial instruments As of March 31, 2020, carrying amount, fair value and unrealized gain (loss) are as follows: Carrying amount Fair value Unrealized gain (loss) Millions of Japanese Yen Cash and bank deposits ¥43,767 ¥43,767 ¥— Notes and accounts receivable, trade 83,275 83,275 — Advanced money 12,068 12,068 — Investments in securities Other securities 8,781 8,781 — Total assets 147,893 147,893 — Notes and accounts payable, trade 34,796 34,796 — Electronically recorded obligations, operating 11,894 11,894 — Short-term borrowings 8,636 8,636 — Deposits received 21,161 21,161 — Convertible bonds with stock acquisition rights 7,000 7,206 206 Long-term debt (*1) 18,834 18,901 66 Total liabilities 102,323 102,596 272 Derivative transactions (*2) (¥39) (¥39) ¥— (*1) Current portion of long-term debt of ¥6,100 million (US$56,485 thousand) is included in long-term debt and carrying amount and fair value are represented. (*2) The assets and liabilities are reported as net amount. As of March 31, 2021, carrying amount, fair value and unrealized gain (loss) are as follows: Carrying amount Fair value Unrealized gain (loss) Carrying amount Fair value Unrealized gain (loss) Millions of Japanese Yen Thousands of U.S. Dollars Cash and bank deposits ¥32,331 ¥32,331 ¥— $293,919 $293,919 $— Notes and accounts receivable, trade 87,702 87,702 — 797,295 797,295 — Advanced money 15,285 15,285 — 138,960 138,960 — Investments in securities Other securities 9,486 9,486 — 86,242 86,242 — Total assets 144,805 144,805 — 1,316,417 1,316,417 — Notes and accounts payable, trade 32,005 32,005 — 290,960 290,960 — Electronically recorded obligations, operating 11,929 11,929 — 108,445 108,445 — Short-term borrowings 4,116 4,116 — 37,418 37,418 — Deposits received 23,546 23,546 — 214,056 214,056 — Convertible bonds with stock acquisition rights 6,990 9,284 2,294 63,545 84,405 20,860 Long-term debt (*1) 17,634 17,699 64 160,314 160,902 588 Total liabilities 96,221 98,580 2,359 874,741 896,189 21,448 Derivative transactions (*2) (¥12) (¥12) ¥— ($111) ($111) $— NOTES TO CONSOLIDATED FINANCIAL STATEMENTS TOA CORPORATION and its consolidated subsidiaries 33 (*1) Current portion of long-term debt of ¥5,749 million (US$52,264 thousand) is included in long-term debt and carrying amount and fair value are represented. (*2) The assets and liabilities are reported as net amount. a) Computation of fair value for financial instruments, investment in securities and derivative transactions Assets Cash and bank deposits, and advanced money in other current assets Those accounts are carrying value, since those are settled in a short period and their fair value is equivalent to carrying amount approximately. Notes and accounts receivable, trade The most of its account are carrying value, since those are settled in a short period and their fair value is equivalent to carrying amount approximately. Investments in securities Fair value of investments in securities is based on market price at Stock Exchange or asking price from correspondent financial institutions. Liabilities Notes and accounts payable, trade, electronically recorded obligations, operating, short-term borrowings, and deposits received in other current liabilities. Those accounts are carrying value, since those are settled in a short period and their fair value is equivalent to carrying amount approximately. Convertible bonds with stock acquisition rights The fair value of convertible bonds with stock acquisition rights is calculated using prices provided by counterparty financial institutions. Long-term debt For the fair value of long-term debt by variable interest rates, the market rate is almost equal to the book price because it reflects the interest rates in a short time. Fair value of long-term debt by fixed rate is based on the present value of the total of principal and interest discounted by the interest rate to be applied, provided that the equivalent loans are newly entered into. In addition, long-term debt by some variable interest rates is subject to the special treatment of interest rate swaps. The total amount of the principal that is being treated as a combination of interest rate swaps is calculated by discounting the interest rate to be applied,provided that the equivalent loans are newly entered into. Derivative Transactions Please refer to Note 13, Derivative Transactions, of the notes the consolidated financial statements. b) Financial instruments for which it is extremely difficult to determine fair value Unlisted stocks are not included in Investments in securities, since those have no market price and it is extremely difficult to determine fair value. Millions of Japanese Yen Thousands of U.S. Dollars 2020 2021 2021 Unlisted stocks ¥1,860 ¥1,837 $16,706 c) Projected redemption The projected redemption of monetary claims as of March 31, 2020 was as follows: Within one year Over one year within five years Over five years within ten years Over ten years Millions of Japanese Yen Cash and bank deposits ¥43,767 ¥— ¥— ¥— Notes and accounts receivable, trade 77,172 6,095 8 — Investments in securities Other securities with maturities — 42 — — (Government bonds) — — — — Total ¥120,939 ¥6,138 ¥8 ¥— 34 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS TOA CORPORATION and its consolidated subsidiaries The projected redemption of monetary claims as of March 31, 2021 was as follows: Within one year Over one year within five years Over five years within ten years Over ten years Within one year Over one year within five years Over five years within ten years Over ten years Millions of Japanese Yen Thousands of U.S. Dollars Cash and bank deposits ¥32,331 ¥— ¥— ¥— $293,919 $— $— $— Notes and accounts receivable, trade 87,532 168 1 — 795,751 1,528 15 — Investments in securities Other securities with maturities — 42 — — — 389 — — (Government bonds) — — — — — — — — Total ¥119,863 ¥211 ¥1 ¥— $1,089,671 $1,918 $15 $— d) The projected repayment of short-term borrowings, long-term debt and lease obligation as of March 31, 2020 was as follows: Within one year Over one year within two years Over two years within three years Over three years within four years Over four years within five years Over five years Millions of Japanese Yen Short-term borrowings ¥8,636 ¥— ¥— ¥— ¥— ¥— Long-term debt 6,100 5,797 3,545 2,304 1,080 7 Lease obligation 71 65 28 25 2 — Total ¥14,808 ¥5,862 ¥3,574 ¥2,329 ¥1,082 ¥7 The projected repayment of short-term borrowings, long-term debt and lease obligation as of March 31, 2021 was as follows: Within one year Over one year within two years Over two years within three years Over three years within four years Over four years within five years Over five years Millions of Japanese Yen Short-term borrowings ¥4,116 ¥— ¥— ¥— ¥— ¥— Long-term debt 5,749 4,884 3,508 2,284 1,207 1 Lease obligation 534 497 494 470 183 352 Total ¥10,399 ¥5,381 ¥4,002 ¥2,754 ¥1,391 ¥353 Within one year Over one year within two years Over two years within three years Over three years within four years Over four years within five years Over five years Thousands of U.S. Dollars Short-term borrowings $37,418 $— $— $— $— $— Long-term debt 52,264 44,036 31,892 20,766 10,976 14 Lease obligation 4,856 4,518 4,491 4,279 1,670 3,201 Total $94,538 $48,555 $36,383 $25,045 $12,646 $3,215 35 13.Securities (1) The following is certain information related to the aggregate acquisition costs, carrying amount and fair value of securities. At March 31, 2020 Millions of Japanese Yen Fair value (Carrying value) Acquisition cost Unrealized gain (loss) Other securities whose fair value amount exceeds their acquisition cost Stock ¥6,949 ¥3,271 ¥3,677 Government bond 42 41 1 Sub total 6,992 3,312 3,679 Other securities whose fair value does not exceed their acquisition cost Stock 1,789 2,013 (223) Government bond — — — Sub total 1,789 2,013 (223) Total ¥8,781 ¥5,325 ¥3,456 (2) Other securities sold during the years ended March 31, 2020 and 2021 were as follows: At March 31, 2020 Millions of Japanese Yen Sales proceeds Gain on sales Loss on sales Stock ¥487 ¥197 ¥72 Other — — — Total ¥487 ¥197 ¥72 At March 31, 2021 Millions of Japanese Yen Thousands of U.S. Dollars Sales proceeds Gain on sales Loss on sales Sales proceeds Gain on sales Loss on sales Stock ¥2,107 ¥1,425 ¥5 $19,160 $12,959 $49 Other — — — — — — Total ¥2,107 ¥1,425 ¥5 $19,160 $12,959 $49 At March 31, 2021 Millions of Japanese Yen Thousands of U.S. Dollars Fair value (Carrying value) Acquisition cost Unrealized gain (loss) Fair value (Carrying value) Acquisition cost Unrealized gain (loss) Other securities whose fair value exceeds its acquisition cost Stock ¥9,080 ¥5,236 ¥3,844 $82,553 $47,603 $34,950 Government bond 42 41 1 389 379 10 Sub total 9,123 5,278 3,845 82,943 47,983 34,960 Other securities whose fair value does not exceed their acquisition cost Stock 362 407 (44) 3,298 3,703 (404) Government bond — — — — — — Sub total 362 407 (44) 3,298 3,703 (404) Total ¥9,486 ¥5,685 ¥3,801 $86,242 $51,686 $34,556 36 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS TOA CORPORATION and its consolidated subsidiaries 14.Derivative Transactions Derivative transactions for the year ended March 31, 2020 were classified into: a) Hedge accounting unapplied Not applicable b) Hedge accounting applied Notional amounts and fair value conditioned on contracts based on each hedge accounting method are as follows: (1) Currency related derivatives Millions of Japanese Yen Hedge accounting method Types of derivative Hedged item Notional amount Maturing over one year Fair value Accounting in principle Forward foreign exchange contracts Buying U.S. Dollars Accounts payable ¥756 ¥238 ¥8 (*) (*) Fair value is calculated based on prices provided by counterparty financial institution. (2) Interest rate related derivatives Millions of Japanese Yen Hedge accounting method Types of derivative Hedged item Notional amount Maturing over one year Fair value Accounting in principle Interest rate swaps Pay/fixed and receive/ floating Long-term debt ¥4,428 ¥3,393 (¥48) (*1) Short-cut Interest rate swaps Pay/fixed and receive/ floating Long-term debt ¥914 ¥83 (*2) (*1) Fair value is calculated based on prices provided by counterparty financial institutions. (*2) Fair value based on the short-cut method is included in fair value of these long-term debt, since the derivative transactions are accounted for together with the hedged long-term debt collectively. Derivative transactions for the year ended March 31, 2021 were classified into: a) Hedge accounting unapplied Not applicable b) Hedge accounting applied Notional amounts and fair value conditioned on contracts based on each hedge accounting method are as follows: (1)Currency related derivatives Millions of Japanese Yen Thousands of U.S. Dollars Hedge accounting method Types of derivative Hedged item Notional amount Maturing over one year Fair value Notional amount Maturing over one year Fair value Accounting in principle Forward foreign exchange contracts Buying U.S. Dollars Accounts payable ¥238 — (¥14) (*) $2,168 — $129 (*) (*) Fair value is calculated based on prices provided by counterparty financial institutions. (2) Interest rate related derivatives Millions of Japanese Yen Thousands of U.S. Dollars Hedge accounting method Types of derivative Hedged item Notional amount Maturing over one year Fair value Notional amount Maturing over one year Fair value Accounting in principle Interest rate swaps Pay/fixed and receive/ floating Long-term debt ¥3,393 ¥2,021 (¥26) (*1) $30,845 $18,377 ($239) (*1) Short-cut Interest rate swaps Pay/fixed and receive/ floating Long-term debt ¥83 — (*2) $760 — (*2) (*1) Fair value is calculated based on the price provided by counterparty financial institutions. (*2) Fair value based on the short-cut method is included in fair value of these long-term debt, since the derivative transactions are treated with the hedged long-term debts collectively. 15.Reserve for Retirement Benefits and Pension Plan The Company and some of its consolidated subsidiaries have the funded/unfunded defined benefit retirement plans. The Company has the funded defined benefit plan, the cash balance plan and sets up the retirement benefit trust. 37 Some consolidated subsidiaries have the unfunded retirement lump sum plans. Furthermore, additional severance payment covering substantially all employees. (1)The changes in the retirement benefit obligation during the years ended March 31, 2020 and 2021 are as follows: Millions of Japanese Yen Thousands of U.S. Dollars 2020 2021 2021 Retirement benefit obligation balance at the beginning of the year ¥21,135 ¥21,073 $191,574 Service cost 781 811 7,377 Interest cost 78 78 709 Actuarial gain 158 (272) (2,476) Retirement benefit paid (1,081) (1,236) (11,236) Past service costs — 514 4,673 Retirement benefit obligation balance at the end of the year ¥21,073 ¥20,968 $190,621 (2)The changes in plan assets during the years ended March 31, 2020 and 2021 are as follows: Millions of Japanese Yen Thousands of U.S. Dollars 2020 2021 2021 Plan assets balance at the beginning of the year ¥17,889 ¥15,721 $142,927 Expected return on plan assets 233 240 2,186 Actuarial gain (loss) (2,396) 2,072 18,842 Contributions by the Company 1,077 1,641 14,924 Retirement benefits paid (1,080) (1,213) (11,031) Plan assets balance at the end of the year ¥15,721 ¥18,463 $167,849 (3)The following table sets forth the funded status of the plans and the amounts recognized in the consolidated balance sheet as of March 31, 2020 and 2021 for the Company’s and the consolidated subsidiaries’ defined benefit plans: Millions of Japanese Yen Thousands of U.S. Dollars 2020 2021 2021 Funded retirement benefit obligation ¥20,596 ¥20,473 $186,118 Plan assets at fair value (15,721) (18,463) (167,849) 4,874 2,009 18,269 Unfunded retirement benefit obligation 476 495 4,502 Net liability for retirement benefits in the balance sheet 5,351 2,504 22,771 Liability for retirement benefits 5,351 2,504 22,771 Net liability for retirement benefits in the balance sheet ¥5,351 ¥2,504 $22,771 (4)The components of retirement benefit expense for the years ended March 31, 2020 and 2021 are as follows: Millions of Japanese Yen Thousands of U.S. Dollars 2020 2021 2021 Service cost ¥781 ¥811 $7,377 Interest cost 78 78 709 Expected return on plan assets (233) (240) (2,186) Amortization of actuarial loss 565 939 8,542 Past service costs — 316 2,876 Other 11 5 51 Retirement benefit expense ¥1,203 ¥1,910 $17,370 (5)Unrecognized actuarial gain (loss) included in other comprehensive income (before tax effect) for the years ended March 31, 2020 and 2021 is as follows: Millions of Japanese Yen Thousands of U.S. Dollars 2020 2021 2021 Past service costs — (¥197) ($1,797) Actuarial gain (loss) (1,990) 3,284 29,862 Total (¥1,990) ¥3,087 $28,064 38 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS TOA CORPORATION and its consolidated subsidiaries (6)Unrecognized actuarial gain (loss) included in accumulated other comprehensive income (before tax effect) as of March 31, 2020 and 2021 is as follows: Millions of Japanese Yen Thousands of U.S. Dollars 2020 2021 2021 Unrecognized past service costs — ¥197 $1,797 Unrecognized actuarial gain (loss) 3,671 386 3,517 Total ¥3,671 ¥584 $5,315 (7)The fair value of plan assets, by major category, as a percentage of total plan assets as of March 31, 2020 and 2021 is as follows: 2020 2021 Stocks 34% 39% Bonds 30% 27% General account assets 19% 16% Other 17% 17% Total 100% 100% The expected return on assets has been estimated based on the anticipated allocation to each asset class and the expected long-term returns on assets held in each category. (8)The assumptions used in accounting for the above plans as of March 31, 2020 and 2021 were as follows: (Weighted average) 2020 2021 Discount rate 0.4% 0.5% Expected rate of return on plan assets 2.0% 2.0% Expected rate of future salary increase 2.4%~7.2% 2.2%~7.1% 16.Tax Effect Accounting 1.The significant components of deferred tax assets and liabilities at March 31, 2020 and 2021 were as follows: Millions of Japanese Yen Thousands of U.S. Dollars 2020 2021 2021 Deferred Tax Assets: Net liability for retirement benefits ¥2,467 ¥1,615 $14,683 Loss carried forward 2,358 1,120 10,188 Reserve for loss on construction works 805 522 4,749 Accrued bonus to employees 820 801 7,286 Loss on valuation of utility rights 233 232 2,110 Loss on valuation of investment in securities 142 135 1,229 Loss on impairment of fixed assets 252 317 2,885 Loss on construction defects 459 58 535 Others 1,389 1,940 17,642 Total gross deferred tax assets ¥8,929 ¥6,744 $61,312 Valuation allowance for tax loss carried forward (¥242) (¥251) (2,287) Valuation allowance for deductible temporary differences (¥970) (¥929) (8,453) Total valuation allowance (¥1,213) (¥1,181) (10,740) Total deferred tax assets ¥7,716 ¥5,562 50,571 Deferred Tax Liabilities: Unrealized gains on securities (¥1,007) (¥1,100) (10,008) Revaluation reserve for land (545) (548) (4,983) Other (58) (279) (2,538) Total deferred tax liabilities (1,612) (1,928) ($17,530) Net deferred tax assets ¥6,103 ¥3,634 $33,041 (Note) A breakdown of tax loss carried forward and valuation allowance by expiry date as of March 3, 2020 is as follows: 39 At March 31, 2021 Within one year Over one year within two years Over two years within three years Over three years within four years Over four years within five years Over five years Total Millions of Japanese Yen Tax loss carried forward (*1) ¥16 ¥— ¥— ¥— ¥26 ¥1,077 ¥1,120 Valuation allowance (9) — — — (25) (216) (251) Deferred tax assets 6 — — — 0 861 869 (*2) Within one year Over one year within two years Over two years within three years Over three years within four years Over four years within five years Over five years Total Thousands of U.S. Dollars Tax loss carried forward (*1) $152 $— $— $— $241 $9,794 $10,188 Valuation allowance (89) — — — (233) (1,964) (2,287) Deferred tax assets 62 — — — 7 7,830 7,901 (*2) (*1) The amount is determined by multiplying the corresponding loss carried forward by effective statutory tax rate. (*2) Deferred tax assets of ¥869 million (US$7,901 thousand) for the tax loss carried forward of ¥1,120 million (US$10,188 thousand) (the amount is determined by multiplying the corresponding effective statutory tax rate) were recorded. Deferred tax assets of ¥869 million (US$7,901 thousand) mainly consist of the balance of tax loss carried forward of ¥849 million (the amount is determined by multiplying the corresponding effective statutory tax rate). The tax loss carried forward within deferred tax assets was mainly due to the reversal of a portion of the ¥14,100 million (US$128,181thousand) provision for loss on construction defects recorded in the fiscal year ended March 31, 2017. The Companies consider that it is likely the tax loss carried forward will be realized based on estimates of future taxable income; therefore, a related valuation allowance has not been recognized. 2. A reconciliation between the normal effective statutory tax rates for the years ended March 31, 2020 and 2021, and the actual effective tax rates reflected in the accompanying consolidated statements of income is as follows: 2020 2021 Normal effective statutory tax rate 30.6% 30.6% Expenses not deductible for income tax purposes 2.5 1.0 Non-taxable income (0.4) (0.3) Per capita levy of inhabitant taxes 1.5 1.1 Change in valuation allowance (1.3) (0.3) Other-net 0.1 0.3 Actual effective tax rates 32.9% 32.4% 17.Asset Retirement Obligations Because the amounts of asset retirement obligations are inmaterial, the Companies have omitted a disclosure in the Notes to Consolidated Financial Statements for the years ended March 31, 2020 and 2021. 18.Investment and Rental Property Because the amounts of investment and rental property are inmaterial, the Companies have omitted a disclosure in the Notes to Consolidated Financial Statements for the year ended March 31, 2020 and 2021. 40 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS TOA CORPORATION and its consolidated subsidiaries 19.Information on Reportable Segments Ⅰ. Outline of the reportable segments The reportable segments of the Companies are components for which discrete financial information is available and prepared for the regular review, so that the board of directors can make decisions on the distribution of management resources and evaluate the operating performance. The Company comprises "Civil Engineering General Headquarters" and "Building Construction General Headquarters", which control domestic construction businesses, and "International Division" for overseas businesses. Those Headquarters and International Division develop strategies comprehensively in each line of business and expand business activities. Accordingly, the Company's businesses consist of segments classified by products and services based on the headquarters. The reportable segments are composed of "Domestic Civil Engineering Businesses", "Domestic Architectural Businesses", "Overseas Businesses" and principal activities in each segment are the following: 1) Domestic Civil Engineering Businesses: domestic civil engineering contracts, contracts related to design and others 2) Domestic Architectural Building Businesses: domestic architectural contracts, contracts related to design and others 3) Overseas Businesses: general overseas contracts Ⅱ .Computation for the amount of net sales, profits or losses and other items in each reportable segment The accounting policies of the reportable segments are substantially equivalent to the description in Significant Respects for the Basis of Preparing Consolidated Financial Statements. Intersegment net sales and transfers are based on the current market price. Meanwhile, assets are not allocated to the business segments. Ⅲ .Information on net sales, profits or losses and other items in the reportable segments For the year ended March 31, 2020 Millions of Japanese Yen Reportable Segments Domestic Civil Engineering Domestic Architectural Building Overseas Total Others (Note 1) Total Adjustments (Note 2) Consolidated (Note 3) Net sales: External customers ¥101,454 ¥49,439 ¥29,012 ¥179,906 ¥10,372 ¥190,278 ¥ — ¥190,278 Inter-segment — 66 — 66 28,987 29,053 (29,053) — Total ¥101,454 ¥49,505 ¥29,012 ¥179,972 ¥39,360 ¥219,332 (¥29,053) ¥190,278 Segment profits or losses 7,172 2,605 248 10,026 1,832 11,859 (3,902) 7,957 Other items Depreciation and amortization ¥412 ¥0 ¥270 ¥683 ¥473 ¥1,156 ¥404 ¥1,560 Notes : 1. "Other" is excluded from the reportable segments and inclusive of Real Estate Business, Manufacture / Sale / Repairing of construction machineries. 2. Adjustment of the segment profits amounting to ¥(3,902) million is inclusive of inter-segment elimination amounting to ¥40 million and Selling, General and Administrative Expenses amounting to ¥(3,942) million which are not attributed to any reportable segments. 3. Segment profits or losses are adjusted to the operating income in the consolidated statements of income. 4. Assets are not described due to no allocation to the business segments. For the year ended March 31, 2021 Millions of Japanese Yen Reportable Segments Domestic Civil Engineering Domestic Architectural Building Overseas Total Others (Note 1) Total Adjustments (Note 2) Consolidated (Note 3) Net sales: External customers ¥95,385 ¥57,024 ¥26,812 ¥179,221 ¥10,490 ¥189,712 ¥ — ¥189,712 Inter-segment 100 84 — 184 28,803 28,987 (28,987) — Total ¥95,485 ¥57,108 ¥26,812 ¥179,405 ¥39,293 ¥218,699 (¥28,987) ¥189,712 Segment profits or losses 7,100 3,586 (495) 10,192 1,989 12,181 (3,466) 8,714 Other items Depreciation and amortization ¥509 ¥0 ¥319 ¥828 ¥454 ¥1,283 ¥352 ¥1,635 41 For the year ended March 31, 2021 Thousands of U.S. Dollars Reportable Segments Domestic Civil Engineering Domestic Architectural Building Overseas Total Others (Note 1) Total Adjustments (Note 2) Consolidated (Note 3) Net sales: External customers $867,137 $518,405 $243,746 $1,629,289 $95,365 $1,724,655 $ — $1,724,655 Inter-segment 909 764 — 1,673 261,850 263,524 (263,524) — Total $868,046 $519,169 $243,746 $1,630,963 $357,216 $1,988,179 ($263,524) $1,724,655 Segment profits or losses 64,550 32,608 (4,501) 92,656 18,084 110,741 (31,515) 79,226 Other items Depreciation and amortization $4,627 $7 $2,900 $7,535 $4,134 $11,670 $3,201 $14,871 Notes : 1. "Other" is excluded from the reportable segments and inclusive of Real Estate Business, Manufacture / Sale / Repairing of construction machineries. 2. Adjustment of the segment profits amounting to ¥(3,466) million (US$(31,515) thousand) is inclusive of inter-segment elimination amounting to ¥(7) million (US$(66) thousand) and Selling, General and Administrative Expenses amounting to ¥(3,459) million (US$(31,448) thousand) which are not attributed to any reportable segments. 3. Segment profits or losses are adjusted to the operating income in the consolidated statements of income. 4. Assets are not described due to no allocation to the business segments. 20.Related Information Ⅰ .Information on products and services Description is excluded since the similar information is disclosed in the segment information. Ⅱ .Geographical information 1) Net sales For the year ended March 31, 2020 Millions of Japanese Yen 2020 Japan ¥161,284 Other 28,994 Total ¥190,278 For the year ended March 31, 2021 Millions of Japanese Yen Thousands of U.S. Dollars 2021 2021 Japan ¥162,903 $1,480,937 Other 26,808 243,717 Total ¥189,712 $1,724,655 Note) Net sales are based on the customers' location and categorized into the countries or areas. (Changes in presentation) Net sales in South East Asia was presented separately in the previous fiscal year, however, it is included in Other from the fiscal year ended March 31, 2021. To reflect this change in presentation, the Company reclassified this item in the geographical information for the previous fiscal year. Consequently, the amount of ¥19,590 million shown as South East Asia in the consolidated statement of income for the previous fiscal year was reclassified as Other. 2) Tangible fixed assets Description is excluded since the amounts of the tangible fixed assets in Japan exceed 90% of those amounts in the consolidated balance 42 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS TOA CORPORATION and its consolidated subsidiaries sheets. Ⅲ .Information on principal customers For the year ended March 31, 2020 Name of Customer Related segments Millions of Japanese Yen 2020 Japanese Ministry of Land, Infrastructure, Transport and Tourism Domestic Civil Engineering Businesses,others ¥33,509 For the year ended March 31, 2021 Name of Customer Related segments Millions of Japanese Yen 2021 Thousands of U.S. Dollars 2021 Japanese Ministry of Land, Infrastructure, Transport and Tourism Domestic Civil Engineering Businesses,others ¥30,687 $278,979 Ⅳ . Information on the loss on impairment of fixed assets in each reportable segment The losses on impairment of fixed assets were not allocated to the reportable segments of the Companies. Description of the amounts and contents is excluded since the similar information is disclosed in the notes related to the consolidated statements of income for the years ended March 31, 2020 and 2021. Ⅴ .Information on amortization and the unamortized balance of goodwill in each reportable segment Amortization was not applicable for the years ended March 31, 2020 and 2021. Ⅵ .Information on gain on negative goodwill in each reportable segment The Companies did not allocate the gain on negative goodwill to the reportable segments. The gain was not applicable for the years ended March 31, 2020 and 2021. 21.Per Share Data Japanese Yen U.S. Dollars 2020 2021 2021 Net assets ¥3,492.34 ¥3,946.12 $35.873 Net income 244.65 350.63 3.187 Diluted net income 230.68 294.34 2.675 Note) The basic information for calculation of per share data was as follows: 1.Per share data on net assets Millions of Japanese Yen Thousands of U.S. Dollars 2020 2021 2021 Net assets ¥69,166 ¥76,175 $692,502 Net assets amount for common stock 68,462 75,446 685,878 Significant breakdown of differences Non-controlling interests ¥703 ¥728 $6,624 Thousands of shares 2020 2021 Numbers of issued shares of common stock 22,494 22,494 Numbers of shares of treasury stock 2,891 3,375 Numbers of shares of common stock which were used for calculation for per share data on net assets 19,603 19,119 Net sales Net sales 43 2.Per share data on net income Millions of Japanese Yen Thousands of U.S. Dollars 2020 2021 2021 Profit attributable to owners of parent ¥5,007 ¥6,859 $62,359 Profit attributable to owners of parent not attributable to common stockholders — — — Profit attributable to owners of parent for common stock ¥5,007 ¥6,859 $62,359 Thousands of Shares 2020 2021 Average number of shares of common stock 20,467 19,563 Thousands of Shares 2020 2021 Increase in the number of common stock 1,239 3,741 22.Significant Subsequent Events Not applicable Supplementary Information Details on convertible corporate bonds with stock acquisition rights Company name Descripiton Issue date Beginning balance (Millions of Japanese Yen) Closing Balance (Millions of Japanese Yen) Interest Rate Collateral Redemption due date Toa Corporation Yen-denominated convertible corporate bonds with stock acquisition rights maturing in 2024 December 13, 2019 7,000 6,990 — Unsecured December 13, 2024 Total 7,000 6,990 Notes : 1.Details of convertible corporate bonds with stock acquisition rights are as follows. Type of stock : Common Issue price of stock acquisition rights : Free of charge Exercise price : ¥1,870.8 Yen Total exercise price : ¥7,000 million Yen Total issue price of stock acquisition rights upon exercise : - Grant ratio of stock acquisition rights : 100% Exercise period of stock acquisition rights : From December 27, 2019 to November 29, 2024 In case there is the request of the exercise of the stock acquisition rights, the Company treats such exercise as the payment by the bondholder of the full amount required to be paid upon exercise of the stock acquisition rights, in lieu of the full redemption of the convertible bond. 2.Details of the bond redemption schedule over five years subsequent to the closing date are as follows. Within one year Over one year within two years Over two years within three years Over three years within four years Over four years within five years Millions of Japanese Yen ¥6,990 Thousands of US dollars $63,545 44 Details of borrowings Millions of Japanese Yen Thousands of U.S. Dollars Average rates Beginning balance Closing Balance Beginning balance Closing Balance % Repayment deadline Short-term borrowings ¥8,636 ¥4,116 $78,509 $37,418 0.67% Current portion of Long-term debt 5,557 5,293 50,524 48,125 1.12 Current portion of Non-recourse debt 542 455 4,933 4,139 1.98 Current portion of lease obligations 71 534 653 4,856 — Long-term debt (excluding current portion) 12,076 11,682 109,782 106,202 1.07 from 2022 to 2026 Non-recourse debt (excluding current portion) 658 203 5,985 1,846 2.35 from 2022 to 2026 Lease obligation (excluding current portion) 122 1,997 1,113 18,161 — from 2022 to 2026 Other debt — — — Total ¥27,665 ¥24,282 $251,502 $220,749 Notes : 1.The "average rates" are balanced by the weighted average. The average rates of lease obligations are not listed because interest is included in the lease obligation in the consolidated balance sheets. 2.The amount scheduled to be repaid of long-term debt, non-recourse debt and lease obligations (excluding current portions) within 5 years after the consolidated closing date were as follows: Millions of Japanese Yen Thousands of U.S. Dollars Over one year within two years Over two years within three years Over three years within four years Over four years within five years Over one year within two years Over two years within three years Over three years within four years Over four years within five years Long-term debt ¥4,701 ¥3,502 ¥2,278 ¥1,201 $42,736 $31,837 $20,710 $10,919 Non-recourse debt 183 6 6 6 1,664 54 56 57 Lease obligations 497 494 470 183 4,518 4,491 4,279 1,670 Table for asset retirement obligation The indication omitted due to the beginning balance and closing balance of asset retirement obligation were less than or equal to hundredth part of the beginning balance and closing balance of liabilities and net assets. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS TOA CORPORATION and its consolidated subsidiaries