This document has been translated from the Japanese original for reference purposes only. In the event ofany discrepancy between this translated document and the Japanese original, the original shall prevail. The
Company assumes no responsibility for this translation or for direct, indirect or any other forms of damages
arising from the translation.

Securities code: 1882
June 7, 2024
(Start date of measures for electronic provision: June 5, 2024)
To Shareholders with Voting Rights:
Kyouichi Morishita
Representative Director, President
TOA ROAD CORPORATION
7-3-7 Roppongi, Minato City, TokyoNOTICE OF
THE 118th ANNUAL GENERAL MEETING OF SHAREHOLDERS

We would like to express our appreciation for your continued support and patronage.
We hereby inform you that the 118th Annual General Meeting of Shareholders of TOA ROADCORPORATION (the “Company”) will be held as described below.
In convening this General Meeting of Shareholders, the Company has taken measures to provide
information electronically. Matters subject to electronic provision are posted on the following website as“Notice of the 118th Annual General Meeting of Shareholders.”
The Company’s website:
https://www.toadoro.co.jp
In addition to the above website, matters subject to electronic provision are also posted on the following
website.
Tokyo Stock Exchange Inc. website:
https://www2.jpx.co.jp/tseHpFront/JJK020010Action.do?Show=Show
Please access the abovementioned Tokyo Stock Exchange Inc. website, search for the Company byentering either the Company name or securities code, and select “Basic information,” followed by“Documents for public inspection/PR information” in order to view the information.
Please review the Reference Documents for the General Meeting of Shareholders described in thematters subject to electronic provision, and exercise your voting rights by 5:30 p.m. Japan time on
Wednesday, June 26, 2024.
[Exercise of voting rights in writing]
Please indicate your vote for or against the proposals on the enclosed Voting Rights Exercise Form, and returnit by mail so that it arrives by the cutoff time for exercise of voting rights specified above.
[Exercise of voting rights via the Internet]
For the method of exercising voting rights via the Internet, please refer to the “Procedures for Exercising
Voting Rights via the Internet.”
If you exercise your voting rights both in writing and via the Internet, voting rights exercised via the Internet
shall be treated as valid.

11. Date and Time:
2. Venue:

Thursday, June 27, 2024 at 10:00 a.m. Japan time
Company Head Office
Conference Room, 7th floor
7-3-7 Roppongi, Minato City, Tokyo

3. Meeting Agenda:
Matters to be reported:1. The Business Report and Consolidated Financial Statements for theCompany’s 118th Fiscal Year (April 1, 2023 - March 31, 2024) and theresults of audits by the Accounting Auditor and the Board of Corporate
Auditors of the Consolidated Financial Statements
2. Non-consolidated Financial Statements for the Company’s 118th Fiscal
Year (April 1, 2023 - March 31, 2024)
Proposals to be resolved:<Proposals by the Company (Proposals 1 through 3)>
Appropriation of Surplus
Proposal 1:
Election of Six Directors
Proposal 2:
Election of One Corporate Auditor
Proposal 3:<Shareholder Proposal (Proposal 4)>
Appropriation of Surplus
Proposal 4:
Proposal 4 is made by a portion of shareholders, and is opposed by the Board of Directors. The
outline of this proposal is stated in the Reference Documents for the General Meeting of Shareholders
attached hereto.

(Request) When attending the meeting, please submit the enclosed Voting Rights Exercise Form at thereception desk on the day of the meeting.
(Notice) In the event of any revisions to the matters subject to electronic provision, details of therevisions will be posted on each of the designated websites.

2Reference Documents for the General Meeting of Shareholders
Proposals and References<Proposals by the Company (Proposals 1 through 3)>
Proposal 1:

Appropriation of Surplus

Regarding appropriation of surplus, we hereby propose as described below.
The Company intends to enhance internal reserves in order to strengthen the corporate constitution and be
prepared for future business development. At the same time, for the returning of profits to shareholders, theCompany remains committed to maintaining a stable dividend payment level based on a comprehensive
consideration of the profit forecast over the medium term, the investment plan, cash flows, and the financial
position, among other factors.
The Company intends to utilize the internal reserves for prioritized investment for further strengthening thebusiness foundation and for future business development from a medium- to long-term perspective.
It is proposed that the year-end dividend for the fiscal year ended March 31, 2024 be paid as follows, taking
into consideration the Company’s performance for the year and future business development:
Matters concerning year-end dividend(1) Type of dividend property
Cash(2) Matters related to the allotment of dividend property and the total amount thereof
Per share of common stock of the Company: ¥210
(common dividend of ¥210)
Total amount: ¥1,974,038,430(3) Effective date of distribution of surplus
June 28, 2024

3

Proposal 2:

Election of Six Directors

The terms of office of all six Directors will expire at the conclusion of this General Meeting of Shareholders.
Mr. Shizuo Fukuhara passed away on May 20, 2024, and thus retired from office.
Accordingly, the election of six Directors is proposed.
The candidates for Director are as follows:

No.

Current positions at theCompanyName

1[Reappointment]

Kyouichi Morishita

2[Reappointment]

Satoru Horinouchi

3[New appointment]

Naoki Nakamura

4[Reappointment]

Masataka Kusumi

5[Reappointment]

Yuko Tahara

6[New appointment]

Yuichiro Ichikawa[Independent
Director][Outside Director][Independent
Director][Outside Director][Independent
Director][Outside Director]

4

Attendanceat Board of
Directors
meetings

Representative Director,
President
Representative Director,
Executive Vice President
Executive Officer,
General Manager,
Administration Division

16/16(100%)

Outside Director

16/16(100%)

Outside Director

16/16(100%)-

16/16(100%)--

Candidates for Director
No.

Name
(Date of birth)

Career summary and positions
April 1981
June 2013
April 2014
April 2015

[Reappointment]

Kyouichi Morishita(September 22, 1956)

1

April 2016

Attendance at Board of
Directors meetings:
16/16

May 2016

No. of years in office as
Director (at the conclusionof this General Meeting of
Shareholders):
11 years

April 2017
June 2017

Joined the Company
Director; Executive Officer; General Manager,
Construction and Engineering Division, theCompany
Director; Executive Officer; General Manager,
Construction and Engineering Division; General
Manager, Construction Department, the Company
Director; Executive Officer; General Manager,
Construction and Engineering Division; General
Manager, Construction Department; General
Manager, Civil Engineering Department, theCompany
Director; Managing Executive Officer; General
Manager, Planning and Sales Division; General
Manager, Construction and Engineering Division;
General Manager, Construction Department, theCompany
Director; Managing Executive Officer; General
Manager, Planning and Sales Division; General
Manager, Construction and Engineering Division;
General Manager, Construction Department;
General Manager, Product Business Division, theCompany
Director; Managing Executive Officer; General
Manager, Technology Division; General Manager,
Affiliated Business Division, the Company
Representative Director; President, the Company
To present

Number ofshares of theCompany held

116,225

Responsibilities
Chairman, Internal Control Committee; Chairman, Compliance
Committee; in charge of Audit Office; in charge of Corporate Planning
Office[Reason for nomination as candidate for Director]
Since joining the Company, Mr. Kyouichi Morishita has been mainly engaged in construction and sales divisions
and has a wealth of experience and extensive knowledge. He assumed office as Director and Managing Executive
Officer in 2016. Serving as Representative Director and President since 2017, he is demonstrating strong
leadership and decisiveness in managing the Company and striving to achieve continuous enhancement ofcorporate value. Therefore, the Company proposes his reelection as Director.

5

No.

Name
(Date of birth)

Career summary and positions
April 1983
June 2016

April 2017
June 2017

April 2018
[Reappointment]

2

Satoru Horinouchi(July 5, 1959)

June 2018

Attendance at Board of
Directors meetings:
16/16

April 2019

No. of years in office as
Director (at the conclusionof this General Meeting of
Shareholders):
8 years

April 2020

April 2021
April 2023

Joined the Company
Director; Executive Officer; General Manager,
Construction and Engineering Division; General
Manager, Engineering Department; General
Manager, Construction Department, the Company
Director; Executive Officer; General Manager,
Construction and Engineering Division; General
Manager, Construction Department, the Company
Director; Executive Officer; General Manager,
Construction and Engineering Division; General
Manager, Construction Department; General
Manager, Technology Division, the Company
Director; Managing Executive Officer; General
Manager, Technology Division; General Manager,
Affiliated Business Division, the Company
Representative Director; Managing Executive
Officer; General Manager, Technology Division;
General Manager, Affiliated Business Division, theCompany
Representative Director; Senior Managing
Executive Officer; General Manager, ProductBusiness Division; General Manager, Technology
Division; General Manager, Affiliated Business
Division, the Company
Representative Director; Senior Managing
Executive Officer; General Manager, Sales
Division; General Manager, Affiliated Business
Division, the Company
Representative Director; Senior Managing
Executive Officer; General Manager, Construction
Division
Representative Director; Executive Vice President;
General Manager, Construction Division, theCompany
To present

Number ofshares of theCompany held

92,230

Responsibilities
In charge of Affiliated Business Department; in charge of Safety,
Environment and Quality Department; General Manager, Construction
Division; Chairman, Workstyle Improvement Committee; responsible
for Labor Relations[Reason for nomination as candidate for Director]
Since joining the Company, Mr. Satoru Horinouchi has been mainly engaged in construction divisions and has awealth of experience and extensive knowledge. He assumed office as Representative Director and Managing
Executive Officer in 2018, and as Representative Director and Executive Vice President in 2023, reporting
directly to, and assisting the President. He has been engaged in management of the Company, including byformulating corporate concepts and engaging in management decisions and business development, and has been
contributing to continuous enhancement of corporate value.
Therefore, the Company proposes his reelection as Director.

6

No.

Name
(Date of birth)

Career summary and positions
April 1986
April 2011

[New appointment]

April 2014

Naoki Nakamura(February 28, 1964)

April 2016

Attendance at Board of
Directors meetings:-

3

No. of years in office as
Director (at the conclusionof this General Meeting of
Shareholders):-

April 2020
April 2021
April 2022
April 2024

Joined the Company
General Manager, Administration Department,
Tohoku Branch, the Company
General Manager, Administration Department,
Kanto Branch, the Company
General Manager, Accounting Department,
Administration Division, the Company
General Manager, Accounting Department;
General Manager, Finance Department,
Administration Division, the Company
Executive Officer; Deputy General Manager,
Administration Division, the Company
Executive Officer; General Manager,
Administration Department, Administration
Division, the Company
Executive Officer; General Manager,
Administration Division, the Company
To present

Number ofshares of theCompany held

15,580

Responsibilities
None[Reason for nomination as candidate for Director]
Since joining the Company, Mr. Naoki Nakamura has been mainly engaged in administration divisions and hasa wealth of experience and extensive knowledge. Currently he is supervising the Company’s administration
divisions as Executive Officer and General Manager of Administration Division, and has great ability required asa Director. The Company believes that he will execute his duties properly as the Company strives for sustainablegrowth and medium to long term enhancement of corporate value, and therefore proposes his election as Director.

7

No.

Name
(Date of birth)

Career summary and positions
April 1991
September 2001
December 2006

4

Number ofshares of theCompany held

Joined Fujita Corporation
Joined Masasho Co., Ltd.
[Reappointment]
Joined ShinNihon & Co. (currently, Ernst & Young[Independent Director]
ShinNihon LLC)
[Outside Director]
August 2010
Registered as Certified Public Accountant
August 2016
Representative, Masataka Kusumi CPA Office
Masataka Kusumi(current position)(February 17, 1968) May 2017
Auditor, Nissan Satio Hirosaki Co., Ltd. (current
position)
Attendance at Board of
4,500
December 2017 Outside Director (Audit and Supervisory
Directors meetings:
Committee Member), E-Guardian Inc. (current
16/16
position)
June 2020
Director, the Company (current position)
No. of years in office as
To present
Director (at the conclusion[Significant concurrent positions]of this General Meeting ofRepresentative, Masataka Kusumi CPA Office
Shareholders):
4 years
Auditor, Nissan Satio Hirosaki Co., Ltd.
Outside Director (Audit and Supervisory Committee Member), EGuardian Inc.
[Reason for nomination as candidate for Outside Director and expected role]
Mr. Masataka Kusumi has a specialist perspective based on his insight and experience as a CPA and considerable
knowledge of corporate finance, legal affairs, and tax affairs. In order to ensure validity and appropriateness ofdecision-making by the Board of Directors, the Company wishes him to appropriately oversee the Company’sbusiness execution from an independent standpoint with a specialist perspective. In addition, the Company
believes that it can receive useful advice and suggestions from him on overall management and therefore proposes
his reelection as Outside Director.

8

No.

Name
(Date of birth)[Reappointment][Independent Director][Outside Director]

Yuko Tahara(May 21, 1967)
Attendance at Board of
Directors meetings:
16/16

5

Career summary and positions
Assistant, Graduate School of Arts and Sciences,
College of Arts and Sciences, The University ofTokyo
April 2002
Assistant Professor, Faculty of Economics,
Kokugakuin University
April 2008
Professor, Faculty of Economics, Kokugakuin
University (current position)
June 2021
Director, the Company (current position)
To present[Significant concurrent positions]
Professor, Faculty of Economics, Kokugakuin University

Number ofshares of theCompany held

April 1996

2,000

No. of years in office as
Director (at the conclusionof this General Meeting of
Shareholders):
3 years[Reason for nomination as candidate for Outside Director and expected role]
Ms. Yuko Tahara has a specialist perspective based on her profound insight and extensive knowledge cultivatedover the years as an expert on local community issues, the aging society, and social security. In order to ensure
validity and appropriateness of decision-making by the Board of Directors, the Company wishes her toappropriately oversee the Company’s business execution from an independent standpoint with a specialist
perspective. In addition, the Company believes that it can receive useful advice and suggestions from her on
overall management and therefore proposes her reelection as Outside Director.
Although she has never been involved in corporate management, the Company believes that she will execute
her duties properly as an Outside Director of the Company for the reasons stated above.

9

No.

Name
(Date of birth)

Career summary and positions

Number ofshares of theCompany held

April 1977
July 2004

6

Joined Japan Drilling Co., Ltd.
Director; General Manager, Operating Department,[New appointment]
Japan Drilling Co., Ltd.
[Independent Director]
June 2005
Managing Director; General Manager, Operating[Outside Director]
Department, Japan Drilling Co., Ltd.
July 2006
Representative Director; Senior Managing Director,
Japan Drilling Co., Ltd.
Yuichiro Ichikawa
Representative Director; Senior Managing(November 17, 1954) June 2007
Executive Officer, Japan Drilling Co., Ltd.
June 2013
Representative Director; President, Japan Drilling
Attendance at Board of
0Co., Ltd.
Directors meetings:
June 2018
Advisor, Japan Drilling Co., Ltd.
February 2019
Resigned from Japan Drilling Co., Ltd.
No. of years in office as
August 2019
Management Advisor, REBIRTH, Limited
Director (at the conclusion(Resigned in March 2024)of this General Meeting of November 2021 Management Advisor, Fukuda Honten K.K.
Shareholders):(Resigned in March 2024)
To present[Significant concurrent positions]
None[Reason for nomination as candidate for Outside Director and expected role]
Mr. Yuichiro Ichikawa has a specialist perspective based on his insight and experience as a corporate manager.
In order to ensure validity and appropriateness of decision-making by the Board of Directors, the Company wishes
him to appropriately oversee the Company’s business execution from an independent standpoint with a specialist
perspective. In addition, the Company believes that it can receive useful advice and suggestions from him on
overall management and therefore proposes his election as Outside Director.
For the reasons stated above, the Company believes that he will execute his duties properly as an Outside
Director of the Company.

Notes: 1. No special interest exists between any of the candidates and the Company.
2. Mr. Masataka Kusumi, Ms. Yuko Tahara, and Mr. Yuichiro Ichikawa are candidates for Outside
Director.
3. Matters concerning the candidates for Outside Director are as follows:(1) Mr. Masataka Kusumi and Ms. Yuko Tahara are independent directors as defined by the
Tokyo Stock Exchange.
If this proposal is approved, Mr. Yuichiro Ichikawa will become an independent director as
defined by the Tokyo Stock Exchange.
(2) Number of years since assumption of office as the Company’s Outside Director of eachcandidate for Outside Director
Mr. Masataka Kusumi will have been in office as Outside Director for four years at theconclusion of this Annual General Meeting of Shareholders.
Ms. Yuko Tahara will have been in office as Outside Director for three years at theconclusion of this Annual General Meeting of Shareholders.
(3) Liability limitation agreements with Outside Directors
1) The Company has entered into agreements with Mr. Masataka Kusumi and Ms. Yuko
Tahara to limit their liability for damages pursuant to Article 423 Paragraph 1 of theCompanies Act. The amount of liability for damages in accordance with the agreements10

is limited to the minimum liability amount stipulated by laws and regulations.
If reelection of Mr. Masataka Kusumi and Ms. Yuko Tahara is approved at this General
Meeting of Shareholders, the Company intends to renew the said agreements with them.
2) If election of the candidate for Outside Director Mr. Yuichiro Ichikawa is approved, theCompany intends to enter into an agreement with him to limit his liability for damages
pursuant to Article 423 Paragraph 1 of the Companies Act, as he will assume office as
non-executive Director. The amount of liability for damages in accordance with theagreement is limited to the minimum liability amount stipulated by laws and regulations.
4. The Company has entered into a directors and officers liability insurance (D&O Insurance)
contract, as stipulated in Article 430-3, Paragraph 1 of the Companies Act, with an insurancecompany. The said insurance contract covers litigation expenses related to derivative lawsuits
and third-party litigation and incidental expenses to be borne by the insured. The Company’s
Directors (including Outside Directors) and Corporate Auditors (including Outside Corporate
Auditors) are the insured under the said insurance contract. The insurance premiums are fully
borne by the Company. However, liability for legal damages arising from illegal acts including
criminal acts committed by the insured is outside the scope of coverage under the said insurance
contract.
The candidates for reelection nominated in this proposal are already the insured under the said
insurance contract and will remain so following their reelection. The new candidates will be
the insured following their election.
The Company intends to renew the said insurance contract with the same contents at the next
renewal.
5. On April 1, 2024, the Company conducted a 5-for-1 stock split of its common stock. For eachcandidate, the “Number of shares of the Company held” indicates the number of shares held
following the stock split.

11

Proposal 3:

Election of One Corporate Auditor

The terms of office of one of the three Corporate Auditors will expire at the conclusion of this General
Meeting of Shareholders. Accordingly, the election of one Corporate Auditor is proposed.
The Company has obtained the consent of the Board of Corporate Auditors regarding this proposal.
The candidate for Corporate Auditor is as follows:
Candidate for Corporate Auditor
Name(Date of birth)

Career summary and positions

Number ofshares of theCompany held

April 1982
April 2007

Joined the Company
General Manager, Administration Department,
Chubu Branch, the Company
April
2010
General Manager, Administration Department,[Reappointment]
Kanto Branch, the Company
April 2014
General Manager, Administration Department,
Yoshihiko Takeuchi
Administration Division, the Company(December 24, 1959) April 2015
General Manager, Administration Department,
Administration Division; General Manager,
General Affairs Department; General Manager,
Attendance at Board of
Corporate Communications Office; General
Directors meetings:
Manager, Corporate Ethics Promotion Office, the
16/16Company
35,300April 2016
Executive Officer; General Manager,
Attendance at Board of
Administration Division, the Company
Corporate Auditors
June 2016
Director; Executive Officer; General Manager,
meetings:
Administration Division, the Company
12/12
April 2018
Director: Managing Executive Officer; General
Manager, Administration Division, the Company
No. of years in office as
Director; Managing Executive Officer; General
Corporate Auditor (at the April 2020
Manager,
CSR Promotion Division, the Company
conclusion of this General
April
2021
Director;
Managing
Executive Officer; General
Meeting of Shareholders):
Manager,
Legal
Affairs
and Compliance
3 years
Department, CSR Promotion Department, theCompany
June 2021
Corporate Auditor, the Company (current position)
To present[Reason for nomination as candidate for Corporate Auditor]
Since joining the Company, Mr. Yoshihiko Takeuchi has been mainly engaged in administration divisions andhas a wealth of experience and extensive knowledge in finance and accounting. Since his appointment as Directorof the Company in 2016 and Corporate Auditor of the Company in 2021, he has been executing his duties forboth positions appropriately. The Company proposes his reelection as Corporate Auditor in order for him toreflect his deep insight and extensive experience in the Company’s audits.

Notes: 1. No special interest exists between the candidate for Corporate Auditor and the Company.
2. Liability limitation agreement with Corporate Auditor:
The Company has entered into an agreement with Mr. Yoshihiko Takeuchi to limit his
liability for damages pursuant to Article 423 Paragraph 1 of the Companies Act. The amountof liability for damages in accordance with the agreement is limited to the minimum liability
amount stipulated by laws and regulations. If reelection of Mr. Yoshihiko Takeuchi isapproved at this General Meeting of Shareholders, the Company intends to renew the said
agreement with him.

12

3. The Company has entered into a directors and officers liability insurance (D&O Insurance)
contract, as stipulated in Article 430-3, Paragraph 1 of the Companies Act, with an insurancecompany. The said insurance contract covers litigation expenses related to derivative lawsuits
and third-party litigation and incidental expenses to be borne by the insured. The Company’s
Directors (including Outside Directors) and Corporate Auditors (including Outside Corporate
Auditors) are the insured under the said insurance contract. The insurance premiums are fully
borne by the Company. However, liability for legal damages arising from illegal acts including
criminal acts committed by the insured is outside the scope of coverage under the said insurance
contract.
The candidate for reelection nominated in this proposal are already the insured under the said
insurance contract and will remain so following his reelection.
The Company intends to renew the said insurance contract with the same contents at the next
renewal.
4. On April 1, 2024, the Company conducted a 5-for-1 stock split of its common stock. For the
candidate, the “Number of shares of the Company held” indicates the number of shares held
following the stock split.

13

[Skills Matrix]
Major specialty and experience
OutsideDirector /AuditorKyouichi Morishita
Satoru Horinouchi
Naoki Nakamura

Nomination
andCompensation
Committee

Corporate
management/
management
strategy

Sales /
marketingTechnology/ quality

○

○

○

○

○

○

○

○

Masataka Kusumi◎◎

Yuko Tahara◎○

Yuichiro Ichikawa◎○

Shinichi Mori
Yoshihiko Takeuchi◎

Hiroshi Fujita◎

Finance /accounting

Legal affairs/
compliance

○

○

○

○

○

○

ESG

Diversity /gender○(governance)

○
○

○

○
○

○
(environment /society)○(governance)

○
○

○

○

○

○
○

○
(governance)

Notes: 1. ◎ in the column under “Outside Director / Auditor” indicates independent director/auditor.
2. ◎ in the column under “Nomination and Compensation Committee” indicates the chairman.

14○(female)<Shareholder Proposal (Proposals 4)>
Proposals 4 is made by two shareholders (hereinafter referred to as the “Proposing Shareholders”).
Proposal 4:

Appropriation of Surplus

1. Details of the proposal(1) Type of dividend
Cash(2) Allocation and the total amount of dividends
Total amountThe Company shall pay the amount of dividend obtained by deducting the amount of dividend
per share of common stock in the proposal on appropriation of surplus made by the Board of
Directors of the Company and to be approved at the 118th Annual General Meeting of Shareholders(hereinafter, the proposal is referred to as the “Company Proposal on Appropriation of Surplus”
and the dividend amount is referred to as the “Company Dividend”) from the amount obtained bymultiplying 0.08 by the amount of net assets per share at the end of the 118th Fiscal Year (calculated
in accordance with ASBJ Guidance No. 4 “Guidance on Accounting Standard for Earnings Per
Share” including deducting treasury shares from the total number of issued shares) (rounded down
to the nearest decimal, the same applies hereinafter), in addition to the Company Dividend.
The total dividend amount shall be the dividend amount per share of common stock multipliedby the number of shares subject to the dividend as of the record date for voting at the 118th Annual
General Meeting of Shareholders.
(3) Effective date of dividend payment from surplus
The day after the 118th Annual General Meeting of Shareholders of the Company is held.
This proposal will be made additionally as an independent and compatible proposal with theCompany Proposal on Appropriation of Surplus, if it is made at the 118th Annual General Meetingof Shareholders.
2. Reasons for the proposal
This proposal is to plan a payment of an 8% of equity as dividends.
Since 2007, the Company’s equity-to-asset ratio has increased every year, and as of December 31,
2023, it was at a very high level of approximately 62%. In addition, the Company holds a large numberof assets unrelated to its core business, such as cross-shareholdings and real estate for lease, etc.
Further increasing equity would only result in a lower ROE and higher capital cost. Therefore, werequest that the Company adopt a shareholder return policy of a dividend on equity (DOE) of 8% (439
yen as of December 31, 2023).
If ROE is less than 8%, the dividend payout ratio will exceed 100%. That way, the Company shouldpresent a policy to gradually reduce equity and improve capital efficiency and at the same time provide
stable shareholder returns.
(Note from the Company) The above presents the details of the proposal and reasons thereof in the shareholder
proposal document submitted by the Proposing Shareholders in the original text.

15

Opinions of the Board of Directors
The Board of Directors opposes this proposal.
As presented in the medium-term management plan “Toa Road Sustainable Plan 2026” released on May 10,2024, the Company has established a medium-term management plan (FY2024-FY2026) with “shift to CSRoriented management” and “establishment of a foundation for sustainable growth” as its two pillars (hereinafterreferred to as the “Medium-term Management Plan”), and set sustainable growth and management strategies
with a keen eye on capital costs as the focus issues.
With regard to capital efficiency, the Company is aiming for sustainable growth with a targeted ROE of 9.0%
or more under the Medium-term Management Plan. For the coming three years, the Company plans to invest 5
billion yen in CSR activities, R&D, and M&As as an aggressive investment in growth, and 10 billion yen in the
improvement of production capabilities and efficiency, renewal of existing facilities by considering carbon
neutrality, and to respond to the overtime cap on truck drivers that came into effect in April 2024. By
implementing these investments geared toward growth and responding to issues, the Company will strive forfurther enhancement of its corporate value. For the procurement of funds necessary to implement thesecontinuous investments in business, the Company plans to utilize not only its own funds but also external funds
including loans in a flexible and agile manner, to ensure the appropriateness and soundness of capital costs.
Also, in terms of shareholder returns, the Company plans to provide stable shareholder returns with a baseline
dividend payout ratio of 50% or more, while aiming for the continuous growth of our business. In fact, theCompany plans to submit a proposal for dividend payouts, under which we will propose a dividend payment of
42 yen per share, with a dividend payout ratio of 52.5% (after factoring in the 5-for-1 stock split of common
stock conducted on April 1, 2024), as the dividend for the previous fiscal year (fiscal year ended March 31,2024) at the 118th Annual General Meeting of Shareholders. If this proposal on dividend payment is approved
and resolved, the dividend payout ratio will significantly exceed that of the fiscal year ended March 31, 2023
(27.0%), and also exceed that in the shareholder return policy established in the Medium-term Management
Plan (50% or more).
As for improvement of the Company’s share valuations in the stock market, the Company plans to set andsteadily implement KPI for profit on invested capital for each business, in order to realize management strategies
with a keen eye on capital costs, as well as to enhance medium- to long-term corporate value and profitability
on capital. At the same time, the Company acknowledges the importance of continuous dissemination of
information on these measures to shareholders and investors to gain their understanding.
As stated above, the Company’s policy is to implement management strategies with a keen eye on sustainablegrowth and capital costs, aiming at stable shareholders returns and improvement of the Company’s sharevaluations in the stock market. This shareholder proposal is requesting shareholder returns from a short-term
perspective, without considering the said policy. The Company also believes that this shareholder proposal is
not appropriate from the perspective of medium- to long-term maximization of common interests ofshareholders.
Accordingly, the Board of Directors of the Company opposes this shareholder proposal.

16

Consolidated Balance Sheet(As of March 31, 2024)
AssetsItem
Current assets

Liabilities
AmountMillions of yen¥ 61,566

Cash and deposits
Notes receivable, accounts receivable fromcompleted construction contracts and other
Electronically recorded monetary claims operating
Costs on construction contracts in progress
Merchandise and finished goods
Work in process

14,22735,934
3,296
2,201
1,125
447

Raw materials and supplies

1,668

Other

2,739

Allowance for doubtful accounts
Non-current assets
Property, plant and equipment
Buildings and structures(73)
31,32923,0853,292

Land

13,764

Leased assets

677

Construction in progress

150

Other

310

Intangible assets
Investments and other assets
Investments securities

281
7,962
5,437

Long-term loans receivable

317

Retirement benefit asset

1,612

Deferred tax assets

381

Other

328

Allowance for doubtful accounts(113)

Total assets

Current liabilities
Notes payable, accounts payable forconstruction contracts and other
Electronically recorded obligations-operating¥ 32,487

Short-term borrowings
Income taxes payable
Advances received on construction contracts
in progress
Provision for warranties for completed
construction
Provision for loss on construction contracts
Other
Non-current liabilities
Long-term borrowings
Deferred tax liabilities
Deferred tax liabilities for land revaluation

600
1,112

Retirement benefit liability
Asset retirement obligations
Other

4,889

Machinery, equipment and vehicles

AmountMillions of yen

Item

Total liabilities

21,176
3,916

1,044
24
169
4,444
4,332
900
1,244
1,041
439
55
650
36,820Net assets
Shareholders’ equity

50,893

Share capital
Capital surplus
Retained earnings
Treasury shares
Accumulated other comprehensive income
Valuation difference on available-for-salesecurities
Revaluation reserve for landRemeasurements of defined benefit plans
Non-controlling interests

7,584
7,258
38,670(2,620)3,753¥ 92,895(Amounts are rounded down to the nearest million yen.)

17

2,437
648
667
1,428

Total net assets

56,075

Total liabilities and net assets¥ 92,895

Consolidated Statement of Income
April 1, 2023
( Fromto March 31, 2024 )AmountMillions of yen
Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating profit
Non-operating income
Interest income
Dividend income
Reversal of allowance for doubtful accounts
Other
Non-operating expenses
Interest expenses
Financial commission
Litigation expenses
Commission expenses
Other
Ordinary profit
Extraordinary income
Gain on sale of non-current assets
Other
Extraordinary losses
Loss on sale of non-current assets
Loss on retirement of non-current assets
Impairment losses
Other
Profit before income taxes
Income taxes - current
Income taxes - deferred
ProfitProfit attributable to non-controlling interests
Profit attributable to owners of parent(Amounts are rounded down to the nearest million yen.)18¥ 118,060
104,576
13,483
8,009
5,473
317
5
178

35
98
83
13
15
29
12
12
5,707
54
47
6
81
0
77
0
2
5,680
1,889
(102)
3,893
100
¥3,793

Consolidated Statement of Changes in Equity
April 1, 2023
( Fromto March 31, 2024 )(Millions of yen)
Shareholders’ equity
Share capital
Balance at beginning of
periodCapital surplus¥ 7,584

Retained earnings

Total shareholders’equityTreasury shares¥ 7,105¥ 35,722¥ (1,724)¥ 48,688

(5)

5

-

(855)

(855)

3,793

3,793

4

4

Changes during period
Change in scope of
consolidation
Dividends of surplus
Profit attributable toowners of parent
Reversal of revaluation
reserve for land
Purchase of treasury
shares
Disposal of treasury
sharesNet changes in items
other thanshareholders’ equity
Total changes during
periodBalance at end of period

158(1,002)(1,002)

106

264

-

153

2,947

(896)

2,205

¥ 7,584¥ 7,258¥ 38,670¥ (2,620)¥ 50,893(Millions of yen)
Accumulated other comprehensive income

Balance at beginning of
periodValuationdifference on
available-for-salesecurities

Revaluation
reserve for landRemeasurementsof defined benefit
plans

Total accumulated
other comprehensive
incomeNon-controllinginterests

Total net assets¥ 1,805

¥ 652

¥ 198

¥ 2,656¥ 1,366¥ 52,711

Changes during period
Change in scope of
consolidation-

Dividends of surplus(855)

Profit attributable toowners of parent
Reversal of revaluation
reserve for land
Purchase of treasury
share
Disposal of treasury
share
Net changes in items
other thanshareholders’ equity
Total changes during
periodBalance at end of period

3,793
4(1,002)
264
632

(4)

469

1,097

61

1,158

632

(4)

469

1,097

61

3,363

¥ 2,437

¥ 648

¥ 667

¥ 3,753¥ 1,428¥ 56,075(Amounts are rounded down to the nearest million yen.)

19

Notes on Consolidated Financial Statements
I. Notes on Significant Matters that Serve as the Basis for Consolidated Financial Statements
1.

Scope of Consolidation:(1) Number of consolidated subsidiaries and names of major consolidated subsidiaries
Number of consolidated subsidiaries:
22
Names of major consolidated subsidiaries: ASUKA Inc., TOA-TONE BORING Co., Ltd.
TAC ENGI Co., Ltd. has been excluded from the scope of consolidation due to its liquidation during the consolidated fiscal year
under review.
(2) Names and other information of major non-consolidated subsidiaries
DAISHIN HODO Co., Ltd. and other two subsidiaries
Reason for exclusion from the scope of consolidation:
All of the non-consolidated subsidiaries are small-scale companies and their aggregated total assets, net sales, and profit or loss
and retained earnings have no significant effect on the consolidated financial statements. Therefore, they are excluded from thescope of consolidation.
2.

Application of the Equity Method:(1) Number of non-consolidated subsidiaries and affiliates accounted for using the equity method and names of major companies
Number of non-consolidated subsidiaries and affiliates accounted for using the equity method:
1
Names of major companies:
1) Non-consolidated subsidiaries
Not applicable2) Affiliates
KEN-NAN Co., Ltd.
(2) Names and other information of non-consolidated subsidiaries and affiliates not accounted for using the equity method
Names of major companies:
1) Non-consolidated subsidiaries
DAISHIN HODO Co., Ltd. and other two subsidiaries
2) Affiliates
MIYAGIREKISEI CO., LTD.
CHUO KOGYO Co., Ltd. is no longer an affiliate of the Company due to its transfer through the sale of shares.
Reason for not accounted for using the equity method:
All of the non-consolidated subsidiaries and affiliates not accounted for using the equity method have an immaterial effect on
the consolidated financial statements individually even if they are excluded from the scope of application of the equity method
and are not significant in aggregate in terms of their profit or loss (amount commensurate with equity interests) and retained
earnings (amount commensurate with equity interests). Therefore, they are not accounted for using the equity method.
3.

Fiscal years of consolidated subsidiaries:
The closing date of all consolidated subsidiaries coincides with the closing date of the consolidated financial statements.

4.

Accounting policies(1) Standards and methods for valuation of significant assets
1) Standards and methods for valuation of securities
Available-for-sale securities
Securities other than shares without market prices
Fair value method based on market prices, etc. as of the closing date (with the entire amount of valuation differences recorded
directly into net assets, and the cost of sales calculated using the moving average method)
Shares without market prices
Moving average cost method
2) Standards and methods for valuation of inventories
Cost method based on specific identification(a) Costs on construction contracts inprogress(b) Merchandise and finished goods
Cost method based on the weighted average method(Method of writing down book values due to decline in profitability)(c) Work in process
Cost method based on specific identification(Method of writing down book values due to decline in profitability)(d) Raw materials and supplies
Cost method based on the weighted average method(Method of writing down book values due to decline in profitability)20

(2) Depreciation of significant non-current assets
1) Property, plant and equipment(a) Property, plant and equipment other than leased assets
The declining balance method is used, except that the straight line method is used for those buildings (excluding facilities
attached to buildings) purchased on April 1, 1998 or thereafter as well as those structures and facilities attached tobuildings purchased on April 1, 2016 or thereafter.
Estimated useful life of these assets are based on the same standards as for the method stipulated in the Corporation Tax
Act.
(b) Leased assets
Leased assets related to finance leases in which ownership is not transferred
The straight line method, considering the lease period as the estimated useful life of leased assets and their residual value
as zero, is used.
2) Intangible assets
The straight line method is used. The straight line method based on the estimated internal useful life of five years is used forsoftware (for internal use).
(3) Standards for recognition of significant allowances
1) Allowance for doubtful accounts: In order to prepare for credit loss on receivables, the collectability of normal receivables is
estimated by applying the historical overall credit loss rates; the collectability of doubtful receivables is analyzed individually,and estimated uncollectible amount is recorded.
2) Provision for warranties for completed construction: In order to prepare for loss on compensation for defects in completed
contracts, reserves are provided by the amount obtained by multiplying the amount of completed contracts by the compensation
rate for the completed contracts during the preceding three fiscal years, adding any specific amounts expected for futurecompensation.
3) Provision for loss on construction contracts: In order to prepare for future loss on construction contracts, expected loss is incurred
for those contracts uncompleted at the end of the consolidated fiscal year under review that are expected to suffer a loss and forwhich the amount of the loss can be reasonably estimated.
(4) Accounting method for reserve for retirement benefits
In order to prepare for the payment of retirement benefits to employees, the Company has recorded the amounts of the reserve basedon the expected amount of retirement benefit obligations at the end of the consolidated fiscal year under review.
In addition, some companies in the Group apply the simplified method to calculate retirement benefit obligations.
1) Period attribution method for the expected amount of retirement benefits
In calculating retirement benefit obligations, the Company uses the benefit formula to allocate the projected retirement benefits
to the period that closes at the end of the consolidated fiscal year under review.
2) Accounting of actuarial differences and prior service costs
Actuarial differences are recognized as expenses in the consolidated fiscal year following the fiscal year in which they arise,using the straight line method over 10 years, a period less than the average of the estimated remaining service lives.
Prior service costs are recognized as expenses in the consolidated fiscal year in which they arise, using the straight line method
over 10 years, a period less than the average of the estimated remaining service lives.
(5) Standards for recognition of significant revenue and costs
Revenues related to “Construction” are mainly from pavement construction and civil engineering projects, and the Company has aperformance obligation to perform construction and deliver the work to the customer based on a contractual agreement with thecustomer. The contract is a transaction that satisfies a performance obligation over time, as the customer obtains control over theasset as the value of the asset increases by fulfilling its obligations under the contract with the customer, and revenue is recognizedbased on the degree of progress in satisfying the performance obligation. And when the degree of progress toward satisfying aperformance obligation cannot be reasonably estimated, but the costs to be incurred are expected to be recovered, revenue isrecognized on a cost recovery basis. For a contract with a considerably short period until the performance obligation is expected tobe satisfied in full, the Company recognizes revenue as if the performance obligation is satisfied at a point of time. The Company
does not recognize revenue if the degree of completion of the performance obligation cannot be reasonably estimated at the initialstage of the contract, even if the performance obligation is satisfied over time.
Revenues related to “Asphalt Products, Environment and Other” consist primarily of sales from the manufacture of asphalt
emulsions and asphalt mixtures, etc. The Company has performance obligations to deliver products based on sales contracts with
its customers. The revenue is recognized at the time of delivery of the product because the customer obtains control of the productat the point of delivery and the performance obligation is deemed to be satisfied.
No adjustment for significant financial factors is made for both “Construction” and “Asphalt Products, Environment and Other,”because the consideration for the transactions is received primarily within one year of satisfaction of the performance obligation.

21

(6) Significant hedge accounting method
1) Hedge accounting method
The exceptional method is applied to interest rate swaps.
2) Hedging instruments and hedged items
Hedging instruments: Interest rate swaps
Hedged items: Interest on borrowings
3) Hedging policy
Interest rate swaps are performed to avoid risks of fluctuations in the interest rates for borrowings.
4) Method of evaluating hedge effectivenessEvaluation of hedge effectiveness is omitted because the Company performs only interest rate swaps to which the exceptional
method is applied.
(7) Standards for translating assets or liabilities denominated in foreign currencies into Japanese yen
Assets and liabilities denominated in foreign currencies are translated into Japanese yen based on spot exchange rates on thesettlement date, and exchange differences are reported as foreign exchange profits or losses.
(8) Accounting of consumption taxes
Non-deductible consumption tax and non-deductible local consumption tax are recorded at cost of the consolidated fiscal year inwhich it occurs.
(9) The adopted accounting principles and procedures when the related accounting standards or other rules are not clear
The accounting treatment for joint ventures in “Construction” and “Asphalt Products, Environment and Other” of the Company
and some of its consolidated subsidiaries is mainly based on the method of recognizing assets, liabilities, income, and expenses
according to the investment ratio of the members.

II. Changes in presentation
Since the amount of “electronically recorded monetary claims - operating,” which was included in “notes receivable, accounts
receivable from completed construction contracts and other” (41,904 million yen as of March 31, 2023) on the consolidated balance
sheet, became material in terms of amount, it is presented as “electronically recorded monetary claims - operating” from theconsolidated fiscal year under review (3,296 million yen as of March 31, 2024).

22

III. Notes on Accounting Estimates(1) Provision for loss on construction contracts1) Amount recorded in consolidated financial statements for the consolidated fiscal year under review
169 million yen
2) Information about the content of significant accounting estimates about the identified subject
If, out of the works ordered by customers, those for which a loss is expected to occur in the next consolidated fiscal year due tothe fulfillment of the order, and the amount of the loss can be reasonably estimated, in order to prepare for the future loss, theamount of loss expected to occur in the next consolidated fiscal year or later is recorded as a provision for loss on construction
contracts.
When estimating the provision for loss on construction contracts, if the total estimated construction cost for each construction
contract is expected to exceed the construction revenue, the provision for loss on construction contracts is recorded. Therefore,
additional provision may occur due to changes in the preconditions for estimating the total construction cost (design changes,
construction conditions, etc.), which may have a significant impact on the amount recognized in the financial statements for the
next consolidated fiscal year.
(2) Estimates of the revenue recognized for performance obligations satisfied over time1) Amount recorded in consolidated financial statements for the consolidated fiscal year under review
14,505 million yen
2) Information about the content of significant accounting estimates about the identified subject
When recognizing revenue of performance obligations satisfied over time, for the contracts for which the progress towardsatisfying performance obligations can be reasonably estimated, the amount of completed contracts is recorded based on the
progress ratio calculated by the percentage of construction costs incurred to the total expected cost of construction using the
input method. And we make the best estimate for the total construction revenue, total construction cost, and progress ofconstruction on the closing date for each individual construction contract based on all the information available on the closing
date. And, when the degree of progress toward satisfying a performance obligation cannot be reasonably estimated, but the costs
to be incurred are expected to be recovered, revenue is recognized on a cost recovery basis.
In calculating the total construction revenue, if there is a changed construction fee due to unconfirmed additions or designchanges, the amount estimated based on the status of discussions with the ordering party is added to or subtracted from thefinalized contract amount. And, in calculating the total cost of construction, the Company estimates the cost of construction to
be incurred after the closing date of accounts based on assumptions considering various conditions for each individual
construction contract, in addition to the status of negotiations with subcontractors on the outsourcing costs and material costs.
Therefore, any changes to the preconditions for the estimate may have a significant impact on the amount recognized in the
consolidated financial statements for the next consolidated fiscal year.
The amounts shown in 1) are revenues related to construction contracts to be carried over to the next fiscal year.

23IV. Notes on the Consolidated Balance Sheet
1. Accumulated depreciation for property, plant and equipment

37,155 million yen

2. Pursuant to the Act on Revaluation of Land (Act No. 34 promulgated on March 31, 1998) and the Act to Revise Part of the Act on
Revaluation of Land (Act No. 24 promulgated on March 31, 1999), land used for the Company’s business operations was revalued.
The effect in terms of income tax of the differences between the book value and the revalued amount has been presented underliabilities as “deferred tax liabilities for land revaluation” and the remaining balance has been presented under net assets as“revaluation reserve for land” in the consolidated balance sheet.
Revaluation method
Land is revalued by making reasonable adjustments on the assessed value of fixed assets (prices registered with the land tax
ledger stipulated in Article 341, Item 10 of the Local Tax Act or the supplementary land tax ledger stipulated in Item 11).
Date of revaluation
March 31, 2002
Difference between the market price of revalued land at the end of the consolidated fiscal year under review and the postrevaluation book value of the land
(1,851) million yen
3. The amount of receivables and contract assets from contracts with customers included in “notes receivable, accounts receivablefrom completed construction contracts and other” and “electronically recorded monetary claims - operating” are as follows:
Notes receivable
Electronically recorded monetary claims - operating
Accounts receivable from completed construction
contracts
Accounts receivable - trade
Contract assets

3,658 million yen
3,296 million yen
15,041 million yen
7,962 million yen
9,271 million yen

4. The amount of contract liabilities included in “other” of the current liabilities is as follows:
Contract liabilities

158 million yen

5 Notes, electronically recorded monetary claims - operating and electronically recorded obligations - operating that mature on theclosing date are settled on their clearing date or settlement date.
As the final day of the consolidated fiscal year under review fell on a holiday for financial institutions, the following notes, etc.
matured as of the same date have been included in the ending balance.
Notes receivable
462 million yen
Electronically recorded monetary claims - operating
203 million yen
Notes payable
290 million yen
Electronically recorded obligations - operating
33 million yen

24V. Notes on the Consolidated Statement of Income
The Company does not disaggregate revenues from contracts with customers and other sources of revenue. The amount of revenue fromcontracts with customers is presented in “1. Disaggregation of revenue from contracts with customers” of “X. Notes on Revenue
Recognition” in Notes on Consolidated Financial Statements.

VI. Notes on the Consolidated Statement of Changes in Equity
1. Class and total number of issued shares at the end of the consolidated fiscal year under review
Common stock
10,440,046 shares
2. Matters concerning dividends(1) Amount of dividends paid
A resolution was made as follows at the Annual General Meeting of Shareholders held on June 29, 2023.
Matters concerning dividends of common shares:
1) Total amount of dividends paid
855 million yen
2) Dividends per share
180 yen3) Record date
March 31, 2023
4) Effective dateJune 30, 2023
(Note) On April 1, 2023, the Company conducted a 2-for-1 stock split of its common stock. Since the record date for theabovementioned year-end dividend is March 31, 2023, dividends were paid based on the number of shares held prior to
the stock split.
(2) Dividends whose record date is in the consolidated fiscal year under review and effective date is in the succeeding fiscal year
A proposal will be submitted as follows at the Annual General Meeting of Shareholders to be held on June 27, 2024.
Matters concerning dividends of common shares:
1) Source of dividends
Retained earnings
2) Total amount of dividend paid
1,974 million yen
3) Dividends per share
210 yen4) Record date
March 31, 2024
5) Effective dateJune 28, 2024
(Note) On April 1, 2024, the Company conducted a 5-for-1 stock split of its common stock. Since the record date for theabovementioned year-end dividend is March 31, 2024, dividends will be paid based on the number of shares held prior
to the stock split.

25

VII. Notes on Financial Instruments
1. Status of financial instruments(1) Management policy for financial instruments
The Group’s policy is to limit its fund investment to short-term instruments such as deposits and procure funds through bankloans.
(2) Details and risks of financial instruments and the risk management structure
Notes receivable, accounts receivable from completed construction contracts and other, which are trade receivables, and longterm loans receivable are exposed to credit risk of customers. To manage this risk, the Company performs due date control andbalance control for each customer in accordance with the Company’s credit management regulations. In addition, the sales
management division monitors the credit status of customers on a timely basis to ensure early discovery and reduction of any
recoverability concerns due to deteriorated financial position or other reasons. Furthermore, the consolidated subsidiaries
perform the same management in accordance with the Company’s credit management regulations.
Shares, which are investment securities, are exposed to stock price volatility risk. However, shares held by the Company aremainly those of its business partners and their fair values are measured and reported to the Board of Directors on a regular basis.
Most of notes payable, accounts payable for construction contracts and other, which are trade payables, are due within one year.
With regard to borrowings, short-term borrowings are mainly related to fund procurement for operating transactions and longterm borrowings are mainly related to fund procurement for capital investments.
Trade payables and borrowings are exposed to liquidity risk. The Group manages this risk by the method whereby the
consolidated subsidiaries prepare their cash management plan on a monthly basis and the Company conducts the overall cash
management at the Administration Division based on the submitted reports.
2. Fair value, etc. of financial instruments
The book value on the consolidated balance sheet, fair value and any differences therebetween as of March 31, 2024 (the closing
date of the consolidated financial statements for the consolidated fiscal year under review) are as shown in the table below.
Shares without market prices are not included in the table below (Please refer to “(Note)”).
The notes for cash are omitted. The notes for the following are also omitted, because they are settled over a short term and their fairvalue approximates their book value; deposits; notes receivable, accounts receivable from completed construction contracts andother; notes payable, accounts payable for construction contracts and other; and short-term borrowings.
(Millions of yen)Book value on the
Fair value
Difference
consolidated balance sheet(1) Investment securities
Available-for-sale securities
5,107
5,107
(2) Long-term loans receivable
317
Allowance for doubtful accounts (*1)
(62)
254
13
268
Total assets
5,361
5,375
13
(1) Long-term borrowings
900
900
Total liabilities
900900(*1) Allowance for doubtful accounts recorded specifically for long-term loans receivable is deducted.
3. Fair value by level within the fair value hierarchy
The fair value of financial instruments is classified into the following three levels according to the observability and materiality of
inputs used to measure fair value:
Level 1 fair value:
Level 2 fair value:
Level 3 fair value:

Fair value measured using observable inputs, i.e. quoted prices in active markets for assets or liabilities thatare the subject of the measurement.
Fair value measured using observable inputs other than Level 1 inputs.
Fair value measured using unobservable inputs.

(1) Financial instruments measured at fair value
Category

Fair value (Millions of yen)
Level 2
Level 3

Level 1

Investment securities
Available-for-sale securities
Total assets

5,107
5,107

-

Total
-

5,107
5,107

(2) Financial instruments other than those measured at fair value
Category
Long-term loans receivable
Total assets
Long-term borrowings
Total liabilities

Fair value (Millions of yen)
Level 2
Level 3
268
268
900
900

Level 1
-

Total
-

268
268
900
900

Investment securities:
The fair value of listed shares is measured using quoted prices. As listed shares are traded in active markets, their fair value is26

classified as Level 1.
Long-term loans receivable
Long-term loans receivable are categorized by a specified period and measured at the present value calculated by discounting
their future cash flows using an interest rate obtained by reflecting credit risk to government bond yield or other appropriate
indicator.
The fair value of doubtful receivables is measured at the present value of estimated cash flows calculated using the same discountrate or the amount expected to be recovered over collateral and guarantees, and is classified as Level 2.
Long-term borrowings
The fair value of long-term borrowings is determined by discounting the total amount of principle and interests using an interest
rate assumed for the similar new borrowing transaction. Some long-term borrowings with variable interest rate are subject to the
exceptional method for interest rate swaps. Their fair value is determined by discounting the total amount of principle and interest
that was accounted for together with the interest rate swap using an interest rate reasonably estimated for the similar borrowing
transaction, and is classified as Level 2.
(Note) Shares without market prices
Category
Non-listed shares(Millions of yen)Book value on the
consolidated balance
sheet
194

Shares of subsidiaries and associates

135

VIII. Notes on Asset Retirement Obligations
Asset retirement obligations recorded on the consolidated balance sheet
1. Outline of the asset requirement obligations
These are obligations to restore land for business use to its original state, as specified in the real estate lease agreements.
2. Method of calculation of the asset retirement obligations
The amount of asset retirement obligations is calculated with an estimated period of use of 20 to 30 years and using a discount rateof 0.6 to 2.3%.
3. Increase or decrease in asset retirement obligations during the consolidated fiscal year under review
Balance at the beginning of the consolidated fiscal year under
54 million yen
review
Adjustment due to passage of time
0 million yen
Balance at the end of the consolidated fiscal year under review

55 million yen

IX. Notes on Real Estate for Rent, etc.
Status and fair value of real estate for rent, etc.
1. Outline of real estate for rent, etc.
The Company and some of its subsidiaries hold land or other real estate properties for rent in Osaka prefecture and other regions.
2. Book value on the consolidated balance sheet, major changes during the consolidated fiscal year under review, and fair value at theclosing date and calculation method thereof for real estate for rent, etc.
(Millions of yen)Book value on the consolidated balance sheet
Fair value at the end of the
Balance at the beginning of
Increase/decrease during theBalance at the end of theconsolidated fiscal year under
the consolidated fiscal year
consolidated fiscal year
consolidated fiscal year
reviewunder review
under review
under review
1,288
(95)
1,193
1,163
(Notes) 1. The book value on the consolidated balance sheet is cost of acquisition less accumulated depreciation and accumulated
impairment losses. The difference between the fair value of revalued land at the end of the consolidated fiscal year
under review and the post-revaluation book value of the land is 31 million yen.
2. Major changes
Decrease due to moving out(91) million yen
Decrease due to depreciation of assets(2) million yen
Other
0 million yen
3. Method of fair value calculation
The fair values are mainly those calculated by the Company based on the “Japan Real Estate Appraisal Standards”(including those adjusted using certain indicators).
3. Profit or loss on real estate for rent, etc.
Profit on real estate for rent, etc. was 43 million yen (rent income is recorded under net sales and major rent expenses are recorded27under cost of sales).

X. Notes on Revenue Recognition
1. Disaggregation of revenue from contracts with customers
Consolidated fiscal year under review (from April 1, 2023 to March 31, 2024)(Millions of yen)

Construction

Reportable segment
Asphalt Products,
Environment andOther
43,407

Total

Goods transferred at a point of time

34,723

Goods transferred over time

35,523

4,309

39,832

70,24747,717

117,964-

96

96

47,813

118,060

Revenue from contracts with customers
Revenue from other sources(Note)Net sales to outside customers
70,247“Revenue from other sources” are revenue from real estate business.

78,131

2. Fundamental information to understand revenue from contracts with customers
The information is as described in “(5) Standards for recognition of significant revenue and costs,” “4. Accounting policies” of “I.
Notes on Significant Matters that Serve as the Basis for Consolidated Financial Statements.”
3. Information to understand the amounts of revenue for the consolidated fiscal year under review onward(1) Contract asset and contract liability balances
The breakdown of receivables, contract assets and contract liabilities arising from contracts with customers is as follows.
Consolidated fiscal year under review (from April 1, 2023 to March 31, 2024)(Millions of yen)
April 1, 2023

March 31, 2024

Receivables from contracts with customers

33,80829,826

Contract assets

8,026

9,271

Contract liabilities
1,438
1,202
Revenue recognized in the consolidated fiscal year under review that was included in the contract liability balance at the
beginning of the consolidated fiscal year is 1,366 million yen.
The contract liability balance in the table above includes advances received on construction contracts in progress.
(2) Transaction prices allocated to the remaining performance obligations
The amount of the transaction prices allocated to unsatisfied performance obligations of contracts with an individual contract
term of over one year is 14,765 million yen for the consolidated fiscal year under review. These transaction prices are mainly
those of construction contracts for construction projects. The information is omitted for contracts with an individual contract
term of less than one year.

XI. Notes on information on amounts per share
On April 1, 2024, the Company conducted a 5-for-1 stock split of its common stock. Therefore, net assets per share and earnings per
share are calculated on the assumption that the stock split was conducted at the beginning of the consolidated fiscal year under review.
1162.69 yen
1. Net assets per share
79.94 yen
2. Earnings per share
The basis for calculating earnings per share is as follows:
Profit attributable to owners of parent
Profit attributable to owners of parent relating to common shares
Amount not attributable to common shareholders
Average number of common shares during the period

28

3,793 million yen
3,793 million yen
47,455 thousand shares

XII. Notes on significant subsequent events
Retirement of treasury shares
At the Board of Directors meeting held on April 2, 2024, the Company resolved on matters regarding the retirement of treasury sharesin accordance with the provision of Article 178 of the Companies Act and conducted the retirement of treasury shares as follows.
1 Reason for the retirement of treasury shares
To improve shareholder returns and capital efficiency
2 Details of matters relating to the retirement of treasury shares(1) Class of shares retired
Common stock of the Company(2) Total number of shares retired
805,500 shares(The number of all shares acquired based on the resolution at the Board of Directors meeting held on June 29, 2023)(3) Total number of issued shares after retirement
51,394,730 shares(4) Date of retirement
April 30, 2024
(Note) On April 1, 2024, the Company conducted a 5-for-1 stock split of its common stock. The numbers of shares presented above
are recalculated on a post-split basis.

29

Balance Sheet(As of March 31, 2024)
AssetsItem

Liabilities
AmountMillions of yen

Current assets¥ 45,236

Cash and deposits

10,993

Notes receivable - trade
Electronically recorded monetary claims operating
Accounts receivable from completed
construction contracts
Accounts receivable - trade

2,163

Costs on construction contracts in progress

1,459
563

Raw materials and supplies

723

Short-term loans receivable

546

Prepaid expenses

231

Accounts receivable - other

898
1,185

Allowance for doubtful accounts
Non-current assets
Property, plant and equipment(20)
27,0694,008

Machinery, equipment and vehicles

2,382

Land

68
1,144
2,909
900

Deferred tax liabilities for land revaluation
Asset retirement obligations
Deferred tax liabilities
Long-term guarantee deposits
Provision for retirement benefits
Other

1,041
52
653
42
60
157

248
12,258

Leased assets

187

Other

150

Intangible assets
Software213
137

Telephone subscription right
Other

7
68

Investments and other assets

7,620

Investments securities

4,140

Shares of subsidiaries and associates

2,346

Long-term loans receivable

317

Distressed receivables

63

Long-term prepaid expenses

27

Membership30

Prepaid pension costs

649

Other

154

Allowance for doubtful accounts(108)

Total assets

1,288
3,907
9,065
3,787
7,886
600

Accounts payable - otherAccrued expenses
Income taxes payable
Accrued consumption taxes
Advances received on construction contracts
in progress
Provision for warranties for completed
construction
Provision for loss on construction contracts
Other
Non-current liabilities
Long-term borrowings

19,235

Buildings and structures
Tools, furniture and fixtures

Notes payable - trade
Electronically recorded obligations - operating
Accounts payable for construction contracts
Accounts payable - trade
Short-term borrowings
Current portion of long-term borrowings

19,643Merchandise and finished goods

Other

Current liabilities

2,345

4,501

AmountMillions of yen¥ 31,944

Item

Total liabilities

944
1,212
200
948
866
23

34,853
Net assets

Shareholders’ equity
Share capital
Capital surplus
Legal capital surplus

35,033
7,584
6,531
5,619

Other capital surplus
Retained earnings
Legal retained earnings
Other retained earnings
Reserve for tax purpose reduction entry of
non-current assets
General reserve
Retained earnings brought forward
Treasury shares
Valuation and translation adjustments
Valuation difference on available-for-salesecurities
Revaluation reserve for land

912
23,537906
22,631¥ 72,306(Amounts are rounded down to the nearest million yen.)30

170
19,4073,054(2,620)
2,418
1,769
648

Total net assets

37,452

Total liabilities and net assets¥ 72,306

Statement of Income
April 1, 2023
( Fromto March 31, 2024 )AmountMillions of yen
Net sales
Net sales of completed construction contracts
Net sales of finished goods
Other operating revenue
Cost of sales
Cost of sales of completed construction contracts
Cost of finished goods sold
Other costs
Gross profit
Gross profit on completed construction contracts
Gross profit - finished goods
Gross profit - other
Selling, general and administrative expenses
Operating profit
Non-operating income
Interest income
Dividend income
Other
Non-operating expenses
Interest expenses
Financial commission
Litigation expenses
Commission expenses
Other
Ordinary profit
Extraordinary income
Gain on sale of non-current assets
Other
Extraordinary losses
Loss on sale of non-current assets
Loss on retirement of non-current assets
Impairment losses
Profit before income taxes
Income taxes - current
Income taxes - deferred
Profit(Amounts are rounded down to the nearest million yen.)31¥ 56,100
21,414
4,616

82,13250,97920,908
3,028

74,916

5,121
505
1,588

7
713
80
87
15
29
12
8

21
23
0
60
0

7,215
5,365
1,849

801

153
2,497

45

62
2,480
501
17
¥ 1,961Statement of Changes in Equity
April 1, 2023
( Fromto March 31, 2024 )(Millions of yen)
Shareholders’ equity
Capital surplus

Balance at beginning of
periodSharecapitalLegalcapitalsurplus¥ 7,584¥ 5,619

Legal
retainedearnings

Total
capitalsurplus

Othercapitalsurplus¥ 753

Retained earnings
Other retained earnings
Reserve fortax purpose
Retained
reduction
earnings
Generalentry ofbrought
reserve
nonforward
current
assets¥ 6,373

¥ 906

¥ 173

Total
retainedearnings¥ 18,607¥ 2,740¥ 22,427

800

(800)

-

Dividends of surplus

(855)

(855)

Profit

1,961

1,961

3

-

4

4

Changes during period
Provision of generalreserve

Reversal of reserve fortax purpose reduction
entry of non-current
assets
Reversal of revaluation
reserve for land
Purchase of treasury
shares
Disposal of treasury
sharesNet changes in items
other thanshareholders’ equity
Total changes during
periodBalance at end of period

(3)

158

158

-

-

158

158

-

(3)

800

313

1,110

¥ 7,584¥ 5,619¥ 912¥ 6,531

¥ 906

¥ 170

¥ 19,407¥ 3,054¥ 23,537(Millions of yen)
Shareholders’ equity
Treasury shares
Balance at beginning of
period¥ (1,724)

Valuation and translation adjustments
Valuation
Total valuation
Revaluationdifference onand translation
reserve for landavailable-for-saleadjustments
securities

Total
shareholders’equity¥ 34,661¥ 1,424¥ 652¥ 2,077

Total net assets¥ 36,738

Changes during period
Provision of generalreserve--

Dividends of surplus

(855)

(855)

Profit

1,961

1,961

-

-

4

4

(1,002)(1,002)(1,002)

106

264

264

Reversal of reserve fortax purpose reduction
entry of non-current
assets
Reversal of revaluation
reserve for land
Purchase of treasury
shares
Disposal of treasury
sharesNet changes in items
other thanshareholders’ equity
Total changes during
periodBalance at end of period

345

(4)

340

340

(896)

372

345

(4)

340

713

¥ (2,620)¥ 35,033¥ 1,769¥ 648¥ 2,418¥ 37,452(Amounts are rounded down to the nearest million yen.)32

Notes on Non-consolidated Financial Statements
1.

Notes on significant accounting policies(1) Standards and methods for valuation of securities
1. Shares of subsidiaries and associates
Moving average cost method
2. Available-for-sale securities
Securities other than shares without market prices
Fair value method based on market prices, etc. as of the closing date (with the entire amount of valuation differences recorded
directly into net assets, and the cost of sales calculated using the moving average method)
Shares without market prices
Moving average cost method(2) Standards and methods for valuation of inventories
Cost method based on specific identification
1. Costs on construction contracts inprogress
2. Merchandise and finished goods
Cost method based on the weighted average method(Method of writing down book values due to decline in profitability)
3. Raw materials and supplies
Cost method based on the weighted average method(Method of writing down book values due to decline in profitability)(3) Depreciation of non-current assets
1. Property, plant and equipment(a) Property, plant and equipment other than leased assets
The declining balance method is used, except that the straight line method is used for those buildings (excluding facilities
attached to buildings) purchased on April 1, 1998 or thereafter as well as those structures and facilities attached tobuildings purchased on April 1, 2016 or thereafter.
Estimated useful life of these assets are based on the same standards as for the method stipulated in the Corporation Tax
Act.
(b) Leased assets
Leased assets related to finance leases in which ownership is not transferred
The straight line method, considering the lease period as the estimated useful life of leased assets and their residual value
as zero, is used.
2. Intangible assets
The straight line method is used. The straight line method based on the estimated internal useful life of five years is used forsoftware (for internal use).
(4) Standards for recognition of allowances
1. Allowance for doubtful accounts: In order to prepare for credit loss on receivables, the collectability of normal receivables is
estimated by applying the historical overall credit loss rates; the collectability of doubtful receivables is analyzed individually,and estimated uncollectible amount is recorded.
2. Provision for warranties for completed construction: In order to prepare for loss on compensation for defects in completed
contracts, reserves are provided by the amount obtained by multiplying the amount of completed contracts by the compensation
rate for the completed contracts during the preceding three fiscal years, adding any specific amounts expected for futurecompensation.
3. Provision for loss on construction contracts: In order to prepare for future loss on construction contracts, expected loss is
incurred for those contracts uncompleted during the fiscal year under review that are expected to suffer a loss and for which
the amount of the loss can be reasonably estimated.
4. Provision for retirement benefits: In order to prepare for the payment of retirement benefits to employees, the Company hasrecorded the amounts of the provision based on the expected amount of retirement benefit obligations and pension assets at theend of the fiscal year under review.
And, in order to prepare for the payment of retirement benefits to re-employees, the simplified method, which assumes
retirement benefit obligation to be equal to the benefits payable assuming voluntary retirement at the closing date, is applied to
calculate the reserve for retirement benefits and retirement benefit costs.
(a) Period attribution method for the expected amount of retirement benefits
In calculating retirement benefit obligations, the Company uses the benefit formula to allocate the projected retirement
benefits to the period that closes at the end of the fiscal year under review.
(b) Accounting of actuarial differences and prior service costs
Actuarial differences are recognized as expenses in the fiscal year following fiscal year in which they arise, using the straightline method over 10 years, a period less than the average of the estimated remaining service lives.
Prior service costs are recognized as expenses in the fiscal year in which they arise, using the straight line method over 10
years, a period less than the average of the estimated remaining service lives.
If pension assets that should be recognized during the fiscal year under review exceed the amount obtained by deducting
actuarial differences, etc. from retirement benefit obligations, the Company considers the assets as prepaid pension costs andreports them as part of investments and other assets.
The accounting of unrecognized actuarial differences related to retirement benefits and unrecognized prior service costs isdifferent from that of such differences and costs in consolidated financial statements.

33

(5) Standards for recognition of significant revenue and costs
Revenues related to net sales of completed construction contracts are mainly from pavement construction and civil engineering
projects, and the Company has a performance obligation to perform construction and deliver the work to the customer based on acontractual agreement with the customer. The contract is a transaction that satisfies a performance obligation over time, as thecustomer obtains control over the asset as the value of the asset increases by fulfilling its obligations under the contract with thecustomer, and revenue is recognized based on the degree of progress in satisfying the performance obligation. And when the degreeof progress toward satisfying a performance obligation cannot be reasonably estimated, but the costs to be incurred are expected tobe recovered, revenue is recognized on a cost recovery basis. For a contract with a considerably short period until the performanceobligation is expected to be satisfied in full, the Company recognizes revenue as if the performance obligation is satisfied at a pointof time. The Company does not recognize revenue if the degree of completion of the performance obligation cannot be reasonably
estimated at the initial stage of the contract, even if the performance obligation is satisfied over time.
Revenues related to net sales of finished goods consist primarily of sales from the manufacture of asphalt emulsions and asphalt
mixtures, etc. The Company has performance obligations to deliver products based on sales contracts with its customers. The
revenue is recognized at the time of delivery of the product because the customer obtains control of the product at the point ofdelivery and the performance obligation is deemed to be satisfied.
No adjustment for significant financial factors is made for both net sales of completed construction contracts and net sales of finishedgoods, because the consideration for the transactions is received primarily within one year of satisfaction of the performanceobligation.
(6) Hedge accounting method
1. Hedge accounting method
The exceptional method is applied to interest rate swaps.
2. Hedging instruments and hedged items
Hedging instruments: Interest rate swaps
Hedged items: Interest on borrowings
3. Hedging policy
Interest rate swaps are performed to avoid risks of fluctuations in the interest rates for borrowings.
4. Method of evaluating hedge effectivenessEvaluation of hedge effectiveness is omitted because the Company performs only interest rate swaps to which the exceptional
method is applied.
(7) Standards for translating assets or liabilities denominated in foreign currencies into Japanese yen
Assets and liabilities denominated in foreign currencies are translated into Japanese yen based on spot exchange rates on the closing
date, and exchange differences are reported as foreign exchange profits or losses.
(8) Accounting of consumption taxes
Non-deductible consumption tax and non-deductible local consumption tax are recorded at cost of the fiscal year in which it occurs.
(9) The adopted accounting principles and procedures when the related accounting standards or other rules are not clear
The accounting treatment for joint ventures in our “Construction” and “Asphalt Products, Environment and Other” of the Company
is mainly based on the method of recognizing assets, liabilities, income, and expenses according to the investment ratio of themembers.

34

2.

Changes in presentation

Since the amount of “electronically recorded monetary claims - operating,” which was included in “notes receivable” (5,156 million yen
as of March 31, 2023) on the balance sheet, became material in terms of amount, it is presented as “electronically recorded monetaryclaims - operating” from the fiscal year under review (2,345 million yen as of March 31, 2024).

3.

Notes on accounting estimates(1) Provision for loss on construction contracts
1.
Amount recorded in financial statements for the fiscal year under review
2.

68 million yen
Information about the content of significant accounting estimates about the identified subject
Description is omitted since the same information is disclosed in Notes on Consolidated Financial Statements.

(2) Estimates of the revenue recognized for performance obligations satisfied over time1.
Amount recorded in financial statements for the fiscal year under review
11,515 million yen
2.
Information about the content of significant accounting estimates about the identified subject
Description is omitted since the same information is disclosed in Notes on Consolidated Financial Statements.

4.

Notes on the Balance Sheet(1) Accumulated depreciation for property, plant and equipment
28,844 million yen(2) Receivables from and payables to subsidiaries and associates
Short-term receivables 1,154 million yen
Short-term payables
9,110 million yen
Long-term receivables
45 million yen(3) Guarantee obligations
Guarantee obligations for commercial transactions
1,125 million yen(4) Pursuant to the Act on Revaluation of Land (Act No. 34 promulgated on March 31, 1998) and the Act to Revise Part of the Act on
Revaluation of Land (Act No. 24 promulgated on March 31, 1999), land used for the Company’s business operations was revalued.
The effect in terms of income tax of the differences between the book value and the revalued amount has been presented underliabilities as “deferred tax liabilities for land revaluation” and the remaining balance has been presented under net assets as“revaluation reserve for land” in the balance sheet.
Revaluation method
Land is revalued by making reasonable adjustments on the assessed value of fixed assets (prices registered with the land tax
ledger stipulated in Article 341, Item 10 of the Local Tax Act or the supplementary land tax ledger stipulated in Item 11).
Date of revaluation
March 31, 2002
Difference between the market price of revalued land at the end of the fiscal year under review and the post-revaluation bookvalue of the land
(1,851) million yen

5.

Notes on the Statement of Income
Transactions with subsidiaries and associates
Operating transactions
Net sales
2,192 million yen
Purchases
10,247 million yen
Non-operating transactions
82 million yen

6.

Notes on the Statement of Changes in Equity
Types and number of treasury shares at the end of the fiscal year under review
Common stock
1,039,863 shares
On April 1, 2024, the Company conducted a 5-for-1 stock split of its common stock. The number of shares shown above is thenumber before the stock split, because the record date is March 31, 2024.

35

7.

Notes on tax effect accounting(1) Breakdown of major factors causing deferred tax assets and liabilities(Deferred tax assets)
Allowance for doubtful accounts
39 million yen
Accrued bonuses
306 million yen
Accrued business tax
38 million yen
Loss on valuation of membership
15 million yen
Loss on valuation of investment securities
289 million yen
Non-current assets
214 million yen
Provision for loss on construction
21 million yen
contracts
Other
62 million yen
Subtotal of deferred tax assets
987 million yen
Valuation reserve(530) million yen
Total deferred tax assets
457 million yen(Deferred tax liabilities)
Reserve for tax purpose reduction entry of(75) million yen
non-current assets(180) million yen
Prepaid pension costs
Valuation difference on available-for-sale(714) million yen
securities
Other(141) million yen
Total deferred tax liabilities(1,110) million yen
Net deferred tax liabilities(653) million yen(Other)Deferred tax liabilities for land revaluation
1,041 million yen(2) Breakdown of major items causing differences between effective statutory tax rates and corporation tax rates after the applicationof tax effect accounting
Effective statutory tax rate
30.6%
(Adjustment)
Entertainment expenses and other permanently non1.1%
deductible items for tax purposes
Municipal tax on a per-capita basis
3.0%
Dividend income and other items which are not taxable(7.6)%
permanently
Tax deduction for experimentation and research expenses(1.8)%Tax deduction for tax measure to promote wage increases(3.3)%
Other(1.1)%
Corporation tax rates after the application of tax effect20.9%
accounting

36

8.

Notes on transactions with related parties(1) Transactions with related parties
Subsidiaries and associates
Attribute

Subsidiary

Names ofcompanies

Percentage ofvoting rights
held (%)

Sapporo Kyodo
Ascon Co., Ltd.

Ownership
Direct, 65

TOA-TONEBORING Co., Ltd.

Ownership
Direct, 100

Umetsugumi Co.,Ltd.

Ownership
Direct, 100

Relationship withrelated parties
Purchase ofmaterials, etc.
Interlocking
directors
Purchase ofmaterials, etc.
Interlocking
directors
Purchase ofmaterials, etc.
Interlocking
directors

Details of transactions

Amount oftransactions(Millions of yen)

Borrowing of funds(70)Interest expenses

11

Borrowing of funds(786)Interest expenses

12

Borrowing of funds(10)Interest expenses

8

Item

Balance at end of
period(Millions of yen)

Short-termborrowings

1,317

Short-termborrowings

1,567

Short-termborrowings

903(Conditions of transactions and policy to decide conditions of transactions)
1. Loan interest rates are reasonably determined considering market interest rates.
2. Terms and conditions of transactions are determined in the same way as for general parties.
3. Based on requests from business partners, the Company has guaranteed accounts payable-trade as required.
(2) Notes on the parent company or significant subsidiaries and associates
Not applicable9.

Notes on revenue recognition
Fundamental information to understand revenue
Fundamental information to understand revenue is as described in “(5) Standards for recognition of significant revenue and costs”
of “1. Notes on significant accounting policies.”

10. Notes on information on amounts per share
On April 1, 2024, the Company conducted a 5-for-1 stock split of its common stock. Therefore, net assets per share and earnings
per share are calculated on the assumption that the stock split was conducted at the beginning of the fiscal year under review.
796.84 yen(1) Net assets per share
41.33 yen
(2) Earnings per share
The basis for calculating net income per share is as follows:
Profit in the Statement of Income
Profit relating to common shares
Amount not attributable to common shareholders
Average number of common shares during the period

1,961 million yen
1,961 million yen
47,455 thousand shares

11. Notes on significant subsequent events(Retirement of treasury shares)
The information is the same as XII. Notes on significant subsequent events (Retirement of treasury shares) in Notes on
Consolidated Financial Statements.

37

[Supplementary Schedules to the Financial Statements]
Fiscal year
(118th term)

From April 1, 2023
To March 31, 2024

7-3-7 Roppongi, Minato-ku, Tokyo
TOA ROAD CORPORATION
President

Kyouichi Morishita

This statement has been prepared in accordance with the provisions of Article 435, Paragraph 2 of the Companies Act and Article
118 of the Corporate Accounting Rules.
Amounts herein are rounded down to the nearest million yen.
Items listed herein
1.

Details of property, plant and equipment and intangible assets

2.

Details of allowance and provisions

3.

Details of selling, general and administrative expenses38

1. Details of property, plant and equipment and intangible assets
Book value
on April 1,
2023

Increase

Decrease¥ 3,792

¥ 494

¥3

¥ 275

¥ 4,008¥ 7,341¥ 11,349

2,395

1,089

79

1,023

2,382

19,496

21,878

270

115

0

138

248

1,980

2,228

10,916

1,350

8
（0）

-

12,258-12,258

Leased assets

64

151

-

28

187

51

238

Other

143

152

144

-

150

-

150

¥ 17,583¥ 3,355

¥ 237
¥（0）

¥ 1,465¥ 19,235¥ 28,869¥ 48,104

Software

-

-

-

93

137

81

218

Telephonesubscription right

-

-

-

-

7

-

7

Other

-

-

-

-

68

-

68

-

-

-

¥ 93

¥ 213

¥ 81

¥ 294

Property, plant and equipment

Category

Types of assets
Buildings andstructures
Machinery,equipment, andvehiclesTools, furniture,and fixtures
Land

Total
Intangible assets(Millions of yen)
Accumulated Acquisition
Depreciation Book value
depreciation
cost onoron March 31,
orMarch 31,
amortization2024
amortization
2024

Total

(Notes)1. The balance of intangible assets at the beginning of the fiscal year and the increase/decrease in such assets during this period
are omitted, because they account for 1% or less of total assets.
2. Decrease during this period presented in parentheses in the amount of decrease that relates to impairment loss.
3. Breakdown of major increases

Land

Buildings and structures
Machinery, equipment and vehicles

Yokohama factory
Machine center
Saitama asphalt plant
Kennan asphalt plant
Osaka factory

39

Land for factory relocation
Office building
Stock yard
Asphalt plant repair
Asphalt modification tank

1,350 million yen
130 million yen
31 million yen
49 million yen
32 million yen

2. Details of allowance and provisions(Millions of yen)
Category
Allowance for doubtful
accounts

Provision for warranties
for completed construction
Provision for loss on
construction contracts

Balance on April
1, 2023

Decrease
Used for theintended purpose

Increase

Balance on
March 31, 2024

Other

¥ 187

¥ 129

¥0

¥ 186

¥ 129

22

23

-

22

23

52

68

-

52

68

(Notes)1. The decrease in allowance for doubtful accounts during this period (other) consists of reversal due to reevaluation.
2. The decrease in provision for warranties for completed construction during this period (other) consists of reversal due toreevaluation.
3. The decrease in provision for loss on construction contracts during this period (other) consists of reversal due toreevaluation.

40

3. Details of selling, general and administrative expenses
Item
Remuneration for directors(and other officers)

AmountMillions of yen

Remarks¥ 202

Consulting expenses

91

Employees’ salaries and allowances

2,823

Retirement benefits expenses

108

Retirement payments

26

Legal welfare expenses

441

Power utilities expenses

40

Repair expenses

28

Taxes and dues

291

Rents expenses on land buildings

160

Welfare expenses

91

Stationery expenses

316

Communication andtransportation expenses

346Entertainment expenses

91

Advertising expenses

63

Donations12

Depreciation

174

Provision of allowance for doubtful
accounts(20)

Miscellaneous expenses

74

Total

*

*

¥ 5,365(Notes)
The economic benefits provided by the Company free of charge (including the provision of economic benefits whose
reciprocal benefits are extremely small) are included in the above items marked with an asterisk.

41

(Translation)

INDEPENDENT AUDITOR'S REPORTMay 23,2024

To the Board of Directors of TOA ROAD CORPORATION

Gyosei ＆Co.

Tokyo office

Designated Engagement Partner,
Certified Public Accountant:

Hitake Fukuda

Designated Engagement Partner,
Certified Public Accountant:

Taketsugu Haruta

OpinionPursuant to the fourth paragraph of Article 444 of the Companies Act, we have audited the consolidated
financial statements of TOA ROAD CORPORATION and its consolidated subsidiaries (the "Group"),namely, the consolidated balance sheet, the consolidated statement of income, consolidated statement ofchanges in equity, and notes on consolidated financial statements applicable to the consolidated fiscal year
from April 1, 2023 to March 31, 2024.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects,
the consolidated financial position of the Group as of March 31, 2024, and its consolidated financial
performance for the year then ended in accordance with accounting principles generally accepted in Japan.

Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted in Japan. Our
responsibilities under those standards are further described in the Auditor’s Responsibilities for the Auditof the Consolidated Financial Statements section of our report. We are independent of the Group inaccordance with the provisions of the Code of Professional Ethics in Japan, and we have fulfilled our otherethical responsibilities as auditors. We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our opinion.

Other Information
The other information comprises the information included in the business report and the accompanying
supplementary schedules to the business report. Management is responsible for the other information. Audit& Supervisory Board members and the Audit & Supervisory Board are responsible for overseeing the
Directors’ execution of duties relating to the design and operating effectiveness of the controls over theother information.
Our opinion on the consolidated financial statements does not cover the other information and we do not
express any form of assurance conclusion thereon.
In connection with our audit of the consolidated financial statements, our responsibility is to read the otherinformation and, in doing so, consider whether the other information is materially inconsistent with theconsolidated financial statements or our knowledge obtained in the audit or otherwise appears to bematerially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this otherinformation, we are required to report that fact.
We have nothing to report in this regard.

Responsibilities of Management and Audit & Supervisory Board Members and the Audit &Supervisory Board for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of the consolidated financial statementsin accordance with accounting principles generally accepted in Japan, and for such internal control as
management determines is necessary to enable the preparation of consolidated financial statements that are
free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is responsible for assessing the Group's
ability to continue as a going concern, disclosing, as applicable, matters related to going concern inaccordance with accounting principles generally accepted in Japan.
Audit & Supervisory Board members and the Audit & Supervisory Board are responsible for overseeing
the Directors' execution of duties relating to the design and operating effectiveness of the controls over theGroup's financial reporting process.
Auditor's Responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as awhole are free from material misstatement, whether due to fraud or error, and to issue an auditor's reportthat includes our opinion. Misstatements can arise from fraud or error and are considered material if,
individually or in the aggregate, they could reasonably be expected to influence the economic decisions ofusers taken on the basis of these consolidated financial statements.
As part of an audit in accordance with auditing standards generally accepted in Japan, we exercise
professional judgment and maintain professional skepticism throughout the audit. We also:• Identify and assess the risks of material misstatement of the consolidated financial statements, whether

due to fraud or error, design and perform audit procedures responsive to those risks. The procedures
selected depend on the auditor's judgment. In addition, we obtain audit evidence that is sufficient andappropriate to provide a basis for our opinion.
• Obtain, when performing risk assessment procedures, an understanding of internal control relevant tothe audit in order to design audit procedures that are appropriate in the circumstances, but not for the
purpose of expressing an opinion on the effectiveness of the Group's internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting

estimates and related disclosures made by management.
• Conclude on the appropriateness of management's use of the going concern basis of accounting and,based on the audit evidence obtained, whether a material uncertainty exists related to events orconditions that may cast significant doubt on the Group's ability to continue as a going concern. If weconclude that a material uncertainty exists, we are required to draw attention in our auditor's report to
the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, tomodify our opinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor's report. However, future events or conditions may cause the Group to cease to continue as agoing concern.
• Evaluate whether the overall presentation and disclosures of the consolidated financial statements are inaccordance with accounting principles generally accepted in Japan, as well as the overall presentation,
structure and content of the consolidated financial statements, including the disclosures, and whether
the consolidated financial statements represent the underlying transactions and events in a manner that
achieves fair presentation.

• Obtain sufficient appropriate audit evidence regarding the financial information of the entities orbusiness activities within the Group to express an opinion on the consolidated financial statements. We
are responsible for the direction, supervision and performance of the group audit. We remain solely
responsible for our audit opinion.
We communicate with Audit & Supervisory Board members and the Audit & Supervisory Board
regarding, among other matters, the planned scope and timing of the audit and significant audit findings,
including any significant deficiencies in internal control that we identify during our audit.
We also provide Audit & Supervisory Board members and the Audit & Supervisory Board with astatement that we have complied with relevant ethical requirements regarding independence, andcommunicate with them all relationships and other matters that may reasonably be thought to bear on our
independence, and where applicable, actions taken to eliminate threats or safeguards applied.

Interest Required to Be Disclosed by the Certified Public Accountants Act of Japan
Our firm and its designated engagement partners do not have any interest in the Group which is required
to be disclosed pursuant to the provisions of the Certified Public Accountants Act of Japan.

Notes to the Readers of Independent Auditor’s Report• This is an English translation of the independent auditor's report as required by the Companies Act ofJapan for the conveniences of the readers.
• "Other Information" referred to in this report are not included in the attached financial documents.

(Translation)

INDEPENDENT AUDITOR'S REPORTMay 23,2024

To the Board of Directors of TOA ROAD CORPORATION

Gyosei ＆Co.

Tokyo office

Designated Engagement Partner,
Certified Public Accountant:

Hitake Fukuda

Designated Engagement Partner,
Certified Public Accountant:

Taketsugu Haruta

OpinionPursuant to the first item, second paragraph of Article 436 of the Companies Act, we have audited the nonconsolidated financial statements of TOA ROAD CORPORATION (the "Company"), namely, the nonconsolidated balance sheet, the non-consolidated statement of income, non-consolidated statement ofchanges in equity, notes on non-consolidated financial statements and the accompanying supplementaryschedules to the financial statements applicable to the 118th fiscal year from April 1, 2023 to March 31,2024.

In our opinion, the accompanying non-consolidated financial statements present fairly, in all material
respects, the financial position of the Company as of March 31, 2024, and its financial performance for theyear then ended in accordance with accounting principles generally accepted in Japan.

Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted in Japan. Our
responsibilities under those standards are further described in the Auditor's Responsibilities for the Auditof the Non-consolidated Financial Statements section of our report. We are independent of the Company inaccordance with the provisions of the Code of Professional Ethics in Japan, and we have fulfilled our otherethical responsibilities as auditors. We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our opinion.

Other Information
The other information comprises the information included in the business report and the accompanying
supplemental schedules to the business report. Management is responsible for the other information.
Audit & Supervisory Board members and the Audit & Supervisory Board are responsible for overseeing
the Directors' execution of duties relating to the design and operating effectiveness of the controls over
the other information.
Our opinion on the non-consolidated financial statements does not cover the other information and we do
not express any form of assurance conclusion thereon.
In connection with our audit of the non-consolidated financial statements, our responsibility is to read theother information and, in doing so, consider whether the other information is materially inconsistent with
the non-consolidated financial statements or our knowledge obtained in the audit or otherwise appears to
be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this otherinformation, we are required to report that fact.
We have nothing to report in this regard.

Responsibilities of Management and Audit & Supervisory Board Members and the Audit &Supervisory Board for the Non-consolidated Financial Statements
Management is responsible for the preparation and fair presentation of the non-consolidated financial
statements in accordance with accounting principles generally accepted in Japan, and for such internal
control as management determines is necessary to enable the preparation of non-consolidated financial
statements that are free from material misstatement, whether due to fraud or error.
In preparing the non-consolidated financial statements, management is responsible for assessing theCompany's ability to continue as a going concern, disclosing, as applicable, matters related to going concern
in accordance with accounting principles generally accepted in Japan.
Audit & Supervisory Board members and the Audit & Supervisory Board are responsible for overseeing
the Directors' execution of duties relating to the design and operating effectiveness of the controls over theCompany's financial reporting process.

Auditor’s Responsibilities for the Audit of the Non-consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the non-consolidated financial statements
as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor'sreport that includes our opinion. Misstatements can arise from fraud or error and are considered material if,
individually or in the aggregate, they could reasonably be expected to influence the economic decisions ofusers taken on the basis of these non-consolidated financial statements.
As part of an audit in accordance with auditing standards generally accepted in Japan, we exercise
professional judgment and maintain professional skepticism throughout the audit. We also:• Identify and assess the risks of material misstatement of the non-consolidated financial statements,

whether due to fraud or error, design and perform audit procedures responsive to those risks. The
procedures selected depend on the auditor's judgment. In addition, we obtain audit evidence that is
sufficient and appropriate to provide a basis for our opinion.
• Obtain, when performing risk assessment procedures, an understanding of internal control relevant tothe audit in order to design audit procedures that are appropriate in the circumstances, but not for the
purpose of expressing an opinion on the effectiveness of the Company's internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimatesand related disclosures made by management.
• Conclude on the appropriateness of management's use of the going concern basis of accounting and,based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions
that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude
that a material uncertainty exists, we are required to draw attention in our auditor's report to the related
disclosures in the non-consolidated financial statements or, if such disclosures are inadequate, to modify
our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’sreport. However, future events or conditions may cause the Company to cease to continue as a going
concern.
• Evaluate whether the overall presentation and disclosures of the non-consolidated financial statements
are in accordance with accounting principles generally accepted in Japan, as well as the overall
presentation, structure and content of the non-consolidated financial statements, including thedisclosures, and whether the non-consolidated financial statements represent the underlying
transactions and events in a manner that achieves fair presentation.
We communicate with Audit & Supervisory Board members and the Audit & Supervisory Board
regarding, among other matters, the planned scope and timing of the audit and significant audit findings,

including any significant deficiencies in internal control that we identify during our audit.
We also provide Audit & Supervisory Board members and the Audit & Supervisory Board with astatement that we have complied with relevant ethical requirements regarding independence, andcommunicate with them all relationships and other matters that may reasonably be thought to bear on our
independence, and where applicable, actions taken to eliminate threats or safeguards applied.
Interest Required to Be Disclosed by the Certified Public Accountants Act of Japan
Our firm and its designated engagement partners do not have any interest in the Company which is
required to be disclosed pursuant to the provisions of the Certified Public Accountants Act of Japan.

Notes to the Readers of Independent Auditor's Report• This is an English translation of the independent auditor's report as required by the Companies Act ofJapan for the conveniences of the readers.
• "The accompanying supplementary schedules to the financial statements" referred to in this report are

not included in the attached financial documents.
• "Other Information" referred to in this report are not included in the attached financial documents.