Main Contents of Q&A from the FY2023 3rd Quarter Financial Presentation
Date: February 9, 2024 Friday 13:30-14:10
Presenters：President and CEO Kazunari Kibe/ Executive Officer Yuji Hatakama

Q. Despite your company's past success in recovering from cost increases in the Building Construction segment,
this time you have made a downward revision from the initial full year plan. Is this because the profit isexpected to be postponed until the next fiscal year, or is it due to a significant increase in material prices?
A. The main reason for the downward revision is our inability to place low-cost orders with our partner companies.
Among these, the rise in labor costs is the primary factor that has prevented us from placing such orders. We
have been negotiating with the owners about passing on costs, but the situation is challenging because theincrease in labor costs is not reflected in the inflation index. For the projects we plan to take orders for in thenext fiscal year, we are currently negotiating with the owners with new price offers that reflect the priceincrease. As such, we believe that the issue of profit decline due to cost increases will be minimized from thenext fiscal year onwards. The Construction Deflator (“the Deflator”) is used for price change negotiations basedon the “indexation clause”, but the rapid increase in costs, especially labor costs, is not reflected in the Deflator
for the 2Q of this fiscal year, making negotiations with owners difficult. We will continue to negotiate torecover the difference between the Deflator and the actual costs in the 4Q.

Q. I would like to know how confident you are in achieving the operating profit target of 59 billion yen as weapproach the final year of the medium-term management plan in the next fiscal year. Do you anticipate selling
projects developed by Japan Wind Development Co., Ltd. ("JWD") and the biomass power generation projectin the next fiscal year? Additionally, how do you foresee the performance of the Infrastructure Management
segment?
A. We are gearing up to sell the Ozu Biomass Power Plant, which we had decided not to sell this fiscal year, asconstruction will be completed this summer. We are also closely scrutinizing the details of the projects
developed by JWD and we are preparing to achieve the operating profit target of 59 billion yen for the next
fiscal year, factoring in the sale of these projects.

Q. Regarding the Civil Engineering business segment, while there is a possibility of obtaining design change orders
in the 4Q, it appears you are not anticipating a significant performance improvement. I would like to know yourexpectations for obtaining design change orders in the 4Q. Also, the profit margin for this fiscal is quite high,but should we assume that it will be challenging to maintain the same level of profit margin in the next fiscalyear?
A. There is still potential for obtaining design change orders in the 4Q, but please understand that there are notexpected to significantly improve performance, as our full-year forecast already takes into account the 4Q as of
the 3Q. In next fiscal year, it may be challenging to secure large design change orders as consistently as thisfiscal year, but we anticipate maintaining the usual profit margin.

Q. The operating profit forecast for the Road Pavement segment for this fiscal year is 7.6 billion yen, and it appears
that profits are recovering due to the progress of cost pass-on. However, I don't believe the level of 7.6 billion
yen is particularly high compared to the past levels for Maeda Road. I would like to know whether profits will
recover further from this level, or if they have already reached a certain level.
A. We are currently in the process of passing on cost, so we anticipate a further improvement in profits. Maeda
Road had previously achieved an operating profit of nearly 10 billion yen, and we believe that there is a good1/3

possibility that profits will return to the 10 billion yen level, depending on the stability of material costs and thestatus of orders.

Q. Is it correct to say that the issuance of bond-type shares, like bonds, does not carry the risk of dilution of voting
rights? While it appears that the goal of shareholder returns has been met, could you please provide more details
on your plans or strategies for shareholder returns moving forward?
A. We have not made a decision to issue bond-type shares, but please understand that we have expanded ourfundraising options this time. Subordinated bonds, subordinated loans, and bond-type shares do not dilutevoting rights upon issuance, so we are considering using one of them as a fundraising method. We do not plan
to conduct a public stock offering that would dilute voting rights. We have not yet decided on a plan for future
shareholder returns, but we are considering the possibility of distributing dividends higher than last year, taking
into account factors such as the potential increase in profit in the second half of the year. Our policy is to returnto shareholders if we can consistently increase profits.

Q. Regarding the concession business, it appears that bids for water supply/sewerage facilities and arenas areprogressing steadily. Are there any other projects that you anticipate bidding on?
A. In the concession business, we bid on water supply/sewerage facilities projects and arena projects that qualifyfor subsidies. The "Level 3.5" in Water PPP policy indicates that the project will transition to a concession
business in the future. "Level 4.0" are those that are initiated as concession businesses from the start. Theseprojects receive substantial subsidies from the central government, so many local governments are considering
issuing Water PPP projects. water supply/sewerage facilities projects of local governments that have beenplanning for several years have now reached the stage where the implementation policy is issued and the callfor proposals will be announced shortly. Similarly, for arena businesses, many local governments areconsidering introducing them due to the potential to receive subsidies from the central government. In local
governments that have been planning for several years, I think some projects will be issued next fiscal year. Inaddition, I heard that the recent Noto Peninsula earthquake caused significant damage to the water and sewage
systems. I think the water charge income in the Noto Peninsula region was about 500 million to 1 billion yen,
but it is said that it will cost several tens of billions of yen to restore the water and sewage systems. Therefore,
even if subsidies are granted, it has become clear again that it is very difficult to maintain the facilities with thewater charge income alone. In response to this, it is expected that local governments nationwide will furtherconsider privatizing water supply businesses. We are also receiving significantly more inquiries from local
governments. After preparing for the next fiscal year, we expect that more water supply/sewerage facilities
projects than expected will be issued as concession businesses from the year after next. In addition to watersupply/sewerage facilities projects and arena businesses, preparations for several projects are underway, but I
think that large projects will not be issued until the year after next.

Q. Now that the share transfer contract for JWD shares has been closed, could you provide specific materials
demonstrating how to increase the profits of the Infrastructure Management segment, including the profits fromJWD, when disclosing the full-year financial results or the expected performance for the next fiscal year? If thegain on project sales increases revenue, it will turn into a rotational business model similar to a real estatecompany, which won't enhance your company's valuation. There are many instances where performance isstrong, but the stock price does not increase. I believe it is necessary to demonstrate that INFRONEER isgenerating profits sustainably, rather than relying on one-off profits from project sales, to improve valuation.
Could you present this policy when the full-year financial results are disclosed?

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A. We plan to clearly explain how we aim to increase the profits of the Infrastructure Management segment fromthe next fiscal year at the time of disclosing the full-year financial results. We appreciate your patience until
then.

Q. Many companies worldwide are facing challenges in the renewable energy business. There are projects that areinterrupted or discontinued because the return on investment does not meet expectations. However, for instance,in the United States, there seems to be a policy to promote businesses in favor of renewable energy developers.
In such a situation, I would like to understand how you view the business in light of a tightening investment
environment in the renewable energy sector. Also, this week, there were reports that TEPCO will start
requesting output control of electricity from this spring in its service area. In Japan, electricity demand isdecreasing, and we are at a stage where a considerable number of coal-fired power plants need to be shut down
due to a mismatch in supply and demand. If that is the case, I believe the return will decrease compared to theinitial estimate. Do you have any measures to claim compensation from insurance companies when the return isinsufficient? I would like to know how you plan to deal with the output control of electricity.
A. In the renewable energy business, the environmental value is significantly increasing. Particularly, the numberof companies joining the "RE100" initiative is on the rise, and we believe that the price of electricity produced
from renewable energy will significantly increase. This is a global trend. On the other hand, while the energy
business market in Japan may be shrinking due to the declining birthrate and aging population, the recent surge
in digitalization has led to a tremendous increase in energy usage. Many experts predict that electricity
consumption will increase more than the decline in population. We are not overly concerned about thetemporary output control. Instead, we believe that the supply of renewable energy will increase through thesupply of battery systems. According to newspaper reports, the United States and the United Kingdom areproviding incentives for wind power generation projects. We are advocating for changes in the mechanism forselling electricity generated by offshore wind power in Japan as well. We hope that the fact that the UnitedStates and the United Kingdom have implemented such policies first will lead to higher rates for electricity
generated by renewable energy in Japan as well.

Q. I would like to revisit the positioning of Toyo Construction within your company. I had thought that the large
sum invested to acquire JWD would make it difficult for INFRONEER to make other investments. However,coincidentally, YFO also withdrew the TOB for Toyo Construction at that time. Given this situation, I believe
the judgment on investment in Toyo Construction is neutral for the time being, but I would like to know yourcurrent views on marine civil engineering.
A. We can only officially reiterate what we have stated before, but there is no change in the fact that ToyoConstruction is an equity method affiliate in which we hold a 20% stake. We had Toyo Construction construct
the pier that receives the pellet transport vessels used at Ozu Biomass Power Plant, which we decided not tosell. We are also considering collaborating on several offshore wind power projects that we are currently
planning. The relationship between Toyo Construction and us remains the same as the one we have cultivatedover the past 20 years, barring any major changes. Unless there is a significant shift, we plan to continue
fostering synergy in the same manner as we currently are.

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