Note:

This document has been translated from the original in Japanese for reference purposes only. In the event of any discrepancy
between this translated document and the original in Japanese, the original shall prevail.

To our shareholders:
We would like to extend our sincere gratitude to our shareholders for their continued support. On the occasion ofreporting on our Company’s 85th fiscal year (from April 1, 2023 to March 31, 2024), I would like to extend agreeting.
The Japanese economy gradually recovered, although business conditions had been at a standstill, as social andeconomic activities continued to normalize and personal consumption recovered. Meanwhile, uncertainty over theoutlook remained as before, due to persistently high raw material and energy prices associated with the prolonged
situation in Ukraine, the weakening yen and rising prices amid global fiscal tightening, and the situation in the
Middle East.
Domestic demand in the Corrugated Container business fell below the previous year’s level due to cooling consumer
spending and continued cost-saving efforts, as well as the impact of poor fruit and vegetable crops due to intenseheat and lack of rainfall. The Tomoku Group saw an increase in sales volume for processed food, its mainstay
business, over the previous year and a slight decrease in overall case sales volume. However, sheet sales volume
fell significantly compared to the previous year. Meanwhile, earnings increased due to the penetration of productprice adjustments.
In Housing, new housing starts for owned houses and single-family detached homes continued to fall due to soaring
material prices, higher energy costs, and inflation. Sweden House Co., Ltd. was awarded the top spot overall in the
ORICON Customer Satisfaction Survey in custom-built housing for the tenth consecutive year since the survey
began in 2015, thoroughly promoting customer satisfaction and environmental efforts. Meanwhile, Tamazen Co.,
Ltd. has been working to increase its customer base by constructing its own website, creating TV commercials, andutilizing inserts and billboard advertisements. However, both companies had a decline in the number of units solddue to a decrease in the number of visitors and a cooling of the housing market.
In Transportation and Logistics, we promoted efforts to respond to the 2024 problem facing the logistics industry,
such as aggressive hiring activities, creation of comfortable workplaces, and negotiations for appropriate logistics
costs. However, the sector saw a decrease in the handling volume of mainstay beverage products, resulting in a
decline in vehicle utilization as well as an increase in storage costs due to higher inventory volume, and fuel costs
remained high.
As we look to the future, we will establish policies for ESG and SDG initiatives as well as goals for reducing
greenhouse gas emissions and work on environmental conservation activities in conjunction with our businessactivities in order to pass on a livable planet to future generations, based on our philosophy of “Providing value for
consumers, enveloping life with sustainability and conservation for our clients and the global environment.” We
consider investing in human capital a key strategy to realize our medium- to long-term business plan and enhance
corporate value, and we are actively promoting its implementation and disclosure.
Regarding the year-end dividend for the fiscal year ended March 31, 2024, based on our policy to pay stabledividends to shareholders, it was resolved at the Board of Directors meeting held on May 17, 2024 to pay a dividendof 35 yen per share with the payment date of June 5, 2024. As a result, the annual dividend will be 70 yen per shareincluding the interim dividend of 35 yen per share paid on December 4, 2023.
To all of our shareholders, we sincerely appreciate your continued understanding, support, and cooperation.
June 2024
Mitsuo Nakahashi, President & Chief Executive Officer-1-Attachments to the 85th Notice of Convocation

Business Report(from April 1, 2023 to March 31, 2024)
1.

Matters Regarding the Current Status of the Corporate Group(1) Business activities and results
During the current fiscal year, due to the relaxation of restrictions accompanying the reclassification of
COVID-19, socioeconomic activities showed signs of normalization and consumer spending picked up,
leading to a moderate recovery of the domestic economy despite some stagnation. Meanwhile, the future
outlook continues to remain uncertain due to soaring raw material and energy prices accompanying prolonged
tensions in Ukraine, the weakening of the yen and inflation amid global monetary tightening, the situation in
the Middle East, and other factors.
Under these circumstances, the Group posted consolidated net sales of 211,526 million yen, a decrease of 0.6%
from the previous fiscal year, consolidated operating income of 8,057 million yen, an increase of 8.1%,
consolidated ordinary profit of 8,614 million yen, an increase of 7.9%, and current net income attributable toparent company’s shareholders of 5,308 million yen, an increase of 1.1%.

Corrugated Container

Housing

Transportation andLogistics-2-

CorrugatedContainer

Sales

117,965 million yen (Up 7.3% YoY)

Operatingincome7,649 million yen (Up 54.7% YoY)

Domestic demand in the Corrugated Container business fell below the previous year’s level due to cooling
consumer spending and continued cost-saving efforts as a result of continued product price increases,
particularly in food, as well as the impact of poor fruit and vegetable crops due to intense heat and lack ofrainfall.
Domestically, the Corrugated Container sector saw an increase in sales volume for processed food, its mainstay
business, over the previous year and a slight decrease in overall case sales volume. However, sheet sales
volume fell significantly compared to the previous year. Meanwhile, earnings increased due to the penetrationof product price adjustments.
At our corrugated packing factories, Aomori Works relocated to the Aomori Seibu Kogyo Danchi industrial
park due to aging, with operations beginning in January 2024. At this and other factories, we have beenworking to promote the production of high-quality products, strengthen proposals to add value, improve
productivity, enhance labor conditions, and foster utilization and training of human resources including
diversity initiatives. In addition, we are committed to tackling current issues in the logistics industry bysupporting the “White Logistics” movement to enhance the work environment in the industry and improvelogistics conditions as a shipper and logistics stakeholder. We continue to invest in environmental initiatives
such as completing the introduction of renewable energy in all of our standalone factories in an effort to reducegreenhouse gas emissions.
At our folding carton factories, after increasing production capacity by introducing new equipment, we
continue to implement improvements to ensure stable operations, and we have strengthened productivity andour workforce in response to an increase in sales volume.
Overseas, SOUTHLAND BOX COMPANY, a consolidated subsidiary in the U.S., saw an increase in sales
volume over the previous year, and profits increased due to ongoing efforts to reduce transportation costs.
As a result, the Corrugated Container sector recorded sales of 117,965 million yen, an increase of 7.3% overthe previous year, and operating income of 7,649 million yen, an increase of 54.7%.

HousingSales

54,051 million yen (Down 13.7% YoY)

Operatingincome259 million yen (Down 87.3% YoY)

In the Housing market, new housing starts for owned houses and single-family detached homes continued tofall due to soaring material prices, higher energy costs, and inflation.
Amid this environment, Sweden House Co., Ltd. was awarded the top spot overall in the ORICON Customer
Satisfaction Survey in custom-built housing for the tenth consecutive year since the survey began in 2015, andthe company was also awarded the High Standard Award and Leading Company Award from the Tokyo Eco
Builders Award, a new framework recognizing businesses that contribute to realizing net zero emissions by
2050. In addition to thoroughly promoting customer satisfaction and environmental efforts, we haveestablished an employee training center in Ariake, Tokyo and are working to enhance our services andtechnological capabilities to meet the diverse needs of our customers. Meanwhile, Tamazen Co., Ltd. has beenworking to increase its customer base by constructing its own website, creating TV commercials, and utilizing
inserts and billboard advertisements. However, both companies had a decline in the number of units sold due
to a decrease in the number of visitors and a cooling of the housing market.
As a result, the Housing sector recorded sales of 54,051 million yen, a decrease of 13.7% compared to theprevious year, and operating income of 259 million yen, a decrease of 87.3%.

-3-

SalesTransportationand Logistics Operating

income39,509 million yen (Down 1.8% YoY)
1,117 million yen (Down 16.1% YoY)

The Transportation and Logistics sector saw a decrease in the handling volume of mainstay beverage products,
resulting in a decline in vehicle utilization as well as an increase in storage costs due to higher inventory
volume, and fuel costs remained high.
As a result, the Transportation and Logistics sector recorded sales of 39,509 million yen, a decrease of 1.8%
compared to the previous year, and operating income of 1,117 million yen, a decrease of 16.1%.
(2) Capital investments
Total capital investments of the corporate group in this fiscal year came to 10,207 million yen. The main
capital investments were for relocating the Aomori Works and for upgrading equipment for quality
improvement purposes.
(3) Financing
In terms of financing during the fiscal year, we procured 21,400 million yen in long-term borrowings in order
to install and upgrade equipment, and to allocate it to the repayment of long-term borrowings. Our long-termborrowing repayments totaled 23,804 million yen.

-4-(4) Trends in assets at the end of and operating results in the (current and) most recent three fiscal years
Category

82nd Term(Fiscal year ended
March 31, 2021)

83rd Term(Fiscal year ended
March 31, 2022)

84th Term(Fiscal year ended
March 31, 2023)

85th Term(Current fiscal year)(Fiscal year ended
March 31, 2024)

Sales(millions of yen)

175,647

206,007

212,817

211,526

Ordinary profit(millions of yen)

7,734

8,978

7,983

8,614

Current net income
attributable to parent
company’s shareholders(millions of yen)

4,887

5,980

5,251

5,308

Current net income per
(yen)
share
Total assets(millions of yen)299.04364.87

179,743

190,018

319.71
195,378322.99213,366(millions of yen)
Net assets
71,214
76,12680,707
89,203Note:
Current net income per share is calculated based on the average number of shares outstanding during the period (after the
deduction of treasury shares).

Financial highlights (reference information)-5-(5) Issues to be addressed
The Japanese economy is expected to continue a gradual recovery amid improvements in employment andincome conditions. However, as global monetary tightening continues, an overseas economic downturn createsa risk of downward pressure on the Japanese economy, and close attention must be paid to the effects ofinflation, the Middle East situation, fluctuations in financial capital markets, and other factors.
Amid this situation, the Group is working on environmental conservation activities in conjunction with ourbusiness activities by establishing policies for ESG and SDG initiatives as well as goals for reducing
greenhouse gas emissions, in order to pass on a livable planet to future generations based on our philosophyof “Providing value for consumers, enveloping life with sustainability and conservation for our clients and theglobal environment.”
In the Corrugated Container business, we are strengthening our system for supplying high-quality and highvalue-added products in cooperation with our design and folding carton sectors to accurately meet thesophisticated and diversified needs of our customers. This includes expanding sales volume of high-valueadded products by beginning full-scale operation of production facilities for our new single-sided cardboard
envelopes for EC and establishing a mass-production system as well as utilizing ECowrap, the industry’s firsteco-friendly all-paper cushioning material to protect goods from impact during transport without using plastic,
which won a WorldStar Award in the 2024 WorldStar Competition held by the World Packaging Organisation.
Furthermore, we are working to improve working styles and productivity in line with the times.
At our domestic production factories, we are promoting research and development of production equipmentwith consideration to the working environment, such as by creating an efficient workflow, reducing physicalstrain, and providing measures against heat, and we will continue to invest in reducing carbon emissions andensuring health management. Investing in human capital is a key strategy to realizing our medium- to longterm business plan and enhancing corporate value, and we are actively promoting its implementation anddisclosure. In response to raw material prices, which have an uncertain outlook, we are working to improvetransaction terms and conditions as well as implement internal improvements, and there is an urgent need tosecure human resources and improve working conditions and environments. In addition, because internal
efforts alone are not enough to absorb rising costs, we are working to adjust prices to ensure a stable supply
of corrugated container and folded carton products.
In the Housing business, we need to continue to pay attention to soaring raw material prices and electricity
costs due to the Ukraine situation and other factors. We will promote the achievement of Sweden House Co.,
Ltd. being awarded the top spot overall in the ORICON Customer Satisfaction Survey in custom-built housing
for the tenth consecutive year as well as receiving the High Standard Award and Leading Company Award at
the Tokyo Eco Builders Award to enhance our environmentally-friendly brand image and aggressively expand
sales activities to younger generations and parenting generations with a strengthened product lineup. In
addition, Tamazen Co., Ltd. is working to strengthen its brand and increase the number of new visitors byconstructing its own website, utilizing inserts and billboard advertisements, and making use of press releases
for social media and news media as well as promoting its top ranking in the ORICON Customer Satisfaction
Survey for Tokai design detached home builders for the fourth consecutive year. We will further enhanceinternal education and training to streamline operations and increase our conversion rate.
In Transportation and Logistics, we expect the environment to become even more challenging, with highenergy costs and inflation as well as other current issues in the logistics industry. Amid this situation, we arevigorously pursuing negotiations to optimize logistics costs, strengthening employment activities andenhancing our training programs to help empower women in the workplace and develop human resources. In
addition, we will further strengthen our business foundation by implementing human capital management andhealth management initiatives, such as creating a workplace with easily accessible childcare leave andimproving employee satisfaction, and by securing transportation capacity and enhancing logistics quality.
The outlook for consolidated performance for the fiscal year ending March 31, 2025 is expected to be sales of
226,000 million yen, an increase of 6.8% from the previous fiscal year, operating income of 10,300 million
yen, an increase of 27.8%, ordinary profit of 10,400 million yen, an increase of 20.7%, and current net income
attributable to parent company’s shareholders of 7,000 million yen, an increase of 31.9%.
To all of our shareholders, we sincerely appreciate your continued understanding, support, and cooperation.

-6-(6) Principal parent company and significant subsidiaries(i)

Parent company
Not applicable.

(ii) Significant subsidiaries
Subsidiary

Capital(Millions of yen, unlessotherwise stated)

Capitalcontribution
ratio
(%)

Principal business activities

Toshin Package Co., Ltd.

80

100.00

Manufacture and sale of corrugatedcontainer products

Sendai Shiki Kogyo Co., Ltd.

90

100.00

Manufacture and sale of corrugatedcontainer products

Wako Co., Ltd.

10100.00

Manufacture and sale of corrugatedcontainer products

Taiyo Co., Ltd.

60

100.00

Manufacture and sale of corrugatedcontainer products

Daiichi Container Co., Ltd.

125

70.00

Manufacture and sale of corrugatedcontainer products

Tokachi Package Co., Ltd.

10

70.00

Manufacture and sale of corrugatedcontainer products

SOUTHLAND BOX COMPANY(thousands of U.S.
dollars)
5,000

100.00

Manufacture and sale of corrugatedcontainer products

TOMOKU VIETNAM CO., LTD.

(billions of Vietnamese
dong)
2,008

100.00

Manufacture and sale of corrugatedcontainer products
Design, building, and sale of imported
housing

Sweden House Co., Ltd.

400

100.00

Tamazen Co., Ltd.

95

100.00Design, building, and sale of housing

280*100.00

Manufacture and sale of mainly housingmaterials

20*100.00

Housing renovations*100.00

Manufacture and sale of housingmaterials

Prime Truss Co., Ltd.
Sweden House Reform Co., Ltd.
TOMOKU HUS AB(thousands of Swedishkrona)
32,000

Hokuyo Koeki Co., Ltd.

30

*100.00

Wholesale of imported housing materials
and golf course management

Hokuyo Co., Ltd.

50

100.00

Trading of packaging materials andinsurance agency businessTohun Co., Ltd.

574

100.00Transportation and warehousing business

Kanto Tohun Co., Ltd.

20

*100.00

Transportation businessTohun Logitem Co., Ltd.

100

*66.00

Hoju Unyu Co., Ltd.
9.5
*100.00
Note:
Capital contribution ratio with an asterisk denotes indirectly held shares.

Transportation and warehousing businessTransportation business(7) Principal business activities (as of March 31, 2024)
Business Segment

Business Activities

Corrugated Container

Manufacture and sale of corrugated container sheets, containers, and printed cartons

Housing

Manufacture and sale of imported Swedish housing materials
Design, building, supervision, and sale of detached homes
Housing renovations

Transportation and Logistics

Freight and warehousing businesses-7-(8) Major offices and production factories (as of March 31, 2024)
The Company

Sweden House Co., Ltd.

Tohun Co., Ltd.

Hokuyo Co., Ltd.
Tamazen Co., Ltd.
Hokuyo Koeki Co., Ltd.

Head Office

Chiyoda-ku, Tokyo

Works

Tatebayashi (Tatebayashi-shi, Gunma)
Iwatsuki (Saitama-shi, Saitama)
Atsugi (Atsugi-shi, Kanagawa)
Nagano (Chino-shi, Nagano)
Sapporo (Otaru-shi, Hokkaido)
Osaka (Kadoma-shi, Osaka)
Kobe (Kobe-shi, Hyogo)
Komaki (Komaki-shi, Aichi)
Kyusyu (Kiyama-cho, Saga)
Shimizu (Shizuoka-shi, Shizuoka)
Hamamatsu (Hamamatsu-shi, Shizuoka)
Aomori (Aomori-shi, Aomori)Niigata (Seiro-machi, Niigata)
Yamagata (Yamagata-shi, Yamagata)
Sendai (Iwanuma-shi, Miyagi)
Chiba Folding Carton (Chonan-machi, Chiba)
Tomoprest (Meiwa-machi, Gunma)

Head OfficeSetagaya-ku, Tokyo

Branches
Regional Offices

Hokkaido (Sapporo-shi, Hokkaido)
Tohoku (Sendai-shi, Miyagi)
Kita-kanto (Saitama-shi, Saitama)
Chiba (Funabashi-shi, Chiba)
Tokyo (Musashino-shi, Tokyo)
Yokohama (Yokohama-shi, Kanagawa)
Nagoya (Nagoya-shi, Aichi)
Kansai (Kobe-shi, Hyogo)
Kyusyu (Fukuoka-shi, Fukuoka)

Display House

Hokkaido area (10 locations)
Tohoku area (1 location)
Kanto area (27 locations)
Nagoya area (6 locations)Kansai area (5 locations)
Chugoku area (2 locations)
Kyusyu area (3 locations)

Head Office

Saitama-shi, Saitama

Offices

Hokkaido (Otaru-shi, Hokkaido)
Tohoku (Tagajo-shi, Miyagi)
Kita-kanto No. 1 (Hanyu-shi, Saitama)
Kita-kanto No. 2 (Meiwa-machi, Gunma)
Kita-kanto No. 3 (Chiyoda-machi, Gunma)
Kita-kanto No. 4 (Saitama-shi, Saitama)
Minami-Kanto (Atsugi-shi, Kanagawa)
Chubu/West Japan (Suita-shi, Osaka)

Head Office

Chiyoda-ku, Tokyo

Head Office

Nagoya-shi, Aichi

BranchToyohashi-shi, Aichi

Head Office

Sapporo-shi, Hokkaido

BranchKawasaki-shi, Kanagawa

Head Office

Kazo-shi, Saitama

Works

Head Office (Kazo-shi, Saitama)
Ohtone (Kazo-shi, Saitama)

SOUTHLAND BOX COMPANY

Head Office /Works

Los Angeles, California, U.S.A.

TOMOKU HUS AB

Head Office /Works

Insjön, Sweden

TOMOKU VIETNAM CO., LTD.

Head Office /Works

Binh Duong Province, Vietnam

Toshin Package Co., Ltd.

-8-

(9) Employees (as of March 31, 2024)(i)

Employees of the corporate group
Business Segment

Number of Employees

YoY Change

Corrugated Container

1,680

Housing

1,162

+2

914

+13

Transportation and Logistics
Company-wide (common)
Total
Note:

+49

27

+2

3,783

+66

In addition to the above, 555 casual workers are employed, on average, each year.

(ii) Employees of the Company
Number of Employees

YoY Change

Average Age

Average Years of Service

1,144

+50

38.9

14.2

Note:

In addition to the above, 168 casual workers are employed, on average, each year.

(10) Major creditors (as of March 31, 2024)
Creditor

Loan Balance (millions of yen)

MUFG Bank, Ltd.

8,143

Mizuho Bank, Ltd.

7,905

The Norinchukin Bank

3,755

Sumitomo Mitsui Trust Bank, Limited

3,428

Sumitomo Mitsui Banking Corporation

2,600

North Pacific Bank, Ltd.

1,700

Nippon Life Insurance Company

1,000

The Hokkaido Bank, Ltd.

900

The Gamagori Shinkin Bank

451

The Shizuoka Bank, Ltd.

420

Note:

Syndicated loans totaling 40,887 million yen are not included in the above loan balances.

(11) Other important matters regarding the current status of the corporate group
Not applicable.

-9-

2.

Shareholding ratio by owner

Shares (as of March 31, 2024)(1) Total number of authorized shares

60,000,000 shares(2) Total number of issued shares

19,341,568 shares(3) Number of shareholders

5,602 persons(4) Major shareholders
Investment in the Company
Shareholder

Number of shares held
(thousand shares)

Capital contribution ratio(%)

The Master Trust Bank of Japan, Ltd. (trust account)

1,625

9.88

Custody Bank of Japan, Ltd. (trust account)

1,195

7.27

Marubeni Corporation

923

5.61

Nippon Paper Industries Co., Ltd.

719

4.37

Tomoku Kyoeikai

655

3.98

HOKKAN HOLDINGS LIMITED

604

3.67

Tomoku Employee Shareholding Association

591

3.59

Tokushu Tokai Paper Co., Ltd.

540

3.28

Takateru Murakami

399

2.42

Mizuho Bank, Ltd.

388

2.36

Notes:

1. The Company holds 2,903 thousand treasury shares, which are excluded from the above table.
2. The capital contribution ratio is calculated after subtracting the treasury shares.

(5) Shares delivered during the fiscal year to the Company’s officers as consideration for the performanceof duties
Number of shares

Number of persons thatreceived shares

Directors (excluding external Directors)
11,300 shares
6 persons
Note:
Details of the Company’s stock compensation are provided under [(2) Total amount of remuneration for Directors and Audit& Supervisory Board Members] in [4. Matters Regarding Company Officers] of the business report.

3.

Share Acquisition Rights
Not applicable.

- 10 -

4.

Matters Regarding Company Officers(1) Directors and Audit & Supervisory Board Members (as of March 31, 2024)
Position in the Company

Name

Responsibilities in the Company and significant concurrent positions

President & Chief
Executive Officer

Mitsuo Nakahashi

Director & Senior
Managing Executive
Officer

Shoji Hirose

President’s Assistant

Director & Senior
Managing Executive
Officer

Yoshiyuki Kurihara

General Manager of Administration Div. / General Manager of Logistics &Procurement Dept.
President of Hokuyo Co., Ltd.

Director & Managing
Executive Officer

Takeshi Ariga

General Manager of Production Div.

Director & Managing
Executive Officer

Terutaka Fukazawa

General Manager of the Sales Div. / Manager of Tokyo Sales Dept. / Manager
of Sales Development Dept.

Director & Managing
Executive Officer

Yoshito Yamaguchi

Deputy General Manager of Administration Div. / General Manager of
Housing Material Dept.

Director

Toshihiko Nagayasu

Chairman of the Board of NTS Holdings Company, Limited

Director

Mito Shimonaka

Representative Director and Chairman of Heibonsha Ltd.

Director

Tetsuya Kobayashi

Full-time Audit &Haruo Haneishi
Supervisory Board Member
Full-time Audit &Natsuki Tsujino
Supervisory Board Member
Audit & Supervisory Board
Shigeki Yagi
MemberCertified Public Accountant

Audit & Supervisory Board
Kayoko Kitade
MemberAttorney-at-law

Notes:

1. Directors Toshihiko Nagayasu, Mito Shimonaka, and Tetsuya Kobayashi are external Directors.
2. Audit & Supervisory Board Members Shigeki Yagi and Kayoko Kitade are external Audit & Supervisory Board Members.
3. The Company has designated external Directors Toshihiko Nagayasu, Mito Shimonaka, and Tetsuya Kobayashi as well
as external Audit & Supervisory Board Members Shigeki Yagi and Kayoko Kitade as independent directors as stipulatedby the Tokyo Stock Exchange, Inc., and has reported this to the exchange.
4. Audit & Supervisory Board Member Shigeki Yagi holds a certified public accountant qualification and has considerable
knowledge in finance and accounting.
5. Directors and Audit & Supervisory Board Members who resigned during the fiscal year are as follows.
Name

Date of resignation

Reason for
resignation

Position, responsibilities, and significant concurrent position outside
the Company at the time of resignation

Hidetoshi Murai

June 23, 2023

Expiration ofterm

Director
President of Sweden House Co., Ltd.

Michio Sato

June 23, 2023

Resigned

Audit & Supervisory Board Member
Full-time Audit & Supervisory Board Member of Sweden House
Co., Ltd.

- 11 -

6. Changes in positions and responsibilities of Directors during the fiscal year are as follows.
Name

New position or responsibility

Previous position or responsibility

Date of change

Shoji Hirose

Director & Senior Managing Executive
OfficerPresident’s Assistant

Director, Senior Managing Executive
Officer and General Manager of SalesDiv.
General Director of Tomoku Vietnam
Co., Ltd.

Yoshiyuki
Kurihara

Director, Senior Managing Executive
Officer and General Manager of
Administration Div.
General Manager of Logistics &Procurement Dept.
President of Hokuyo Co., Ltd.

Director, Senior Managing Executive
Officer and General Manager of
Administration Div.
General Manager of Logistics &Procurement Dept. and General Manager
of Housing Material Dept.
President of Hokuyo Co., Ltd.

Terutaka
Fukazawa

Director, Managing Executive Officer
and General Manager of Sales Div.
Manager of Tokyo Sales Dept. andManager of Sales Development Dept.

Director, Managing Executive Officer and
Deputy General Manager of Sales Div.
June 23, 2023
Manager of Tokyo Sales Dept. andManager of Sales Development Dept.

YoshitoYamaguchi

Director, Managing Executive Officer
and Deputy General Manager of
Administration Div.
General Manager of Housing Material
Dept.

Director, Managing Executive Officer and
Deputy General Manager ofJune 23, 2023
Administration Div.

- 12 -

June 23, 2023

June 23, 2023

(2) Total amount of remuneration for Directors and Audit & Supervisory Board Members
Category

Number ofpeople to be paid

Fixed
Non-monetary
Director bonuses
remuneration
remuneration(millions of yen)(millions of yen)(millions of yen)

Director(of which external Directors)

10
[3]

178
[16]

59
[4]

Audit & Supervisory Board Member(of which external Audit &Supervisory Board Members)

5

36

9

Total
Notes:

[2]

[9]

[3]

15

214

69

21

Amount of
remuneration(millions of yen)
260
[20]
45

–
21

[12]
305

1. The amount of remuneration for Directors does not include employee salaries and bonuses for Directors who also serve as
employees.
2. The amount of remuneration for Directors was resolved to be 360 million yen or less a year (However, this does not include
employee salaries and bonuses for Directors who also serve as employees.), and the amount of remuneration for Audit &Supervisory Board Members was resolved to be 60 million yen or less a year, at the 69th Annual General Meeting of
Shareholders held on June 27, 2008. At the same General Meeting of Shareholders, it was resolved to abolish the retirement
benefits system for directors and other officers. At the end of the same General Meeting of Shareholders, there were 10
Directors (of which none were external Directors) and 4 Audit & Supervisory Board Members (of which 2 were external
Audit & Supervisory Board Members).
Separate from monetary compensation, at the 83rd Annual General Meeting of Shareholders held on June 23, 2022, it was
resolved to provide to Directors of the Company (excluding external Directors) monetary compensation claims paid ascompensation for Restricted Shares in the amount of within 80 million yen annually, with a maximum of 40,000 shares
per year. At the conclusion of the same Annual General Meeting of Shareholders, there were six Directors subject to theresolution.
3. Individual remuneration of Directors (performance-linked monetary remuneration) is based on the Policy for determining
remuneration, using ordinary profit (consolidated 8,614 million yen/non-consolidated 6,278 million yen) as the basis.
4. Non-monetary remuneration consists of the Company’s shares, and the terms and conditions of allotment are as describedin “(3) Policy for determining remuneration.”
5. The above number of people to be paid includes one resigned Director and one resigned Audit & Supervisory Board
Member at the conclusion of the 84th Annual General Meeting of Shareholders held on June 23, 2023.

(3) Policy for determining remuneration
The Basic Policy on the Remuneration of Directors is comprised of monetary fixed remuneration and officers’
bonuses and non-monetary stock remuneration as performance-linked remuneration paid according to theperformance in a single fiscal year to function as a sound incentive for sustainable growth. This remuneration
is paid at an appropriate level according to the positions and roles of each Director and the Company’s
performance.
In regards to the calculation method and determination procedures of the fixed remuneration for Directors,
remuneration is calculated using the guidelines that determine the standards according to the positions androles of the Directors. The Board of Directors will pass a resolution based on the report of the remunerationcommittee chaired by an external Director to ensure objectivity and transparency relating to the determinationof remuneration.
We will change to a method to also adjust the amount of remuneration in regards to performance-linked
remuneration for Directors according to the degree of achieving the SDGs as a specific ESG issue. This will
be a non-financial indicator that strengthens the Group’s efforts with a long-term perspective in addition tofinancial indicators. The Board of Directors will determine the method of calculating that and its results in
consultation with the remuneration committee.
Moreover, we are working to enhance our business execution structure and to strengthen the supervisory
functions of the Board of Directors. Against that background, the purpose of the stock remuneration is for
Directors to share the benefits and risks of stock price fluctuations in the mid- to long-term with shareholders
and to elevate their desire to contribute to an increase in the stock price and corporate value more than everbefore. Under that aim, we have decided to allot Restricted Shares within the allotment limit determined inadvance according to positions and roles as non-monetary stock remuneration for Directors excluding external
Directors. The Board of Directors will determine the number of shares to be allotted to each individual in
consultation with the remuneration committee. In principle, the Company will lift the Transfer Restrictions onallotted Restricted Shares with a resolution by the Board of Directors when officers retire.

- 13 -

In addition, the Board of Directors has confirmed that the remuneration of the Board of Directors for thecurrent fiscal year is consistent with and in line with the policy for determining remuneration approved by the
Board of Directors.
The basic policy of the Company is that the remuneration for Audit & Supervisory Board Members shall be
paid at an appropriate level as compensation for the duties of each Audit & Supervisory Board Member. The
remuneration for Audit & Supervisory Board Members is determined through discussions with the Audit &Supervisory Board Members within the range of the amount of remuneration based on the resolution at theGeneral Meeting of Shareholders.
(4) Matters regarding outside directors(i)

Significant concurrent positions as executives at other organizations and relationships between the Company
and such other organizations
Director Toshihiko Nagayasu is Chairman of the Board of NTS Holdings Company, Limited. We have no
special interest with NTS Holdings Company, Limited.
Director Mito Shimonaka is Representative Director and Chairman of Heibonsha Ltd. We have no special
interest with Heibonsha Ltd.

(ii) Significant concurrent positions as outside directors and other officers at other organizations andrelationships between the Company and such other organizations
Director Mito Shimonaka is an external Director of AGS Corporation. We have no special interest with AGS
Corporation.
(iii) Major activities during the fiscal year
<Attendance and remarks at Board of Directors meetings and overview of duties performed with respect toexpected role>
Director Toshihiko Nagayasu attended all 13 Board of Directors meetings held during the fiscal year. Mr.
Nagayasu has played an important role as Chair of the Board of Directors based on his extensive experienceand insight in corporate management. In addition, he plays an important role as Chair of the nominationcommittee and remuneration committee in deliberating on nominations and remuneration of Directors andExecutive Officers and reporting to the Board of Directors.
Director Mito Shimonaka attended 12 of 13 Board of Directors meetings held during the fiscal year. Ms.
Shimonaka offers useful remarks in Board of Directors meetings based on her experience and insight frommultifaceted viewpoints and unique perspective as a woman and drawing on her practical experience incorporate management. In addition, she plays an important role as a member of the nomination committee indeliberating on nominations of Directors and Executive Officers and reporting to the Board of Directors.
Director Tetsuya Kobayashi attended 12 of 13 Board of Directors meetings held during the fiscal year. Mr.
Kobayashi offers useful remarks from multifaceted viewpoints in Board of Directors meetings based on his
global knowledge, extensive experience, and broad insight. In addition, he plays an important role as a memberof the remuneration committee in deliberating on the remuneration of Directors and Executive Officers andreporting to the Board of Directors.
<Attendance and remarks at meetings of the Board of Directors and Audit & Supervisory Board>
Audit & Supervisory Board Member Shigeki Yagi attended 12 of 13 Board of Directors meetings and 6 of 7
Audit & Supervisory Board meetings held during the fiscal year.
Audit & Supervisory Board Member Kayoko Kitade attended all 13 Board of Directors meetings and 6 of 7
Audit & Supervisory Board meetings held during the fiscal year.
As a certified public accountant and attorney-at-law, Mr. Yagi and Ms. Kitade provide advice and suggestions
from their respective professional perspectives to ensure valid and appropriate decision-making at Board of
Directors meetings. Similarly, in Audit & Supervisory Board meetings, they actively express their opinionsfrom their professional perspectives.
Mr. Yagi, as a member of the nomination committee, and Ms. Kitade, as a member of the remunerationcommittee, play an important role in deliberating on the nomination and remuneration of Directors andExecutive Officers and reporting to the Board of Directors.
In addition, they offer comments to the Board of Directors meetings on the establishment, enhancement, andenforcement of the compliance system across the entire Group.
- 14 -

(iv) Overview of the contents of the limited liability agreement
Based on Articles 25 and 35 of the Company’s Articles of Incorporation, the Company has entered into
agreements with Toshihiko Nagayasu, Mito Shimonaka, Tetsuya Kobayashi, Shigeki Yagi, and Kayoko
Kitade limiting their liability for damages under Article 427, Paragraph 1 of the Companies Act to the extent
allowed by laws and regulations.
(5) Summary of directors and officers liability insurance policy
To secure excellent human resources and support proactive and decisive business decisions for corporate
growth, the Company entered into a directors and officers liability insurance policy with an insurance company.
A summary of the agreement is as follows.
(i)

Scope of insured
Directors, Audit & Supervisory Board Members, and Executive Officers of the Company(ii) Summary of contents of insurance agreementa. Actual premium share of insured
Premiums are paid in full by the Company, and the insured does not pay any premiums.
b. Summary of insured accidents subject to coverage
The insurance provides indemnification for damages that may arise from the responsibilities borne by insured
directors and other officers in the execution of their duties or from claims related to the pursuit of said
responsibilities. However, there are certain exemption clauses, such as when an insured person commits an act
while recognizing it is an act in violation of laws and ordinances.
c. Measures to ensure the propriety of the duties of directors and other officers
The insurance agreement has a deductible provision and does not cover losses up to the amount of thedeductible.

- 15 -

5.

Accounting Auditor(1) Name

Ernst & Young ShinNihon LLC(2) Amount of remuneration
Category

Payment amount (millions of yen)Amount of remuneration for the accounting auditor for the fiscal year

42

Total of money and other economic benefits to be paid by the Company and its subsidiaries tothe accounting auditor

107

Notes:

1. The audit agreement between the Company and the accounting auditor does not distinguish between remuneration
for audits performed under the Companies Act and remuneration for audits performed under the Financial Instruments
and Exchange Act and such amounts cannot be practically separated. Accordingly, the amount of remuneration to be
paid to the accounting auditor for the fiscal year, as shown above, is the total amount.
2. The Company’s Audit & Supervisory Board checked the audit plans, audits undertaken, audit hours, and remuneration foraudits from past years, and also examined the appropriateness of the accounting auditor’s audit plan, its content, estimatedaudit hours, and remuneration for this fiscal year. Based on this review, it approved the payment of remuneration to theaccounting auditor pursuant to Article 399, Paragraph 1 of the Companies Act.
3. The financial statements (including documents of an equivalent nature) of some of the Company’s principal subsidiaries
have been audited by a certified public accountant or accounting firm (including those overseas with equivalentqualifications) other than the Company’s accounting auditor in accordance with the provisions of the Companies Act or
the Financial Instruments and Exchange Act (including foreign laws and regulations corresponding to these laws).

(3) Non-auditing services
Not applicable.
(4) Policy on decisions of dismissal or non-reappointment of accounting auditor
If the Audit & Supervisory Board has determined it to be necessary, for example, when it is deemed difficult
for the accounting auditor to fulfill their duties properly, the Board of Directors shall include in the agenda of
the General Meeting of Shareholders the dismissal or non-reappointment of the accounting auditor based on a
resolution of the Audit & Supervisory Board.
Also, if it can be concluded that the accounting auditor falls under the items prescribed in Article 340,
Paragraph 1 of the Companies Act, the Audit & Supervisory Board shall, based on the agreement of all Audit& Supervisory Board Members, dismiss the accounting auditor. In this case, one of the members nominatedby the Audit & Supervisory Board shall report on the accounting auditor’s dismissal and the reasons thereofat the first General Meeting of Shareholders convened after the dismissal.

- 16 -

6.

System to Ensure the Appropriateness of Operations and Its Operational Status

Overview of system to ensure the appropriateness of operations(1) System to ensure that execution of duties of Directors and employees complies with laws and regulations,and the Company’s Articles of Incorporation(i)

The Company has established an Internal Control Office to achieve the objectives of internal control, namely,
the effectiveness and efficiency of operations, the reliability of financial reports, compliance with laws andregulations related to our business activities, and the safeguarding of assets.
(ii) The Internal Control Office has developed, and reviews when necessary, the Company’s Management
Philosophy and Code of Conduct, various regulations and manuals, and job descriptions, so that the Directors
and employees can execute their duties in compliance with laws and regulations and the Company’s Articles
of Incorporation.
(iii) The Internal Audit Department carries out internal control audits and compliance audits to verify legal andregulatory compliance and then reports its findings to the president and the members of the Audit &Supervisory Board.
(iv) The Legal Affairs/Compliance Office serves as the point of contact for internal whistleblowing submitted by
employees and others. Also, an external lawyer designated by the Company shall serve as the point of contact
for external whistleblowing.
(v) The Company has established regulations concerning the basic policy of having no dealings whatsoever with
antisocial forces, which we make sure is well understood by the Company and its subsidiaries. We maintaina firm stance against antisocial forces and take a systematic approach to dealing with them.
(2) Systems for retaining and managing information regarding the execution of duties by Directors
The Company has a system in place whereby information concerning the execution of duties with respect tothe approvals by Directors and the establishment/administration of internal controls is recorded and saved in
documents and the like, which can then be accessed by the Directors and Audit & Supervisory Board Members
when needed.
(3) Regulations and other systems for the management of risk of loss
As the person responsible for risk management, the president issues instructions to the Internal Control Officeand other relevant departments to oversee and manage the risks of the corporate group, including its
subsidiaries, in accordance with the Risk Management Policy. The president identifies and assesses various
risks mainly pertaining to financial and information security, compliance, product quality, the environment,
and natural disasters, and adopts the necessary measures for avoiding such risks or mitigating their impact. In
addition, the president reviews the Company’s organizations, as well as regulations and manuals, in responseto the emergence of risks.
(4) System to ensure efficient execution of duties by Directors
The Board of Directors has developed, and continues to review, the Company’s Approval Regulations,
Organizational Regulations, and Job Description Regulations, among other policies, and by doing so, clearly
articulates the division of duties and purview of Directors. The Board of Directors also works to facilitatesmooth reporting, communication, and consultation between Directors on a day-to-day basis.
(5) System to ensure the properness of operations by the corporate group comprised of the Company andits subsidiaries(i)

System for directors of subsidiaries to report to the Company
The Company periodically requests reports from our subsidiaries regarding their earnings, financial position,and other important business matters.
The directors responsible for subsidiary operations, as well as department heads and factory managers, have athorough understanding of the nature of such operations. They therefore deliver appropriate instructions, reportto the president and the Board of Directors when necessary, and follow the necessary procedures, including
approvals.

(ii) System for efficient business execution by subsidiary directors
The Company makes an effort to ensure the consistency of the regulations and manuals of our subsidiaries,
taking into account the nature and scale of their business operations. Also, through various meeting bodies,
we have established a framework under which business operations are carried out appropriately and uniformly
across the corporate group.

- 17 -

(iii) System to ensure that the operations of subsidiary directors and employees comply with laws and regulations
The Company provides guidance by way of audits, meetings, notices, and other means to ensure that theoperations of the Company’s subsidiaries are being carried out properly and in compliance with laws,
regulations, and the Company’s Articles of Incorporation. We also have a system in place that guarantees thecredibility of consolidated financial statements and other financial reports.
(6) System to ensure audits are conducted efficiently by Audit & Supervisory Board Members(i)

Employees appointed to assist with duties
If the Audit & Supervisory Board Members have requested the placement of employees to assist with theirduties, the Company will appoint employees exclusively for that purpose after consulting with the Audit &Supervisory Board.
During the period that said employees are engaged in such duties, they shall follow the instructions and ordersof the Audit & Supervisory Board Members. Their performance assessment, transfer, and benefits shall bedecided by way of consultation between the Audit & Supervisory Board and the Board of Directors.

(ii) System for reporting to Audit & Supervisory Board Members
The Internal Control Office and Audit Department regularly, or when deemed necessary, report on theestablishment/operational status of internal controls and the results of internal audits to the Audit &Supervisory Board Members.
Employees of the Company, as well as directors and employees of subsidiaries, can report to the members of
the Audit & Supervisory Board when it is deemed necessary to do so.
We have established regulations and the like to make sure that any employee or director/employee of a
subsidiary that reports to a member of the Audit & Supervisory Board is not treated unfairly simply for thereason of making such a report.
(iii) Other systems to ensure audits are conducted efficiently by Audit & Supervisory Board Members
In addition to the meetings of the Board of Directors, the members of the Audit & Supervisory Board also
attend Executive Board meetings comprising Directors and executive officers to hear about specific policies
and reports on business administration.
Meetings for exchanging opinions and presenting reports between the president and the Audit & Supervisory
Board Members are set up on a regular or ad hoc basis. In addition, meetings between the Audit & Supervisory
Board Members and subsidiary auditors and audit department heads are held regularly as part of our groupwide audit framework.
(iv) Audit expenses and other costs
The Company processes the expense claims submitted by the members of the Audit & Supervisory Board inconnection with the execution of their duties, unless it has been demonstrated that an expense claim is not
required for the execution of duties by the members of the Audit & Supervisory Board.
[Overview of operational status of system to ensure the properness of operations](1) Internal controls
The Audit Department and Legal Affairs/Compliance Office conduct internal audits of the Company’s
departments based on an annual audit plan. The results are reported to the president, the full-time Audit &Supervisory Board Members, and the Internal Control Office.
The establishment and operational status of internal controls pertaining to financial reports for the Company
and group companies are evaluated in accordance with the Internal Control Regulations.
(2) Compliance system
New hires, mid-career employees, and newly appointed managers are obligated to attend compliance training
for the purpose of deepening their understanding of the Tomoku Group Code of Conduct and Compliance
Regulations.
As compliance is a focal point of audits, the Legal Affairs/Compliance Office inspects whether the Company
is complying with laws, regulations, the Company’s Articles of Incorporation, internal regulations, and otherpolicies. It also checks whether operations are being carried out appropriately and efficiently, and whether
employees have a thorough understanding of management policies. Measures for improvement are
implemented as needed.

- 18 -

(3) Risk management system
Our policy on risk management is to identify risks that could have a significant impact on the Group and takemeasures to avoid or mitigate losses.
There were no major accidents, disasters, or misconduct incidents during the current fiscal year.
(4) Execution of duties by Directors
The Board of Directors convened 13 meetings during the fiscal year to make decisions on important mattersprescribed in the Company’s Approval Regulations and the Regulations of the Board of Directors, as well as
to report on the execution of duties by directors. Audit & Supervisory Board Members attended the meetingsof the Board of Directors to monitor agenda item discussions and decision making. Efforts were also made tofacilitate smooth reporting, communication, and consultation between Directors on a day-to-day basis.
(5) Management of group companies
In terms of the administration of group companies, we obtain the necessary approvals for the execution ofsubsidiary operations based mainly on the Affiliated Company Management Regulations.
During the fiscal year, three Group Meetings were held. We periodically receive reports from our subsidiaries
regarding their earnings, financial position, and other important business matters.
(6) Execution of duties by Audit & Supervisory Board Members
In addition to the meetings of the Board of Directors, the members of the Audit & Supervisory Board also
attend Executive Board meetings comprising Directors and executive officers to hear about specific policies
and reports on business administration, and to confirm the appropriateness of business execution by the
Directors and executive officers.
During the fiscal year, the Audit & Supervisory Board convened seven meetings. Furthermore, the Audit &Supervisory Board conducts group-wide cross-functional audits mainly by meeting with the president, groupauditors, and the head of the Audit Department, through review sessions with the accounting auditor, and by
setting up opportunities for information exchange with the Internal Audit Department and outside auditors.
7.

Policy on Decisions on Dividends and Other Appropriation of Surplus
Our basic policy is to pay stable dividends to shareholders. When distributing surplus funds, we aim to strikea balance between enhancing our internal reserves from a long-term perspective to maximize corporate value
through investments and the like and to continually secure dividends for shareholders.
For this fiscal year, a year-end dividend of 35 yen per share will be paid to shareholders in accordance with aresolution of the Board of Directors. Combined with the interim dividend of 35 yen per share that was
distributed on December 4, 2023, the annual dividend amount comes to 70 yen per share.

- 19 -

<Reference>
Organization Chart of Corporate Governance<Remarks>
The business report is presented according to the following.
(1) Amounts stated have been rounded down to the nearest unit.
(2) The number of shares have been rounded down to the nearest thousand.
(3) The capital contribution ratios for the principal parent company and significant subsidiaries have been rounded to the third
decimal place. The year-on-year rate of change, average age, and average length of service have been rounded to the second
decimal place. The average number of casual workers has been rounded to the first decimal place.
(4) Current net income per share and capital contribution ratios related to shares have been rounded down to the third decimal place.

- 20 -

Consolidated Financial Statements
Consolidated Balance Sheet(millions of yen)Previous fiscal
Current fiscal
year
year
(Reference)(As of March(As of March
31, 2024)
31, 2023)

Current fiscal
year(As of March
31, 2024)

Previous
fiscal year
(Reference)(As of March
31, 2023)

Category

213,366
93,75918,125

195,378
83,62815,015(Liabilities)
Current liabilities
Notes and accounts payable

124,162
66,491
23,518

114,671
67,641
22,79331,22230,055

Short-term borrowings

13,511

8,480

Electronic records receivable

8,620

7,467

12,11023,839Inventories
Other
Allowance for doubtful
accounts

27,6608,143

24,128
6,986

1,958
2,059

991
1,998

(12)

(24)

107

99

192

221

13,0339,217

57,67147,029Category(Assets)
Current assets
Cash and deposits
Notes receivable, accounts
receivable, and contract
assetsNon-current assets
Property, plant, and equipment
Buildings and structures
Machinery, equipment, andvehiclesLand

Current maturities of longterm borrowings
Income taxes payable
Provision for bonuses
Provision for directors’
bonuses
Provision for warranties forcompleted construction
Other

119,606
96,35036,263

111,750
94,59733,962

19,885

17,528Long-term borrowings

47,35537,276

36,83038,609

4,526

3,300

Construction in progress

586

1,535

–

432

Other
Intangible assets
Investments and other assets
Investment securities
Long-term loans receivable
Deferred tax assets
Retirement benefit asset
Other
Allowance for doubtful
accounts

2,785
1,051
22,204
12,047
76
1,415
5,461
3,500

2,961
1,433
15,718
7,634
106
2,093
2,729
3,600

Deferred tax liabilities
Provision for retirement
benefits for directors andother officers
Retirement benefit liability
Other

3,083
2,706

3,435
2,584

(Net assets)
Shareholders’ equity
Share capital
Capital surplus
Retained earnings

89,20379,85813,66911,28459,09080,70775,62913,66911,27654,882

(298)

(445)

Treasury stock(4,185)(4,199)

8,765

4,567

4,178

2,711

1,909

981

2,677

875

579

509

213,366

195,378

Non-current liabilities

Accumulated othercomprehensive income
Valuation difference on
available-for-sale securities
Foreign currency translation
adjustment
Remeasurements of defined
benefit plans
Non-controlling interests
Total assets

213,366

195,378

Total liabilities and net assets- 21 -

Consolidated Profit and Loss Statement
Current fiscal year
(from April 1, 2023 toMarch 31, 2024)

Category(millions of yen)Previous fiscal year
(Reference)(from April 1, 2022 toMarch 31, 2023)

Net sales
Cost of sales

211,526
176,728

212,817
179,233

Gross profit

34,79733,583

Selling, general, and administrative expenses

26,74026,131

Operating profit

8,057

7,452

Non-operating income
Interest and dividend income
Miscellaneous income
Non-operating expenses
Interest expenses
Miscellaneous loses

1,385
274
1,110
827
428
399

1,375
249
1,126
843
487
355

Ordinary profit

8,614

7,983

Extraordinary income
Gain on sales of non-current assets
Gain on insurance adjustment
Gain on sales of investment securities
Extraordinary losses
Loss on reduction of non-current assets
Loss on disposal of non-current assets
Impairment losses
Other

1,691
1,251
439
–
1,599
1,291
302
5
0

34
–
–
34
162
–
161
1
–

Profit before income taxes
Income taxes - current
Income taxes - deferred
ProfitProfit attributable to non-controlling interests

8,705
2,906
426
5,372
64

7,856
2,301
254
5,299
48

Profit attributable to parent company’s shareholders

5,308

5,251

- 22 -

Consolidated Statement of Changes in Net Assets(from April 1, 2023 to March 31, 2024)(millions of yen)
Shareholders’ equity

Balance as of April 1,
2023

Share capital

Capital surplus

Retainedearnings

Treasury stock

Total
shareholders’equity13,66911,27654,882(4,199)75,629Changes during theconsolidated fiscal year
Dividends of surplus(1,101)(1,101)

Profit attributable toparent company’s
shareholders

5,308

5,308

Purchase of treasury
stock
Restricted stockcompensation

7

(2)

(2)

16

23

Net changes in items
other than shareholders’equity during theconsolidated fiscal year
Total changes during theconsolidated fiscal year

–

7

4,207

13

4,228

Balance as of March 31,
2024

13,66911,28459,090(4,185)79,858

Accumulated other comprehensive income

Balance as of April 1,
2023

Valuationdifference on
available-forsale securities

Foreigncurrencytranslation
adjustment

2,711

981

Total
Remeasurements accumulated Non-controlling Total net assetsinterestsof definedotherbenefit planscomprehensive
income
875

4,567

509

80,707

Changes during theconsolidated fiscal year
Dividends of surplus(1,101)

Profit attributable toparent company’s
shareholders

5,308

Purchase of treasury
stock

(2)

Restricted stockcompensation

23

Net changes in items
other than shareholders’equity during theconsolidated fiscal year

1,467

928

1,802

4,198

69

4,267

Total changes during theconsolidated fiscal year

1,467

928

1,802

4,198

69

8,496

Balance as of March 31,
2024

4,178

1,909

2,677

8,765

579

89,203- 23 -

Non-consolidated Financial Statements
Non-consolidated Balance Sheet
Current fiscal
year(As of March
31, 2024)

Previous
fiscal year
(Reference)(As of March
31, 2023)

149,858
59,3124,404
2,346

130,57347,302
1,200
3,049

Accounts receivable - trade

20,21918,402

Electronic records receivable
Lease receivable
Merchandise and finishedgoods
Semi-finished goods andwork in process

8,103
619

Category(Assets)
Current assets
Cash and deposits
Notes receivable - trade

Category(millions of yen)Previous fiscal
Current fiscal
year
year
(Reference)(As of March(As of March
31, 2024)
31, 2023)
86,97142,914
15,1708,611

72,90040,853
14,578
2,715

9,875

18,475

6,840
732(Liabilities)
Current liabilities
Accounts payable - trade
Short-term borrowings
Current maturities of longterm borrowings
Accounts payable - otherAccrued expenses

4,840
1,781

2,137
1,626

2,824

3,008

Income taxes payable

1,395

293

95

89

Provision for bonuses

846

779

Raw materials and supplies

1,808

1,711

Short-term loans receivable
Accounts receivable
Other
Allowance for doubtful
accounts
Non-current assets
Property, plant, and equipment
Buildings
Structures
Machinery and equipment
Vehicles and transportationequipment
Tools, equipment, andfixtures
Land
Construction in progress
Intangible assets
Investments and other assets
Investment securities

12,438
6,404
51

69

53

5,131
6,836
304

Provision for directors’
bonuses
Other
Non-current liabilities
Long-term borrowings

324
44,05741,512

195
32,04729,987(5)(4)

Deferred tax liabilities

2,487

1,972

90,54645,44415,099438
9,964

83,271
41,64912,657
292
7,488

57

87

(Net assets)
Shareholders’ equity

62,887
58,91557,673
55,11359

49

Share capital

13,66913,669991

998

Capital surplus

11,179

11,172

18,85238
27
45,074
8,653

18,931
1,231
28
41,593
6,629

11,13841
38,295
1,364
36,930

11,13834
34,514
1,364
33,149

Shares of subsidiaries andassociates

13,026

10,740

2,062

2,119

Long-term loans receivable

20,301

21,22934,86731,029Distressed receivables

16

147

(4,229)(4,243)

Guarantee deposits

327

332

3,971

2,559

Prepaid pension cost

1,663

1,536

3,971

2,559

Other
Allowance for doubtful
accounts

1,185

1,224

(100)

(248)

Total assets

149,858

130,573

149,858

130,573

Other

Legal capital surplus
Other capital surplus
Retained earnings
Legal retained earnings
Other retained earnings
Reserve for advanced
depreciation of noncurrent assets
Retained earnings brought
forwardTreasury stock
Valuation and translation
adjustments
Valuation difference on
available-for-sale securities

Total liabilities and net assets- 24 -

Profit and Loss Statement
Current fiscal year
(from April 1, 2023 toMarch 31, 2024)

Category(millions of yen)Previous fiscal year
(Reference)(from April 1, 2022 toMarch 31, 2023)

Net sales
Cost of sales

98,662
82,53891,80578,297Gross profit

16,123

13,507

Selling, general, and administrative expenses

11,326

10,978Operating profit

4,797

2,529

Non-operating income
Interest and dividend income
Miscellaneous income
Non-operating expenses
Interest expenses
Miscellaneous loses

2,094
1,555
539
612
159
453

2,002
1,422
579
563
116
446

Ordinary profit

6,278

3,967

544
439
105
–
253
252
1
0

34
–
–
34
52
51
1
–

Profit before income taxes
Income taxes - current
Income taxes - deferred

6,569
1,770
(81)

3,950
980
(5)

Profit

4,881

2,975

Extraordinary income
Gain on insurance adjustment
Gain on sales of non-current assets
Gain on sales of investment securities
Extraordinary losses
Loss on disposal of non-current assets
Impairment losses
Other- 25 -

Non-consolidated Statement of Changes in Net Assets(from April 1, 2023 to March 31, 2024)(millions of yen)
Shareholders’ equity
Capital surplus

Retained earnings
Other retained earnings
Reserve foradvanceddepreciationof noncurrent
assetsRetainedearnings
brought
forwardTotal
retainedearnings

2,119

31,02934,514

(56)

56

–

Dividends of surplus(1,101)(1,101)

Profit

4,881

4,881

Balance as of April 1,
2023

Share
capitalLegalcapitalsurplus

OthercapitalsurplusTotal
capitalsurplusLegalretainedearnings

13,669

11,13834

11,172

1,364

Changes during the
fiscal year
Reversal of reserve foradvanced depreciationof non-current assets

Purchase of treasury
stock
Restricted stockcompensation

7

7

Net changes in items
other than shareholders’equity during the fiscal
year
Total changes during
the fiscal year

–

–

7

7

–

(56)

3,837

3,780

Balance as of March
31, 2024

13,669

11,13841

11,179

1,364

2,062

34,86738,295

Valuation and translation
adjustments

Shareholders’ equity

Balance as of April 1,
2023

Valuationdifference on
available-forsale securities

Total valuationand translation
adjustments

Total net assets

Treasury stock

Total
shareholders’equity(4,243)

55,113

2,559

2,559

57,673

Changes during the
fiscal year
Reversal of reserve foradvanced depreciationof non-current assets––

Dividends of surplus(1,101)(1,101)

Profit

4,881

4,881

Purchase of treasury
stock

(2)

(2)

(2)

Restricted stockcompensation

16

23

23

Net changes in items
other than shareholders’equity during the fiscal
year

1,412

1,412

1,412

Total changes during
the fiscal year

13

3,801

1,412

1,412

5,214

Balance as of March
31, 2024(4,229)58,915

3,971

3,971

62,887- 26 -

This is the English translation of the audit report on consolidated financial statements which was originally issued
in Japanese.

Audit Report
Audit Report on the Consolidated Financial Statements (Translation)

Independent Auditor’s Report (Translation)
May 15, 2024
To: Board of Directors, Tomoku Co., Ltd.
Tokyo Office
Ernst & Young ShinNihon LLC
Teruyasu Omote
Certified Public Accountant
Designated Engagement Partner
Hiroyuki Saito
Certified Public Accountant
Designated Engagement Partner
Audit Opinion
Pursuant to Article 444, Paragraph 4 of the Companies Act, we have audited the consolidated financial statementsof Tomoku Co., Ltd., which comprise the consolidated balance sheet, the consolidated profit and loss statement,
the consolidated statement of changes in net assets and the notes to the consolidated financial statements applicableto the fiscal year from April 1, 2023 through March 31, 2024.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, thefinancial position and results of operations of the Group, which consisted of Tomoku Co., Ltd. and its consolidated
subsidiaries, applicable to the fiscal year ended March 31, 2024 in accordance with accounting principles generally
accepted in Japan.
Basis for Audit 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 Audit of the Consolidated
Financial Statements section of our report. We are independent of the Company and its consolidated subsidiaries
in accordance with the ethical requirements that are relevant to our audit of the consolidated financial statements
in Japan, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believethat the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Other Information
The other information comprises the business report and its supplementary schedules. Management is responsible
for the preparation and presentation of the other information. Audit & Supervisory Board Members and the Audit& Supervisory Board are responsible for overseeing the Directors’ performance of duties within the maintenanceand operation of the financial reporting process for the other 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 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, Audit & Supervisory Board Members and the Audit & Supervisory Board for theConsolidated Financial Statements
Management is responsible for the preparation and fair presentation of the consolidated financial statements inaccordance with accounting principles generally accepted in Japan, this includes the maintenance and operation- 27 -

of internal control deemed necessary by management for the preparation and fair presentation of the 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 whether it isappropriate to prepare the consolidated financial statements with the assumption of the Group’s ability to continue
as a going concern and disclosing, as required by accounting principles generally accepted in Japan, matters related
to going concern.
Audit & Supervisory Board Members and the Audit & Supervisory Board are responsible for overseeing the
Directors’ performance of duties within the maintenance and operation of the financial reporting process.
Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements
Our responsibilities 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 report that
includes our opinion on the consolidated financial statements based on our audit from an independent point ofview. 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 decisions of users of these consolidated financial statements.
In accordance with auditing standards generally accepted in Japan, we exercise professional judgment andmaintain professional skepticism throughout the audit process to perform the following:• Identify and assess the risks of material misstatement of the consolidated financial statements, whether due tofraud or error. Design and perform audit procedures responsive to those risks. Selecting audit procedures tobe applied is at the discretion of the auditor. Obtain audit evidence that is sufficient and appropriate to provide
a basis for our opinion.
• Consider, in making those risk assessments, internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, while the purpose of the audit of the consolidated
financial statements is not expressing an opinion on the effectiveness of the Group’s internal control.
• Evaluate the appropriateness of accounting policies used by management and their method of application, as
well as the reasonableness of accounting estimates by management and related notes thereto.
• Conclude on the appropriateness of management’s use of the going concern basis for preparing theconsolidated financial statements and, based on the audit evidence obtained, whether a material uncertainty
exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as agoing concern. If we conclude that a material uncertainty exists, we are required to draw attention in our
auditor’s report to the notes to the consolidated financial statements or, if the notes to the consolidated financial
statements on material uncertainty are inadequate, to express a qualified opinion with exceptions on the
consolidated financial statements. Our conclusions are based on the audit evidence obtained up to the date of
our auditor’s report. However, future events or conditions may cause the Group to cease to continue as a going
concern.
• Evaluate whether the presentation of the consolidated financial statements and the notes thereto are inaccordance with accounting standards generally accepted in Japan, as well as evaluate the overall presentation,
structure and content of the consolidated financial statements, including the related notes thereto, and whether
the consolidated financial statements fairly represent the underlying transactions and accounting events.
• Obtain sufficient and appropriate audit evidence regarding the financial information of the Company and its
consolidated subsidiaries to express an opinion on the consolidated financial statements. We are responsible
for the direction, supervision and performance of the audit of the consolidated financial statements. We remainsolely responsible for our audit opinion.
We report to the Audit & Supervisory Board Members and the Audit & Supervisory Board regarding, among othermatters, 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 process, and other matters required by auditing
standards.
We also provide Audit & Supervisory Board Members and the Audit & Supervisory Board with a statement that
we have complied with the ethical requirements in Japan regarding independence that are relevant to our audit of
the financial statements, and communicate with them all relationships and other matters that may reasonably bethought to bear on our independence, and where applicable, any measures taken to eliminate obstruction factors
to independence or any safeguards applied to reduce obstruction factors to a tolerable level.
Conflicts of Interest
We or engagement partners have no interests in the Company and its consolidated subsidiaries, which should bestated in compliance with the Certified Public Accountants Act.

- 28 -

Audit Report on the Financial Statements (Translation)

Independent Auditor’s Report (Translation)
May 15, 2024
To: Board of Directors, Tomoku Co., Ltd.
Tokyo Office
Ernst & Young ShinNihon LLC
Teruyasu Omote
Certified Public Accountant
Designated Engagement Partner
Hiroyuki Saito
Certified Public Accountant
Designated Engagement Partner
Audit Opinion
Pursuant to Article 436, Paragraph 2, item (i) of the Companies Act, we have audited the accompanying nonconsolidated financial statements, which comprise the non-consolidated balance sheet, the non-consolidated profit
and loss statement, the non-consolidated statement of changes in net assets, the notes to the non-consolidated
financial statements and the related supplemental schedules (collectively, “non-consolidated financial statements,etc.”) of Tomoku Co., Ltd. (the “Company”) applicable to the 85th fiscal year from April 1, 2023 to March 31,2024.
In our opinion, the non-consolidated financial statements, etc. referred to above present fairly, in all material
respects, the financial position and results of operations of the Company, applicable to the fiscal year ended March
31, 2024, in accordance with accounting principles generally accepted in Japan.
Basis for Audit 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 Audit of the Non-consolidated
Financial Statements, Etc. section of our report. We are independent of the Company in accordance with the ethicalrequirements that are relevant to our audit of the non-consolidated financial statements, etc. in Japan, and we havefulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence
we have obtained is sufficient and appropriate to provide a basis for our opinion.
Other Information
The other information comprises the business report and its supplementary schedules. Management is responsible
for the preparation and presentation of the other information. Audit & Supervisory Board Members and the Audit& Supervisory Board are responsible for overseeing the Directors’ performance of duties within the maintenanceand operation of the financial reporting process for the other information.
Our opinion on the non-consolidated financial statements, etc. 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, etc., our responsibility is to read theother information and, in doing so, consider whether the other information is materially inconsistent with the nonconsolidated financial statements, etc. 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, Audit & Supervisory Board Members and the Audit & Supervisory Board for the
Non-consolidated Financial Statements, Etc.
Management is responsible for the preparation and fair presentation of the non-consolidated financial statements,
etc. in accordance with accounting principles generally accepted in Japan, this includes the maintenance andoperation of such internal control as management determines is necessary to enable the preparation and fairpresentation of non-consolidated financial statements, etc. that are free from material misstatement, whether due
to fraud or error.
- 29 -

In preparing the non-consolidated financial statements, etc., management is responsible for assessing whether it isappropriate to prepare the non-consolidated financial statements, etc. with the assumption of the Company’s ability
to continue as a going concern and disclosing, as required by accounting principles generally accepted in Japan,
matters related to going concern.
Audit & Supervisory Board Members and the Audit & Supervisory Board are responsible for overseeing the
Directors’ performance of duties within the maintenance and operation of the financial reporting process.
Auditor’s Responsibilities for the Audit of the Non-consolidated Financial Statements, Etc.
Our responsibilities are to obtain reasonable assurance about whether the non-consolidated financial statements,
etc. as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s reportthat includes our opinion on the non-consolidated financial statements, etc. based on our audit from an independent
point of view. Misstatements can arise from fraud or error and are considered material if, individually or in theaggregate they could reasonably be expected to influence the decisions of users taken on the basis of the nonconsolidated financial statements, etc.
In accordance with auditing standards generally accepted in Japan, we exercise professional judgment andmaintain professional skepticism throughout the audit process to perform the following:• Identify and assess the risks of material misstatement of the consolidated financial statements, whether due tofraud or error. Design and perform audit procedures responsive to those risks. Selecting audit procedures tobe applied is at the discretion of the auditor. Obtain audit evidence that is sufficient and appropriate to provide
a basis for our opinion.
• Consider, in making those risk assessments, internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, while the purpose of the audit of the non-consolidated
financial statements, etc. is not expressing an opinion on the effectiveness of the internal control.
• Evaluate the appropriateness of accounting policies used by management and their method of application, as
well as the reasonableness of accounting estimates by management and related notes thereto.
• Conclude on the appropriateness of management’s use of the going concern basis for preparing the nonconsolidated financial statements, etc. 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 tocontinue 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 notes to the non-consolidated financial statements, etc. or, if the notes tothe non-consolidated financial statements, etc. on material uncertainty are inadequate, to express a qualified
opinion with exceptions on the non-consolidated financial statements, etc. Our conclusions are based on theaudit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause
the Group to cease to continue as a going concern.
• Evaluate whether the presentation of the non-consolidated financial statements, etc. and the notes thereto arein accordance with accounting standards generally accepted in Japan, as well as evaluate the overall
presentation, structure and content of the non-consolidated financial statements, etc., including the related
notes thereto, and whether the non-consolidated financial statements, etc. fairly represent the underlying
transactions and accounting events.
We report to the Audit & Supervisory Board Members and the Audit & Supervisory Board regarding, among othermatters, 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 process, and other matters required by auditing
standards.
We also provide Audit & Supervisory Board Members and the Audit & Supervisory Board with a statement that
we have complied with the ethical requirements in Japan regarding independence that are relevant to our audit of
the financial statements, and communicate with them all relationships and other matters that may reasonably bethought to bear on our independence, and where applicable, any measures taken to eliminate obstruction factors
to independence or any safeguards applied to reduce obstruction factors to a tolerable level.
Conflicts of Interest
Our firm and the designated engagement partners have no interest in the Company which should be disclosed inaccordance with the Certified Public Accountants Act.

- 30 -

Audit Report of the Audit & Supervisory Board

Audit Report
The Audit & Supervisory Board, having received audit reports from each auditor on the business performance of
the Company’s directors during the 85th fiscal year from April 1, 2023 through March 31, 2024, and, as a resultof discussion, does hereby report the audit report as follows.
1.

Auditing methods and content of audits by Audit & Supervisory Board Members and the Audit &Supervisory Board(1) In addition to formulating an audit policy and the division of audit duties and receiving reports concerning
the status and results of audits conducted by each auditor, the Audit & Supervisory Board received reports
from the directors and the accounting auditor on the performance of their duties and sought explanations
when necessary.
(2) Each auditor, in accordance with the standards of the Audit & Supervisory Board, audit policy, and thedivision of roles formulated by the Audit & Supervisory Board, sought to facilitate mutual understanding
with the directors, the Internal Audit Department, and other employees, and endeavored to gather informationand improve the audit environment. Audits were conducted based on the following methods.
(i) Each auditor attended meetings of the Board of Directors and other important meetings, received reports
from the directors and other employees regarding the performance of their duties, and when deemednecessary, sought explanations, perused important documents including those subject to executive
approval, and conducted examinations of the conditions of business and assets at the head office and otherprincipal business sites. With respect to subsidiaries, the auditors sought to facilitate mutual understanding
and exchange of information with the directors and company auditors of subsidiaries, and when necessary,received reports from subsidiaries regarding their business operations.
(ii) The auditors periodically received reports from the directors and employees, sought explanations whenrequired, and expressed their opinions regarding a resolution of the Board of Directors passed inaccordance with the provisions of Paragraphs 1 and 3 of Article 100 of the Ordinance for Enforcement of
the Companies Act, which stipulates the establishment of a system that ensures the performance of theduties of the directors, as stated in the business report, is compliant with relevant laws and regulations andthe Company’s articles of incorporation, and that other affairs of the Company and the corporate group
comprising its subsidiaries are conducted in an appropriate manner, and that the establishment andoperational status of the Company’s internal control system is in accordance with that resolution.
(iii) The auditors monitored and examined the independence of the accounting auditor and the appropriatenessof audits conducted, received reports from the accounting auditor concerning the performance of theirduties, and also requested explanations when necessary. The auditors received notice from the accounting
auditor that the system to ensure the appropriateness of duties performed by the accounting auditor (setforth under Article 131 of the Ordinance for Corporate Accounting) is in accordance with audit quality
control standards (Business Accounting Council) and requested their explanations when necessary.

Based on the above methods, an examination was carried out with respect to the Company’s business reports andsupplementary schedules, financial statements and supplementary schedules (balance sheet, profit and loss
statement, statement of changes in net assets, and notes to non-consolidated financial statements), as well as
consolidated financial statements (consolidated balance sheet, consolidated statement of income, consolidated
statement of changes in net assets, and notes to the consolidated financial statements) for the fiscal year.
2. Results of audit(1) Results of audit of business report(i) The contents of the business report and its supplementary schedules fairly present the position of theCompany pursuant to laws and regulations and the Company’s articles of incorporation.
(ii) With regard to the performance of the duties of the directors, no unfair conduct, or any material breach oflaws, regulations, or the Company’s articles of incorporation has been found.
(iii) The details of resolutions approved by the Board of Directors concerning the internal control system areproper and fair. In addition, with regard to the content of the business report concerning the internal control- 31 -

system and the performance of the duties of the directors, nothing has been found that would necessitatecomment.
(2) Results of audit of financial statements and the accompanying supplementary schedules
We confirm that the audit method employed by the accounting auditor, Ernst & Young ShinNihon LLC, andthe results thereof are proper and fair.
(3) Results of audit of consolidated financial statements
We confirm that the audit method employed by the accounting auditor, Ernst & Young ShinNihon LLC, andthe results thereof are proper and fair.
May 15, 2024
Audit & Supervisory Board of Tomoku Co., Ltd.
Haruo Haneishi, Full-time Audit & Supervisory Board
MemberNatsuki Tsujino, Full-time Audit & Supervisory Board
MemberShigeki Yagi, External Audit & Supervisory Board Member
Kayoko Kitade, External Audit & Supervisory Board Member- 32 -