Independent Auditor’s Report
June 21, 2024

The Board of Directors
SEIKITOKYU KOGYO CO., LTD.
Ernst & Young ShinNihon LLC
Tokyo, Japan中川
政人
Masato Nakagawa
Designated Engagement Partner
Certified Public Accountant

中村■崇
Takashi Nakamura
Designated Engagement Partner
Certified Public Accountant

OpinionPursuant to Article 436, Section 2, paragraph 1 of the Companies Act, we have audited theaccompanying financial statements, which comprise the non consolidated balance sheet, the nonconsolidated statement of income, the non consolidated statement of changes in net assets, thenotes to the non consolidated financial statements and the related supplementary schedules of
SEIKITOKYU KOGYO CO., LTD. (the “Company”) applicable to the fiscal year from April 1,
2023 to March 31, 2024.
In our opinion, the accompanying financial statements present fairly, in all material respects, thefinancial 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 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 Financial Statements section of our report. We are independent of the Company inaccordance with the ethical requirements that are relevant to our audit of the financial statements inJapan, and we have fulfilled our other ethical responsibilities in accordance with theserequirements. 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 information included in a disclosure document that
contains audited financial statements but does not include the financial statements and our
auditor’s report thereon. We have concluded that the other information does not exist.
Accordingly, we have not performed any work related to the other information.
Responsibilities of Management, the Corporate Auditor and the Board of Corporate
Auditors for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statementsin accordance with accounting principles generally accepted in Japan, and for such internal
control as management determines is necessary to enable the preparation of financial statementsthat are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing 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.
The Corporate Auditor and the Board of Corporate Auditors are responsible for overseeing theCompany’s financial reporting process.
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole
are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Misstatements can arise from fraud or error and are considered material if,
individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with auditing standards generally accepted in Japan, we exercise
professional judgment and maintain professional skepticism throughout the audit. We also:・ Identify and assess the risks of material misstatement of the financial statements, whether due
to fraud or error, design and perform audit procedures responsive to those risks, and obtain
audit evidence that is sufficient and appropriate to provide a basis for our opinion.
・ Consider internal control relevant to the audit in order to design audit procedures that areappropriate in the circumstances for our risk assessments, while the purpose of the audit of
the financial statements is not expressing an opinion on the effectiveness of the Company’s
internal control.
・ Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.
・ Conclude on the appropriateness of management’s use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to events
or conditions that may cast significant doubt on the Company’s ability to continue as a going
concern. If we conclude that a material uncertainty exists, we are required to draw attention
in our auditor’s report to the related disclosures in the financial statements or, if suchdisclosures are inadequate, to modify our opinion. 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 Company to cease to continue as a going concern.
・ Evaluate the overall presentation, structure and content of the financial statements, including thedisclosures, and whether the financial statements represent the underlying transactions andevents in a manner that achieves fair presentation in accordance with accounting principles
generally accepted in Japan.

・ Obtain sufficient appropriate audit evidence regarding the financial information of the entities
or business activities within the Company to express an opinion on the financial statements.
We are responsible for the direction, supervision and performance of the Company audit. We
remain solely responsible for our audit opinion.
We communicate with the Corporate Auditor and the Board of Corporate Auditors regarding,among other matters, the planned scope and timing of the audit and significant audit findings,
including any significant deficiencies in internal control that we identify during our audit.
We also provide the Corporate Auditor and the Board of Corporate Auditors with a statementthat we have complied with the ethical requirements regarding independence that are relevant toour audit of the financial statements in Japan, and to communicate with them all relationships
and other matters that may reasonably be thought to bear on our independence, and whereapplicable, actions taken to eliminate threats or safeguards applied to reduce threats to an
acceptable level.
Interest Required to Be Disclosed by the Certified Public Accountants Act of Japan
Our firm and its designated engagement partners do not have any interest in the Company whichis required to be disclosed pursuant to the provisions of the Certified Public Accountants Act ofJapan.

SEIKITOKYU KOGYO CO., LTD.
Non Consolidated Balance Sheetfor the year ended March 31, 2024

U.S. dollars(thousands)(Note 2)2024

Yen(millions)
2024

AssetsLiabilities and Net assets

Current assets:
Cash and deposits

U.S. dollars(thousands)(Note 2)2024

Yen(millions)
2024

Current liabilities:¥

Trade receivables
Notes receivables
Accounts receivables
Total trade receivables

12,675$

1,760
28,10929,869Inventories
Cost on uncompleted construction contracts
Raw materials and supplies
Total inventories
Short-term loans receivable
Other current assets
Allowance for doubtful accounts
Total current assets

83,714

Short-term loans payable (Note 4)
Trade payables
Notes payables
Accounts payables
Total trade payables

11,626
185,644
197,270

60
425
485

397
2,807
3,204

408
2,480
(431)
45,486

2,697
16,375(2,846)300,414

¥

3,060

$

20,2106,560
14,51321,07343,32895,855
139,183

845
621
18
19
1,651
3,653
30,940

5,580
4,099
121
125
10,904
24,128204,350

Long-term loans payable (Note 4)
Provision for retirement benefits
Other non-current liabilities
Total non-current liabilities

6,700
820
87
7,607

44,251
5,414
573
50,238

Total liabilities

38,547

254,588

Shareholders’ equity (Note 6)
Share capital
Capital surplus
Retained earnings
Treasury stock - 955,786 shares
Total shareholders’ equity

2,000
512
33,816(787)
35,541

13,2093,383
223,338(5,197)
234,73382
35,623543
235,276

Income taxes payable
Advances received on uncompleted construction contracts
Provision for warranties for completed construction
Provision for loss on construction contracts
Provision for bonuses
Other current liabilities
Total current liabilities

Non-current liabilities :Non-current assets:
Property, plant and equipment (Notes 3 and 4 )Intangible assets

25,263

166,851

134

888
Net assets:

Investment and other assets
Subsidiaries and affiliates
Other securities
Deferred tax assets (Note 9)
Guarantee deposits and other investments (Note 5)
Allowance for doubtful accounts
Total investments and other assets
Total non-current assets
¥

1,783
316
859
455
(126)
3,287

11,774
2,090
5,672
3,006
(831)
21,711

28,684

189,450

Unrealized gain on investment securities
Total net assets

489,864

Total liabilities and net assets

74,170$Total assets
See accompanying notes to non consolidated financial statements.
1¥

74,170$489,864SEIKITOKYU KOGYO CO., LTD.
Non Consolidated Statement of Income
for the year ended March 31, 2024

U.S. dollars(thousands)(Note 2)2024

Yen(millions)2024
Completed construction contracts:
Net sales
Cost of sales
Gross profit¥

65,58958,702
6,887$

433,186
387,70245,484

Finished goods:
Net sales
Cost of sales
Gross profit

18,116
16,017
2,099

119,654
105,787
13,867

Total:Net sales
Cost of sales
Gross profit

83,70574,7198,986

552,840
493,489
59,351

Selling, general and administrative expenses:
Operating income

5,208
3,778

34,397
24,954

Other income (Note 7):
Interest and dividends
Other
Subtotal

26
376
402

172
2,483
2,655

Other expenses (Note 8):
Interest
Impairment loss (Note 14)
Other
Subtotal

56
300
621
977

370
1,983
4,098
6,451

3,203

21,158

1,039
77

6,859
512

Profit before income taxes
Income taxes:
Current
Deferred¥

Net profit

2

2,087

$

13,787SEIKITOKYU KOGYO CO., LTD.
Non Consolidated Statement of Changes in Net Assets
for the year ended March 31, 2024

Shareholders' equity (Notes 2 and 6)
Share capital

Capital surplus

Retained earnings

Treasury stock

Total shareholders'equity¥¥(Millions of yen)
Balance at April 1, 2023

¥

2,000

¥

500

¥

34,463(804)

36,159Changes during the year
Dividend of surplus(2,734)

Net income for the period

2,087(2,734)
2,087

Purchase of treasury stock
Disposal of treasury stock

12

(0)

0

17

29

17

(618)

Net changes of items other thanshareholders' equity－－

Total changes during period
Balance as of March 31, 2024

¥

2,000

Accumulated othercomprehensive
Unrealized gain on
investment securities

12
¥

(647)

512

¥

Total net assets(Millions of yen)
Balance at April 1, 2023

¥

32

¥

36,191

Changes during the year
Dividend of surplus(2,734)

Net income for the period

2,087

Purchase of treasury stock0

Disposal of treasury stock29

Net changes of items other thanshareholders' equity

50

50

Total changes during period

50

(568)

Balance as of March 31, 2024

¥

82

¥

35,623

3

33,816

¥

(787)

¥

35,541SEIKITOKYU KOGYO CO., LTD.
Non Consolidated Statement of Changes in Net Assets
for the year ended March 31, 2024

Shareholders' equity (Notes 2 and 6)
Share capital

Capital surplus

Retained earnings

Total shareholders'equityTreasury stock(Thousands of U.S. dollars)
Balance at April 1, 2023$

13,209

$

3,303

$

227,611$(5,308)$238,815

Changes during the year
Dividend of surplus(18,060)

Net income for the period

13,787(18,060)
13,787Purchase of treasury stock
Disposal of treasury stock

80

(4)

(4)

115

195

Net changes of items other thanshareholders' equity－－

Total changes during period
Balance as of March 31, 2024$

13,209

Accumulated othercomprehensive
Unrealized gain on
investment securities

80
$

3,383

Total net assets(Thousands of U.S. dollars)
Balance at April 1, 2023

$

211

$

239,026

Changes during the year
Dividend of surplus(18,060)

Net income for the period

13,787Purchase of treasury stock(4)

Disposal of treasury stock

195

Net changes of items other thanshareholders' equity

332

Total changes during period
Balance as of March 31, 2024

332

332
$

543

(3,750)$235,276

4(4,273)$

223,338

111$(5,197)(4,082)$

234,733

Notes to the Non Consolidated Financial Statements

1.

Summary of Significant Accounting Policies(a) Basis of Presenting Non Consolidated Financial Statements
The accompanying non consolidated financial statements have been prepared from the accounts
maintained by the SEIKITOKYU KOGYO CO., LTD. (the “Company”) in accordance with theprovisions set forth in the Companies Act of Japan and in conformity with accounting principles
generally accepted in Japan, which may differ in some material respects from accounting principles
generally accepted and applied in countries and jurisdictions other than Japan.
Certain items presented in the Japanese non consolidated financial statements have been reclassified
for presentation solely for the convenience of readers outside Japan.
In addition, the notes to the non consolidated financial statements include certain information which is
not required under accounting principles generally accepted in Japan but is presented herein as
additional information.
(b) Method of Accounting for Significant revenues and expenses
The Company has applied the Accounting Standard for Revenue Recognition (Accounting Standards
Board of Japan No. 29, March 31, 2020) and the Implementation Guidance on Accounting Standard
for Revenue Recognition (Accounting Standards Board of Japan Guidance No. 30, March 31, 2020).
The Company's main businesses are construction business and manufacturing and sales business ofpavement materials. The details of performance obligations in each business are as follows.
Construction business:
The Company is engaged in paving, civil engineering, and other businesses related to construction
work in general, and is obligated to perform construction work under construction contracts with its
customers. Under such construction contracts, since the value of the property increases and thecustomer obtains control of the asset as the Company proceeds with the construction work, theperformance obligation is satisfied over a certain period of time and is satisfied as the construction
progresses over the contract period. Therefore, the measurement of the degree of completion of thesatisfaction of performance obligations for construction work, etc. is based on the percentage ofincurred costs up to the end of each reporting period to the estimate of total construction cost. For
construction contracts for which the percentage-of-completion for satisfaction of performanceobligations cannot be estimated reasonably, revenue is recognized on a cost recovery method only tothe extent of contract costs incurred will be recoverable. The transaction price is determined by theconstruction contract, and the payments from customers are received in stages at the time stipulated in
the contract. The amount of payments from customers does not include any significant financing
component. There is no significant variable consideration that could change the amount of thepayments from customers.

5

Manufacturing and sales business of pavement materials:
The Company manufactures and sells asphalt mixture and other construction materials and is
obligated to deliver the goods under sales contracts with customers. The performance obligation issatisfied at the time the goods are delivered, and revenue is recognized at the time of delivery. The
transaction price is determined by the contract with the customer and is received in accordance withthe contract. The amount of payments from customers does not include any significant financing
component. There is no significant variable consideration that could change the amount of thepayments from customers.
(c) Inventories
Inventories are stated at cost, cost being determined by the identified cost method for cost on
uncompleted construction contracts or by the moving average method for raw materials and supplies.
Cost of inventories for raw materials and supplies is written-down when their carrying amounts
become unrecoverable.
(d) Investments
Investments in subsidiaries and affiliates are carried at cost. The cost of subsidiaries and affiliates soldis computed based on the moving average method.
Other securities (securities which are neither trading, held-to-maturity securities nor investments in
subsidiaries and affiliates) with market value are carried at the market value on the balance sheet date.
The difference between the acquisition cost and the market value of other securities is recognized as
unrealized gain on investment securities in the balance sheet, net of tax effect.
Non-marketable securities classified as other securities are carried at cost. The cost of other securities
sold is computed based on the moving average method.
(e) Property, Plant and Equipment (Excluding leased assets)
The Company computes depreciation of Property, plant and equipment by the declining balancemethod, however, buildings (excluding structures attached to the buildings) and building facilities andstructures acquired on or after April 1, 1998 are depreciated by the straight-line method. Rates fordepreciation are based on the estimated useful lives of the assets according to their general class, typeof construction, and use.
The estimated useful lives are principally as follows:
Buildings and structures ...................................................... 7 to 50 years
Machinery, equipment and vehicles .................................... 5 to 7 years(f)Intangible Assets (Excluding leased assets)
Computer software for internal use is amortized by the straight-line method over the estimated useful
lives (5 years).

(g) Leases
Depreciation of leased assets under finance leases that do not transfer ownership of the leased assets tothe lessee is calculated by the straight-line method over the lease period with a residual value of zero.

6

(h) Income Taxes
Deferred tax assets and liabilities have been recognized in the non consolidated financial statements
for the year ended March 31, 2024 with respect to the differences between the financial reporting andtax bases of assets and liabilities, and were measured using the enacted tax rates which will be ineffect when the differences are expected to be reversed. Valuation allowances are recognized for thedeferred tax assets that are not considered to be recoverable.
(i)

Allowance for Doubtful Accounts
General provision for doubtful accounts is recorded by applying a certain reserve percentage of thereceivables based on the experience from past transactions. When considered necessary, specificreserves are recognized based on the assessment of individual receivables.

(j)

Provision for Warranties for Completed Construction
Provision for warranties for completed construction is recorded at an estimated amount, based on theactual number of defects and related warranty costs stipulated in completed construction contracts.

(k) Provision for Loss on Construction Contracts
Provision for loss on construction contracts is recorded for estimated future losses related to theconstruction contracts in progress.
(l)Provision for Bonuses
Provision for bonuses is stated at the estimated amount of bonuses which the Company is anticipatedto pay to its employees.

(m) Provision for Retirement Benefits
Provision for retirement benefits for employees has been recorded mainly at an amount calculated
based on the retirement benefit obligations and the fair values of the pension plan assets as of thebalance sheet date, as adjusted for unrecognized actuarial gain or loss. The retirement benefit
obligations are allocated to each period by the straight-line method over the estimated years of serviceof the eligible employees.
Prior service cost is amortized by the straight-line method over a period of 13 years, which is shorter
than the average remaining years of service of the employees.
Actuarial gains and losses are amortized from the following year in which the gains or losses arerecognized. Amortization is primarily calculated by the straight-line method over 10 years, which isshorter than the average remaining years of service of the employees.
(n) Accounting Principles and Procedures Adopted When Provisions of Relevant Accounting Standards
are Unclear
With respect to construction projects and asphalt plants conducted by the Company as a joint venturewith other companies, the Company accounts for them in proportion to its own share ratio.

7

(o) Significant Accounting Estimates
Estimate of the total construction cost in revenue recognized when performance obligations are satisfied
over a specified over time:
Revenue recognized when performance obligations are satisfied over a specified over time was¥65,464 million (U.S.$432,364 thousand) for the fiscal year ended March 31, 2024.
Calculation method:
Revenue recognized when performance obligations are satisfied over a specified over time ismeasured based on the progress of completion at the end of the fiscal year. The progress ofcompletion is calculated based on the proportion of the cost incurred as of the end of the fiscal year
to the estimated total cost of the project.
The total construction cost is accumulatively estimated based on objective prices such as standard
unit price approved internally and quotation obtained from suppliers. Such estimations of total
construction cost are reviewed as of the closing date, according to construction status, actual costs
incurred or requests of specification changes received from customers.
Key assumptions:
Since each of the construction is highly individualized and basic specifications and work content
are based on customer’s instructions, it is necessary to sufficiently incorporate the characteristicsof the construction in estimating total construction cost. In doing so, certain assumptions andjudgments are required based on specialized knowledge of construction and construction
experience such as unit price and quantity of materials and labor.
Impact on non consolidated financial statements for the next fiscal year:
Since construction work generally takes a long period of time, key assumptions may change due
to fluctuation of unit price of materials and labor, changes of construction contract during
construction and delay of construction due to bad weather, etc., which may affect nonconsolidated financial statements for the next fiscal year.

Estimate of the impairment of fixed assets of Manufacturing and sales business of pavement materials:
Fixed assets of Manufacturing and sales business of pavement materials was ¥17,292 million(U.S.$114,206 thousand) and impairment loss was ¥300 million (U.S.$1,983 thousand) for fiscal year
ended March 31, 2024.
Calculation method:
The Company determines the cash-generating units by the smallest group of assets that generates
cash inflows that are largely independent of the cash inflows from other assets or groups of assets.
The Company is assessing the recognition of impairment losses for asphalt plants that haveindications of impairment. An impairment loss is recognized when the undiscounted future cash
flows from the relevant asset group are less than the carrying amounts. The carrying amounts ofsuch assets are reduced to their recoverable amounts. The recoverable amount of such asset
groups is measured based on fair value or value in use.
Key assumptions:
The key assumptions used in the calculation of undiscounted future cash flows are sales volumes,
sales prices and raw material prices for each asphalt plant. Sales volumes, sales prices, and raw
material prices are determined based on historical experience, trends in raw material prices and theextent to which raw material prices are passed through to product prices.
8

Impact on financial statements for the next fiscal year:
Key assumptions are subject to change based on trends in sales volumes, sales prices, raw material
prices and other factors. If the recoverable amount decreases, an impairment loss may be recognizedfinancial statements for the next fiscal year.

2.

Basis of Translation
The non consolidated financial statements as of and for the year ended March 31, 2024 presented herein
are denominated in Japanese yen, and solely for the convenience of the readers, have been translated
into U.S. dollars at the rate of ¥151.41 = U.S.$1, the approximate rate of exchange in effect on March
31, 2024. This translation should not be construed as a representation that any of the yen amounts could
be converted into U.S. dollar amounts at the above or any other rate.

9

3.

Property, Plant and Equipment
Property, plant and equipment at March 31, 2024 are as follows:

Buildings and structures
Machinery, equipment vehicles, tools, furniture andfixtures
Land
Total
4.

Yen
(millions)
2024

U.S. dollars(thousands)
2024¥27,527$149,714

3,445
14,291¥25,263

22,753
94,384$166,851

Collateral Assets and Corresponding Liabilities
The following assets are provided as collateral for the borrowings at March 31, 2024:

Buildings and structures
Land
Total

Yen
(millions)
2024

U.S. dollars(thousands)
2024¥1,461492¥1,953$9,652
3,247$12,899

Yen(millions)
2024

U.S. dollars(thousands)
2024¥1,1001,700¥1,800$11,660
11,228$11,888

Corresponding Liabilities at March 31, 2024

Short-term loans payable
Long-term loans payable
Total
5.

Receivables Fully Offset Against Allowance for Doubtful Accounts

Long-term trade receivables

10

Yen(millions)
2024

U.S. dollars(thousands)
2024

¥466

$3,079

6.

Shareholders’ Equity
In accordance with the Companies Act of Japan (the “Act”), the Company provides legal retained
earnings, which is included in retained earnings. The Act requires that an amount equal to at least 10%of the amounts to be disbursed as distribution of earnings be appropriated to the legal retained earnings
until the total of the legal retained earnings plus the legal capital surplus or either of them equals 25% of
the share capital account.
The Act further provides that neither legal capital surplus nor the legal retained earnings is available forthe payment of dividends, but either may be used to reduce or eliminate accumulated deficits by aresolution of the shareholders, or may be transferred to the share capital account by a resolution of theshareholders. The Act also provides that, if the total amount of legal capital surplus and the legal
retained earnings exceeds 25% of the amount of share capital, the excess may be distributed to theshareholders, either as a return of capital or as dividends, subject to the approval of the shareholders.

7.

Other Income
The composition of “Other income” for the year ended March 31, 2024 is as follows:
Yen
U.S. dollars(millions)(thousands)
2024
2024
Interest income
Dividend income
Rent income
Foreign exchange gains
Gain on sales of non-current assets
Settlement income
Gain on reversal of liabilities
Other

¥418
8
23
41
5
120
155
32
¥402

Total
8.

$2,121
51
153
270
32
792
1,027
209
$2,655

Other Expenses
The composition of “Other expenses” for the year ended March 31, 2024 is as follows:
Yen
U.S. dollars(millions)(thousands)
2024
2024
Interest expenses
Guarantee commission
Composition expenses for syndicated loan
Loss on sales of non-current assets
Loss on retirement of non-current assets
Loss on valuation of shares of subsidiaries and associates
Provision of allowance for doubtful accounts for
subsidiaries and associates
Impairment loss
Other
Total

11

¥956
18
22
2
29
44

$1,370
119
142
15
193
285

454
300
52
¥977

3,000
1,983
344
$6,451

9.

Income Taxes
The tax effects of temporary differences which gave rise to significant portions of deferred tax assets
and deferred tax liabilities as at March 31, 2024 are summarized as follows:
Yen
U.S. dollars(millions)(thousands)
2024
2024
Deferred tax assets:
Allowance for doubtful accounts
Provision for retirement benefits
Loss on valuation of golf club membership
Impairment loss
Provision for bonuses
Loss on valuation of shares of subsidiaries andassociates
Book value adjustment of investment of shares ofsubsidiaries and associates
Other
Gross deferred tax assets
Less: Valuation allowances
Total deferred tax assets
Deferred tax liabilities:
Asset retirement obligations
Total deferred tax liabilities
Net deferred tax assets

12

¥313
414
130
777
505

$2,069
2,732
857
5,130
3,338

371

2,454

762
566
3,838
(2,970)
868

5,031
3,739
25,350(19,617)
5,733

9
9

61
61

¥859

$5,672

10. Related Party Transactions
Transactions with related party, for the year ended March 31, 2024 are as follows:(a) NameYen(b) Type(millions)(c) Relationship(d) Percentage of equity ownership held by
Description ofAmountthe Company
transaction or balance(a) TOKYU CONSTRUCTION CO.,LTD.
(b) Principal shareholder(c) Interlocking directors and undertaking
construction (Note 2)(d) (24.5%) (directly)

Transactions: (Note 1)
Completed construction
contracts-Net sales
Balances: (Note 1)
Accounts receivable from:electronically recordedmonetary claims-operating
Completed construction
contracts
Advances received on
uncompleted construction
contracts(a) SHINSEIKI KOGYO CO., LTD.
(b) Subsidiaries(c) Interlocking directors and distributing
paving materials (Note 3)(d) 100% (directly)

Transactions: (Note 1)
Finished goods-Net sales
Balances: (Note 1)
Accounts receivable(a) STK PACIFIC CORPORATION(b) Subsidiaries(c) Interlocking directors and fund lending(Note 4)(d) 100% (directly)

Transactions: (Note 1)
Fund lending
Interest received
Reimbursement ofexpenses
Balances: (Note 1,5)
Short-term loans
receivable
Advances paid

U.S. dollars(thousands)
Amount¥1,366$9,025

100

663

156

1,032

0

3

840

5,547

852

5,625

318
18

2,100
120

24

160

363
90

2,400
594

Note 1: Consumption taxes are not included in the transaction amounts, however, balances areaccounted for with consumption taxes.
Note 2: Construction services with related parties are carried out on an arm’s-length basis consistent
with third party transactions, presenting a quotation for each of constructions.
Note 3: Unit prices are determined taking market prices and total costs into account.
Note 4: Lending and borrowing of funds is related to CMS (cash management system) and collateral is
not accepted. The transaction amount of fund lending and fund borrowing is the averagebalance during over the period. The interest rate is reasonably determined in consideration of
the market interest rate.
Note 5:For the receivables from STK PACIFIC CORPORATION, the Company set aside theallowance for doubtful accounts of ¥431 million (U.S.$2,845 thousand) and recorded ¥431
million (U.S.$2,845 thousand) as provision of allowance for doubtful accounts for subsidiaries
and associates for the current fiscal year.

1311. Monetary Receivables and Monetary Payables to Affiliated Companies

Short-term monetary receivables
Long-term monetary receivables
Short-term monetary liabilities

Yen(millions)
2024

U.S. dollars(thousands)
2024¥1,762
86
3,223$11,635
566
21,283Yen(millions)
2024

U.S. dollars(thousands)
2024¥2,788
1,407
531$18,411
9,295
3,505

12.. .Transactions with Affiliated Companies

Operating transactions
Net sales
Cost of sales
Non–operating transactions
13. Amounts per Share

Amounts per share as of and for the year ended March 31, 2024 are as follows:
As of March 31

Net assets

Yen
2024

U.S. dollars
2024¥976.81

$6.45

Yen
2024

U.S. dollars
2024¥57.25$0.38

For the year ended March 31

Net Income

1414. Impairment Loss
The Company recognized impairment loss for the following assets or groups of assets.
Yen(millions)

U.S. Dollars(thousands)

Kumamoto
Prefecture

¥128

$847

Buildings,
structures,
machinery,equipment, tools,
furniture and land

Gifu
Prefecture

84

555

Business assets

Buildings,
structures,
machinery,equipment, tools,
furniture and land

Hokkaido
Prefecture

31

208

Business assets

Buildings,
structures,
machinery,equipment,
vehicles, tools,
furniture and fixture

Aichi
Prefecture

29

191

Business assets

Buildings,
structures,
machinery,equipment, tools
and furniture

Kanagawa
Prefecture

28

182

Total

－

－

¥300

$1,983

Use

Classification

Location

Business assets

Buildings,
structures,
machinery,equipment, tools,
furniture and landBusiness assets

The Company determines the cash-generating units by the smallest group of assets that generates cash
inflows that are largely independent of the cash inflows from other assets or groups of assets.
The Company recognized impairment loss of ¥ 300 million (U.S.$1,983 thousand) in other expenses
due to a significant decline in profitability for assets or groups of assets for the current fiscal year. The
carrying amounts of such assets were reduced to their recoverable amounts.
The breakdown is as follows: Buildings and structures: ¥91 million (U.S.$603 thousand), Machinery,equipment, vehicles: ¥162 million (U.S.$1,068 thousand), Tools, furniture and fixtures: ¥4 million(U.S.$25 thousand), Land: ¥43 million (U.S.$287 thousand).
The recoverable amount of such assets or asset groups is measured based on sales value or value in use.
15. Other Notes
In December 2020, the Company executed a syndicate loan contract with The Bank of Mitsubishi UFJ,
Ltd. serving as the arranger (of which, the balance of the term loan as of the end of fiscal year is ¥5,000
million (U.S.$33,023 thousand)).
15

The following financial covenants are attached to the syndicate loan mentioned above;(a) The amount of net assets recorded on the balance sheet and consolidated balance sheet on the last
day of each accounting period in and after the fiscal year ended March 31, 2021 must be
maintained to at least 75% of the amount of net assets recorded on the balance sheet andconsolidated balance sheet for the fiscal year immediately preceding said fiscal year or for the
fiscal year ended March 31, 2020, whichever is the higher amount.
(b) Ordinary losses* must not be recorded in two consecutive periods on the statements of income orconsolidated statements of income in and after the fiscal year ended March 31, 2020.
*Ordinary income or loss is calculated by subtracting extraordinary income or loss pursuant toJapanese GAAP from income before income taxes.
(c) Net losses must not be recorded in two consecutive periods on the statements of income orconsolidated statements of income in and after the fiscal year ended March 31, 2020.
(d) The total coverage ratio for the consolidated balance sheets, consolidated statements of income,and consolidated cash flow statements in and after the fiscal year ended March 31, 2021 must be
maintained at 15.0 or lower.
It is stipulated under the loan that, in the event of changes in accounting standards, all concerned
parties shall consult on the abovementioned financial covenants to determine the impact of the saidchanges.

16

SEIKITOKYU KOGYO CO., LTD.
Related Supplementary Schedules
for the year ended March 31, 2024
1.

Details of Changes in Property, Plant and Equipment and Intangible assets
Changes in Property, plant and equipment at March 31, 2024 are as follows:Yen(millions)
Openingbalance¥ 6,218

Increase¥ 1,988

Machinery, equipment andvehiclesTools, furniture and fixtures

3,440

1,000

240

39

Land

14,339－879¥ 25,116－¥ 3,027

Type of Assets
Buildings and structures

Construction in progress
Total

Type of Assets
Buildings and structures
Machinery, equipment andvehiclesTools, furniture and fixtures
Land
Construction in progress
Total

Acquisition
cost

U.S. dollars(thousands)

Decrease
¥ 121
(91)
169
(162)
5
(4)
48
(43)
879
¥ 1,222(300)

Yen(millions)
Accumulated
depreciation Depreciation

Endingbalance¥ 13,290$ 87,774

19,187

126,722

1,137

7,512

14,291

94,384－¥ 47,905－$ 316,392

U.S. dollars(thousands)
Net bookvalue¥ 13,290¥ 5,763¥ 558¥ 7,527$ 49,714

19,187
1,137
14,291－¥ 47,905

15,942937－－¥ 22,642

1,026
74
－
－
¥ 1,658

3,245
200
14,291－¥ 25,263

21,433
1,320
94,384－$ 166,851

Changes in Intangible assets at March 31, 2024 are as follows:
U.S. dollars(thousands)

Yen(millions)Type of Assets
Intangible assets
Total

Type of Assets
Intangible assets
Total

Openingbalance
¥ 107
¥ 107

Acquisition
cost
¥ 400
¥ 400

Increase¥ 60¥ 60

Decrease
¥ －
¥ －

Yen
(millions)
Accumulated
depreciation Amortization
¥ 266
¥ 266
17

¥ 33
¥ 33

Endingbalance
¥ 400
¥ 400

$ 2,642$ 2,642
U.S. dollars(thousands)

Net book
value
¥ 134
¥ 134

$ 888
$ 888

(Note) 1.

2.

The figures in parentheses are the amount of impairment loss for the current period.

2.

The amount for Buildings and structures in the current period increased mainly due to theequipment for asphalt plant at Myokenjima mixing plant : ¥1,276 million (U.S.$8,430 thousand).

3.

The amount for Machinery, equipment and vehicles in the current period increased mainly due
to the equipment for asphalt plant at Myokenjima mixing plant: ¥391 million (U.S.$2,579
thousand).

4.

The amount for Construction in Progress in the current period decreased mainly due to thecompletion of the equipment for asphalt plant at Myokenjima mixing plant: ¥815 million(U.S.$5,381 thousand).

Details of Allowances and Provisions
Allowances and Provisions at March 31, 2024 are as follows:

Opening

Balance
Allowance for doubtful
accounts
Provision for warranties
for completed
construction
Provision for loss on
construction contracts
Provision for bonuses
Provision for retirement
benefits(Note)

Increase

Yen(millions)
DecreaseAmountused asOther
intended

U.S. dollars(thousands)Endingbalance

¥ 102

¥ 455

¥ －

¥ －

¥ 557

$ 3,677

40

14

8

28

18

121

4
1,563

19
1,651

4
1,563

－
－

19
1,651

125
10,904

1,148

274

602

－

820

5,414

Other decrease of Provision for warranties for completed construction is the amount of reversal due
to decrease the estimated amount of warranties for completed constructions: ¥28 million(U.S.$188 thousand).

18

3.

Details of Selling, General and Administrative Expenses
Selling, general and administrative expenses for the year ended March 31, 2024 are as follows:

Selling, general and administrative expenses:
Directors' compensation
Employees' salaries and allowances
Retirement benefit expenses
Legal welfare expenses
Welfare expenses
Repair and maintenance
Stationery expenses
Transportation expenses
Power utilities expenses
Research study expenses
Advertising expenses
Provision of allowance for doubtful accounts
Entertainment expenses
Contributions
Rents
Depreciation
Taxes and dues
Insurance expenses
Miscellaneous expenses
Total

19

Yen
(millions)
2024

U.S. dollars(thousands)
2024

¥ 181
2,346
81
408
205
28
228
405
20
247
54
3
49
3
183
183
346
32
206
¥ 5,208$ 1,198
15,492
536
2,691
1,357
187
1,509
2,676
130
1,633
354
20
325
18
1,206
1,206
2,287
209
1,363
$ 34,397