Independent auditor’s report
To the Board of Directors of TAKUMA Co., Ltd.:

Report on the Audit of the Consolidated Financial Statements
OpinionWe have audited the accompanying consolidated financial statements of TAKUMA Co., Ltd. (“theCompany”) and its consolidated subsidiaries (collectively referred to as “the Group”), which comprisethe consolidated balance sheets as at March 31, 2024 and 2023, the consolidated statements ofoperations, statements of comprehensive income, statements of changes in net assets and statements ofcash flows for the years then ended, and notes, comprising a summary of significant accounting policies
and other explanatory information.
In our opinion, the accompanying consolidated financial statements present fairly, in all material
respects, the consolidated financial position of the Group as at March 31, 2024 and 2023, and its
consolidated financial performance and its consolidated cash flows for the years then ended inaccordance 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 Consolidated Financial Statements section of our report. We are independent of the Groupin 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 theserequirements. We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our
audit of the consolidated financial statements of the current period. These matters were addressed in thecontext of our audit of the consolidated financial statements as a whole, and in forming our opinion
thereon, and we do not provide a separate opinion on these matters.
Reasonableness of the estimate of total construction costs of construction contracts for which
performance obligations are satisfied over a certain period of time
The key audit matter

How the matter was addressed in our audit

As discussed in Note 3. “Significant
accounting estimates” under “Net sales where
the performance obligations in construction

The primary procedures we performed to assess thereasonableness of the estimate of total construction
costs of construction contracts for whichcontracts are satisfied over a certain period oftime and provision for loss on construction
contracts" to the consolidated financial
statements, when the control over goods orservices in connection with a construction
contract is transferred to customers over acertain period of time, TAKUMA Co., Ltd.
(the “Company”) and its consolidated
subsidiaries recognize revenue over a certain
period as they satisfy the performanceobligation to transfer goods or services tocustomers. The amount of revenue recognized
for construction contracts for which
performance obligations were satisfied overtime during the fiscal year ended March 31,
2024 amounted to \45,183million, which
accounted for 30% of net sales.
The progress toward complete satisfaction of aperformance obligation is estimated on thebasis of a percentage of the construction costs
incurred by the end of each reporting period
compared to the estimate of total construction
costs. The estimate of total construction costs
involves a high degree of uncertainties, such as
the following:

Since the conditions and specifications of
new plant constructions differ fromproject to project, each construction
project is unique in nature, which requires
complex estimates in determining total
construction costs. In addition, since someprojects take a longer period of time fromorder to delivery, changes in economic
conditions during such period may lead tofluctuations in the price of necessary
materials and equipment or construction
work.

performance obligations are satisfied over a certain
period of time included the following:(1) Internal control testing
We tested the design and operating effectiveness ofcertain of the Company’s internal controls relevant to
the estimate of total construction costs. In thisassessment, we focused on the Company’s internal
controls that ensure the completeness of items to beaggregated and the appropriateness of the estimate ofeach cost item.
(2) Assessment of the reasonableness of the estimateof total construction costs
To assess the reasonableness of the estimate of total
construction costs, we:selected certain construction projects which may
involve a relatively higher level of uncertainty
in the estimate of total construction costs basedon our understanding of the terms of theconstruction contract, the details of the project,
the cost structure, and the assumptions used toestimate the total construction costs;

assessed the accuracy of the estimate of total
construction costs by comparing the pastestimates of total construction costs with theactual costs of similar projects in the businesses
to which the selected construction projects
belonged and analyzing any variances;

traced the main cost items of the selected
construction projects to supporting documents
including quotations and purchase orders;

inquired of personnel responsible for theselected construction projects regarding the
progress of construction, including their
judgment as to whether total construction costs
should be updated considering the status of costs
incurred against the project budget, andinspected relevant documents supporting their
responses to our inquiries; andinquired of personnel responsible for theselected construction projects of which total
construction costs were updated regarding theirjudgement leading to the update, and traced the
update to approval requests and other relevant
documents.

Additional costs may be incurred if anadverse event, such as failure to achieve
performance, delivery delay, or a material
incident that causes personal injury or
physical damage, occurs due to design orconstruction work issues.

We, therefore, determined that our assessmentof the reasonableness of the estimate of total
construction costs of construction contracts forwhich performance obligations are satisfied
over a certain period of time was of mostsignificance in our audit of the consolidated
financial statements for the current fiscal year,
and accordingly, a key audit matter.

Other Information
The other information comprises the information included in the disclosure documents that contain or
accompany the audited financial statements, but does not include the financial statements and our
auditor’s report thereon.
We do not perform any work on the other information as we determine such information does not exist.
Responsibilities of Management and the Audit and supervisory committee for the Consolidated
Financial Statements
Management is responsible for the preparation and fair presentation of the consolidated financial
statements in accordance with accounting principles generally accepted in Japan, and for such internal
control as management determines is necessary to enable the preparation of consolidated financial
statements that are free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is responsible for assessing the Group’s
ability to continue as a going concern, disclosing, as applicable, matters related to going concern inaccordance with accounting principles generally accepted in Japan and using the going concern basis ofaccounting unless management either intends to liquidate the Group or to cease operations, or has no
realistic alternative but to do so.
The audit and supervisory committee is responsible for overseeing the directors’ performance of theirduties with regard to the design, implementation and maintenance of the Group’s financial reporting
process.
Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements
as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’sreport that includes our opinion. Reasonable assurance is a high level of assurance, but is not aguarantee that an audit conducted in accordance with auditing standards generally accepted in Japan
will always detect a material misstatement when it exists. Misstatements can arise from fraud or error
and are considered material if, individually or in the aggregate, they could reasonably be expected toinfluence the economic decisions of users taken on the basis of these consolidated financial statements.
As part of our audit in accordance with auditing standards generally accepted in Japan, we exercise
professional judgment and maintain professional skepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the consolidated financial statements,
whether due to fraud or error, design and perform audit procedures responsive to those risks, andobtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The riskof not detecting a material misstatement resulting from fraud is higher than for one resulting fromerror, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or theoverride of internal control.

Obtain an understanding of internal control relevant to the audit in order to design audit proceduresthat are appropriate in the circumstances, while the objective of the audit is not to express an
opinion on the effectiveness of the Group’s internal control.



Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.

Conclude on the appropriateness of management’s use of the going concern basis of accounting
and based on the audit evidence obtained, whether a material uncertainty exists related to events orconditions that may cast significant doubt on the Group’s ability to continue as a going concern. If
we conclude that a material uncertainty exists, we are required to draw attention in our auditor’sreport to the related disclosures in the consolidated financial statements or, if such disclosures are
inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to
the date of our auditor’s report. However, future events or conditions may cause the Group tocease to continue as a going concern.



Evaluate whether the presentation and disclosures in the consolidated financial statements are inaccordance with accounting standards generally accepted in Japan, the overall presentation,
structure and content of the consolidated financial statements, including the disclosures, andwhether the consolidated financial statements represent the underlying transactions and events in amanner that achieves fair presentation.

Obtain sufficient appropriate audit evidence regarding the financial information of the entities orbusiness activities within the Group to express an opinion on the consolidated financial statements.
We are responsible for the direction, supervision and performance of the group audit. We remainsolely responsible for our audit opinion.

We communicate with the audit and supervisory committee regarding, among other matters, theplanned scope and timing of the audit, significant audit findings, including any significant deficiencies
in internal control that we identify during our audit.
We also provide corporate auditors and the audit and supervisory committee with a statement that wehave complied with relevant ethical requirements regarding independence, and communicate with them
all relationships and other matters that may reasonably be thought to bear on our independence, andwhere applicable, actions taken to eliminate threats or safeguards applied.
From the matters communicated with corporate auditors and the audit and supervisory committee, we
determine those matters that were of most significance in the audit of the consolidated financial
statements of the current period and are therefore the key audit matters. We describe these matters in
our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in
extremely rare circumstances, we determine that a matter should not be communicated in our reportbecause the adverse consequences of doing so would reasonably be expected to outweigh the public
interest benefits of such communication.
Fee-related Information
Fees paid or payable to our firm and to other firms within the same network as our firm for audit andnon-audit services provided to the Company and its subsidiaries for the current year are 65 million yen
and 4 million yen, respectively.
Convenience Translation
The U.S. dollar amounts in the accompanying consolidated financial statements with respect to the year
ended March 31, 2024 are presented solely for convenience. Our audit also included the translation of
yen amounts into U.S. dollar amounts and, in our opinion, such translation has been made on the basis
described in Note 1 to the consolidated financial statements.
Interest required to be disclosed by the Certified Public Accountants Act of Japan

TAKUMA CO., LTD. and Consolidated Subsidiaries
FINANCIAL HIGHLIGHTS(Years Ended March 31, 2024 and 2023)
Millions of yen
2024
For the year:
Net sales
Operating profit
Ordinary income
Profit before income taxes
Profit attributable to owners of parent
As of year-end:
Total assets
Total net assets
Per share data:
ProfitDiluted profit
Net assets
Cash dividends applicable for the year

¥

2023

149,167
10,229
11,167
12,427
8,754¥

191,180
111,000

142,652
13,814
14,684
14,103
9,622$

179,689
101,168

1,262,665
733,109
U.S. dollars
$
0.72
9.11
0.32

Yen
¥

109.43
1,378.90
48.00¥

Thousands of
U.S. dollars
2024

120.22
1,258.24
43.00

985,186
67,56073,75382,08057,819Note: 1. U.S. dollar amounts are shown solely for the convenience of readers and are translated at the rate of \151.41 to U.S.$1.00,
the exchange rate prevailing as at March 31, 2024.
2. Ordinary income is a measure of accounting profit that equals operating profit plus other income minus other expenses,
except for extraordinary items under the Japanese GAAP.

Consolidated Balance Sheets
TAKUMA CO., LTD. and Consolidated Subsidiaries
As of March 31, 2024 and 2023
Millions of yen
ASSETS
Current assets:
Cash and deposits (Notes 4 and 8)
Notes and accounts receivable
Notes receivable – trade
Accounts receivable – trade
Contract assets
Unconsolidated subsidiaries
and affiliated companies receivable
Other
Allowance for doubtful accounts
Total
Inventories (Note 5)
Other
Total current assets

2024¥

Property, plant and equipment:
Land
Buildings and structures
Machinery, equipment, ｌease assets and construction in progress
Less accumulated depreciation
Total property, plant and equipment
Investments and other assets:
Investment securities (Notes 8 and 9)
Investments in:
Unconsolidated subsidiaries
and affiliated companies
Other
Allowance for doubtful accounts
Total
Deferred tax assets (Note 16)
Net defined benefit asset (Note 12)
Other
Total investments and other assets

Total assets

See accompanying notes.

¥

45,3382023¥

65,243Thousands of
U.S. dollars(Note 1)
2024$

299,436

3,406
28,942
46,2483,175
32,82924,371

22,499191,147
305,448

423
929
(15)
79,933
9,741
4,465
139,477

507
188
(16)
61,054
6,012
1,941
134,250

2,794
6,138
(101)
527,925
64,33229,495921,188

2,611
21,26013,80537,676(18,096)
19,5802,605
19,028
13,68535,318(16,882)
18,436

17,244140,414
91,175
248,833(119,515)
129,318

22,432

16,274

148,154

2,354
3,579
(135)
5,798
2,967
25
901
32,123

2,255
3,872
(136)
5,991
4,160
38
540
27,003

15,546
23,642(893)
38,295
19,597165
5,948
212,159

191,180¥

179,689$

1,262,665

Thousands of
U.S. dollars(Note 1)
2024

Millions of yen
LIABILITIES AND NET ASSETS
Current liabilities:
Short-term loans payable (Notes 8 and 11)
Notes and accounts payable (Note 8):
Trade
Unconsolidated subsidiaries
and affiliated companies
Other
Total
Income taxes payable
Contract liabilities
Provision for product warranties
Provision for loss on construction contracts
Other
Total current liabilities

2024
¥

2023
753

¥

220

$

4,975

43,076

41,078284,495

348
1,745
45,1692,301
10,804
184
1,353
7,638
68,202291
1,623
42,992
3,363
11,059
216
626
8,365
66,841

2,299
11,527298,321
15,19771,353
1,215
8,936
50,448450,445264
11,179535
11,97880,180267
10,980433
11,68078,521

1,741
73,831
3,538
79,110529,555

13,367

13,36788,286

3,886
86,961(3,827)

3,874
82,046(3,917)25,670574,339(25,278)

100,387
9,837
20
137
(40)
9,954
659

95,370
5,227
49
92
(138)
5,230
568

663,01764,973
134
900
(266)
65,741
4,351

111,000

101,168

733,109

Non-current liabilities:
Provision for retirement benefits for directors (and other officers)
Retirement benefit liability (Note 12)
Other
Total non-current liabilities
Total liabilities
Net assets (Note 13):
Share capital
Authorized: 321,840,000 shares
Issued: 83,000,000 shares
Capital surplus
Retained earnings
Treasury shares
2,978,525 shares in 2024 and
3,047,184 shares in 2023
Total shareholders' equity
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Non-controlling interests
Total net assets
Liabilities and net assets

See accompanying notes.

¥

191,180¥

179,689$

1,262,664

Consolidated Statements of Operations
TAKUMA CO., LTD. and Consolidated Subsidiaries
For tｈe years ended Marcｈ 31, 2024 and 2023

Net sales (Note 19)
Cost of sales (Notes 12, 14, 15 and 19)
Gross profit
Selling, general and administrative expenses (Notes 12, 15 and 19)
Operating profit (Note 19)
Otｈer income (expenses):
Interest and dividend income
Interest expenses
Gain on sales of investment securities (Note 9)
Loss on valuation of investment securities
Commitment fees
Loss on investments in investment partnerships
Loss on disposal of non-current assets
Share of profit of entities accounted for using equity method
New factory construction expenses
Disaster recovery cost
Otｈer, net
Otｈer
Otｈerincome
expenses,(expenses),
net
net

¥

Millions of yen
2024
2023
149,167¥
142,652
119,628
111,097
29,53931,555
19,31017,741
10,22913,814

Tｈousands of
U.S. dollars(Note 1)
2024$
985,186
790,092
195,094
127,534
67,560

655
(3)
1,849
(29)
(15)
(13)
181
(524)
(64)
161
2,198

570
(3)
195
(178)
(28)
(27)
(20)
145
(599)
207
289

4,327
(18)
12,209
(187)
(102)
(85)
1,196
(3,463)(421)
1,064
14,520

Profit before income taxes
Income taxes (Note 16):
Current
Deferred
Total income taxes

12,427

14,10382,080

4,277
(723)
3,554

4,412
9
4,421

28,252(4,777)23,475

Profit

8,873

9,682

58,605

119

60

786

Profit attributable to non-controlling interests
in consolidated subsidiaries
Profit attributable to owners of parent

¥

8,754

¥

Yen
Per sｈare:
ProfitDiluted profit
Cash dividends applicable for the year
See accompanying notes.

¥

109.43
48.00

9,622

$

U.S. dollars(Note 1)

Yen¥

120.2243.00

57,819

$

0.72
0.32

Consolidated Statements of Comprehensive Income
TAKUMA CO., LTD. and Consolidated Subsidiaries
For tｈe years ended Marcｈ 31, 2024 and 2023
Thousands of
U.S. dollars(Note 1)
2024

Millions of yen
2024
ProfitOther comprehensive income：
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Total other comprehensive income
Comprehensive income (Note 18)
Comprehensive income attributed to:
Owners of the parent
Non-controlling interests
See accompanying notes.

2023

¥

8,873

¥

4,611
(29)
59
98
4,739
13,612¥

13,478
134

¥

9,682

¥

1,271
(62)
16
82
1,307
10,989¥10,92564$

58,605$30,454
(189)
389
647
31,30189,906$89,020886

Consolidated Statements of Changes in Net Assets
TAKUMA CO., LTD. and Consolidated Subsidiaries
For tｈe years ended Marcｈ 31, 2024 and 2023
Millions of yen

SharecapitalFor the year ended March 31, 2024
Balance at the beginning of the current period
Cash dividends (\48.00 per share)
Profit attributable to owners of parent
Purchase of treasury shares
Disposal of treasury shares
Other changes during the year, net
Balance at the end of the current period

For the year ended March 31, 2023
Balance at the beginning of the current period
Cash dividends (\43.00 per share)
Profit attributable to owners of parent
Change in scope of consolidation
Purchase of treasury shares
Disposal of treasury shares
Other changes during the year, net
Balance at the end of the current period

For the year ended March 31, 2024
Balance at the beginning of the current period
Cash dividends ($0.32 per share)
Profit attributable to owners of parent
Purchase of treasury shares
Disposal of treasury shares
Other changes during the year, net
Balance at the end of the current period

See accompanying notes.

¥

¥

¥

¥

$

$

CapitalsurplusRetainedearnings

13,367 ¥13,367 ¥

3,874
12
3,886

¥

13,367 ¥13,367 ¥

3,872
2
3,874

¥

88,286 $88,286 $25,583
87
25,670$ 541,878(25,358)
57,819$ 574,339¥¥

Treasuryshares

Total
Valuation
DeferredForeign
Remeasure- accumulated
Total
difference on gains and losses currency
ments ofother
Nonshareholders' available-foron
translation
defined comprehensive controlling
equitysale securities
hedgesadjustments benefit plansincomeinterests

82,046 ¥(3,839)8,754
86,961 ¥(3,917)(0)90(3,827)

95,370(3,839)
8,754
(0)
102
¥ 100,387¥

75,508 ¥(2,973)9,622(111)
82,046 ¥(2,765)(1,253)101(3,917)¥¥¥(25,867)(1)
590(25,278)

$

$

¥

49 ¥
(29)
20 ¥

92
45
137

¥

110
(61)
49 ¥

$80
12
92

¥

Thousands of U.S. dollars (Note 1)$ 629,880$ 34,525$
323(25,358)
57,819(1)677
30,448(189)$ 663,017$ 64,973
$
134 $

$,606
294
900

$

89,982(2,973)9,622(111)(1,253)
103
95,370

¥

¥

5,227
4,610
9,837

¥

3,957
1,270
5,227

¥

¥

¥

¥

¥

$

(138)
98
(40)

¥

(220)
82
(138)

¥

(913)
647
(266)

$

¥

¥

$

5,230
4,724
9,954

¥

3,927
1,303
5,230

¥

34,541
31,20065,741

$

¥

¥

$

Total
net
assets

568
91
659

¥

446
122
568

¥

3,750
601
4,351

$

¥

¥

$

101,168(3,839)
8,754
(0)
102
4,815
111,000

94,355(2,973)9,622(111)(1,253)
103
1,425
101,168

668,171(25,358)
57,819(1)677
31,801
733,109

Consolidated Statements of Cash Flows
TAKUMA CO., LTD. and Consolidated Subsidiaries
For tｈe years ended Marcｈ 31, 2024 and 2023
Millions of yen
2024
Cash flows from operating activities:
Profit before income taxes
Adjustments to reconcile profit before income taxes
to net cash provided by (used in) operating activities:
Depreciation
Loss (gain) on sale of investment securities
Loss (gain) on valuation of investment securities
Loss (gain) on disposal of non-current assets
Increase (decrease) in provision for bonuses
Increase (decrease) in provision for loss on construction contracts
Increase (decrease) in retirement benefit liability
Interest and dividend income
Interest expenses
Share of loss (profit) of entities accounted for using equity method
Decrease (increase) in trade receivables
Decrease (increase) in inventories
Decrease (increase) in other current assets
Increase (decrease) in trade payables
Increase (decrease) in other current liabilities
Other
SubtotalInterest and dividends received
Interest paid
Income taxes refund (paid)
Net cash provided by (used in) operating activities¥

12,4272023¥

14,103Thousands of
U.S. dollars(Note 1)
2024$

82,0801,797(1,849)
13
582
728
340
(655)
3
(181)
(18,419)(3,729)(2,892)
4,521(1,261)
1,049(7,526)705(3)(5,399)(12,223)

1,136
(195)
178
20
413
(891)
306
(570)
3
(145)
23,796(1,380)701(10,990)
2,618
2,228
31,331619(3)245
32,192

11,872(12,209)
85
3,842
4,804
2,241
(4,327)18(1,196)(121,648)(24,626)(19,100)
29,858(8,329)6,929(49,706)
4,653(18)(35,655)(80,726)

Cash flows from investing activities:
Net decrease (increase) in time deposits
Purchase of property, plant and equipment
Sale of property, plant and equipment
Purchase of intangible assets
Purchase of investment securities
Proceeds from sale of investment securities
Collection of loans receivable
Other
Net cash provided by (used in) investing activities(4,042)(5,011)
1
(500)
(593)
2,358
30
(682)
(8,439)411(5,809)
99
(101)
(323)
390
51
(323)
(5,605)(26,694)(33,094)7(3,302)(3,917)
15,571
202(4,507)(55,734)

Cash flows from financing activities:
Net increase (decrease) in short-term borrowings
Repayments of long-term borrowings
Purchase of treasury shares
Dividends paid
Dividends paid to non-controlling interests
Other
Net cash provided by (used in) financing activities533
0(3,839)(78)
4(3,380)(80)(1,253)(2,973)(32)
57(4,281)3,522(1)(25,358)(516)
31(22,322)

Effect of exchange rate change on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of period
Increase (decrease) in cash and cash equivalents resulting from change in scope of consolidation
Cash and cash equivalents at the end of period (Note 4)

68(23,974)
63,91239,93817
22,323
41,244345
63,912447(158,335)
422,111
263,776

See accompanying notes.

¥

¥

$

Notes to Consolidated Financial Statements

TAKUMA CO., LTD. and Consolidated Subsidiaries

1. Basis of presenting financial statements
The accompanying consolidated financial statements have been prepared in accordance with the provisions set forth in theJapanese Financial Instruments and Exchange Law and its related accounting regulations and in conformity with accounting
principles generally accepted in Japan, which are different in certain respects as to application and disclosure requirements fromInternational Financial Reporting Standards.
The accounts of overseas subsidiaries are based on their accounting records maintained in conformity with generally accepted
accounting principles prevailing in the respective countries of domicile. However, necessary adjustments are made upon
consolidation. The accompanying consolidated financial statements have been restructured and translated into English from theconsolidated financial statements of TAKUMA CO., LTD. (the “Company”) prepared in accordance with Japanese GAAP and
filed with the appropriate Local Finance Bureau of the Ministry of Finance as required by the Japanese Financial Instruments
and Exchange Law. Some supplementary information included in the statutory Japanese language consolidated financial
statements, but not required for fair presentation, is not presented in the accompanying consolidated financial statements.
The translations of the Japanese yen amounts into U.S. dollar amounts are included solely for the convenience of readers outside
Japan, using the prevailing exchange rate as at March 31, 2024, which was ¥151.41 to U.S.$1.00. The translations should not be
construed as representations that the Japanese yen amounts have been, could have been or could in the future be converted into
U.S. dollars at this or any other rate of exchange.

2. Summary of significant accounting policies(1) Principles of consolidation
The consolidated financial statements include the accounts of the Company and its 41 significant subsidiaries (the “Companies”).
Osakachuo High Trust Co., Ltd., Ashikaga High Trust Co., Ltd., Shiroishi High Trust Co., Ltd., and Amagasaki High Trust Co.,
Ltd. which were newly established subsidiaries, have also been included in the consolidation from the consolidated fiscal year
ended March 31, 2024. All significant intercompany transactions and unrealized profits among the Companies have been
eliminated in consolidation. Investments in certain significant affiliates over which the Company and/or its subsidiaries are able
to exert influence to a material degree with regard to financial and operating decision making, other than consolidated
subsidiaries, are accounted for by the equity method after the elimination of unrealized intercompany profits.
Investments in the remaining unconsolidated subsidiaries and affiliated companies are not accounted for by the equity method
because of the immaterial effect on the consolidated financial statements. Therefore, such investments are carried at cost,adjusted for any substantial and non-recoverable decline in value. Income from those unconsolidated subsidiaries and affiliatedcompanies is recognized only when the Companies receive dividends therefrom.
(2) Foreign currency translation
Revenue and expense are translated at the rates of exchange prevailing on the transaction date. Assets and liabilities denominatedin foreign currencies are generally translated at the rate of exchange prevailing at the balance sheet date, and the resulting
translation gains and losses are included in earnings.
The financial statements of a consolidated overseas subsidiary are translated into Japanese yen at the year-end rate, except thatnet asset accounts are translated at historical rates and income statement items resulting from transactions with the Company aretranslated at rates used by the Company. The resulting translation adjustments are shown as “Foreign currency translation
adjustment,” a separate component of net assets.
(3) Cash and cash equivalents
In preparing the consolidated statements of cash flows, cash and cash equivalents include cash on hand, readily available deposits
and short-term investments with maturities not exceeding three months from the date of acquisition and which have high liquidity
and low risk of price fluctuation.
(4) Securities
Equity securities issued by subsidiaries and affiliated companies which are not consolidated or accounted for using the equity
method are stated at cost determined by moving average cost. Available-for-sale securities with available fair market value arestated at fair market value, and unrealized gains and losses on these securities are reported net of applicable income taxes as aseparate component of net assets. Realized gains and losses on the sale of such securities are computed at cost using moving
average cost. Available-for-sale securities with no available fair market value are stated at cost determined by moving average
cost.
If the market value of equity securities issued by unconsolidated subsidiaries and affiliated companies or available-for-salesecurities declines significantly, such securities are stated at fair market value and the difference between fair market value andthe carrying amount is recognized as a loss in the period of the decline. If the fair market value of such securities is not readily
available, such securities should be written down to the net asset value with a corresponding charge in the income statement in
the event the net asset value declines significantly. In these cases, the fair market value or the net asset value will be the carrying
amount of the securities at the beginning of the next year.

(5) Allowance for doubtful accounts
The Companies provide an allowance for doubtful accounts by estimating the uncollectible amounts of certain individual accounts
and by applying a percentage based on collection experience to the remaining receivables.
(6) Inventories
Merchandise and finished goods are stated at cost using the moving average method. Work-in-process is stated at cost
determined by the identified cost method. Materials and supplies are stated at cost using the average method. For theseinventories, the carrying amounts on the balance sheet are written down to reflect decreases in profitability.
(7) Property, plant and equipment
Property, plant and equipment are depreciated principally using the declining balance method over the estimated useful life of theasset. However, buildings acquired after March 31, 1998 and facilities attached to buildings and structures acquired after March
31, 2016 are depreciated using the straight-line method. The range of useful lives is principally from 3 to 60 years for buildings
and structures and from 2 to 20 years for machinery, equipment and other. Maintenance and repairs, including minor renewals
and improvements, are charged to income as incurred.
Lease assets under finance leases in which the ownership of the lease assets is not transferred to the lessee are depreciated using
the straight-line method over the lease term with an assumption of no residual value.
(8) Provision for loss on construction contracts
For sales orders on hand at the balance sheet date for projects in which the estimated cost is expected to exceed the price of theorder by a wide margin, a provision for loss on construction contracts is recognized at the estimated aggregate amount.
(9) Provision for product warranties
Provision for product warranties is based on estimated amounts of expenditure in the warranty period after products aredelivered.
(10) Provision for retirement benefits for directors (and other officers)
Directors are generally entitled to receive retirement benefits based on the Companies’ internal rules. The Companies provide anallowance for directors’ retirement benefits based on the amount that would be required if all directors retired at the balance sheet
date.
(11) Retirement benefit liability
In calculating retirement benefit obligations, the method of attributing expected benefits to periods employs principally a benefit
formula basis. Actuarial gains and losses are recognized in expenses using the straight-line method principally over 10 years
commencing with the following period. Prior service costs are recognized in expenses using the straight-line method principallyover 10 years.
(12) Revenue recognition
For construction contracts, that met one of the following criteria, it is determined that the performance obligations in suchcontracts are satisfied over time. The progress rate for fulfillment of the performance obligation is estimated and revenue isrecognized based on the progress rate over time.
I. By fulfilling the obligations in the contract with the customer, the asset arises or the value of the asset increases, and thecustomer obtains control of the asset as the asset arises or the value of the asset increases,
II. By fulfilling obligations in a contract with a customer, the asset that cannot be diverted to another use arises, and also thecompany has the enforceable right to receive compensation for the portion of the contract with the customer that has fulfilled
its obligations.
Estimates of the progress is measured on the basis of the construction costs incurred by the end of each reporting period, relative
to the total expected construction costs. However, adopting alternative treatment, for construction contracts for which the period
from the commencement date of the contract to the date when it is expected that the performance obligation will be fully satisfied
is very short, revenue is not recognized over a certain period of time, and revenue is recognized at the time the performanceobligation is judged to be satisfied. Incidentally, the consideration for the transaction is mainly received in stages during thecontract period separately from the fulfillment of the performance obligation, and the remaining amount is received withinapproximately one year after all the performance obligations are satisfied, and the important financial factor is not included.
For Operation control and O&M contracts, the customer receives the benefits as we fulfill the obligations in the contract with thecustomer, therefore it is determined that the performance obligations in such contracts are satisfied over time. Since we have theright to receive from the customer the amount of consideration that directly corresponds to the value to the customer for the
portion that has been fulfilled so far, we recognize the revenue by the amount that we have the right to claim.
Incidentally, the consideration for the transaction is received within approximately one year after the performance obligation issatisfied, and does not include important financial factors.

(13) Income taxes
The Companies are subject to corporation tax, inhabitant tax and enterprise tax based on taxable income. The Companies
recognize the tax effects of the temporary differences between the carrying amounts of assets and liabilities for tax and financial
reporting. The provision for income taxes is computed based on the pretax income of each of the Companies, with certain
required adjustments. The asset-liability approach is used to recognize deferred tax assets and liabilities for the expected future
tax consequences of temporary differences.
The Companies have adopted the group taxation system.

(14) Net income and cash dividends per share
Net income per share is computed based on the weighted average number of shares of share capital outstanding during eachperiod. Diluted net income per share is computed with the assumption that all convertible bonds were converted into share capitalat the beginning of each period. Cash dividends per share represent interim dividends declared by the Board of Directors during
each year and year-end dividends approved by the shareholders at the annual meeting held subsequent to the end of the fiscal
year.
(15) Derivatives and hedge accounting
The Companies generally state derivative financial instruments at fair value and recognize changes in the fair value as gains orlosses unless the derivative financial instruments are used for hedging purposes. If derivative financial instruments are used ashedges and meet certain hedging criteria, the Companies generally defer recognition of gain or loss resulting from a change in thefair value of the derivative financial instrument until the related loss or gain on the hedged item is recognized.
The Companies use currency forward contracts to hedge accounts receivable and payable denominated in foreign currencies(mainly U.S. dollars) against the risk of fluctuation in exchange rates that comes from foreign currency transactions.
Certain foreign exchange contracts are subject to appropriation if they satisfy the requirements of appropriation treatment.
Interest rate swaps that qualify for hedge accounting and meet specific matching criteria are not re-measured at market value.
(16) Amortization of goodwill
Goodwill is amortized evenly over the reasonably estimated effective duration recognized. However, when de-minimis, it ischarged in full during the fiscal year it arose.
(17) Reclassifications
Certain prior year amounts have been reclassified to conform to the 2024 presentation.

3.Significant accounting estimates(Net sales where the performance obligations in construction contracts are satisfied over a certain period of time and provision
for loss on construction contracts)(1) Carrying amounts in the current year’s financial statements
Net sales where the performance obligations in construction contracts are satisfied over a certain period amounted to ¥ 45,183
million ($ 298,416 thousand) for the year ended March 31, 2024 and amounted to ¥ 30,977 million for the year ended March 31,
2023.
Provision for loss on construction contracts amounted to ¥ 1,353 million ($ 8,936 thousand) for the year ended March 31, 2024
and amounted to ¥ 626 million for the year ended March 31, 2023.
(2) Information on the nature of significant accounting estimates for identified items
The performance obligations in such construction contracts are satisfied over time; therefore revenue in The Takuma Group isrecognized based on the progress towards complete satisfaction of the performance obligation. Estimates of the progress ismeasured on the basis of the construction costs incurred by the end of each reporting period relative to the total expected
construction costs. In addition, in order to prepare for the loss of order construction, the estimated amount of construction costs
generated significantly exceeds the order amount. Excess amounts that are expected to occur after the consolidated fiscal year arerecorded as provision for loss on construction contracts.
In calculating the estimated cost of construction, information and conditions available as of the end of the current consolidated
fiscal year for each individual project (materials and equipment, construction prices, labor costs, specifications, construction
methods, etc.) are the basis for calculation.
However, after-sales service for various construction and delivery plants provided by the Group, the specifications, and someperiods from order to delivery and service delivery are long-term. Therefore, changes in the basis of calculations due toconstruction issues and changes in economic conditions will have a significant impact on consolidated financial statements forthe next consolidated fiscal year.

(Deferred tax assets)(1) Carrying amounts in the current year’s financial statements
Deferred tax assets amounted to ¥ 2,967 million ($ 19,597 thousand) for the year ended March 31, 2024 and ¥ 4,160 million forthe year ended March 31, 2023.
(2) Information on the nature of significant accounting estimates for identified items
The Takuma Group reasonably estimates future taxable income based on business plans for deferred tax assets and the amountthat is expected to be recoverable.
Each group company determines the classification based on accounting standards, and the expected recoverable amounts is
calculated based on future taxation within a reasonably estimated period according to the classification and the scheduling ofincome and one-time difference in future subtraction.
However, due to changes in the business environment because of a decrease in demand, etc., the estimated period based on theclassification and the estimated amount of future taxable income and deferred tax assets will be increased or reduced, which will
have a material impact on the consolidated financial statements for the next consolidated fiscal year.

4. Cash and cash equivalents
Amounts of cash and cash equivalents as of March 31, 2024 and 2023 were reconciled with cash and deposits as follows:
Millions of yen

Cash and deposits
Time deposits with maturities exceeding three months
from the date of acquisition
Total cash and cash equivalents¥

2024
45,338¥(5,400)39,938

Thousands of U.S. dollars

2023¥ 65,243

2024$ 299,436(1,331)
63,912(35,660)$ 263,776¥

5. Inventories
Inventories were summarized as follows:
Millions of yen

Merchandise and finished goods
Work-in-process
Materials and supplies
Total inventories

2024
1,004
6,296
2,441
¥
9,741
¥

Thousands of U.S. dollars

2023
¥
840
3,247
1,925
¥
6,012

2024
6,631
41,582
16,119$ 64,332$

6. Notes maturing on the balance sheet date
The Company settles notes maturing on the balance sheet date based on the actual exchange date.
As March 31, 2024 was a bank holiday, the following notes maturing on the balance sheet date were included in each account on the consolidated balance sheet date:Millions of yen

2024
Notes receivable
Notes and accounts payable

¥

253
3,370

Thousands of U.S. dollars

2023
¥

-

$

2024
1,673
22,257

7. Inventories and provision for loss on construction contracts
Work-in-process related to construction contracts assumed to incur loss on construction contracts are not net out but presented in gross.
Of these, the amount correspondoing to provision for loss on construction contracts is as follows:
Millions of yen

Thousands of U.S. dollars

2024
Work-in-process

¥

475

2023
¥

3

$

2024
3,136

8．Ｆｉｎａｎｃｉａｌ instruments(1) Status of financial instruments(a) Financial instruments policy
Under the Group's policy, investments in financial instruments are limited primarily to short-term deposits and bank loans for raising funds. Derivative transactions are used to hedge risksof fluctuations in foreign exchange and interest rates and the Companies do not conduct speculative transactions.
(b) Financial instruments, risks and risk management structure
The Companies are working to reduce customer credit risk associated with notes and accounts receivable and contract assets through customer based due dates and other balance controls
in accordance with the Companies' regulations. Investment securities consist mainly comprise stocks and are periodically checked for the fair value of the listed shares.
Notes and accounts payables, or operating payables, are due within one year.
Short-term loans payable is primarily for operating funds, while long-term borrowings are for capital investment.

To cope with operating payables and loans exposed to liquidity risk, each Group company prepares monthly cash flow plans and enters into loan commitment agreements with several
financial institutions for raising working capital flexibly and stably.
(c) Supplementary remarks on fair values of financial instruments
The fair values of financial instruments do not reflect the market risks concerning the derivative trading.
(2) Fair value of financial instruments
Amounts recognized on the consolidated balance sheets, fair values and any differences between them as of March 31, 2024 and 2023, except items for which no fair value was obtainable,
were as follows:
The following summary excludes cash, and deposits, notes and accounts receivable – trade, notes and accounts payable, income taxes payable and short-term loans payable are not included
because the fair values of these instruments approximate their carrying amounts as they are expected to be settled shortly.
（Investment securities）
Millions of yen

Amounts recognized on the consolidated balance sheets
Fair value
Difference2024
22,16022,160¥-¥Thousands of U.S. dollars

2023¥ 16,110
16,110¥-2024$ 146,354
146,354$-

Equity securities without market price are not included in (Investment securities).
(Non-listed equity securities)
Millions of yen

Amounts recognized on the consolidated balance sheets
Equity securities
Investments in investment partnerships

2024
¥
2,299
108

(Derivative transactions)
Derivative transactions recorded in other assets and liabilities are presented as a lump sum.
Net claims and debts that arise from derivative transactions are presented on a net basis.

Millions of yen

2024
Amounts recognized on the consolidated balance sheets
Fair value
Difference

Thousands of U.S. dollars

2023
¥
2,170
-

¥
¥

29
29
-

$

2024
15,187715

Thousands of U.S. dollars

2023
¥
¥

2024
70
70
-

$
$

193
193
-

(3) Redemption schedule of monetary assets with contractual maturities and repayment schedule of short-term loans payable and long-term borrowings
As of March 31, 2024
Millions of yen
Less than 1 year

Cash and deposits
Notes receivable
Accounts receivable¥

45,3383,407
29,325

1 to 2 years¥

2 to 3 years-¥

3 to 4 years-¥

4 to 5 years-¥

More than 5 years

-

¥

-

Investment securities
Total

¥

78,070

¥

-

¥

-

¥

-

¥

-

¥

800
800

Short-term loans payable
Total

¥
¥

753
753

¥
¥

-

¥
¥

-

¥
¥

-

¥
¥

-

¥
¥

-

As of March 31, 2023
Millions of yen
Less than 1 year

65,243
3,175
33,305

1 to 2 years

Cash and deposits
Notes receivable
Accounts receivable¥

Investment securities
Total¥ 101,723¥

Short-term loans payable
Total

¥
¥

¥
¥

220
220

¥

2 to 3 years-¥

3 to 4 years

-

-

¥

¥

-

¥
¥

-

$

4 to 5 years

-

¥

¥

-

¥
¥

-

More than 5 years

-

¥

-

¥

-

¥

800
800

¥
¥

-

¥
¥

-

As of March 31, 2024
Thousands of U.S. dollars
Less than 1 year

1 to 2 years

3 to 4 years$ 299,436
22,499193,682

Investment securities
Total$ 515,617

$

-

$

-

$

Short-term loans payable
Total

$
$

$
$

-

$
$

-

$
$

4,975
4,975

$

2 to 3 years

Cash and deposits
Notes receivable
Accounts receivable-$

4 to 5 years

-

$

-

More than 5 years

-

$

-

$

-

$

5,284
5,284

$
$

-

$
$

-

(4) Fair value information of financial instruments by level of inputs
Based on the observability and significance of inputs used to determine fair values, fair value information of financial instruments is presented by categorizing measurements into the following
three levels:
Level 1 fair value: the fair value is measured by quoted prices of identical assets or liabilities in active markets.
Level 2 fair value: the fair value is measured using observable inputs other than Level 1.
Level 3 fair value: the fair value is measured using unobservable inputs.
When multiple inputs of different categories are used in measuring the fair value, the Company and its subsidiaries classifiy fair values into a category to which the lowest priority is assigned.
(a) financial instruments measured at fair values in the consolidated balance sheet
As of March 31, 2024
Millions of yen
Level 1

Investment securities
Other investments in securities
Equity securities
Corporate bonds
Derivative transactions
Currency related
Total assets¥¥

21,36921,369Level 2¥¥

Level 3

791

¥

29
820

¥

Total

-

¥

¥

21,369791
29
22,189As of March 31, 2023
Millions of yen
Level 1

Investment securities
Other investments in securities
Equity securities
Corporate bonds
Derivative transactions
Currency related
Total assets¥¥

15,322
15,322

Level 2¥¥

Level 3

788

¥

70
858

¥

Total

-

¥

¥

15,322788
70
16,180

As of March 31, 2024
Thousands of U.S. dollars
Level 1

Investment securities
Other investments in securities
Equity securities
Corporate bonds
Derivative transactions
Currency related
Total assets$ 141,133$ 141,133

Level 2

$

$

5,222
193
5,415

Level 3

$

$

Total

-

$ 141,133
5,222

-

193
$ 146,548(b) Financial instruments other than those measured at fair values in the consolidated balance sheet
Not appliciable(Note) Valuation techniques and inputs used in measuring fair values
Investments in securities classified as current or non-current
Listed equity securities and corporate bonds are measured using quoted prices. The fair value of listed equity securities are classified as level 1, because they are exchanged in active
markets. The fair value of corporate bonds are classified as level 2, because their quoted prices are not considered to be a quoted price in active markets due to their low frequency oftransactions.
Derivative transactions
Derivatives are classified as Level 2, as they are measured at fair value using observable market inputs obtained from financial institutions.

9. Securities(1) Acquisition costs and book values of available-for-sale securities with available fair values as of March 31, 2024 and 2023 were as follows:
As of March 31, 2024
Securities with book values exceeding acquisition costs：
Equity securities
Subtotal
Securities with book values not exceeding acquisition costs：
Equity securities
Debt securities
Subtotal
Total

Acquisition cost

As of March 31, 2023
Securities with book values exceeding acquisition costs：
Equity securities
Subtotal
Securities with book values not exceeding acquisition costs：
Equity securities
Debt securities
Subtotal
Total

Acquisition cost

As of March 31, 2024
Securities with book values exceeding acquisition costs：
Equity securities
Subtotal
Securities with book values not exceeding acquisition costs：
Equity securities
Debt securities
Subtotal
Total

Acquisition cost

¥

¥

¥

¥

$

$

Millions of yen
Book value

7,108
7,108

¥

65
829
894
8,002

¥

21,30821,30861
791
852
22,160Millions of yen
Book value

7,216
7,216

¥

531
829
1,360
8,576

¥

14,866
14,866
456
788
1,244
16,110Thousands of U.S. dollars
Book value

46,947
46,947$ 140,732
140,732

431
5,470
5,901
52,848

400
5,222
5,622
$ 146,354

Difference¥¥

14,20014,200
(4)
(38)
(42)
14,158Difference
¥

¥

7,650
7,650
(75)
(41)
(116)
7,534

Difference$$

93,78593,785
(31)
(248)
(279)
93,506(2) Available-for-sale securities sold for the years ended March 31, 2024 and 2023 were as follows:
Millions of yen

Total sales amount
Gains

¥

2024
2,884
1,849

Thousands of U.S. dollars

2023
¥
390
195

¥

2024
19,045
12,209

10. Pledged assets
The following assets were pledged to secure short-term loans payable, long-term borrowings, and ｃontingent liabilities under guarantees for bank loans of affiliated companies and fulfillmentof contracts as of March 31, 2024 and 2023:
Millions of yen

2024
Time deposits as construction contract guarantees
Total

¥
¥

80
80

Thousands of U.S. dollars

2023
¥
¥

2024
83
83

$
$

531
531

11. Short-term loans payable and long-term borrowings
Short-term loans payable as of March 31, 2024 and 2023 were as follows:
Millions of yen

2024
SecuredUnsecured

¥

753
753

¥

Thousands of U.S. dollars

2023
¥
¥

2024
220
220

The annual average interest rates applicable for bank loans as at March 31, 2024 and 2023 were as follows:
2024
Short-term loans payable
Current portion of long-term borrowings

2023
0.9%
-

1.1%
1.0%

$
$

4,975
4,975

12. Employees' retirement benefits(1) Outline of adopted retirement benefit scheme
The Company and a part of consolidated subsidiaries provide three types of post-employment benefit plans, unfunded lump sum payment plans, funded non-contributory pension plans anddefined contribution plans. A part of consolidated subsidiaries which provide funded non-contributory pension plans and unfunded lump sum payment plans, calculate retirement benefit
liability and retirement benefit costs by applying the simplified method.
(2) Defined benefit plans
Movements in retirement benefit obligations (except plans applying the simplified method) for the years ended March 31, 2024 and 2023 were as follows:
Millions of yen

Balance as at April 1, 2024 and 2023
Service cost
Interest cost
Actuarial loss (gain)
Benefits paid
Balance as at March 31, 2024 and 2023

2024
¥ 10,197
664
56
(73)
(483)
¥ 10,361

Thousands of U.S. dollars

2023¥ 10,026
657
55
(8)
(533)
¥ 10,197

2024
67,344
4,384
368
(483)
(3,185)$ 68,428$

Movement in retirement benefit liability of plans applying the simplified method for the years ended March 31, 2024 and 2023 was as follows:
Millions of yen

2024
Balance as at April 1, 2024 and 2023
Retirement benefit costs
Contributions paid by the employer
Benefits paid
Other
Balance as at March 31, 2024 and 2023

¥

746
124
(25)
(51)
(1)
793

¥

Thousands of U.S. dollars

2023
¥
726
114
(29)
(46)
(19)
¥
746

2024
4,926
820
(163)
(337)
(9)
$
5,237
$

Reconciliation from retirement benefit obligations and plan assets to retirement benefit liability as of March 31, 2024 and 2023 was as follows:
Millions of yen

2024

Thousands of U.S. dollars

Unfunded retirement benefit obligations
Total retirement benefit liability (asset) as at March 31, 2024 and 2023

632
(421)
211
10,943
11,154

2023
¥
629
(435)
194
10,74910,943Retirement benefit liability
Net defined benefit asset
Total retirement benefit liability (asset) as at March 31, 2024 and 2023

11,179(25)
11,154

10,980(37)
10,943Funded retirement benefit obligations
Plan assets

¥

¥

¥

$

$

2024
4,172
(2,780)1,392
72,27373,66573,831(166)
73,665(Note)Including plans applying the simplified method
Retirement benefit costs for the years ended March 31, 2024 and 2023 were as follows:
Millions of yen

2024
Service cost
Interest cost
Amortization of actuarial differences
Retirement benefit costs based on the simplified method
Total retirement benefit costs for the fiscal years ended March 31, 2024 and 2023

¥

664
56
68
124
912

¥

Thousands of U.S. dollars

2023
¥
657
55
109
114
¥
935

2024
4,384
368
449
820
$
6,021
$

Remeasurements of defined benefit plans for the years ended March 31, 2024 and 2023 were as follows:
Millions of yen

2024
Actuarial gains and losses
Total ｒemeasurements of defined benefit plans for the fiscal years ended
March 31, 2024 and 2023

Thousands of U.S. dollars

¥

141

2023
¥
118

¥

141

¥

118

2024
$

932

$

932

Accumulated ｒemeasurements of defined benefit plans as of March 31, 2024 and 2023 were as follows:
Millions of yen

Thousands of U.S. dollars

2024
Actuarial gains and losses yet to be recognized
Total balance as at March 31, 2024 and 2023

¥
¥

2023
(58)
(58)

¥
¥

(199)
(199)

2024
$
(383)
$
(383)

The principal actuarial assumptions as at March 31, 2024 and 2023 were as follows:
Discount rate
Expected rate of salary increase2024
principally 0.64%
principally 5.5%

2023
principally 0.64%
principally 5.3%

(3) Defined contribution plan
The amount of contribution required for the defined contribution plans of the Companies for the years ended March 31, 2024 and 2023 was \151 million ($994 thousand) and \152 million,
respectively.

13. Net assets
Under Japanese laws and regulations, the entire amount paid for new shares is required to be designated as share capital. However, a company may, by a resolution of the Board of
Directors, designate an amount not exceeding one half of the price of the new shares as additional paid-in capital, which is included in capital surplus.
Under the Japanese Corporate Law (the “Law”), in cases where a dividend distribution of surplus is made, the smaller of an amount equal to 10% of the dividend or the excess, if any, of 25%
of share capital over the total of additional paid-in capital and legal earnings reserve must be set aside as additional paid-in capital or legal earnings reserve. The legal earnings reserve is
included in retained earnings in the accompanying consolidated balance sheets.
Under the Law, legal earnings reserve and additional paid-in capital can be used to eliminate or reduce a deficit or be capitalized by a resolution of the shareholders' meeting.
Additional paid-in capital and legal earnings reserve may not be distributed as dividends. Under the Law, all additional paid-in capital and legal earnings reserve may be transferred to othercapital surplus and retained earnings, respectively, which are potentially available for dividends.
The maximum amount that the Company can distribute as dividends is calculated based on the nonconsolidated financial statements of the Company in accordance with Japanese laws andregulations.
The appropriation of retained earnings with respect to a given financial year is made by resolution of the shareholders at a general meeting held subsequent to the close of the financial year.
Therefore, the accounts for that year do not reflect such appropriations.

14. Provision for losses on construction contracts
Provision for losses on construction contracts included in cost of sales for the years ended March 31, 2024 and 2023 was as follows:
Millions of yen

2024¥

Thousands of U.S. dollars

2023
¥

869

30

$

2024
5,741

15. Research and development expenses
Research and development expenses are charged to income as incurred. Such expenses included in cost of sales and selling, and general and administrative expenses for the years ended
March 31, 2024 and 2023 were as follows:
Millions of yen

¥

2024
1,630

Thousands of U.S. dollars

2023
¥
1,151

$

2024
10,765

16. Income taxes
Components of the Companies' deferred tax assets and liabilities as of March 31, 2024 and 2023 were as follows:
Millions of yen

2024
Deferred tax assets:
Retirement benefit liability
Accrued cost of sales
Provision for bonuses
Unrealized income on non-current assets
Contract assets
Loss on valuation of inventories
Provision for loss on construction contracts
Other
Deferred tax assets – subtotal
Valuation reserves
Total deferred tax assets
Deferred tax liabilities:
Valuation difference on available-for-sale securities
Other
Total deferred tax liabilities
Net deferred tax assets

¥

¥
¥
¥

Thousands of U.S. dollars

2023

3,444
2,028
1,348
677
533
274
423
1,814
10,541(3,032)
7,509¥(4,299)(376)(4,675)
2,834

¥

¥

¥

2024

3,384
2,420
1,169
672
268
200
1,642
9,755
(2,991)
6,764$

22,745
13,394
8,900
4,474
3,519
1,809
2,793
11,984
69,618(20,023)$ 49,595(2,292)(328)(2,620)4,144$(28,395)(2,481)(30,876)$ 18,719

The significant differences between the statutory tax rate and the Companies' effective tax rate for financial statement purposes were set forth in the table below.
There was no significant difference between the normal effective statutory tax rates and effective tax rates reflected in the accompanying consolidated income statements for the year ended
March 31, 2023.
2024
Statutory tax rate

30.6%

Nondeductible expenses
Dividend income
Share of profit of entities accounted for using equity method
Council tax on per capita basis
Tax credits
Valuation allowance
Other
The Companies' effective tax rate

1.1
(0.4)
(0.4)
0.6
(3.4)
0.3
0.2
28.6%

Accounting for corporation tax and local corporation tax and tax effect accounting
The Company and some of its domestic consolidated subsidiaries have adopted the group tax sharing system. In addition, corporation tax and local corporation tax, as well as their tax
effects, are accounted for and disclosed under Practical Solution on the Accounting and Disclosure under the Group Tax Sharing System (PITF No.42, August 12, 2021).

17. Revenue
Disaggregated revenue by business unit was as follows:
As of March 31, 2024

Millions of yen

Reportable segments
Domestic Environment and Energy Business
Municipal Solid Waste
Plants
78,956

Net sales

Energy Plants

Other28,830Subtotal
11,101

As of March 31, 2023

Overseas
Environment andEnergy Business

Package Boiler
Business

Equipment
andSystem Business

2,405

18,441

9,434

Overseas
Environment andEnergy Business

Package Boiler
Business

Equipment
andSystem Business

1,327

17,286

8,345

Overseas
Environment andEnergy Business

Package Boiler
Business

Equipment
andSystem Business

15,887

121,79362,309118,887

Total

149,167

Millions of yen

Reportable segments
Domestic Environment and Energy Business
Municipal Solid Waste
Plants70,027

Net sales

Energy Plants

Other

33,551

Subtotal
12,116

As of March 31, 2024

115,694

Total

142,652

Thousands of U.S. dollars

Reportable segments
Domestic Environment and Energy Business
Municipal Solid Waste
Plants
Net sales

521,474

Energy Plants

Other

190,406

Subtotal
73,317785,197

Total

985,186

Information about the relationship between the fulfillment of performance obligations based on the contract with the customer and cash flow generated from the contract, and the amount andtiming of revenue expected to be recognized from the contract with the customer existing at the end of the current consolidated fiscal year after the next consolidated fiscal year.
(1) Balance of contract assets and contract liabilities, etc.
Millions of yen

Receivables arising from contracts with customers（balance at the beginning of the period）
Receivables arising from contracts with customers（balance at the end of the period）
Contract assets（balance at the beginning of the period）
Contract assets（balance at the end of the period）
Contract liabilities（balance at the beginning of the period）
Contract liabilities（balance at the end of the period）¥

2024
36,48032,732
24,371
46,248
11,05910,804

Thousands of U.S. dollars

2023¥ 33,916
36,48048,18524,371
8,669
11,0592024$ 240,936
216,181
160,962
305,448
73,042
71,353Contract assets comprise of the rights to receive consideration in exchange for the fulfilled portion of contractual obligations, which is measured based on the progress of such obligations forconstruction contracts at the end of the reporting period, and when they become unconditional, the rights to the consideration are transferred to receivables arising from contracts withcustomers.
Contract liabilities are advances received from customers for construction contracts, which are used for expenditures as revenue is recognized.
The revenue recognized at the current consolidated fiscal year, which was included in contract liabilities at the beginning of the years ended March 31,2024 and 2023 was ¥8,766 million($57,893 thousand) and ¥6,551 million, respectively.
Further, the amount of revenue recognized from performance obligations fulfilled in the previous periods is not material for the current fiscal year.
(2) Transaction price allocated to the remaining performance obligation
The aggregate amounts of the transaction price allocated to the performance obligations that were not fulfilled (or partially not fulfilled) were ¥460,023 million ($3,038,262 thousand) and ¥447,646 million for the years ended March 31,2024 and 2023, respectively. These performance obligations were related to construction, operational control and O&M contracts in theDomestic Environment and Energy Business and are expected to be recognized as revenue within approximately 5 years in construction contracts and 20 years in operational control andO&M contracts.
There is no significant variable consideration which is not included in transaction price in the amount of consideration from contracts with customers.

18. Comprehensive income
Amounts reclassified to net income in the current period that were recognized in other comprehensive income in the current or previous periods and the tax effects for each component ofother comprehensive income were as follows:
Millions of yen

2024
Valuation difference on available-for-sale securities
Increase (decrease) during the year
Reclassification adjustments
Subtotal, before tax
Tax (expense) or benefit
Subtotal, net of tax
Deferred gains or losses on hedges
Increase (decrease) during the year
Reclassification adjustments
Subtotal, before tax
Tax (expense) or benefit
Subtotal, net of tax
Foreign currency translation adjustment
Increase (decrease) during the year
Reclassification adjustments
Subtotal, before tax
Tax (expense) or benefit
Subtotal, net of tax
Remeasurements of defined benefit plans
Increase (decrease) during the year
Reclassification adjustments
Subtotal, before tax
Tax (expense) or benefit
Subtotal, net of tax
Total other comprehensive income¥

Thousands of U.S. dollars

2023

8,466
(1,849)6,617(2,006)
4,611

¥

(41)
(41)
12
(29)

¥

59
59
59

¥

¥

¥

73
68
141
(43)
98

¥

4,739

¥
¥

¥

¥

¥
¥

2024
1,856
(17)
1,839
(568)
1,271

$

(89)
(89)
27
(62)

$

16
16
16

$

$

¥

9
109
118
(36)
82

$

483
449
932
(285)
647

¥

1,307

$

31,301¥¥¥

55,910(12,209)43,701(13,247)$ 30,454

$

$

(272)
(272)
83
(189)

389
389
389

19. Segment information(Supplemental information - Accounting Standard for Disclosures about Segments of an Enterprise and Related Information)(1) General information about reportable segments
In the Group, businesses for which separate financial information is available are grouped into the following four reportable segments in accordance with thesimilarity of products and services of the respective business. The results of each reportable segment are reviewed periodically by the Board of Directors to assess
the segments' business performance.
Domestic Environment and Energy Business
General waste treatment plants, industrial waste treatment plants, waste recycling plants, wastewater treatment plants, sludge combustion plants and biomass
power plants
Overseas Environment and Energy Business
Waste combusting power plants and biomass power plants
Package Boiler BusinessCompact through-flow boilers and vacuum water heating systems
Equipment and System Business
Construction equipment, equipment for the semiconductor industry and cleaning systems(2) Basis of measurement about reportable segment profit or loss and other material items
Accounting methods used for reportable segments are the same as those explained in Note 2, “Summary of significant accounting policies.”
Profits of reportable units are operating profit. Internal revenue and transfers between reportable segments are recorded using prevailing market prices.
(3) Information about reportable segment profit or loss and other material items
Reportable segment information for the years ended March 31, 2024 and 2023 was as follows:Year ended March 31, 2024
Sales:
Outside customers
Intersegment
Total
Reportable segment income (loss)
Others:Depreciation

Year ended March 31, 2023
Sales:
Outside customers
Intersegment
Total
Reportable segment income (loss)
Others:Depreciation

Year ended March 31, 2024
Sales:
Outside customers
Intersegment
Total
Reportable segment income (loss)
Others:Depreciation

Millions of yen
Domestic
Overseas
Equipment
Environment andEnvironment andPackageandEnergy Business Energy Business Boiler Business System Business¥ 118,887
304
119,191¥ 11,229
¥

1,614

¥

¥

¥

2,405
36
2,441
185

¥

18,44151
18,492
1,177

¥

3

¥
¥

9,434
3
9,437
341

¥

147

¥

30

Total

¥

948

¥

¥

¥

1,327
25
1,352
(173)

¥

17,28627
17,313
915

¥

3

¥
¥

8,345
15
8,360
826

¥

150

¥

32

$
$

15,887
232
16,119
1,220

$

$

19

10,658$ 121,793
340
122,133
$
7,775

$
$

62,30920
62,329
2,255

$

$

199

973

¥

¥ 149,167
149,167¥ 10,229

¥

(394)
(394)
(2,703)

¥

¥

3

1,794

Total

¥

¥ 142,652
142,652¥ 13,814

¥

¥

¥

3

¥

1,136

Adjustment

Consolidated$$ 985,186
985,186$ 67,560$ 985,186
2,599
987,785$ 85,413$(2,599)(2,599)(17,853)$$

23

11,8491,797

Consolidated

(359)
(359)
(2,629)1,133¥

Adjustment¥ 142,652
359
143,011¥ 16,443

Thousands of U.S. dollars
Domestic
Overseas
Equipment
Environment andEnvironment andPackageandEnergy Business Energy Business Boiler Business System BusinessTotal$ 785,197
2,007
787,204$ 74,163

Consolidated¥ 149,167
394
149,561¥ 12,932

Millions of yen
Domestic
Overseas
Equipment
Environment andEnvironment andPackageandEnergy Business Energy Business Boiler Business System Business¥ 115,694
292
115,986¥ 14,875

Adjustment$

11,872Adjustments in reportable segment income (loss) include eliminations of transactions between segments and corporate expenses not allocated to reportable segment
expenses, including selling, general and administrative expenses not attributable to reportable segments.
Total reportable segment income is adjusted with operating profit reported on the Consolidated Statements of Operations.
Disclosure of information related to segment assets is omitted since assets are not allocated to business segments.

(Related information)
Reportable segment information for the years ended March 31, 2024 and 2023 was as follows:(1) Information about products and services
Disclosure of this information is omitted since similar information is disclosed in Note 19, “Segment information.”(2) Information about geographic areas
Revenues
Since over 90% of net sales reported on the Consolidated Statements of Operations were sales to outside customers within Japan, disclosure of this information isomitted.
Tangible fixed assets
Since 90% of tangible non-current assets reported on the consolidated balance sheet (in terms of values) were located within Japan, disclosure of this information isomitted.
(3) Information about major customers
Since no outside customer accounted for 10% or more of net sales reported on the income statement, disclosure of this information is omitted.
（Information related to non-current asset impairment loss by reportable segment）
Not applicable（Information related to amortization and unamortized balance of goodwill）
The note is omitted because it is not important.
（Information related to gain on negative goodwill by reportable segment）
Not applicable

20. Significant subsequent event
Takuma Co., Ltd. announced that a resolution was passed at the meeting of the Board of Directors held on May 14, 2024 on matters related to a share purchase
based on the provisions of Article 156 of the Companies Act of Japan as applied pursuant to the provisions of Article 165-3 of the act, and also resolved to cancel
treasury shares pursuant to Article 178 of the Companies Act.
1. Reasons for the purchase and cancellation of treasury shares
The purchase and cancellation of treasury shares will be conducted to improve capital efficiency and shareholder return.
2. Details of the purchase(1) Type of shares to be purchased: Common stock(2) Total number of shares to be purchased: 3,000,000 (maximum)(Ratio to total outstanding shares [excluding treasury shares]: 3.75%)(3) Total amount to be paid for purchase: ¥4,000,000,000 (maximum)(4) Period of purchase: From May 15, 2024 to January 15, 2025
(5) Method of purchase: Market purchase
3. Details of the cancellation(1) Type of shares to be cancelled: Common stock(2) Total number of shares to be cancelled: All of the treasury shares purchased as stated in 2. above(3) Scheduled date of cancellation: February 28, 2025