INFRONEER : Consolidated Financial Results for the Year Ended March 31, 2022 (Based on Japanese GAAP)

Translation

Notice: This document is a translation of the original Japanese document and is only for reference purposes. In the event of any discrepancy between this translated document and the original Japanese document, the latter shall prevail.

			Consolidated Financial Results
			for the Year Ended March 31, 2022
			(Based on Japanese GAAP)			May 13, 2022
Company name:	INFRONEER Holdings Inc.
Stock exchange listing:	Tokyo
Stock code:	5076	URL	https://www.infroneer.com
Representative:	Representative Executive Officer and		Kazunari Kibe
President
Inquiries:	General Manager of Financial Strategy		Kazutaka Deguchi		TEL [phone]
Scheduled date of ordinary general meeting of shareholders:		June 23, 2022
Scheduled date to file Securities Report:			June 23, 2022
Scheduled date to commence dividend payments:		June 24, 2022
Preparation of supplementary material on financial results:		Yes
Holding of financial results meeting:				Yes (for institutional investors and analysts)
					(Amounts less than one million yen are rounded down)
1. Consolidated financial results for the year ended March 31, 2022 (from April 1, 2021 to March 31, 2022)
(1) Consolidated operating results (cumulative)				Percentages indicate year-on-year changes
			Net sales		Operating profit		Ordinary profit		Profit attributable to
						owners of parent
			Millions of yen	%	Millions of yen	%	Millions of yen	%	Millions of yen	%
Fiscal year ended March 31, 2022		682,912	-	37,489	-	38,036	-	26,689	-
Fiscal year ended March 31, 2021		-	-	-	-	-	-	-	-

(Note) Comprehensive income:	Fiscal year ended March 31, 2022: ¥16,756 million [-%]
	Fiscal year ended March 31, 2021: ¥- million [-%]
		Diluted earnings	Profit attributable	Ordinary	Operating profit/net
	Earnings per share	to owners of
	per share	profit/total assets	sales
		parent/equity
	Yen	Yen	%	%	%
Fiscal year ended March 31, 2022	94.73	-	8.7	4.1	5.5
Fiscal year ended March 31, 2021	-	-	-	-	-

(Reference) Share of profit (loss) of entities accounted for using equity method: Fiscal year ended March 31, 2022: ¥652 million Fiscal year ended March 31, 2021: ¥- million

(Notes) 1. The Company was established by joint share transfer on October 1, 2021; therefore, there are no year-on-year results.

1. 2. The "Accounting Standard for Revenue Recognition" (Accounting Standards Board of Japan (ASBJ) Statement No. 29, March 31, 2020), etc., has been applied from the beginning of the first quarter of the fiscal year ending March 31, 2022 of Maeda Corporation, the former parent company, which has become a wholly-owned subsidiary of the Company resulting from the share transfer, and figures for the fiscal year ended March 31, 2022 are based on the application of this Accounting Standard, etc.

2. Consolidated financial position

	Total assets	Net assets	Equity ratio	Net assets per share
	Millions of yen	Millions of yen	%	Yen
As of March 31, 2022	926,432	355,865	37.4	1,312.19
As of March 31, 2021	-	-	-	-

(Reference) Equity: As of March 31, 2022: ¥346,911 million As of March 31, 2021: ¥- million

(Notes) 1. The Company was established by joint share transfer on October 1, 2021; therefore, there are no year-on-year results.

2. The "Accounting Standard for Revenue Recognition" (Accounting Standards Board of Japan (ASBJ) Statement No. 29, March 31, 2020), etc., has been applied from the beginning of the first quarter of the fiscal year ending March 31, 2022 of Maeda Corporation, the former parent company, which has become a wholly-owned subsidiary of the Company resulting from the share transfer, and figures as of March 31, 2022, are based on the application of this Accounting Standard, etc.

1

(3) Consolidated cash flows

	Cash flows from	Cash flows from	Cash flows from	Cash and cash
	equivalents at end of
	operating activities	investing activities	financing activities
	period
	Millions of yen	Millions of yen	Millions of yen	Millions of yen
Fiscal year ended March 31, 2022	(16,333)	(22,547)	15,288	76,018
Fiscal year ended March 31, 2021	-	-	-	-

(Note) The Company was established by joint share transfer on October 1, 2021; therefore, there are no year-on-year results.

2. Cash dividends

		Annual dividends per share		Total cash	Dividend	Ratio of
						dividends	payout ratio	dividends to
	1st quarter-end	2nd quarter-end	3rd quarter-end	Fiscal year-end	Total	(Total)	(Consolidated)	net assets
								(Consolidated)
	Yen	Yen	Yen	Yen	Yen	Millions of yen	%	%
Fiscal year ended March 31, 2021	-	-	-	-	-	-	-	-
Fiscal year ended March 31, 2022	-	-	-	40.00	40.00	10,770	42.2	2.9
Fiscal year ending March 31, 2023	-	-	-	40.00	40.00		32.4
(Forecast)

(Notes) 1. The Company was established by joint share transfer on October 1, 2021; therefore, there are no results for the preceding year or through the six months ended September 30, 2021.

2. The source of all dividends for the fiscal year ended March 31, 2022 is to be other capital surplus. For more details, please refer to "Breakdown of the dividends paid out of other capital surplus" described later.

3. Forecast of consolidated financial results for the fiscal year ending March 31, 2023 (from April 1, 2022 to March 31, 2023)

Percentages indicate year-on-year changes

Net sales

Operating profit

Ordinary profit

Profit attributable to

Earnings per share

owners of parent

Millions of yen

%

Millions of yen

%

Millions of yen

%

Millions of yen

%

Yen

Full year

730,600

7.0

42,600

13.6

43,500

14.4

32,400

21.4

123.55

* Notes

(1) Changes in significant subsidiaries during the year ended March 31, 2022

No

(changes in specified subsidiaries resulting in the change in scope of consolidation):

Notes on changes in significant subsidiaries during the year ended March 31, 2022

(2) Changes in accounting policies, changes in accounting estimates, and restatement of prior period financial statements

1)

Changes in accounting policies due to revisions to accounting standards and other regulations:

Yes

2)

Changes in accounting policies due to other reasons:

No

3)

Changes in accounting estimates:

No

4)

Restatement of prior period financial statements:

No

Notes on changes in accounting policies, changes in accounting estimates, and restatement of prior period financial statements

1. Number of issued shares (common shares)
2. 1. Total number of issued shares at the end of the period (including treasury shares)

		As of March 31, 2022	291,070,502	shares	As of March 31, 2021	-	shares
2)	Number of treasury shares at the end of the period
		As of March 31, 2022	26,694,723	shares	As of March 31, 2021	-	shares
3)	Average number of shares during the period
		Fiscal year ended March 31, 2022	281,728,696	shares	Fiscal year ended March 31, 2021	-	shares

(Notes) 1. The Company's shares held by the Stock Benefit Trust Disposition-type Employee Stock Ownership Plan Trust are included in the number of treasury shares at the end of the period (4,221,300 shares at the end of the year ended March 31, 2022). The Company's shares held by the Stock Benefit Trust Disposition-type Employee Stock Ownership Plan Trust are included in the number of treasury shares deducted in the calculation of the average number of shares during the period (324,715 shares at the end of the year ended March 31, 2022).

2. The Company's shares held by Board Benefit Trust (BBT) are included in the number of treasury shares at the end of the period (657,500 shares at the end of the year ended March 31, 2022). The Company's shares held by Board Benefit Trust (BBT) are included in the number of treasury shares deducted in the calculation of the average number of shares during the period (657,500 shares at the end of the year ended March 31, 2022).

2

• These financial results are outside the scope of audit by certified public accountants or audit corporations.
• Explanation of the proper use of performance forecast and other notes
• • The above forecasts are based on assumptions in light of information available as of the date of announcement of this material and factors of uncertainty that may possibly impact the future results of operation. These statements do not indicate that the Company pledges to realize these forecasts. Actual results may differ significantly from those presented herein as a result of numerous factors.
  • The Company was established on October 1, 2021, as a wholly-owning parent company of Maeda Corporation, Maeda Road Construction Co., Ltd. (hereinafter "Maeda Road") and Maeda Seisakusho Co., Ltd. (hereinafter "Maeda Seisakusho") by means of a joint share transfer. Prior to the business integration, Maeda Road and Maeda Seisakusho were consolidated subsidiaries of Maeda Corporation, and as there has been no substantial change in the scope of consolidation of the Company due to the integration, the business results of the Company will be calculated based on full-year consolidated business results of the former Maeda Corporation.

Breakdown of the dividends paid out of capital surplus

Of the year-end dividends for the fiscal year ended March 31, 2022, the breakdown of the dividends paid out of capital surplus is as follows.

Record date	Fiscal year-end	Total
Dividend per share	¥40.00	¥40.00
Total dividends	¥10,770 million	¥10,770 million

(Note) Percentage decrease in net assets: 0.037

3

• Table of Contents

1. Overview of Operating Results, etc. ...........................................................................................................................	5
(1) Overview of Operating Results for the Fiscal Year under Review ..........................................................................	5
(2) Overview of Financial Position for the Fiscal Year under Review..........................................................................	6
(3) Overview of Cash Flows for the Fiscal Year under Review ....................................................................................	6
(4) Future Outlook.........................................................................................................................................................	7
(5) Basic Policy on Distribution of Profit and Dividends for Current and Next Fiscal Years.......................................	8
2. Status of Corporate Group...........................................................................................................................................	8
3. Basic Approach to the Selection of Accounting Standards .........................................................................................	9
4. Consolidated Financial Statements and Primary Notes.............................................................................................	10
(1)	Consolidated Balance Sheet..................................................................................................................................	10
(2)	Consolidated Statement of Income and Comprehensive Income..........................................................................	12
	Consolidated Statement of Income........................................................................................................................	12
	Consolidated Statement of Comprehensive Income..............................................................................................	13
(3)	Consolidated Statement of Changes in Shareholders' Equity ...............................................................................	14
(4)	Consolidated Statement of Cash Flows.................................................................................................................	15
(5)	Notes to Consolidated Financial Statements.........................................................................................................	17
	(Notes on going concern assumption) .............................................................................................................	17
	(Important matters that form the basis for preparation of consolidated financial statements) ........................	17
	(Changes to accounting policies) ....................................................................................................................	21
	(Additional information) .................................................................................................................................	22
	(Notes to consolidated balance sheet) .............................................................................................................	25
	(Notes to consolidated statement of income) ..................................................................................................	27
	(Notes to consolidated statement of changes in shareholders' equity).............................................................	28
	(Notes to consolidated statement of cash flows) .............................................................................................	30
	(Segment information, etc.).............................................................................................................................	30
	(Per share information)....................................................................................................................................	32
	(Business combination) ...................................................................................................................................	33
	(Significant subsequent event) ........................................................................................................................	34
5. Others ........................................................................................................................................................................	35
(1)	(Building Construction Segment) Classified by Public and Private: Orders Received, Net Sales and Backlog ..	35
(2)	(Civil Engineering Segment) Classified by Public and Private: Orders Received, Net Sales and Backlog .........	36
(3)	(Road Civil Engineering Segment) Classified by Type: Orders Received, Net Sales and Backlog .....................	36
(4) Summary of Forecast of Consolidated Financial Results .....................................................................................	37
(Reference) Maeda Corporation: Supplementary Information ...................................................................................	38

4

1. Overview of Financial Results, etc.

The Company was established on October 1, 2021, as a wholly-owning parent company of Maeda Corporation, Maeda Road Construction Co., Ltd. (hereinafter "Maeda Road") and Maeda Seisakusho Co., Ltd. (hereinafter "Maeda Seisakusho") by means of a joint share transfer. Prior to the business integration, Maeda Road and Maeda Seisakusho were consolidated subsidiaries of Maeda Corporation, and there has been no substantial change in the scope of consolidation of the Company due to the integration. However, as the current fiscal year ended March 31, 2022 is the first consolidated accounting period since the establishment of the Company, no comparison with the previous fiscal year ended March 31, 2021 has been done.

(1) Overview of Operating Results for the Fiscal Year under Review

During the fiscal year ended March 31, 2022, the Japanese economy continued to face difficult conditions due to an uncertain outlook caused by concern over the spread of the novel coronavirus infection (COVID-19) variants and the situation in Ukraine, although signs of recovery appeared owing to the gradual relaxation of COVID-19 restrictions on socioeconomic activities given the effects of vaccinations and various policies.

In the construction industry, although public investment remained at high levels due to the execution of related budgets, capital investments, which had included weakness in both this area and in housing construction, showed signs of movement toward recovery.

Under these circumstances, the Company was established on October 1, 2021, as a wholly-owning parent company of the three companies of Maeda Corporation, Maeda Road, and Maeda Seisakusho by means of a joint share transfer. With the objective of the entire group achieving sustained growth under the Company, the Company will strive to be a "company trusted by all stakeholders" by determining to aim for the mid- to long-term state of being an "integrated infrastructure service company," establishing a "highly profitable and stable revenue base" without being influenced by external factors, operating expeditiously and appropriately, such as by building an effective governance structure and promoting digital transformation, and strengthening the ability to deal with social changes.

In addition, the Company resolved at the Board of Directors' Meeting held on December 16, 2021 to select the Prime Market, and having applied for selection in accordance with the prescribed procedure, transition to the Prime Market was made on April 4, 2022.

Furthermore, at the Board of Directors' Meeting held on March 22, 2022, the Company Group decided to acquire common shares of Toyo Construction Co., Ltd., an equity method affiliate, through a tender offer for the purpose of strengthening the group's overall competitiveness while enhancing its corporate value. A tender offer for that company has been in effect since March 23, 2022.

The business results for the fiscal year ended March 31, 2022 are as follows.

1) Net sales

Consolidated net sales for the fiscal year amounted to about ¥682.9 billion.

2) Profit

In the fiscal year under review, strong performance in the construction business segment generated operating profit of around ¥37.4 billion and ordinary profit amounted to roughly ¥38.0 billion. Profit attributable to owners of parent was about ¥26.6 billion.

The "Accounting Standard for Revenue Recognition" (ASBJ Statement No. 29, March 31, 2020), etc., has been applied from the beginning of the first quarter of the fiscal year ended March 31, 2022 of Maeda Corporation, the former parent company, which has become a wholly-owned subsidiary of the Company resulting from the share transfer. Please refer to "4. Consolidated Financial Statements and Primary Notes (5) Notes to Consolidated Financial Statements (Changes to accounting policies)" for details.

5