MIRAIT : Integrated report 2021

Comprehensive Engineering and Service Company

MIRAIT Group

MIRAIT Group

Integrated report

2021

MIRAIT Holdings Corporation

PR Office

5-6-36, Toyosu, Koto-ku, Tokyo, Japan 135-8111

Phone: [phone] Fax: [phone]

https://www.mirait.co.jp/en/

Company Overview

C O N T E N T S

Overview of MIRAIT Holdings Corporation

03 President's Message

Promote ESG-oriented Management

Date of establishment

October 1, 2010

Head office

5-6-36, Toyosu, Koto-ku, Tokyo, Japan

Representative

NAKAYAMA Toshiki,

President and Chief Executive Officer

Capital

7 billion yen

Stock Listing

1st Section of Tokyo Stock Exchange (Security code: 1417)

Shares

Total outstanding shares 108,325,329

Ratings

Rating and Investment Information, Inc. (R&I): A-

Japan Credit Rating Agency, Ltd. (JCR): A

End of fiscal year

March 31

Number of employees (consolidated) 12,882 (as of March 31, 2021)*

Number of consolidated subsidiaries 79 (as of March 31, 2021)

*Simple tabulation of all companies

06 Our Business

07 Foundation of Our Business/ Value Creation and Performance

09 Unfolding the Medium-term Management Plan

11 Evolution of Our Business Structure Toward

a New MIRAIT Group

13 MIRAIT Group's ESG-oriented Management

17 Realization of a decarbonized society through business activities

19 Contribution to the creation of environmentally-friendly and resilient cities and villages

23 Safety and quality improvement

25 Co-creation of social value through collaboration with partners

27 Promotion of human resource development, workstyle reform, and health-oriented management

33 Respect for human rights and promotion of diversity and inclusion

35	Social responsibilities in the supply chain
36	Helping local communities
	Enhancing Corporate Governance

List of Group Companies

MIRAIT Corporation

M's Frontier Corporation / DAIMEI TECHNO CO.,LTD. / MIRAIT Solutions Corporation / Tohoken System Engineering Corp. / Meisei Correspondence CO.,LTD. / MIRAIT Mobile East Co.,ltd. / MIRAIT Mobile West Co.,ltd. / DAIMEI TUSAN CO.,LTD. / SINKO ELECTRIC CORP. / MIRAIT-X Corporation / TODENTSU Access Corporation / TODENTSU NETWORK Co.,Ltd / Nissetsu Co., Ltd. / Okisokou Co., Ltd. / Libnet CO., LTD. / TIMETEC Co., Ltd. / Trust System Corporation / HOPE NET Co., Ltd. / Line Connect Corporation / Tokaikoei Inc. / NIPPON Sangyo Corporation / DAIMEI SLK (PRIVATE) LIMITED (Sri Lanka)

MIRAIT Technologies Corporation

AST-ENG Corp. / Lapisnet Co., Ltd. / COTONET ENGINEERING Co., Ltd. / Ligare Co., Ltd. / Agility RISE Co., Ltd / Comlead Co., Ltd. / Nishinihondenko Corporation / MiratecDrone Corp. / Ground Create Co., Ltd. / KATAKURA CONSTRUCTION Co., Ltd. /

MIRAIT Information Systems Co.,ltd. / ACTIS Co.,ltd. / CREiST Inc. / Fucom Corp. / Kinki Denki Corp. / MIRAIT Technologies Australia Pty. Limited (Australia) / MIRAIT PHILIPPINES INC. (Philippines)

TTK Co., Ltd.

37

1. Thorough Compliance
2. Thorough Risk Management
3. Financial/Non-financialData

1. Status of Shareholders

TTK ENG Miyagi Co.,Ltd / HOKUBU CO.,Ltd / TTK ENG Iwate Co.,Ltd / TTK ENG Aomori Co.,Ltd / TTK ENG Akita Co.,Ltd / TTK ENG Yamagata Co.,Ltd / TTK ENG Fukushima Co.,Ltd / Tsukada Electrical Construction Co., Ltd

SOLCOM Co.,Ltd.

SOLCOMMEISTER Co.,Ltd. / Yuwakogyo Corporation / Seikenkogyo Co.,Ltd. / Solcom Business Service Corporation / Chugokutsushinshizai Corporation / Dentsushizai Corporation

Shikokutsuken Co., Ltd.

Ochidenki Corporation / STK Techno Corporation

Lantrovision (S) Ltd. (Singapore)

Lantro (S) Pte Ltd. ／ Lantro (Malaysia) Sdn Bhd. ／ Lantro (Penang) Sdn. Bhd. ／ Lantro (HK) Limited ／ Lantrovision Korea Co. Ltd. ／ Lantro (Shanghai) Co. Ltd. ／ Hangzhou Lantro Co. Ltd. ／ Lantro Phils. Inc. ／ Lantro (Taiwan) Ltd. ／ Lantro Technologies India Pvt Limited ／ Vrnet (S) Pte Ltd. ／ Appsilan Asia Pte Ltd. ／ Infilan Pte Ltd. ／ Adnos Solutiens Pte Ltd. ／ Innovative Energy Systems & Technology Pte Ltd. ／ Lantro Myanmar Co. Ltd. ／ PT Lantro Technologies Indonesia ／ YL Integrated Pte Ltd. ／ Sun Power Electrical Pte Ltd. ／ Nectric Engineering Pte Ltd. ／ Shanghai Changling Communication Equipment Co.,Ltd. ／ Altro Solutions Pte Ltd. ／ Lantro (Thailand) Co. Ltd. ／ Lantro (Vietnam) Co. Ltd. ／ Lantro (Cambodia) Co. Ltd. ／ Lantrovision Inc.

Including consolidated subsidiaries and overseas subsidiaries (as of July 1, 2021)

01

Editorial Policy

This report outlines the policies, plans, activities, and achievements of the MIRAIT Group to create value in the short, medium and long term. The business and direction of the MIRAIT Group outlined at the beginning of this report explains initiatives to enhance the capital that supports our businesses. In the report, we then present key initiatives in the business in line with the outline of the Medium-term Management Plan, and also report on the status of strengthening the management foundation with a focus on ESG. We also work to provide a concise yet comprehensive report about information that includes overall governance as well as changes in the financial and non-financial performance.

Boundary

In this report, we report on the MIRAIT Group as a whole. Please note that numerical data and some of the information published in this report are of the boundary for which such data or information is available at the time of publishing this report, as indicated in the text or in supplementary notices.

Reporting Period

FY 2020 (April 1, 2020 to March 31, 2021)

Note: This report contains some data outside the above period so far as it complies with the editorial policy.

Guidelines Referenced

International Integrated Reporting Framework issued by the International Integrated Reporting Council

Date of Publication

December 2021

Inquiries

PR Office

MIRAIT Holdings Corporation

5-6-36, Toyosu, Koto-ku, Tokyo, Japan 135-8111

TEL：[phone]

Related Information on our website

• CSR information https://www.mirait.co.jp/csr/
  (note: previous reports are also available)
• Corporate Information https://www.mirait.co.jp/company/
• Business Information https://www.mirait.co.jp/service/
• IR Information https://ir.mirait.co.jp/index.html

MIRAIT Group	02
Integrated report 2021

President's Message

	Results (FY 2019)	Results (FY 2020)	Planned Figures (FY 2021)*
Net sales	441.1 bil. yen	463.7 bil. yen	480.0 bil. yen
Operating income	21.9 bil. yen	30.1 bil. yen	32.0 bil. yen
Operating income ratio	5.0%	6.5%	6.6%

*Revised upward based on financial results for the first half of FY 2021

NAKAYAMA Toshiki

President

and Chief Executive Officer

With a focus on contributing to the resolution of social issues

in Japan and overseas, we will further enhance our corporate value and achieve sustainable growth.

formulated due to the establishment of the new MIRAIT Group as a result of the integration of three companies, namely, MIRAIT Holdings Corporation, MIRAIT Corporation, and MIRAIT Technologies Corporation (scheduled for July 2022), and projects a vision for the year 2030.

The business strategy is centered on contributing to the resolution of social issues in Japan and overseas. To that end, it has identified the key social issues that we need to address. In relation to the growing demand for environmental conservation, it focuses on "Realization of a decarbonized society through business activities" and "Contribution to the creation of environmentally-friendly and resilient cities and villages." We will be making more active proposals from this perspective to companies in various regions, as well as to national and local governments.

The MIRAIT Group's Purpose (raison d'etre) and Mission (social mission) will also be redefined, and will be announced in May 2022.

Pursuit of Human-Centered Management

Under the new business strategy, we will promote five business reforms, namely "5 Changes."

The first of these changes is expressed as "Human-Centered Management." With engineering as its main business, the MIRAIT Group is a company built on the daily on-site work of its employees and collaborators. The business growth of the MIRAIT Group will be realized through the change and growth of each individual in charge of the site. First, as a foundation to ensure that such processes are working actively, we are promoting "Safety-oriented Management" and "Health-oriented Management" that create a workplace environment where employees can work with peace of mind. Then,

version of "smart work" and build a "good company" for our employees. In addition, as an educational program that encourages people to change and grow, we will operate our "Future College" as an in-house university, expand our real campus where employees can practice their skills, and develop a digital learning environment that lets them learn anywhere in Japan. In order to create a group of human resources that can change society and change the future, we will invest heavily in our people.

Accelerating Business Growth and Strengthening Profit Structure

Change 2 refers to "Acceleration of Business Growth." We will designate the fields in which we aim to achieve business growth as "Future Domain," and work on it by organically combining the management resources of the "Communications Infrastructure Domain," which is centered on the carrier business, and the "Corporate/Environmental and Social Domain," which is centered on the solutions business.

There are four key elements in the "Future Domain." The first is to accelerate city and village development projects and projects that meet corporate needs for DX and greening. We will respond to the needs of each region and company by combining our technical capabilities in communications, IoT, ICT, electricity, energy, civil engineering, and other fields with our greatest strength, on-site capabilities. The second is to make a foray into the green power generation business that will contribute to the era of decarbonization. In addition to the construction, operation and maintenance of power generation facilities, we will become a power generation company

Unchanging Responsibilities and Continuous Improvement

27 billion yen (operating income ratio of 6%), and ROE of more than 8.0%. To achieve these targets, we set up three pillars: "strengthening of the profit structure of existing businesses,"

we will promote workstyle reforms to realize the MIRAIT Group's

ourselves and supply renewable energy. The third is to strengthen

We, at the MIRAIT Group, have been engaged in the social implementation of infrastructures throughout our history, including before we became the current MIRAIT Group. Through engineering, we support the development of people's lives and industries, and once a natural disaster such as a typhoon or earthquake strikes, we do our best to maintain and restore the infrastructures. Our social responsibilities of this kind remain unchanged today when information and communication networks have evolved, and will do so even with further development in the future.

While fulfilling these responsibilities, we will utilize the latest knowledge and technology and make every effort to improve ourselves in order to meet the expectations of our customers and society. This principle is also in line with Matsuo Basho's words we often refer to: Fuekiryuko, which expresses the idea of immutability.

"strengthening of the growth potential of business in new fields," and "strengthening of the management base."

In FY 2020, we minimized the impact of the spread of the new coronavirus infection on the progress of construction and new orders by introducing new workstyles. We achieved all of our targets one year ahead of schedule, thanks to the concerted efforts of our employees to implement the three pillars as well as government measures (introduction of ICT in schools and depopulated areas) that provided a tailwind. To return these positive results to our shareholders, we increased the annual dividend (by 5 yen, to 45 yen per share) and bought back our own shares (6 million shares in total) during the fiscal year.

In the current fiscal year, we are working to establish this achievement as our "true strength," as well as to further strengthen shareholder returns.

Material social issues (materialities) to be addressed

Environment	Social	Governance
	Change 1
	Human-Centered Management
Change 2	5 Business Reforms (5 Changes)	Change 3
Acceleration of Business Growth	Top-Class Profitability

Change 4

Data Insight Management

Achieving Targets Early and Establishing "True Strength"

In our fourth Medium-term Management Plan for the three-year	Business Strategy Towards 2030
period starting in FY 2019, we, the MIRAIT Group, set targets for the	In November 2021, the MIRAIT Group announced the outline of its
final year (FY 2021): net sales of 450 billion yen, operating income of	business strategy for the next stage. The business strategy was

03

Change 5

Strengthening of ESG Management Foundation

MIRAIT Group	04
Integrated report 2021

Acceleration of Business Growth

Until nowInvesting resources in the "Future Domain"

				Future Domain
Base Domain	Frontier Domain		Shift to a full value chain model
	Accelerating projects of "city and village development/
NTT Operations	ICT		corporate DX and GX (green transformation)"
Multicarrier	Environmental and		Entering the green power generation business
	Social Innovation
		Making software business a strategic subsidiary
				Expanding global business
				Bringing together resources
	Mix of existing and
	new fields of business	Communications Infrastructure	Corporate/Environmental and
				Domain	Social Infrastructure Domain

Our Business

Building and Maintaining

Starting with telecommunications infrastructure, we build a broad range of systems offering greater convenience in daily life and society as a whole and ensuring greater safety and security (comprehensive engineering: configuration), and maintain them (servicing: maintenance and operation) both in Japan and overseas.

FY 2020 MIRAIT Group Sales

463.7bil. yen

our software business that supports customers' DX and infrastructure virtualization by making it a strategic subsidiary. Amid the growing use of software as part of the foundation for all infrastructure, the MIRAIT Group will integrate and strengthen its software business. Lastly, the fourth is to strengthen our global business catering to the demand for sharing data centers and infrastructures around the world. With our experience in Japan as a foundation, we will build high-quality infrastructures to contribute to the development of other countries.

In promoting the Future Domain, we will shift our business from the conventional construction-centered model to a full value chain model that encompasses all processes from planning and design to construction and operation.

Change 3 represents "Top-Class Profitability." We aim to strengthen our profit structure and reach the highest level of profitability in the industry by achieving efficient use of management resources through the three-way merger and the collaboration between the five companies, i.e., the new company resulting from the merger, TTK Co.,Ltd., SOLCOM Co.,Ltd., Shikokutsuken Co.,Ltd., and Lantrovision

1. Ltd., as well as by thoroughly promoting the efficiency of operations partly through DX.

The Possibilities of Data

Change 4 is "Data Insight Management." Engineering and data are now inseparable. By extracting and leveraging insights from data, we are opening up many new possibilities.

drones and other devices will greatly improve the efficiency of maintenance. AI-based diagnosis and prediction of water pipe deterioration is also promising.

I often encourage my employees to "improve safety scientifically." For example, we have installed drive recorders in all of our vehicles, analyzed the driving data and shared it with our field staff, which has significantly reduced the number of accidents. Data can also be very useful in preventing heatstroke and accidents at construction sites.

Building an Organizational Foundation for ESG Management

Lastly, Change 5 is "Strengthening of ESG Management Foundation." On September 1, 2021, MIRAIT Holdings established the ESG Management Promotion Committee. It is placed directly under the Executive Committee, chaired by me and joined by officers and presidents of Group companies. The committee meets regularly to discuss material social issues that the MIRAIT Group should address, as well as Group-wide ESG strategies and policies, ESG-related initiatives, and information disclosure.

In October, we also endorsed the Task Force on Climate-related Financial Disclosures (TCFD). In addition to participating in the global movement toward carbon neutrality, we will identify and disclose the financial impact of climate change risks and opportunities.

Moving forward by uniting the power of Group officers and employees

NTT Operations

157.0bil. yen

34%

The MIRAIT Group builds, maintains and operates the NTT Group's fixed-line communication facilities and provides support to make optical fiber networks even more prevalent. Although initially focused on building those facilities, in recent years we have expanded into facility maintenance and operation as well. When disaster strikes, our emergency repairs and reconstruction safeguard these communication networks.

Multicarrier

98.2bil. yen

21%

The MIRAIT Group builds, maintains and operates mobile communications facilities to support the increasing speed and capacity of mobile networks. We are currently conducting constructions for the expansion of 5G service area.

Our Group also builds and maintains fixed-line communications facilities for communication carriers, conducts CATV, and builds and maintains fixed-line and mobile communications facilities overseas (Australia, Philippines, and Sri Lanka).

Environmental and Social Innovation

58.1bil. yen

13%

The MIRAIT Group builds, maintains and operates solar power generation systems, EV charging stations and storage battery systems to make new energy infrastructures more accessible.

In addition, we will contribute to the construction of next-generation environmental and social infrastructures through the elimination of utility poles (undergrounding of electric wires), electrical and air conditioning work, including LED installation, water and sewage work as well as road infrastructure work, such as bridge construction.

ICT Solutions

150.3bil. yen

32%

With our ICT technology, we provide high-quality solutions that respond to a wide range of social and business issues, including introducing LAN/PBX and Wi-Fi, ensuring security, building management advancement, and promotion of operational efficiency. We have begun building and operating data centers and using drones to further expand the breadth of these solutions.

A prime example of this is digital twins in design and construction. In the past, the construction of communication base stations required frequent trips to the roof of the building, each time requiring permission from the building owner. However, using digital twins with 3D mapping technology can dramatically streamline the work by reducing the number of times you need to visit the site. This method is also valid for underground water pipes and telephone cables.

The power of data is astonishing in the operation and maintenance as well. Steel towers installed over a wide geographical area are exposed to the elements, and gradually become rusty and damaged, but this is not easy to check. Utilizing the data collected by

05

In order to keep us all in step towards the year 2030, this fall we conducted a survey of all 14,000 officers and employees of the MIRAIT Group. Our shift to a business strategy focused on resolving social issues reflects the thoughts shared by many of us. We are also working on redefining our Purpose and Mission based on the results of this survey. We are determined to make a dynamic progress by uniting the power of employees in various positions who will drive the new MIRAIT Group forward.

Your further expectations and cooperation to the MIRAIT Group will be greatly appreciated.

A Step Forward

As one of the themes for building the next social infrastructure, the MIRAIT Group places great importance on water. Shikokutsuken Co., Ltd. is involved in the construction of distribution reservoirs in projects to relocate and upgrade filtration plants. As well, SOLCOM Co.,Ltd. has developed "nano gate," a self-cleaning system for building water supply and drainage pipes, which enables low-cost,low-labor maintenance of water supply and drainage pipes and other water-related facilities.

MIRAIT Group	06
Integrated report 2021

Foundation of Our Business/Value Creation and Performance

The MIRAIT Group continuously enhances a wide range of non-financial capital supporting businesses to heighten medium- to long-term financial performance.

MiratecDrone's JUIDA-Certified

Engineering Capital

We keep both the hardware and software directly used for engineering in good shape while regularly adopting the latest versions.

Major Capitals

• Construction equipment (aerial work platform vehicles, etc.)
• Network/cloud service infrastructure
• Various tools used for solutions
• Internal information systems

Development Initiatives

• Systematic renewal of construction equipment
• SD-WAN(software-defined networking)
• Construction and operation of our own data center
• Configuration of networked DC*1
• Enhancement of core systems (for i-Construction)
• Operational improvements through active adoption of RPA*2

*1 System to link with leased data centers through underground cables

*2 Operational automation through robotics

Human Capital

The size and quality of human capital is crucial in engineering. With this recognition in mind, the MIRAIT Group works to cultivate its human capital that supports the growth of business in multifaceted ways.

Major Capitals

• Engineers/skilled workers with a high level of problem-solving skills
• Trusted worksite supervisors
• Sales staff who nurture good relationships with customers

Development Initiatives

• Systematic training through a personnel training system
• Bounty system for obtaining professional qualifications
• Support for career advancement through an interview program
• Personnel rotation that encourages experience in diverse businesses and organizational cultures
• Securing and promoting active participation of diverse talents
• Enhancement of engineering personnel (mid-career employment)

Intellectual Capital

The technical capabilities of the MIRAIT Group are a factor affecting its market competitiveness that often remains unseen. We place importance on turning tacit knowledge into explicit knowledge, sharing and developing it. We are also expanding our new knowledge through M&A, cooperation with various entities, and joint research.

Major Capitals

• Telecommunications construction and other engineering expertise
• Knowledge in specialized relevant fields
• Technical knowledge to be used in new solutions
• Processes and techniques of value engineering
• Quality control, occupational safety and health, environmental conservation and other expertise

Development Initiatives

• Operation of various management systems
• Strengthening of construction management capabilities
  (Use and ongoing revisions of the Worksite Supervisor Handbook)
• KAIZEN Suggestion Activity (reforms and development of articles and methods via suggested improvements)
• Adoption of the latest technology
• Open innovation

Organizational Capital

The business operation system of the MIRAIT Group and partner companies is the foundation for our business growth in Japan and abroad.

Major Capitals

• Presence in each region and country
• Business sites (sales, construction, and services)
• Partner companies (smooth collaboration)
• Networks with organizations and people related to business

Development Initiatives

• Expansion and deepening of regional coverage
• Strengthening of Group operation systems
• Collaboration meetings and regional cooperation meetings with business partners
• ESG sourcing

Social and Relationship Capital

The trusted relationships with our stakeholders are an "unseen foundation" of the MIRAIT Group's businesses.

Major Capitals

• The brand based on confidence and trust from customers
• Long lasting relationships with telecommunications carriers
• Relationships with customers, other than telecommunication carriers, in various fields
• Collaboration with municipalities and government agencies
• Support from local communities

Development Initiatives

• A long and proven track record
• Clarification of quality standards as well as confirmation and validation of quality in each operation
• Disaster recovery response
• Local contribution efforts/activities to promote communication with local communities

Course Wins Top Prize,

"President's Award," at

"JUIDA SCHOOL AWARDS 2021"

MiratecDrone Corp. won the President' s Award, the highest award, at the JUIDA SCHOOL AWARDS 2021 held by the Japan UAS Industrial Development Association (JUIDA). MIRAIT Technologies Corporation' s Drone Business Division, the predecessor of MiratecDrone, was once awarded the "JUIDA SCHOOL AWARDS 2019 Gold," the highest recognition for "an accredited school that has contributed to producing a large number of personnel with safety-related knowledge and high piloting skills." This year' s "President' s Award" recognizes the best drone education activities among schools that, in addition to implementing JUIDA-designated curriculums, conducted their own drone education activities during the year from April 2020 to March 2021 to improve students' knowledge of drone-related laws and rules, their piloting skills, and their understanding of the importance of operating drones safely.

07

Number of employees

12,882

Personnel with qualifications

Approx. 9,350

Approx. 17,650

The data is for FY 2020 (as of March 31, 2021)

Number of KAIZEN suggestions

24,489

KAIZEN Fellows

68

Number of Group Companies

57in Japan 28Overseas

Number of partner companies with Ongoing Business

Over1,000

Sales Sites Lantrovision is Expanding Throughout Asia

13Countries and Regions 28Cities

Number of Users of Information and Communication Facilities Supported by the MIRAIT Group (Japan)

Approx. 41million

Track Record of Building Communications Facilities Worldwide by the MIRAIT Group

Over100Countries

Number of Pilots Produced Through Our Drone School Which We Have Been Running for Three Years

Approx.1,000

Number of Sites Using "Casting Table 3.0"

Contact Center Solutions

83Sites of 308Companies

EV Charging Stations

Approx.1,600Stations

Cumulative total of ee-TaB*® Hotel Room Information Service Terminals Introduced at Hotels

Over1,000Terminals at 69Facilities

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Integrated report 2021