Tobishima : ESG Report

TOBISHIMA

Integrated Report

2022

About this booklet

TOBISHIMA Group promotes sustainability transformation (SX) aiming at a fusion of enterprise sustainability and social sustainability through corporate management in consideration of ESG and SDGs, made possible by epochal DX-based production process reforms. In this process, we will capture medium-to-long-term risks and opportunities and aim at sustainable corporate value enhancement.

This report is intended to provide information on TOBISHIMA Group's current activities and prospects, which, we hope, will meet your expectations.

Philosophy of Corporate Foundation

Rita-Riko: Compassion and Self-Interest

"If you would pursue your interests, weigh first the interests of others, then put those before your own.

Draw on your own efforts and ideas to offset the sacrifices made for others.

Doing so creates prosperity on both sides and, ultimately, to the attainment of your own interests."

Management vision

- To Become a Company that Supports Future Industrial Promotion and Development -

Promoting corporate transformation from Tobishima Corporation to

TOBISHIMA to evolve into a New Business Contractor

Corporate Code of Conduct

CONTENTS

Introduction

The 139-year History of TOBISHIMA ……………………	3
Financial/Non-financial Highlights ……………………	5
Financial Summary for 11 years ………………………	7
Message from the President …………………………	9

TOBISHIMA's Value Creation Process ………………… 13

Strategy

TOBISHIMA Group's Management Vision and Medium-TermFive-Year Plan ………………………… 15

TOBISHIMA's DX Promotion………………………… 17

Civil Engineering and Construction Business ………… 19

Building Construction Business ……………………… 21

Growth Business ……………………………………… 23

Sustainability

Sustainability Management	………………………… 25
Actions for the Environment	………………………… 29

Climate Information Disclosure Based on TCFD Initiatives … 31 Securing Quality and Strengthening Technological Capabilities …………………………………………… 33

Initiatives for Safety Management …………………… 34

Realizing Workplaces that Deliver Job Satisfaction …… 35

Directors ……………………………………………… 37

TOBISHIMA × ANTARCTICA (Background photo by Kazuya Ono)

In the two-plus decades since 1994, we have participated in the Japanese Antarctic Research Expedition, a national Japanese project. Every year, we dispatch engineers to the National Institute of Polar Research to perform general construction and engineering work, including maintenance of facilities at Showa Station, Japan's permanent research base in the Antarctic, and general construction and civil engineering work, including installation, demolition, maintenance of power generation and sewage treatment facilities and other structures, infrastructure improvements, road construction, and heliport facility enhancements. We contribute to research activities by drawing on our accumulated engineering expertise, insight, and experience to complete the tasks necessary under severe conditions.

Editorial policy

Up to FY 2021, TOBISHIMA CORPORATION had issued Corporate Reports that integrate Company Information and an Environmental Report. From FY 2022 on, we will issue an Integrated Report for our shareholders, investors, and other stakeholders. The Integrated Report will facilitate understanding of our sustainable value creation efforts.

Please visit our website for more information on our past achievements and technologies.

Organizations covered in this Report

This report covers the business activities of TOBISHIMA CORPORATION and Group companies; certain portions address non- consolidated Company issues.

Period covered in this Report

April 2021 - March 2022

Certain portions of the Report address period before or after the above period.

Reference guidelines

Framework (International Integrated Reporting Council: IIRC) Guidance for Integrated Corporate Disclosure and Company- Investor Dialogues for Collaborative Value Creation (Ministry of

1. Contributing to society
2. 1. Promoting construction activities satisfying social requirements
   2. Creating and maintaining better environment
   3. Promoting harmony with society
3. Compliance with basic social rules
4. 1. Complying with relevant laws and regulations
   2. Eliminating anti-social activities
   3. Developing business activities through fair competition

3. Awareness of responsibility as a construction company

1. Making efforts to provide high-quality inexpensive construction products
2. Establishing cooperative relationships with construction partners based on mutual understanding
3. Improving technical prowess and quality
4. Enhancing safety awareness
5. Creating lively and worthy workplaces

Corporate Governance ……………………………… 39

Risk Management and Compliance	………………… 40
Messages from Outside Directors	…………………… 41

Data Section

Explanation of Corporate Performance ……………… 43

Consolidated Financial Statements …………………… 44

Company Information ………………………………… 47

Stock Information …………………………………… 48

Economy, Trade, and Industry: METI)

Environmental Reporting Guidelines (Ministry of the Environment: MOE)

Discussions of prospects

Discussions of prospects and future events presented in this Report are based on information currently available to the Company and on certain premises deemed reasonable. For various reasons, actual performance and results may differ materially from projections.

Photo: National Institute of Polar Research

Photo: National Institute of Polar Research

Photo: National Institute of Polar Research

Photo: National Institute of Polar Research

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Introduction

The 139-year History of TOBISHIMA

The foundations of the TOBISHIMA Group date back to 1883, when it was contracted for the demolition of Fukui Castle. Since then, we've continued to grow and respond to social needs.

Drawing on the experience and capabilities accumulated over the past 139 years, TOBISHIMA will continue to evolve and boldly advance to create new value.

Urayama Dam (1997)

Located in Chichibu City, Saitama Prefecture, this is Japan's second-highest gravity dam. Utilizing the world longest layer construction method, the RCD method, the world's first one-meter lift, and belt conveyor technologies to transport raw stone, aggregate, and concrete materials for the first time in Japan, this challenging project applied several unprecedented technologies. The dam is now a familiar site open to the public.

Wacoal New Kyoto Building (2016)

Designed to serve as a new marketing base, the building with its external fins and other design features expresses tact, gentleness, refinement, and purity. Incorporating a toggle brace seismic damping structure, the building attained S rank class, signifying Superior quality by CASBEE.

Mega Solar Park (2020)

To make the most of renewable energy and to achieve carbon neutrality, we installed 122,000 solar panels on a vast 65 ha site developed as part of a mega solar power plant project with an output power of 45 MW in Miyagi Prefecture.

Introduction

Strategy

Demolition of Fukui Castle (1883)

Bunjiro Tobishima founded Tobishima-gumi, which was contracted to demolish Fukui Castle as its first job.

1905

Contracted to construct Kyoto Electric's Nakao power plant (Fukui Prefecture) as its first hydroelectric power plant project.

Echizen Electric Railway (1915)

Construction of Nakao power plant was completed, and the supply of power began, enabling plans for construction of the Echizen Electric Railway to commence. Undertook the construction work between Fukui and Ohno.

1916

Tobishima-gumi Corporation (representative director; Bunkichi Tobishima) founded with 100,000 yen in capital, with headquarters located in Toyoshimanaka- cho, Fukui City.

1940

Headquarters moved from Fukui City to Kudan, Kojimachi Ward, Tokyo.

1946

Tobishima-gumi applied for rehabilitation under the Corporate Reorganization Law and was dissolved.

Haneda Airfield (1931)

Contracted to execute reclamation work for Tokyo Airfield, Japan's first national airfield for aircraft on a 53-ha site. The airfield featured one runway measuring 300 meters in length and 15 meters in width.

1947

Tobishima Civil Engineering (representative director: Hitoshi Tobishima) was founded with 3 million yen in capital.

1960

Shares first traded over the counter on the Tokyo Stock Exchange.

1965

Company name changed to Tobishima Corporation to cast off the image of an exclusive focus on civil engineering.

1983

100th anniversary of the Company's founding Headquarters moved to new building (Sanban-cho, Tokyo).

Seikan Tunnel (1982)

This 53.8 km railway tunnel runs below the Tsugaru Strait, connecting Honshu (the Japanese mainland) and Hokkaido. Tobishima completed the 5.5 km Sanyoushi section on the Honshu side. Fraught with heavy technical challenges and constant flooding hazards, this project had significant consequences for integrating the nation and was selected as one of the 20 Selections of Japan's 20th Century Heritage.

Kanagawa Science Park: KSP (1989)

Developed by Kanagawa Prefecture, Kawasaki City, and TOBISHIMA, this collection of facilities serves as an international center where R&D companies are incubated and developed, gather, and interact, and to formulate creative R&D movements. The project was recognized by various honors, including the BCS Special Prize and the Prize of the Society of Heating, Air-Conditioning, and Sanitary Engineers of Japan.

1993

Celebrated 110th anniversary of the Company's founding.

1994

Began dispatching engineers to the Japanese Antarctic Research Expedition.

Tokyo Bay Aqua-Line (1997)

Named the Apollo Project in Civil Engineering, this project was completed by integrating the cutting- edge technologies and knowhow available at the time; by developing and applying numerous new construction technologies/methods; and by overcoming the countless challenges posed by the natural conditions at the site, including the soft seabed, strong winds and tides, and earthquakes, as well as complications related to environmental concerns and measures to ensure the continuing safe passage of ships in Tokyo Bay.

Shizuoka Prefectural Fuji Swimming Pools (2001) With an external profile that recalls a giant waterdrop, this building contains swimming pools equipped with movable floors and walls that change depths and distances. The facility is open to the public, including children, adults, and the elderly, as a fully equipped sports center. In 2003, it served as the main venue for the Summer National Sports Festival held in Shizuoka Prefecture.

2003

Celebrated 120th anniversary of the Company's founding.

Surikamigawa Dam (2006)

This rock-filled dam with center core, one of the largest in the Tohoku region, supplies city water, including drinking water and water for other everyday uses to three cities and four towns, including Fukushima City. It also provides irrigation for rice paddies and agricultural land along the Surikami River and Abukuma River to support the thriving agriculture of this region.

2013

National Highway No. 45, Rikuzentakata Road (2018)

This 10 km limited highway was planned as a leading earthquake disaster reconstruction project. We constructed the 7.0 km section on the side of Rikuzentakata. Completion of the road will strongly help afflicted areas move forward with local reconstruction and is expected to play a major role in the development of local industries encompassing Iwate and Miyagi Prefectures.

2019

Formulated Medium-TermFive-Year Plan with the basic policy of establishing foundations for our status as a New Business Contractor.

Transformation

Period

(1991-2010)

Elevated Bridge for the Hokuriku Shinkansen Nanetsu Station (2021)

We constructed a 980-meter elevated bridge with Echizen-Takefu Station positioned in the middle as part of the Hokuriku Shinkansen extension project from Kanazawa to Tsuruga. The bridge is scheduled to be opened at the end of FY 2023. We are also currently engaged in separate construction work to build Echizen-Takefu Station.

	Co-creation
	Period
	(2011-)
Civil Engineering
and Construction	Percentage
Business	of sales:
51.1%
Net sales
60.1billion yen
Building
Construction	Percentage

Sustainability

Data Section

Bunkichi Tobishima, Founder

Bunkichi Tobishima, the founder instrumental to the subsequent success of Tobishima-gumi, was born in 1876, the first son of Bunjiro Tobishima. At 13, he became a key assistant to his father as a stone mason and gradually honed his skills. For a construction project in 1901, at a time when oxcarts were commonly used to transport earth and sand, he introduced handcarts, the latest invention at the time. This innovation reduced costs, halved construction times, and won high acclaim.

Work on building hydroelectric power stations added to his reputation. A swelling tide of hydroelectric power station construction boosted the Company to national prominence and earned it the reputation as leading company in water- related facility construction and civil engineering.

Bunkichi Tobishima's word set forth the following ideal: To benefit oneself, one must first make sacrifices that benefit others. Coupled with innovations, these sacrifices will be duly rewarded. These words may remind us of a more modern phrase: The customer's needs come first. His integrity and strong sense of responsibility for work won him an outstanding reputation and the trust of those who requested the services of his company. The company won a steady stream of orders to build electric power stations across the country.

His character and charisma attracted many capable partners, including Santaro Kumagai (founder of Kumagai Gumi) and Matabei Maeda (founder of Maeda Corporation), and generated the driving force behind Tobishima-gumi.

TOBISHIMA's foundations lie in the integrity, sincerity and good faith of these forerunners, qualities since handed down from generation to generation.

Growth

Period

(1920-1959)

Celebrated 130th anniversary of the Company's founding.

Development

Period

(1960-1990)

Business	of sales:
Net sales	37.7%
44.4billion yen
Growth	Percentage
Business
of sales:
Net sales	%
13.2billion yen	11.2

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）

Founding

Period

(1883-1919)

As of March 2022

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Introduction

Financial/Non-financial Highlights

Financial

Non-financial(non-consolidated)

Introduction

Orders received/completed (non-consolidated)

116.0billion yen	104.5billion yen
■ ■ Orders received	■ ■ Orders completed
(Unit: 100 million yen)

2,000
1,500		1,506
1,270	1,221	1,224	1,240
1,212	1,1601,045
1,000		1,057	1,067
500
0
2017	2018	2019	2020	2021 (Fiscal Year)

Net Sales (consolidated)

117.6billion yen

■ ■ Net sales (consolidated)

(Unit: 100 million yen)

1,500	1,311	1,288	1,348
	1,172	1,176
1,000
500
0
	2017	2018	2019	2020	2021 (Fiscal Year)

Number of employees

1,450

■ ■ Number of employees

(Unit: persons)

2,000
1,500	1,322	1,351	1,394	1,483	1,450
1,000
500
0
	2017	2018	2019	2020	2021 (Fiscal Year)

Number of employees taking childcare leave

17

Number of employees taking childcare leave ■ ■ Male ■ ■ Female (Unit: persons)

20					17
15		12			3
			11
10	8	5	8	4
	14
	4		2
5
	7	6	7
	4
0
	2017	2018	2019	2020	2021 (Fiscal Year)

Strategy

Operating profit/Operating profit ratio	Sales component ratio (consolidated)
(consolidated)

4.5billion yen	3.9%		Growth business	Civil
	13.2	engineering
■ ■ Operating profit			Operating profit ratio	and
(Unit: 100 million yen)				(%)	construction
100					10.0	billion yen	business
	82		78			11.2%	60.1
80	72		8.0
6.3
5.8		Building
	5.6
60					6.0	construction	billion yen
				39	45	business	51.1%
40				4.0
				44.4
				3.4	3.9
20				2.0
0					0	billion yen
	2017	2018	2019	2020	2021 (Fiscal Year)	37.7%

Rate of annual paid leave taken			Occupational accident rate
53.2%					0.52
			Rate of annual paid leave taken								Occupational accident rate
(%)										0.94
60						51.9	53.2	1.00
				47.3
													0.71
				37.2				0.80
40							0.57
30.2								0.52
					0.60				0.39
20								0.40
								0.20
0								0
						2021 (Fiscal Year)						2021 (Fiscal Year)
	2017	2018	2019	2020	2017	2018	2019	2020

Sustainability

Data Section

Net assets/Capital adequacy ratio (consolidated)	ROE (consolidated)/Dividend payout ratio
43.8billion yen 38.3%	(non-consolidated)
7.5% 35.1%

■ ■ Net assets			Capital adequacy ratio		ROE		Dividend payout ratio
(Unit: 100 million yen)					(%)	(%)
500				415	438	50.0	60.0
			394					43.3
		364
400	317			40.0
							35.1
				38.3		40.0
300		33.2	32.4	34.2	30.0
31.2
			20.9	21.5
					19.9
200						20.0
					20.0
										7.5
100						10.0	12.2	14.9	13.5	6.1
0						0	0
	2017	2018	2019	2020	2021 (Fiscal Year)	2017	2018	2019	2020	2021 (Fiscal Year)

Workplace CO2 emissions

31,548t-CO2	27.2t-CO2/100 million yen
■ ■ Volume emitted				Specific consumption

(t-CO2)					(t-CO2/100 million yen)
50,000	42,038	43,823				50.0
40,000					31,548	40.0
	34.7		26,174	29,748
30,000			30.0
20,000		29.1	24.8		27.2	20.0
		24.0
10,000						10.0
0						0
	2017	2018	2019	2020	2021 (Fiscal Year)

Construction waste treatment results

80.300t

■ ■ Construction waste treatment results

(1,000 t)

200
		162.7	150.4	161.7
150	134.9
100					80.3
50
0
	2017	2018	2019	2020	2021 (Fiscal Year)

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Introduction

Financial Summary for 11 years

FY 2011	FY2012	FY 2013	FY 2014	FY 2015	FY 2016	FY 2017	FY 2018	FY 2019	FY 2020	FY 2021

Business management results

Introduction

Orders received

Net sales

Operating profit

Ordinary income

Current net income attributable to shareholders of a parent company

(million yen)

(million yen)

(million yen)

(million yen)

(million yen)

105,980	106,111	123,173	139,371	112,848	134,652	122,065	154,556	110,772	128,228	120,647
105,621	111,865	109,227	118,652	120,710	117,807	131,121	128,866	134,859	117,295	117,665
1,331	1,373	1,716	3,287	6,662	5,477	8,252	7,220	7,848	3,995	4,575
508	570	1,007	2,684	6,059	5,048	7,797	7,019	7,382	3,673	4,212
307	442	860	2,449	6,115	4,383	6,024	5,071	5,109	2,451	3,219

Strategy

Segment information (Net sales)
Civil engineering and construction business	(million yen)	61,823	60,538	54,780	64,577	67,591	66,957	73,641	79,216	77,624	65,784	63,175
Building construction business	(million yen)	42,766	50,356	53,321	53,172	52,103	49,554	55,868	47,769	50,088	45,629	47,338
Development business, etc.	(million yen)	1,031	970	1,125	902	1,014	1,294	1,610	1,880	7,146	5,882	7,150
Financial position
Total assets	(million yen)	84,695	96,120	85,864	91,594	91,455	98,125	101,908	109,586	121,804	121,598	114,632
Net assets	(million yen)	11,312	11,995	13,065	16,508	21,962	25,894	31,770	36,410	39,473	41,586	43,872
Interest-bearing liabilities	(million yen)	16,411	17,107	12,205	13,600	10,000	10,000	10,247	10,524	19,897	20,192	16,194
Cash flow
Operating cash flow	(million yen)	△483	6,485	2,613	2,663	4,259	11,335	989	4,164	△2,679	4,173	△6,187
Investing cash flow	(million yen)	△680	△351	△254	1,248	△794	△791	△4,473	△1,233	△1,602	△1,175	△1,772
Financial cash flow	(million yen)	△954	683	△4,920	1,372	△3,627	△452	△318	△721	4,362	△846	△4,561
The ending balances of cash and cash equivalents	(million yen)	4,982	11,859	9,346	14,764	14,532	24,606	20,785	23,013	23,050	25,235	12,749
Per share information
Current net income per share	(yen)	2.44	3.53	6.68	18.10	36.59	22.77	312.95	263.47	266.39	128.15	168.30
Net assets per share	(yen)	△50.18	△41.98	△18.81	31.15	114.04	134.48	1,649.80	1,891.96	2,062.77	2,173.26	2,293.14
Dividend	(yen)	―	―	―	―	2.0	3.0	4.0	50.0	50.0	50.0	50.0
Dividend payout ratio	(%)	―	―	―	―	5.9	13.2	12.2	21.5	19.9	43.3	35.1
Financial indicators
Capital adequacy ratio	(%)	13.4	12.5	15.2	18.0	24.0	26.4	31.2	33.2	32.4	34.2	38.3
Debt to equity ratio	(times)	1.5	1.4	0.9	0.8	0.5	0.4	0.3	0.3	0.5	0.5	0.4
ROE	(%)	2.8	3.8	6.9	16.5	31.8	18.3	20.9	14.9	13.5	6.1	7.5

(Note) As of October 1, 2018, we undertook a reverse stock split for one share for every ten common shares. "Net assets per share" and "current net income per share" are calculated as if the reverse stock split had taken place at the beginning of FY 2018.

Sustainability

Data Section

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