Integrated Report
2021.7.1-- 2022.6.30

SHO-BOND Holdings Co., Ltd.

A Construction Company
that doesn’t Construct

We create the future ofsocial infrastructures

The SHO-BOND Group is a comprehensive maintenance company thatspecializes in repairing and reinforcing social infrastructures.
SHO-BOND combines innovative chemical and civil engineering technologies
to create new materials and construction methods that reflect the current requirements of the times.
SHO-BOND has been a leading company in the structure maintenance business for many years.
Repair and reinforcement work is urgently needed in many places because of
the increasing age of infrastructure in Japan and other countries.
Dedicated to the mission of “Inheriting and passing on social infrastructure to
the next generation in good condition,” SHO-BOND meets the needs of society by using its diverseand powerful resources to provide comprehensive infrastructure maintenance.
This is the mission of the SHO-BOND Group.

K E Y

F I G U R E S

Operating Profit(As of June 30, 2022)

01

SHO-BOND 2022 Integrated Report

17.26

¥bn

Operating Profit Margin

21.3

%

ROE

13.4

%

Equity Ratio

PBR

3.38

times

80.2

%

Total Return Ratio

75.1

%

Number of Employees

951Group Companies

18

SHO-BOND 2022 Integrated Report

02Preserving bridges in your memory

Focused on today’s infrastructure,
looking ahead to the future

Constantly repairing and passing infrastructure
on to the next generation

Experience and Technologies– Our contributions to safety andquality in society –03

SHO-BOND 2022 Integrated Report

CONTENTS

What is the SHO-BOND Group?
Broad Range of Structures We Work On

05

History of SHO-BOND

07

Comprehensive Maintenance System

11

The Value Creation Process

13

Business Environment

15

Financial and Non-financial Highlights

17Management Strategies
Note regarding English translation
The content of this report is composed in Japanese. The
Company provides the English version for your reference andconvenience only without any warranty as to its accuracy. In
case of any discrepancy between the English version and theJapanese original, the latter shall prevail.

Top Message

19

Medium-term Business Plan

25

Message from Chief Financial Officer

27

Materiality

29

Business Strategies
Editorial policy

Construction in Japan31

the purpose of explaining to stakeholders the value that our businessFeature: Various Repair andReinforcement Construction Projects

35

operations create and our commitment to sustained growth.

Manufacturing and Sales of Construction Materials

37

Overseas Business38

Research and Development

39

releases and other recent announcements, please visit our website.

Tsukuba Training Center

41

Period covered by this publication

Investigation / Diagnosis / Design

42This is the first Integrated Report produced by SHO-BOND. We decided to
begin issuing this report with the fiscal year that ended in June 2022 forThis publication is based on the International <IR> Framework of theInternational Integrated Reporting Council and the Guidance forCollaborative Value Creation of the Ministry of Economy, Trade andIndustry. For more information about SHO-BOND, including news

FY2022 (July 1, 2021 to June 30, 2022)
This report uses the latest information that was available at the date of
publication.

Sustainability
Sustainability of SHO-BOND

43

SHO-BOND Holdings and its consolidated subsidiaries and affiliates

Efforts for Environment

45

Date of issue

Feature: Curbing CO₂ Emissions by Repair Work

47

Note regarding forward-looking statements

Efforts to Develop Talent andImprove the Workplace Environment

49

Plans, forecasts, strategies and other forward-looking statements in thisEfforts for Health and Safety

51

Corporate Governance

53

Company Information

59

Organization covered by this publication

December 2022

report are based on information that is currently available and on
judgments believed to be reasonable in accordance with certain
assumptions. Actual results of operations may differ from theseforward-looking statements due to numerous risk factors anduncertainties.

SHO-BOND 2022 Integrated Report04

B road Range of St ru c t u res We Work O n

Inheriting and passing on social infrastructure
to the next generation in good condition
We play an important role in the sustainability of cities by utilizing technologies acquired
during more than 60 years in the infrastructure maintenance business for repairing andreinforcing a broad range of structures that are vital parts of the social infrastructure.

■ Harbor Quay

■ Railways■ Irrigation Channels● Protection from salt damage● Repair of damage at elevated railways● Prevention of cracking● Prevention of concrete degradation

05

SHO-BOND 2022 Integrated Report● Seismic retrofitting● Prevention of water leaks

● Seismic retrofitting● Prevention of ceiling and wall peeling● Repair of expansion joints■ Bridges■ Tunnels■ Road structures■ Water Supply and Sewer Systems■ Buildings■ Silo● Protection from corrosion● Seismic retrofitting● Repair of wall surface degradation● Prevention of concrete degradation● Stop groundwater leaks● Noise reduction

SHO-BOND 2022 Integrated Report06History of SHO-BOND

The Origin of “SHO-BOND”

Akira Ueda when Showa Kogyo was established

Showa Kogyo Corporation was established in Setagaya-ku, Tokyo
on June 4, 1958 by Akira Ueda, who was 31 years old.
Initially, the main business was construction involving rigid PVC
pipes. In 1959, Showa Kogyo quickly repaired cracks at thespillway of the Yakuwa Dam by using PVC boards and epoxy
resin. This accomplishment led to the development in September
1959 of a high-strength epoxy resin adhesive (currently equivalent
to #101 adhesive). This was followed by the development ofadhesives for specific applications that used the registeredtrademark “SHO-BOND”. Production of these adhesives started in
November 1959.
In 1960, the head office moved to Chiyoda-ku, Tokyo and thesale of “SHO-BOND” and construction processes using thismaterial started. To sell this product for civil engineering
applications, whole numbers were used for the ratios of baseagents and hardeners for all versions of SHO-BOND. Synthetic
resin adhesives were soon widely used at construction sites inJapan.

(left) The manufacture of“SHO-BOND”
adhesives(right) A SHO-BOND
adhesive test at theInstitute of Industrial
Science, the Universityof Tokyo

The corporate DNA as a company specializing
in infrastructure maintenanceIn 1989, 31 years after its establishment, the stock listing was moved to thefirst section of the Tokyo Stock Exchange. This was the peak of Japan’s
bubble economy as many companies were diversifying operations. At theCompany-wide Sales Meeting, company president Akira Ueda declared thatthe company would focus exclusively on repair and reinforcement projects.
We, SHO-BOND have dedicated ourselves to the comprehensive
maintenance of concrete structures and this commitment will notchange. We will steadily establish a sound foundation for business
operations in this field. We do not deviate from the mission, do notbranch out into other businesses in response to short-term trends,
and concentrate on serving society.
The corporate DNA as an infrastructure maintenance specialist, based on
growth prospects backed by the aging of Japan’s highway infrastructure, stilldefines the SHO-BOND Group today.
07

SHO-BOND 2022 Integrated Report

Akira Ueda at SHO-BOND’s 30th anniversary

History of SHO-BOND

1958Started operations as Showa Kogyo Corporation.

1963

The company was renamed SHO-BOND Co., Ltd. and the development of new products and construction methods started for the useof high-polymer materials at civil engineering and construction projects.

1964

SHO-BOND participated in the repair of cracks in the deck slab of the Showa Ohashi Bridge in Niigata, which collapsed during anearthquake shortly after the bridge was completed.

1965

Tokyo Olympics

After a trial installation of the Cut-off Joint, an expansion device for highway bridge developed by SHO-BOND and Japan Highway
Public Corporation, this innovation was used nationwide at expressway construction projects.
1965Completion of the Meishin Expressway

SHO-BOND split into two companies: SHO-BOND CORPORATION and SHO-BOND Chemical

1977

Relocated the Central Technical Research Institute to Omiya (now the city of Saitama) and started strengthening R&D capabilities toreinforce SHO-BOND’s reputation as a technology-oriented organization. The institute develops new products and construction
methods that combine chemical and civil engineering technologies.

Business Strategies

1975

Management Strategies

1964

What is the SHO-BOND Group?

June 4, 1958

The special website for SHO-BOND’s 60th anniversary(Japanese version only)

https://www.sho-bond.co.jp/60th/

Sustainability

1977 The Central Technical Research Institutein 1977

1981 The SHO-BOND BICS (Balloon Injection forConcrete Structures) Method for repairingcracks in concrete was used at theJapan-U.S. large earthquake resistanceexperiment at the Building Research Instituteof the Ministry of Construction.

Corporate Governance1961 Founder Akira Ueda transports building
materials to a dam construction site
during a blizzard

History of New Products and Construction Methods

1967 Installation of the Cut-off Jointat the Tomei Expressway
Nagoya Interchange

1968 Developed and started
sales of SHO-BOND Mini

1983 Developed the DD BICS
MethodSHO-BOND 2022 Integrated ReportCompany Information

1962 Concrete successive pour
method using SHO-BOND#202 adhesive08

19821982

Established an agreement with Straub, based on Switzerland, to manufacture Straub couplings in Japan.

1987

SHO-BOND was listed on the second section of the Tokyo Stock Exchange and moved to the first section in 1989 as progresscontinued as a provider of comprehensive maintenance services for concrete structures.
1989

1995

Nikkei Stock Average reached an all-time high of ¥38,915

Many elevated sections of the Hanshin Expressway collapsed during the 1995 Great Hanshin-Awaji Earthquake, but sections
supported by columns with seismic reinforcement using SHO-BOND’s steel plate jacketing method were not damaged. After thisdisaster, seismic reinforcement projects increased throughout Japan and SHO-BOND’s sales and earnings increased significantly.
1995

The Great Hanshin-Awaji Earthquake

1996

The Technical Research Institute began operating. The development of new technologies and equipment at the institute for assessing
durability and other properties have helped make SHO-BOND’s construction methods and products even more reliable.

2005

Enactment of the Act on Promoting Quality Assurance in Public Works resulted in the use of a new evaluation method for the selectionof winning bids by taking into account various considerations other than price. This gave SHO-BOND a big advantage due to thecompany’s reliable technologies and long record of proven reliability at public-works projects.

1982 Signing the coupling manufacturing agreementwith Straub

1991 Exterior work at the bridge over Nihonbashi

1995 A section of the Hanshin Expressway destroyedby the Great Hanshin-Awaji Earthquake

1995 Expressway columns reinforced shortly before
the earthquake were intact

1996 The new Technical Research InstituteHistory of New Products and Construction Methods

1983 ST Joint

09

SHO-BOND 2022 Integrated Report

1997 Restraining Chain

2006 RAC-Sheet Method(prevents concretedegradation)

2006 Restraining Belt

2008

Established SHO-BOND Holdings Co., Ltd.

2011

The Great East Japan Earthquake of 2011 showed the effectiveness of seismic reinforcement work that was done after the Great
Hanshin-Awaji Earthquake. This disaster further increased the pace of work to make Japan’s infrastructure more resistant toearthquakes. SHO-BOND established 12 regional construction subsidiaries (the Kako Group) as a framework for receiving orders fromlocal governments.
The Great East Japan Earthquake

2012

Sasago Tunnel ceiling collapse on the Chuo Expressway

2013

Amendment to the Road Traffic Act, and compilation of the Basic Plan for Life Extension of Infrastructure (the First Year of Social Infrastructures Maintenance)

2015

Beginning of the large-scale renewal and repair projects of expressway companies

2016

Kumamoto Earthquake

Passing of Akira Ueda, founder and chairman.
2018

Management Strategies

2017

2011

What is the SHO-BOND Group?

2008-

Reexamination of the Japanese government’s Fundamental Plan for National Resilience

SHO-BOND and MITSUI & CO., LTD. established SHO-BOND & MIT Infrastructure Maintenance Corp. (SB&M) to operate an
infrastructure maintenance business outside Japan.

2020

SB&M and CPAC, a member of the Siam Cement Group of Thailand, established CPAC SB&M Lifetime Solution Co., Ltd. in Thailand.

2021

Opened the Tsukuba Training Center, which is adjacent to the Technical Research Institute.

Business Strategies

2019

Sustainability

2011 AI Joint2017 Clear Protect Method2020 A trial construction project in Thailand

2020 CPJ-L

SHO-BOND 2022 Integrated ReportCompany Information

2008 Shearing Stopper

2011 Repairing Tohoku Shinkansen columns
damaged by the Great East Japan Earthquake

Corporate Governance2011 SHO-BOND’s work at the Kobe Ohashi Bridge
received a Technology Award from the Japan
Society of Civil Engineers Kansai Branch

10Comprehensive Maintenance System
The SHO-BOND Group is a comprehensive maintenance company which specializes in repairing and reinforcing social infrastructures.
We provide extensive support in social infrastructure maintenance, with a focus on design and construction services as a construction company, together withservices ranging from R&D of materials and construction methods, to manufacturing and sales of developed materials and construction methods.
The country’s foremost and comprehensive maintenance system. This is SHO-BOND’s characteristic, our strength.

DesignInvestigation /Diagnosis

Construction
Work

Technology
Development

GlobalCombination of chemical andcivil engineering technologies

Manufacturing

Sales■ Group Companies
SHO-BOND Holdings Co., Ltd.

SHO-BOND CORPORATION
Technical Research Institute

KAKO-Group (Construction Subsidiary)
TOHOKU KAKO CORPORATIONKAKO CORPORATIONKANTO KAKO CORPORATIONYOKOHAMA KAKO CORPORATIONNIIGATA KAKO CORPORATIONCHUBU KAKO CORPORATIONKANSAI KAKO CORPORATIONCHUGOKU KAKO CORPORATIONSHIKOKU KAKO CORPORATION
KYUSHU KAKO CORPORATION

Kyna-Tech

SHO-BOND MATERIAL CO., LTD.

Maintenance Technology Inc.
SHO-BOND (HONG KONG) Ltd.

SHO-BOND & MIT Infrastructure
Maintenance Corporation (SB&M)

11

SHO-BOND 2022 Integrated Report

CPAC SB&M
Lifetime Solution Co., Ltd.

Business
https://www.sho-bondhd.jp/english/business/

What is the SHO-BOND Group?

of new construction methods○ Technology Development Development
and materials required by the times

We have a wide array of state-of-the-art research equipment specialized inrepair and reinforcement. Our researchers specializing in chemistry and civilengineering work together with external research institutes to develop new
construction methods and materials that meet the needs of the coming age.

Technical Research Institute (SHO-BOND CORPORATION)Management Strategies

proposals based on○ Investigation / Diagnosis / Design Exact
accurate investigation

We propose optimal design and construction methods by investigating anddiagnosing, combining abundant knowledge and state-of-the-art technology inresponse to various structural damage problems.

Maintenance Technology Inc.

Business Strategies○ Construction Work

Construction system that can handle
all types of construction

SHO-BOND CORPORATION handles large-scale, high-difficulty construction works, whileconstruction subsidiaries (the KAKO-Group), which have their head offices in various
locations, handle small and medium-scale construction works. We undertake maintenanceworks nationwide, regardless of scale or whether we are a main contract or a subcontractor.

SHO-BOND CORPORATION / KAKO-Group / Kyna-Tech

Production system utilizing our factories
and contract manufacturing

Sustainability○ Manufacturing

While manufacturing resin-based materials, which are our roots, in our factories,
we develop and design structural construction materials in the TechnicalResearch Institute and contract manufacturing to partner companies (fabless).
We have an efficient and asset-light production system.

SHO-BOND MATERIAL CO., LTD.

Corporate Governance○ Sales

Sales of a wide variety of repair and reinforcement products

Product sales and construction work are the two pillars of our businesses. Witha lineup of organic, inorganic, and structural materials, our group companies
approach a wide range of customers to expand our sales channels.

Group companies

Company Information○ GlobalBringing Japanese maintenance technology overseas

We take on the challenge of solving the social issue of aging infrastructure faced bymany countries by combining our technological expertise in infrastructure maintenancewith the network and business development capabilities of MITSUI & CO., LTD.

SB&M

SHO-BOND 2022 Integrated Report

12The Value Creation Process

With a sense of mission of “Inheriting and passing on social infrastructure
Corporate
to the next generation in good condition,” we will contribute to the realization
Philosophy of a safe and affluent society by utilizing our advanced technological development
capability as a leading company in the structure maintenance business.

Business Model
InputsOur Vision
Fulfill our mission as a company

Financial capitalSocial Issues
Accelerated aging
of infrastructure
Increasingly severe andfrequent natural disasters
Realization ofa decarbonized society
Declining birthrate,
aging population,and decreasing workforce
Heightened geopolitical risks
and changes in
economic conditions inJapan and overseas● Sound financial basewith high profitability

Manufactured capital● The Group’s strength for comprehensive

infrastructure maintenanceBe a technology-orientedorganizationthat combines chemical and civil engineering
technologies to create new materials andconstruction methods

Comprehensive Maintenance
Investigation /Diagnosis● Construction methods andmaterials specialized in repair
and reinforcement

DesignIntellectual capital

Construction Work● Accumulated technological development

capabilities and knowledge centered on
Technical Research Institute“Honing our inherent strengths what

Human capital

Product sales● Experienced and highly skilled engineers● Multi-skilled workers with strengths

as maintenance specialists

Social and relationship capital● Engagement with stakeholders● Strong network with partner companies

Natural capital

Construction work
Technological development

Materiality
Comprehensive maintenancesystem backed by
the organizational capabilities

Productivity improvement
through technology
development● Maintenance work with

reduced environmental impact
Contribution to society

13

SHO-BOND 2022 Integrated Report

Internal

What is the SHO-BOND Group?

specializing in maintenance

Place priority on
profitability and efficiency

Resolution of social issues● Measures against aging throughpreventive infrastructure maintenance

MissionManagement Strategies

Outcomes● Establishment of a safe and● Creation of sustainable

Technology
Development

and livable cities

Manufacturing& Sales● Curbing of greenhouse gas emissions(Reduction of environmental impact)

GlobalImprovement of economic value¥12.0 billion

Profitability
Financial soundness

● ROE

12%

● Total return ratio

75%

Medium-term Business Plan (FY2022 - FY2024)

Corporate Governanceactivities¥87.5 billion● Profit attributable to owners of parent

Shareholder returns

Sound governanceand measures formore improvements● Sales

Sustainability

it is that makes us SHO-BOND”

Inheriting andpassing on social
infrastructure to
the next generationin good condition

Business Strategies

secure national, regional, andeconomic society with resilience

Contribution to
the development ofsustainable cities

Contribution to society

Company Information
SHO-BOND 2022 Integrated Report14

Business Environment

Accelerated Aging of Infrastructure
Most of the infrastructure in Japan was built after the high economic growth period, and its aging is expected to accelerate in the future.
In response to these social issues, national and local governments are taking action nationwide to formulate plans for appropriately maintaining, managing, andrenewing infrastructure and extending the service life.

Number of Bridges by Year of Construction
Total: Approx. 500,000 bridges

Average age:

43 years(As of 2022)

Number of Tunnels by Year of Construction
Total: Approx. 10,000 tunnels

150,000

2,500

120,000

2,000

90,0001,500

60,0001,000

30,000500

01921 1930 1940 1950 1960 1970 1980 1990 2000 2010 2020
MLIT

Expressway
companies

Prefectures

0

Average age:

35 years(As of 2022)

1921 1930 1940 1950 1960 1970 1980 1990 2000 2010 2020

Municipalities

MLIT

Expressway
companies

Prefectures

Municipalities

Notes:
1. Prepared by SHO-BOND based on MLIT data
2. Number of managed facilities by road administrator
3. In addition to the above, there are approximately 230,000 bridges and 400 tunnels whose construction year is unknown.

Estimated Costs of Domestic
Infrastructure Maintenanceand Renewal
194.6 trillion yen

MLIT
Railway companies

38.4 trillion yen

MAFF

29.3 trillion yen

Expressway companies

19.4 trillion yen

2018-2048

282

trillion yen

Note: Based on FY2019 and FY2020 estimates. The maximum
amount of infrastructure maintenance/renewal expenses during thenext 30 years is estimated based on the preventive maintenanceconcepts of various organizations. These expenses for MLIT areabout 50% higher after 30 years when this estimate is based on
the corrective maintenance concepts. (Source: National
government materials, newspaper articles and other sources)

15

SHO-BOND 2022 Integrated Report

Estimated Market Size of Overseas
Infrastructure MaintenanceMiddle East2%

Africa3%

North America& Canada

15%

Latin America

18%

Approx.

200
trillion yen

Asia &
Oceania39%

per year

Europe22%

Source: Prepared by SHO-BOND based on MLIT data

Road bridge

2040

30%

75%

Examples of aging infrastructure

Concrete peeling andexposed reinforcing bars
Aging bridge bearing

Tunnel

53%

21%

66%

Sustainability

Harbor quay

[61,000 facilities]

22%

Business Strategies[11,000 tunnels]

Management Strategies[730,000 bridges]

2020

What is the SHO-BOND Group?

Percentage of Structural Infrastructures Built More Than 50 Years Ago

Salt damage[480,000 km]

5%Corporate Governance

Sewer pipe

35%
Sewer pipe corrosion[46,000 facilities]

10%

Company InformationRivermanagement
facility

38%

SHO-BOND 2022 Integrated Report16

Financial and Non-financial Highlights
Financial
Orders (¥bn)

Net Sales (¥bn)
96.1

84.4
74.4

67.9

6.5

5.7

5.9

7.8

77.9

68.6

62.0

FY20188.2

74.5

FY2019FY2020Constructions

67.6

59.7

60.8

5.9

5.7

53.8

55.1

FY2018FY2019FY2021

FY2022

Products

19.1%

61.1

Constructions

10.8

11.7

FY2018FY2019FY2020

FY202081.4%

FY2021

FY2022

Products

FY2021

10.6%

13.4%

11.1%

17.3

15.7

FY2022

Operating Profit Margin

82.5%

73.0

19.6%

11.3

FY2018

12.4

9.0

8.1

FY2019FY2020

FY2021

Profit Attributable to Owners of Parent

FY2022

ROE

Dividend (¥bn) / Purchase of Treasury
Shares (¥bn) / Total Return Ratio

Net Assets (¥bn) / Equity Ratio
81.4%

72.2

13.0%

7.3

Operating Profit

8.2

Profit Attributable to Owners of Parent(¥bn) / ROE

10.2%
12.9

7.8

6.5

21.3%
19.3%

81.2

87.9
66.7

Operating Profit (¥bn) /Operating Profit Margin

18.1%

80.1

82.8%

9.3

80.2%

75.1%
3.0

46.1%

FY2018FY2019Net Assets

17

83.6

78.1

74.1

FY2020Equity Ratio

SHO-BOND 2022 Integrated Report

91.0

FY2021

45.0%

47.5%

50.1%

94.2

FY2022

4.3

3.4

3.6

FY2018FY2019Dividend

FY20205.7

FY2021

Purchase of Treasury Shares

6.3

FY2022
Total Return Ratio

Number of Employees

819
86

10.5%

855

881

91

94

10.6%

98

10.7%

10.7%

787

818

Turnover Rate
951
103

10.8%

848

2.3%

FY2018Male

FY2019FemaleFY2020

FY2021

FY2022FY20182.8%
1.5%

FY2019FY2020

FY2022

Percentage of Construction Sites where“8 Days Off in 4 Weeks” is Achieved

100.0%

93.7%

77.1%

79.5%

FY2019FY202085.9%

Business Strategies

Percentage of Employees
Taking 100 or More Days Off per Year
99.4%

FY2021(Voluntary turnover rate)

Percentage of Female

98.9%

2.2%
1.2%

Management Strategies

764

733

916

What is the SHO-BOND Group?

Non-financial

89.6%
48.3%
Sustainability

FY2018FY2019FY2020

FY2021

FY2022FY2017FY2018FY2021(According to the Japan Federation of Construction Contractors)

Lost Time Injury (LTI) Severity Rate

1.48

FY20182.01
0.90

FY20190.21

FY2020

FY2021

0.67

FY2022(Lost work time of 4 or more days)

0.15

FY2018FY2019FY20200.09

0.12

FY2021

FY2022Company Information

4.49
3.29

Corporate Governance

Lost Time Injury (LTI) Frequency Rate

(Lost work time of 4 or more days)

SHO-BOND 2022 Integrated Report18

T O PM E S S A G E

P r e s i d e n t a n d R e p r e s e n t a t i ve D i r e c t o r

Tatsuya Kishimoto

19

SHO-BOND 2022 Integrated Report

T O PM E S S A G E

A Resolute Dedication to Using Knowledge
and Technologies Backed by Many Yearsof Accomplishments to Contribute to Society
Q. Why is SHO-BOND issuing an integrated

Q. How would you describe SHO-BOND from

A. The public’s interest in infrastructure maintenance isincreasing year after year. I believe that SHO-BOND, as aleading company in this business sector, should provide
even more information within our organization and to the
public about business activities.
For more than 60 years, the SHO-BOND Group has
contributed to society as a company specializing in the
repair and reinforcement of infrastructure. We did notplace emphasis on public relations activities because we
operated mainly as a subcontractor in prior years andmost of our work is public-sector projects. However, thefrequency of calls from other countries about ourservices is increasing along with the importance ofinfrastructure maintenance. MITSUI & CO., LTD.
contacted us about working together and we haverecently started a joint overseas business. These events
made us realize that we needed to give the public evenmore information about our organization.
Our integrated report is also a means of explaining to
our workforce the philosophy and commitment of the
SHO-BOND Group’s senior management. We aredetermined to continue taking on new challenges. Mostof our operations are currently in Japan. I believe that
expanding our activities outside Japan will be vital to ourability to continue to grow. This is why the senior
executives have a strong commitment to taking on thechallenge of launching and enlarging operations in othercountries. We want everyone in our group to be aware ofthis goal and understand the thinking behind it.
I believe that this report will help our employees andtheir family members to share the SHO-BOND’s Purpose
and to realize that we are contributing to society throughour business activities of infrastructure repair andreinforcement.

A. We are a unique company that specializes in repair

report for the first time?

your standpoint as the president?

and reinforcement work and is capable of providing a fullline of services for these projects.
Repair and reinforcement projects differ from theconstruction of new structures with regard to designs.
For new construction, a company is basically required
only to finish the project as designed. At our projects,
there is a drawing but we cannot know the true status ofa structure’s deterioration until we start working at thesite. Only then can we know what types of procedures
will be needed as well as the volume of work. For
instance, what initially appears to be a mild sprain may
turn out to be a broken bone requiring a completely
different type of treatment. Another difference regarding
repair and reinforcement work is time constraints
because a structure often continues to be used during a
project. This makes our work very difficult and explains
why our customers seek a company with a broad rangeof expertise. SHO-BOND has a long record of providing
customers with a full line of services, extending fromanalysis of deterioration to proposals for reinforcement,
the supply of materials, and the actual repair andreinforcement procedures. I believe this breadth of ourcapabilities is why we have earned a reputation for
reliability among our customers. Earning and retaining
this trust is not easy. At SHO-BOND, this reputation islargely backed by our team of highly skilled engineers.
We have a large number of engineers who are repair andreinforcement work enthusiasts and find this to be an
extremely interesting and rewarding job.
Our Technical Research Institute (note 1) is one of ourgreatest strengths. Repair engineering (note 1) is a
registered trademark of ours. This term expresses ourcommitment to shifting the basis of repair andreinforcement work from simply the experience ofworkers to the level of scientific research. Furthermore,this institute does not use our company name. This isbecause we want to advance repair and reinforcement
technologies for society overall rather than only for

SHO-BOND 2022 Integrated Report

20

P 39

▼

Research and Development

P 11

▼

Comprehensive Maintenance System

Notes:
1. Repair engineering (“補修工学 ®”) and the Technical Research Institute(“補修工学研究所®”) are registered trademarks of SHO-BOND
CORPORATION in Japan.
2. AI Shindanshi (“AI診断士®”) is a registered trademark of SHO-BOND
CORPORATION in Japan as of March 2023.

Q. What are you doing now to makeSHO-BOND even more powerful?

A. SHO-BOND is a unique company in the constructionindustry as a provider of a comprehensive maintenanceservices. But we should not become complacent. We
want to preserve our competitive edge of being able toprovide the same high level of work anywhere in Japan
precisely because we specialize in maintenance. This is
why we need to constantly upgrade our capabilities.
Our highest priority is human resource development.
Large projects on expressways require advanced skills.
The size of bridges, volume of traffic and othercharacteristics of these projects present big challenges.
Only engineers with the necessary know-how andexperience can handle this type of work. Years ago, we
at times accepted expressway project orders where our

Safety patrols by the president

21

SHO-BOND 2022 Integrated Reportskills were inadequate. We learned difficult lessons as
projects were delayed, we lost the trust of customers
and our employees were overworked. To prevent thissituation from happening again, we have beenstrengthening training programs, including by opening
the Tsukuba Training Center in 2021. We are alreadyreceiving positive feedback from people who attend
classes at this center.
In addition to human resource development, we aretaking many other actions based on the current
Medium-term Business Plan for building an evenstronger foundation for our operations. Reinforcing oursafety-first culture is one of our most important
initiatives. Even a small oversight regarding safety can
result in a fatality. A serious accident could also impact
our sales and earnings if clients force us to suspend
business operations. To reinforce everyone’s
commitment to safety, our entire group is conducting
initiatives for creating SHO-BOND culture of safety.
Training programs at the Tsukuba Training Center basedon actual jobsite tasks and safety awareness campaigns
have proven to be effective. We are also implementing
other strategic initiatives to create a stronger foundation
for more growth.
Medium-term Business Plan

P 25

▼

ourselves. The institute has a full lineup ofstate-of-the-art analytical equipment used for this field ofstudy. I believe that no other laboratory anywhere isbetter equipped to study the degradation of concrete
structures. To some extent, we accept requests forexperiments or analysis from people outside our group to
support progress involving repair engineering. One
recent accomplishment is the use of knowledge acquired
over many years to develop AI Shindanshi, an artificial
intelligence diagnosis system (note 2) for the degradationof concrete structures.

Q. Why did you decide to leave your position at
another company to join SHO-BOND?

A. After graduation, I started working at Kumagai Gumi,a large general contractor, because I wanted to work on
big civil engineering projects. My 15 years at thiscompany were very fulfilling as I participated mainly as adesign engineer at tunnel, levee and other projects.
During the construction sector downturn that began
when Japan’s bubble economy collapsed, I realized thatthe industry was likely to shift from building new
structures to the repair and reinforcement of existing
ones. My visit to SHO-BOND’s Technical ResearchInstitute convinced me that I wanted to become part ofthis organization.
Another reason I chose Kumagai Gumi was the large
scale of the company’s operations outside Japan. The
company had the intention of expanding their civilengineering business to other countries. In fact,overseas orders were a large share of their total sales.
This may partly explain why I decided that we should
expand SHO-BOND’s operations to other countries.

T O P

Q. What were some of your most memorable
jobs at SHO-BOND?

A. My first job at SHO-BOND was a repair project ofabout ¥50 million at the Sennin Tunnel in Iwate
prefecture. Traffic restrictions at the two-lane tunnel,
which is about 2.5km long, made this project very
challenging. We had to work on one side while vehicles
used the single lane on the other side. Drivers had to
wait as long as 15 minutes to enter the tunnel. I came up
with the idea of providing a rest area to allow drivers to
get out of their vehicles to relax and enjoy the beautiful
scenery of this area. In addition, I hired a person who
was friendly and particularly good at communicating as a
guard at the tunnel project. With these measures inplace, work to repair the tunnel went well. This type ofchallenge would not exist when building something new.
I learned a valuable lesson about the importance of
maintaining close ties with people living near a jobsite inorder to complete a project.
Complaints that force a suspension of work are oneof the biggest problems at construction projects. Work
must take place in a manner that does not disturb
nearby residents or create concerns for anyone else
associated with the project. This is especially important
for repair and reinforcement work on roads where traffic

M E S S A G E

needs to be restricted. A skillful field representative who
can manage these matters differs somewhat fromothers.
In addition, the Sennin Tunnel project showed me
where improvements were needed at SHO-BOND. In
those days, there was little education and follow-up
support for workers at the jobsite. As a result, there weredifferences in the skills of the people assigned to
manage construction sites. This is one reason that I am
now placing so much emphasis on human resource
development.
Another memorable job is a bridge project where I
learned a lesson by overcoming a mistake. We were
driving large steel parts into a road but had not
sufficiently checked what was underneath the road. We
hit a water pipe that spewed water high into the air. Until
then, most of SHO-BOND’s projects were at bridges andthere were not many engineers accustomed to placing
materials in the ground. Though I was not in charge ofthe project, I rushed to the jobsite and help them as an
excavation expert. I used my soil excavation know-how
acquired at Kumagai Gumi and was able to stop the leakafter about one month.
My experience at Kumagai Gumi was very helpful forthe underground work. This taught me the importance ofa workforce with diverse backgrounds. When an
unfamiliar accident happens, someone with theknow-how to respond properly will be needed.
Maintaining a team of engineers encompassing many
types of skills and experience reduces our exposure torisk concerning these accidents. Therefore, I always tellpeople to keep this diversity of backgrounds in mind
when hiring new employees.

SHO-BOND 2022 Integrated Report22

Q. What is your view of the current businessclimate and the outlook?

23

SHO-BOND 2022 Integrated Report

central component of our growth. Furthermore, although
this is still only a rough idea, we should think about using
this maintenance expertise to extend operations torailways, electric utilities and other market sectors inJapan. Building a network of relationships withcompanies in various industries could allow us to raise
the awareness of the necessity of repair andreinforcement and to increase utilization of thetechnologies and knowledge we have cultivated. The
market for the maintenance of structures is enormous.
The SHO-BOND cannot cover all categories of thismarket by itself. Expansion to more markets will
therefore require the creation of networks with othercompanies.

Overseas Business

P15▼

Business Environment

P 38

▼

A. Repair and reinforcement projects are accounting fora steadily larger share of the demand in the constructionindustry. In Japan’s expressway sector, the large-scale
renewal and repair projects, totaling about ¥5 trillion
between 2015 and 2030, are progressing. The outlook is
positive, but we are always looking ahead to after theseprojects are completed. Local governments are
responsible for the maintenance of most bridges inJapan. Many governments are encountering difficulties
finding people with the right skills and the funding for
maintenance. I believe that we can help them to solvethese problems by using our decades of experience andhighly skilled workforce. Other countries have similar
problems concerning infrastructure maintenance. Thereis an increasing awareness that preventive maintenancecan lower the total cost of the utilization of a bridge orother structure. However, most governments are not yet
establishing budgets for these maintenance procedures.
We need to pay attention to these issues and try toassist them by using our knowledge and experience.
In other countries, we are at the stage of raisingawareness of the importance of preventive maintenancein order to start receiving orders. To accomplish this, we
are working with MITSUI & CO., LTD. and seeking
prominent partner companies in countries where wewant to do business. We want to share our unique
technologies, construction methods and materials withthese partner companies that perform construction
activities in other countries. We are also seeking to utilize
our AI diagnosis expertise as we expand overseas. Our
main targets are Thailand and other Southeast Asian
countries, as well as North America. Every region has its
own distinctive needs. In Thailand, for instance, we plan
to use materials that are easy to work with because
construction workers may have little or no experience at
repair and reinforcement projects. In North America, we
can share our exclusive earthquake resistancetechnologies that we have acquired over the years at our
projects in Japan. Receiving orders there will require
receiving official certifications and explaining ourtechnologies and other innovations to design
consultants. This process takes time, but I am confident
that creating a sound base for our operations like this will
start producing significant benefits in the near future.
I am also thinking about what kind of organization
SHO-BOND should be 10 or 20 years from now. First ofall, we must continue to make our highway and bridge
maintenance business, which is our key strength, theT O P

Q. What is SHO-BOND’s stance regarding
sustainability?

A. The SHO-BOND Group is a provider of maintenancefor infrastructure and many other types of structures. By
extending the lives of structures with proper
maintenance, we significantly lower the consumption ofenergy and resources. This is much more responsible
than using a structure until it fails and then replacing it.
Maintenance lowers CO 2 emissions too. A lower costover a structure’s entire life cycle is another benefit.
Consequently, our business activities are supporting
progress regarding sustainability.
The contribution of our core business activities is not
our only involvement with sustainability. We also have alarge number of initiatives based on ESG materiality. For
example, we use our business activities to reduce CO 2
emissions, we have rigorous water quality and hygiene
management programs, we provide our people with safe,
pleasant, productive workplaces, and we are always
seeking ways to strengthen our governance.

infrastructure repair and reinforcement services, lives onin our corporate philosophy. Our senior executives
embrace this philosophy and make it an integral part oftheir words and actions. Our employees use thephilosophy as a guiding principle for the activities
needed to accomplish their respective missions. I want
the SHO-BOND Group to continue advancing together
by adhering to this philosophy.
I am very grateful for the support of ourshareholders. We will continue to aim for sustained
growth along with suitable distributions to shareholders.
I hope that our shareholders will share with us theawareness of the importance of contributing to society
through our business activities. I look forward to yourcontinued support.

P 29

▼

Sustainability of SHO-BOND

P43▼

Materiality

M E S S A G E

Q. What is your message to the stakeholders of
the SHO-BOND Group?

A. The importance of the SHO-BOND Group in society
will continue to increase as the public becomes moreaware of the need for infrastructure maintenance. We are
one of only a very few companies specializing in thisfield. I believe that we have a responsibility to meet the
expectations of shareholders, employees and all otherstakeholders by resolutely dedicating ourselves to using
knowledge and technologies backed by many years ofaccomplishments to contribute to society. This
integrated report with information about our past,present and vision for the future is one way to express
our commitment to fulfill this responsibility. I wanteveryone at our group to read this report so that we canall move forward as a unified team to accomplish thegoals that we all share.
Our corporate philosophy is the fundamental
guideline for all of our group’s activities. The philosophy
embodies the thinking of our founder Akira Ueda. The
spirit of Mr. Ueda, who identified trends in the businessclimate and was first to recognize the need for

SHO-BOND 2022 Integrated Report24Medium-term Business Plan
In the “Medium-term Business Plan (the fiscal year ended June 30, 2022 - the fiscal year ending June 30, 2024),” we will work to achieve sustainable profit
growth and the improvement of corporate value under the basic policy of “Honing our inherent strengths what it is that makes us SHO-BOND.” We defined the“what it is that makes us SHO-BOND” in terms of business as “construction work capability,” “technological development capability” and “product sales
capability,” and in terms of management as “profitability,” “financial soundness” and “shareholder returns.” In accordance with the Medium-term Business Plan,
we are trying to refine SHO-BOND’s strengths and proceeding with building a system ready for the stage of further accelerated growth. For the fiscal year ended
June 30, 2022, we set steady results for “upgrade the order receipt strategy utilizing the in-house company structure” and “more activities for large projects andconstruction work capability” as business strategy. In terms of stronger foundations for growth, we focused on various measures related to human resources
operation, such as “to become more competitive for capturing orders by developing human resources capable of adapting to changing markets” and “a strong
safety culture and rigorous on-site training.”

Further initiatives for large-scale construction by reinforcing organizational capabilities“Honing our inherent
strengths what it is thatmakes us SHO-BOND”

Develop new technologies ahead of other companies and take on the challenge of a new productsales strategy
Increase orders through human resource development that can respond to market changes
and the increase of productivity
Manage both profitability and financial soundness and enhance shareholder returns
More ESG activities and contributions to SDGs

Technologicaldevelopment
New construction methods andproduct development
Effective use of training centers

Construction
work
Product sales

More competitive forreceiving orders
Maintain advanced
construction capability

Full-scale start of operationsof SB&M
Diversification of sales channels

A company specializing in maintenance

Shareholders’ equity ratio: 82%
Financialsoundness

Dividend payout ratio: 50%
Total return ratio: 75%

Operating margin: 19%
ROE: 12%

Shareholder
returns

Profitability

Business Strategy
Strategic Initiatives

Progress in FY2022

A Stronger Foundation for Growth
Strategic Initiatives

Progress in FY2022

Upgrade the order receipt
strategy utilizing thein-house company structure

In-house companies hold the large project review
meetings to discuss the order receipt strategy andcheck the optimal appointment of engineers, levelingof quarterly sales, and the construction work
capability involving partner companies.

To become more competitive for
capturing orders by developing
human resources capable ofadapting to changing markets

The workforce reached 951 at the end of June 2022 (916 at
the end of June last year). The operation has been started at
Tsukuba Training Center in January 2022, providing practicaltraining for SHO-BOND young people and the staff of partnercompanies. Both in-house companies also have implemented
their own human resource development measures to raise thelevel of personnel capabilities.

More activities for large
projects and construction
work capability

Both in-house companies have sought to secure
construction work capabilities by appointing partnercompanies in larger areas than ever. SHO-BOND
received 21 large orders of 1 billion yen or more (9orders in the previous fiscal year), and the share ofsales from expressway companies rose up to 60%(47% in the previous fiscal year).

Personnel system reforms
that reflect the changing
business environment

With the keywords of “satisfaction”, “growth”,“confidence” and “sense of fulfillment”, we haveembarked on a reform of personnel systems.
External consultants were brought in to ensure
objectivity, and the project is being carried out
while taking into account internal needs.

Challenge a new productsales strategy by SB&M

We have worked on business activities in Thailand
and North America, and approached new privatecompanies and sales of foreign products in Japan
though the impact of the COVID-19 crisis is still
significant. In May 2022, we have started local
manufacturing of our products in Thailand.

A strong safety culture andrigorous on-site training

The action plans for creating a safety culture are
steadily progressing, and new initiatives such as
remote and video-based training have been
started. The frequency rate (0.67), the KPI, is below
the national average.

More joint activities by
increasing cooperation
among group companies andother companies

We as a whole have aimed to reduce construction
costs by having Kyna-Tech undertake water jet
construction work within the group. In addition, a
new cross-company team has been established inorder to strengthen partnerships with partnercompanies and to pursue further cost reduction
measures.

Use of the digitaltransformation (DX)for higher productivity

In terms of on-site DX, we have encouraged broaduse of digital tools such as construction
management applications and 3D design software,and the development of an AI damage diagnosis
system has advanced to the level of a practical
study.

New technologies forpreventive infrastructure
maintenance

We are researching new technologies in various
fields, and some developed inorganic materials havebeen utilized in construction projects. We have also
worked to shorten delivery time and reduce costs
for existing products and to make resin-based ones
non-poisonous.

Build a framework for
responding to ESG issues

In July 2022, we expressed our support for the
TCFD recommendations and calculated ourgreenhouse gas emissions under the guidance of
external consultants. In addition, we havepromoted the disclosure of non-financial
information, including the formulation of various
policies and KPIs related to ESG.

SHO-BOND will aim for sustainable growth of 10% or more over three
years with the operating profit target of ¥17,500 million in the final year byincreasing net sales further and maintaining the operating profit ratio at ahigh level. By continuing management that prioritizes capital efficiency,
return on equity (ROE) will be maintained at 12% or more through themedium-term period.

FY2022 Results
Net Sales

81.19 billion yen

87.5 billion yen

Operating Profit

17.26 billion yen

17.5 billion yen

Profit Attributable to Owners of Parent

12.36 billion yen

12.0 billion yen

13.4%

12.0%

ROE

Operating Profit

FY2024 Targets

ROE & Profit Attributable to Owners of Parent
(¥bn)
14

Plan

Plan

(%)

12

16

10
14
15.7

8

17.5

6
11.3

4
10

12.4 12.7 12.0

Business Strategies

12

17.8

17.3

2

8
Operating Profit

FY2021

FY2023

FY2022

Operating Margin

0

FY2024FY2018FY2021 FY2022 FY2023 FY2024

Profit Attributable to Owners of Parent

Management Strategies

(¥bn)
18

What is the SHO-BOND Group?

Financial Targets

ROE

Capital Policy
FY2022 Results
Dividend Payout Ratio

51.1%

50.0%

Total Return Ratio

75.1%

75.0%

Cross-shareholdings
Plan

3.0

8

(%)

(¥bn)
9

FY2022 Result
Sale
▲0.54
Changes inmarket value +0.32▲0.22￥bn

8

Plan

6

6.3

4
2
0

3.4

FY2018

8.4
7.3

6

7.1

5

FY2021 FY2022 FY2023 FY2024

Total Dividends
Total Return Ratio
Purchase of Treasury Shares

4

5.8
FY2015FY2018FY2021 FY2022 FY2023 FY2024

Cross-shareholdings
The Ratio of Cross-shareholdings to Net Assets

Company Information

5.7

7

(%)

Corporate GovernanceTotal Return Ratio
(¥bn)
10

FY2024 Targets

Sustainability

About dividends for the continuous and stable return of profits, SHO-BOND
will aim to steadily increase the dividend amount per share by maintaining adividend payout ratio of 50% or more. Additionally, we will purchase¥10,000 million of treasury shares over three years, and maintain a total
return ratio of 75% or more.We will reduce the ratio of cross-shareholdings
to net assets by selling 20% on a fair value basis.

Message from the Chief Financial Officer
SHO-BOND is the only listed construction company in Japanthat is a specialist in infrastructure maintenance. The stock has ahigh PBR due to this unique identity and financial managementwith emphasis on the ROE by prioritizing profitability andcarefully selecting orders to accept.
Director and General Manager of Corporate Planning Department

Yasuhiro Sekiguchi

Results of Operations
The start of large-scale renewal and repair projects by all expressway
companies has greatly changed Japan’s infrastructure maintenancemarket. These very costly projects are difficult and will take a few years
to complete. As a result, the characteristics of this market differ fromprior years when most orders were from the national and local
governments.
The SHO-BOND Group is taking many actions to take on these large
expressway projects. One measure is revisions to the internal infrastructure
for conducting business operations that began with the previous
Medium-term Business Plan (FY2019-FY2021). As shown in Figure 1, thesize of each new order has been increasing and expressway company
projects rose to 60% of all construction sales in FY2022.
The large-scale renewal and repair projects of the expressway
companies will not be based on the fiscal year of the Japanese
government, which makes these activities different from public-works
projects of the national and local governments. Orders can be received andwork can proceed throughout the year. The resulting higher utilization rateof construction engineers is levelling off, as shown in Figure 2.
The increase in large projects, backed by benefits of numerous
initiatives and the efforts of our engineers, has significantly raised our laborproductivity, as shown in Figure 3. During the past six years, this figure has
increased about 42%.
Another big change due to the larger number of big projects is the ability
to maintain large order backlogs at the end of every fiscal year, as shown in
Figure 4. Most national and local government orders can be completed in
the same fiscal year that the orders were received. Therefore, theseorders generally do not become part of the fiscal year-end backlogs. The
larger volume of this backlogs has raised the stability of sales andearnings. As a result, beginning with the previous Medium-term Business
Plan, we have been increasing the workforce and further upgrading ourability to receive orders.

Figure 1: Percentage of Expressway Sales andAmount of Orders(Million yen)
60%

150.0

40%

100.0

20%

50.0

0%

FY2016(Million yen)
35

25

23.5

24.4

25.5

27

FY2016FY2017(Billion yen)
20

SHO-BOND 2022 Integrated Report

0.0

19.5

18.7

17.2

17.6

15
10

1Q

2Q

3Q

FY2016FY2018FY20204Q
FY2022(Billion yen)

50

26.6

FY2019FY2022

Amount per Order

54.1

FY2018FY2021Figure 2: Quarterly Construction Sales

25.1

20

FY2020

31.8
28.6

30

FY2019Figure 4: Order Backlogs (at the End of Fiscal Year)
33.3

+42%

FY2018Pct. of Expressway Sales

5

Figure 3: Labor Productivity

FY2017

FY2020

FY2021

FY20220

FY201632.4

FY2017

80.3

70.9

65.4

FY2020

FY2021

40.5

FY2018FY2019FY2022

Figure 5: ROE and PBR
(ROE)
15.0%

(PBR)
3.50

14.0%

3.00

13.0%

2.50

12.0%

2.00

11.0%

1.50

10.0%

FY2016FY2017ROE

FY2018FY2019FY2020

FY2021

FY2022

1.00

PBR

Shareholder Returns
Figure 6: Profit Attributable to Owners of Parent(Billion yen)
15

10

5

Cross-shareholdings

0

7.3

FY20188.1

FY201911.3

9.0

FY2020

FY2021

12.4

FY2022

Figure 7: Total Amount of Shareholder Returns(Billion yen)
10

+176%

3.0

3.4

3.6

FY2018FY2019Dividends

FY2020

FY2021

6.3

FY2022

Purchase of Treasury SharesCompany Information

As was explained earlier, Japan’s infrastructure maintenance market has
been growing year after year since 2016. Sales and earnings of the
SHO-BOND Group have increased significantly along with measures toreceive orders for large-scale projects. We believe that the expansion ofthis market will continue at a moderate pace. Numerous activities areunder way for more improvements in productivity. At the Tsukuba
Training Center, our employees as well as people from partnercompanies receive training that will enable them to perform construction
tasks even more efficiently. In addition, we plan to use the operations of
our overseas infrastructure maintenance joint venture with MITSUI & CO.,LTD. for raising earnings per employee in our construction material sales
business. The SHO-BOND Group, as a specialist in infrastructure
maintenance, will continue using productivity initiatives possible only atan organization with our expertise and resources in order to aim for theconsistent growth of sales and earnings.

0

5.7

4.3

Corporate Governance5

Further Challenges for Improving
Productivity

Sustainability

As a rule, the SHO-BOND Group does not purchase or hold the stock ofsuppliers and other business partners with the exception of cases wherepurchasing and holding stock helps conduct business operations
efficiently and maintain and strengthen business relationships, thereby
contributing to the medium to long-term growth of its corporate value.
When a company that holds our stock as a cross-shareholding notifies
us of the intention to sell this stock, we will never make any attempt tostop this sale. The current Medium-term Business Plan includes the plan
to reduce the ratio of cross-shareholdings to net assets from about 8% to
6% by selling 20% on a fair value basis (as of June 30, 2021).

+69%

Business Strategies

Distributing earnings to shareholders is one of our highest priorities. The
basic policy is to pay a dividend consistently that is based on results ofoperations. Figures 6 and 7 show our net income and shareholder
returns during the past four years. Since FY2018, net income has
increased 69% and shareholder returns, including the purchase oftreasury shares, are up 176%. Furthermore, the average annual incomeof employees increased 35%. Based on our policy of distributing
earnings to shareholders and employees, improving remuneration for
employees is a priority along with raising shareholder returns.

Management Strategies“Honing our inherent strengths what it is that makes us SHO-BOND” isthe central theme of the current Medium-term Business Plan
(FY2022-FY2024). In terms of finances, what makes us SHO-BOND are
financial soundness, profitability and shareholder returns. Figure 5 shows
our return on equity (ROE) and price-to-book ratio (PBR) during the past
several years. For a high PBR, we must maintain an equity spread bykeeping our ROE higher than the cost of equity. We will continue to placepriority on the ROE. In addition, we will enhance the disclosure of
non-financial information, including environment-related information, as
we continue the IR activities that we have been focusing on. We believethat raising the visibility of the outlook for results of operations will holddown the cost of equity.

What is the SHO-BOND Group?

Financial Management Policy

SHO-BOND 2022 Integrated Report28Materiality
The SHO-BOND Group has designated four Materialities based on social demands and the expectations of stakeholders. The Materialities are our priorities inorder to achieve sustainable growth with our stakeholders as the SHO-BOND Group plays a role in solving social issues while continuing to increase corporate
value.
To identify Materiality, we evaluated social issues from the standpoints of the importance to stakeholders and the importance to business operations. Then 22
social issues that were particularly important from both standpoints were selected as the issues that the SHO-BOND Group should target.
We have also established a Sustainability Policy to improve the medium to long-term corporate value, and contribute to creating a sustainable society bycontinuously implementing initiatives in accordance with materiality priorities.

Process to Identify Materiality
Identification ofsocial issues

Establishment ofpriorities

Materiality
proposalConfirmation ofsuitability

Identification anddisclosure ofmateriality

Materiality and the Sustainable Development Goals
Social issues
S Establish a resilient infrastructure
S Leverage comprehensive

maintenance resources tocontribute to society

S Ensuring occupational health and safety

Materiality
Comprehensive maintenance systembacked by the organizational capabilities
Contribute to the development of social infrastructureby using partner companies interactions and thegroup’s aggregate resources for all maintenanceprocesses, whether large or small.

S Develop and use technologies for social issues
S Activities to increase productivity
S Recruiting and training programs
S Employee retention and sound labor relations

Productivity improvement throughtechnology development
Improve productivity by combining chemical and civilengineering technologies to create new technologies
and by conducting training and education programs.

S Improve economic performance

Corresponding SDGs
Ensure sustainable consumption and production
patterns.

Strengthen the means of implementation andrevitalize the global partnership for sustainable
development.

Promote sustained, inclusive and sustainableeconomic growth, full and productive
employment and decent work for all.

Build resilient infrastructure, promote inclusive
and sustainable industrialization and foster
innovation.

G Strengthen corporate governance
G Strengthen risk management
G Compliance with laws and regulations

Sound governance and measures formore improvements

G Fair business practices

Make sound and transparent governance to maintainthe foundation for relationships with all stakeholders.

G Information security measures

Promote peaceful and inclusive societies forsustainable development, provide access tojustice for all and build effective, accountable
and inclusive institutions at all levels.

G Proper management of intellectual property

E Sustainable use of resources
Make cities and human settlements inclusive,
safe, resilient and sustainable.

E Assessment of environmental impact of projects
E Proper management of waste materials
E Measures to combat climate change
S Measures involving Japan’s falling population
S Develop sustainable cities
S Health and safety of customers and consumers
S Community relationship

E Environment

29

S Social

SHO-BOND 2022 Integrated Report

G GovernanceContribution to the development ofsustainable cities
Position the social infrastructure maintenance businessas a key component of the development of sustainable
cities that are environmentally responsible.
Take urgent action to combat climate change
and its impacts.

Materiality
https://www.sho-bondhd.jp/english/csr/materiality/

Comprehensive Maintenance System backed by the organizational capabilities
S Comprehensive maintenance capabilities (investigation, designs, construction)

for public safety and confidence■■

S Workplace health and safety■

We work closely with customers on every stage of maintenance projects, including
investigation, designs and construction, and draw on the strengths of all groupcompanies to provide services of the highest quality for ensuring infrastructure safety.
We use our expertise as an infrastructure maintenance specialist for infrastructure
repair and reinforcement projects for resistance to natural disasters and other threats.

■

Our highest priorities are the protection of life and the safety of construction
activities. Based on this philosophy, our goal is no workplace accidents atconstruction and manufacturing sites. We have rigorous health and safetymeasures that include activities for reducing vulnerability to risk factors.
There are many programs for the physical and mental well-being of employees,
including measures to eliminate long working hours and provision of mental healthcare.

S Develop and use technologies for social issues■

S Activities to increase productivity

We use advanced technologies combining technologies in the fields of chemistry
and civil engineering for the development of environmentally and socially
responsible materials and construction methods.

■

S Recruiting and training programs■■

We maintain a training and education infrastructure for giving people the knowledge
to play key roles in the sustainable growth of the SHO-BOND Group. We arededicated to giving everyone the opportunity to reach his or her full potential.

■

We use many types of equipment for raising productivity in order to raise theefficiency of all tasks required for investigation, design, construction and othertypes of work.

S Employee retention and sound labor relations■

We will use a fair personnel system for evaluating performance to retain talented
people and ensure that knowledge is passed on. We will put focuses especially on
giving younger employees opportunities to advance and providing many job
opportunities for seniors.

■

We comply with all labor laws and regulations and have established numerous
programs and frameworks for maintaining pleasant and productive workplaces atgroup companies and our partner companies.
We maintain sound labor relations by encouraging dialogues between labor andmanagement, providing access to consultations and using other measures.

Business Strategies■

We do everything possible to hire many types of people and make hiring decisions
with fairness and no discrimination of any kind.

Strengthening technological skills and improving operating efficiency results inmore added value and working style reform activities contribute to higher
productivity.

Management Strategies

Productivity improvement through technology development

What is the SHO-BOND Group?

Sustainability Policy

Sound governance and measures for more improvements
G Strengthen corporate governance■

G Strengthen risk management■

Numerous measures are taken for the proper management of risk, including asystem of internal controls, a culture of recognizing and prudently taking on risk,
and a risk identification, evaluation and monitoring system that incorporates ESG
considerations.

G Information security measures■

IT systems and other measures are used for information security and there arestrict measures for the protection of personal and other confidential information. In
addition, education and training programs are provided to employees in order toreinforce their commitment to information security.

G Proper management of intellectual property■

We properly manage and protect our intellectual property rights and performsurveys and other procedures to prevent the infringement of the rights of others.

Sustainability

To meet the expectations of stakeholders for sustainable growth, our corporate
governance is structured for transparency, fairness, and the ability to makemanagement decisions with speed and confidence.

G Strict compliance with laws and regulations/fair and ethical business practices■

There are extensive education and training programs about compliance for
employees as well as monitoring and other activities in order to maintain aframework for fair business practices.

E Sustainable use of resources■■

We contribute to the sustainability of public-sector resources by using advanced
maintenance technologies for life extension of infrastructure.
We are dedicated to playing a role in creating a society where resources arerecycled. We use renewable resources and parts across the entire supply chain asmuch as possible and utilize resources in a manner that supports sustainability.

E Assessment of environmental impact of projects■

S Development of sustainable cities as Japan’s population ages and declines■

E Proper management of waste materials
We use proper and responsible activities for the management and disposal ofwaste materials created by our business operations.

S Health and safety of customers and consumers■

E Measures to combat climate change■■■

We are contributing to the fight against climate change by constantly working on
the reduction of greenhouse gases generated by our business operations.
We understand that life extension of infrastructure helps lower greenhouse gas
emissions. Skills as an infrastructure maintenance specialist are used for theutilization of business operations to play a part in combating climate change.

We will use our maintenance expertise to supply practical and effective solutions
for problems involving aging infrastructure and other public facilities as Japan’s
population declines.
We will maintain the management systems required to ensure the health and safetyof the people who use the infrastructure we help maintain and of customers whopurchased building materials from us. We will respond properly if a problem occurs.

S Community relationships■

We understand that the infrastructure can have a significant effect on communities
and regions and will maintain strong lines of communication in order to earn thetrust of the public.

Company Information■

We will comply with the environmental requirements of every project and take otheractions for minimizing the effects of our activities on the environment and society.

Corporate GovernanceContribution to the development of sustainable cities

We are committed to using infrastructure reinforcement for natural disaster
resilience and other business activities in order to play a role in the fight against
climate change on the entire society.

SHO-BOND 2022 Integrated Report30Construction in Japan East Japan In-house Company
Under the basic operational policy of “Build a robust foundation for the future to become a company thatcan keep pace with changes in the times,” we have established and are pursuing a business strategy
which leverages the technologies we have cultivated and facilitates further development that will connect
to future generations. We have named this strategy Triple P for its focus on three main areas: Project,
Policy, and Progress.

Noriyuki Hosaka

Managing Director and General Manager of the East Japan In-house Company
SHO-BOND CORPORATION

Overview of East Japan In-house Company
The East Japan In-house Company is an organizational framework
covering North and East Japan, as shown on the map to the right. We
have great expertise in the repair and reinforcement or seismic retrofitting
work of a broad range of road structures and buildings. We also have a
specialist company under our umbrella (Kyna-Tech) that possesses uniquecore technology of a high-frequency core drilling method, which is 2.5
times faster than conventional method. It plays an active role in projects
both within and outside the Group. We have also started building aframework for carrying out high pressure water jet work as a new business
area.
Some of the areas we cover experience heavy snowfall, so in order tokeep sales steady, we need to be strategic in how we accept orders, suchas taking on large-scale urban construction projects and orders from local
governments and the private sector to offset the suspension of work on
expressways in these regions during the winter.
We strive to take on difficult large-scale expressway construction
projects in urban areas as a joint venture with bridge manufacturers. In
addition to securing profits, we engage in these projects to improve thetechnical abilities of our young engineers. Also, as the number oflarge-scale projects we receive is growing, we are using the Tsukuba
Training Center and other resources to cultivate the employees of partnercompanies as well.

■ Business Locations /Area

East Japan In-house Company
390 employees
SHO-BOND CORPORATION
Kita-Nihon
Regional Office■ Hokkaido Branch■ Minami-Tohoku Branch■ Kita-Tohoku Branch

Shutoken Hokuriku
Regional Office■ Tokyo Branch■ Chiba Branch■ Kanto Branch■ Hokuriku BranchGroup Companies■ TOHOKU KAKOCORPORATION■ KAKO CORPORATION■ KANTO KAKOCORPORATION■ YOKOHAMA KAKOCORPORATION■ NIIGATA KAKOCORPORATION■ Kyna-Tech

7 branches

6 group companies

Construction Orders and Net Sales
We take on construction orders from expressway companies, national and local governments in a well-balanced manner. In particular, we receive a lot of orders
from local governments in the capital region, including the Tokyo. In regard to expressway construction, we have been driving growth in orders since FY2022,
after the Tokyo Olympics. We have also been trying out new technologies through joint ventures with partners, including major construction companies andbridge manufacturers.

Construction Orders: East Japan In-house Company(Billion yen)
50
40

47.5
1.1

36.5
4.8

30
16.0

32.4
2.6
12.7

33.8
2.3
12.4

Construction Sales: East Japan In-house Company(Billion yen)
40

36.8
30

1.1

16.1

28.2
4.1

33.2

29.3

31.5

10

0

10.2

11.8

5.5

5.4

6.9

8.4

FY2018FY2019FY2020

FY2021

National government

31

11.2

1.3

14.5

10.1

11.0

20

7.7

10

10.8

10.5

5.5

5.5

6.7

7.9

FY2018FY2019FY2020

FY2021

11.6

19.6

12.8
10.5

8.8

Local government

SHO-BOND 2022 Integrated Report

37.1

1.9

2.3

3.2

20
12.3

37.0

Expressway companies

4.4
FY2022
Private sector

0National government

Local government

Expressway companies

5.7
FY2022
Private sectorIn order to build a foundation for the future, we think it is important to cultivate people, both our own employees and those of partner companies, so we arefocusing our energy on safety initiatives and the development of human resources.

■ Creating a Safety Culture

Management Strategies

We have formulated an action plan for creating a safety culture within the in-house company and we are
implementing initiatives in accordance with this plan.
This includes making communication the highest priority, so we are implementing measures forenhancing both organizational and individual capabilities of ensuring safety on construction sites.
Specifically, we are working to deepen mutual understanding between the in-house company, ouremployees, and partner companies by carrying out conversation-based patrols and issuing in-housenewsletters.

■ Empowering Female Engineers and Non-Japanese Employees

2

Non-Japanese employees in training

7

Business Strategies

We are actively employing female engineers at construction sites and some ofthem take a lively part in on-site jobs balancing work and family life. Currently,
we have nine female engineers on staff, one of whom is non-Japanese.
We are also actively working to recruit and develop non-Japanese humanresources so that we will be able to respond to future changes in the businessenvironment. We have already launched an initiative to recruit non-Japaneseengineers and we are actively engaged in developing them, including atpartner companies. This development is not only being carried out throughon-site instruction, but also through measures such as educational support
that enables them to gain official Japanese qualifications.
Non-Japanese employees recruited (2020 to present)

What is the SHO-BOND Group?

Main Initiatives

Note: As of June 30, 2022

T o p i c s

Sustainability

A non-Japanese employee and female engineers

Dispatching Instructors to the Tsukuba Training Center

Corporate GovernanceAs part of our human resource development efforts, we have dispatched more than 10 veteran engineers to
act as instructors for construction management training aimed at less-experienced employees and workers
from partner companies. The in-house instructors are leveraging their experience to create their own courses
and study programs and these have been well received by the trainees.

Recycling Work Clothes and Helmets
We are carrying out an initiative for recycling unneeded work clothes, helmets, and other equipment. The
clothes, helmets, and equipment collected at each of our business locations are put to good use as anindustrial resource.
FY2022 Collection Results (East Japan In-house Company)
Work clothing: 298 pieces
Helmets: 27
Other (cold weather protection, etc.)

Company Information

In-house Newsletters
Each of our regional offices creates its own in-house newsletter. The Kita-Nihon Regional Office’s newsletterhas been named Eco-Hiiki (Eco Promoter) and includes content that aims to strengthen ties with partnercompanies. The Shutoken Hokuriku Regional Office’s newsletter is called Anzen Dayori (Safety News) and itaims to inform staff of revisions to laws and regulations and foster a strong awareness of safety in accordancewith in-house rules. We will continue to issue newsletters as a tool for fostering communication within thein-house company and with partner companies.

SHO-BOND 2022 Integrated Report32Construction in Japan West Japan In-house Company
At the West Japan In-house Company, we aim to achieve further growth by positioning “maintaining
growth,” “employee education,” and “strengthening our base” as priority issues. Accordingly, we will
strengthen our foundation through investment in people. When we receive orders for large-scaleconstruction projects from expressway companies, we decide whether or not to take an order to establish
a proper workforce framework and personnel allocation.

Tsuyoshi Koga
Managing Director and General Manager of the West Japan In-house Company
SHO-BOND CORPORATION

Overview of West Japan In-house Company
The West Japan In-house Company comprises three regional offices(Chubu, Kinki, and Nishi-Nihon) and each of these regional offices isaffiliated to the Kako Group companies. We operate over a wide area
covering South and West Japan.
Each branch of SHO-BOND CORPORATION primarily undertakes
general construction contracts with a focus on large-scale projects. The
Kako Group companies receive orders from national and local
governments taking advantage of being based in the district, as well as
undertake subcontract work from major construction companies. We ask
our partner companies to take on work within the in-house company on across-regional basis and these partners are playing an important role instrengthening our overall construction framework.
When taking on large-scale projects, we compile information from eachregion under the company’s area, while cooperating with the head office,such as anticipated expressway construction orders and personnel
information, so that it is available on the in-house company-wide basis. For
human resources development, we approach skill improvement from apeculiar perspective. We carry out a questionnaire of all young trainees inadvance and then plan experience-based training programs that cover
topics identified through the results.

■ Business Locations /AreaWest Japan In-house Company
378 employees
SHO-BOND CORPORATIONGroup Companies

Chubu
Regional Office■ Nagoya Branch■ Shizuoka Branch■ CHUBU KAKO

Kinki Regional Office■ Osaka Branch■ Kyoto Branch■ Kobe Branch■ KANSAI KAKO

Nishi-Nihon
Regional Office■ Chugoku Branch■ Shikoku Branch■ Kyushu Branch

8 branches

CORPORATIONCORPORATION■ CHUGOKU KAKOCORPORATION■ SHIKOKU KAKOCORPORATION■ KYUSHU KAKOCORPORATION
5 group companies

Construction Orders and Net Sales
We actively undertook large-scale construction orders from expressway companies to advance the Group’s aims of taking on larger construction projects andleveling off operation. We have even taken on two large-scale construction contracts with an initial value in excess of ¥7 billion. In addition to building a
construction framework suitable for handling large-scale projects, we have been improving the gross margin of construction work under strict cost control.

Construction Orders: West Japan In-house Company(Billion yen)
50

35.6
24.8
1.0

20

10

0

33

20.2

20

29.0
25.0

25.2

1.0

1.1

8.8

16.6
7.5

6.6

10
4.7

6.9

7.6

8.9

FY2018FY2019FY2020National government

30

1.5
30.0

11.5
5.3

0.6

29.3
25.7

34.7

39.8

1.5
1.2

30

(Billion yen)
40

43.5

40

Construction Sales: West Japan In-house Company

Local government

SHO-BOND 2022 Integrated Report

4.9

6.5

4.3

FY2021

FY2022

Expressway companies

Private sector

0

7.1

11.9

5.2

1.5

1.1

1.1
19.7
13.7

6.7

6.0

24.4

5.1

8.2

7.1

7.5

7.5

FY2018FY2019FY2020

FY2021

National government

35.4

Local government

Expressway companies

4.7
FY2022
Private sectorIn order to further enhance the Group’s strengths and accelerate growth, we are working on upgrading the order receipt strategy and more activities for large
projects and construction work capability (the targets of the current Medium-term Business Plan). At the same time, we are advancing the following initiatives todevelop human resources and establish a robust safety culture.

■ Utilizing 3D-CAD at Construction Sites

Management Strategies

We are gradually introducing 3D-CAD to construction sites in order to raise
productivity and quality and to visualize construction processes. 3D models
enable users to check the condition of a structure from various angles, andthey can be used to improve construction quality by discoveringinconsistencies between drawings and the actual structure, as well as byidentifying any points of interference between newly added members andthe existing structure. Issues can be solved before work even begins byusing 3D model simulations at the design stage. This contributes to making
construction processes more efficient and to raising productivity. It is also
possible to use 4D models, which are 3D models with a time axis added, atthe same time. This enables the visualization of the entire construction
process, from the pre-construction stage to completion, facilitating ashared awareness among large numbers of people. In terms of safety, 4D
models can also be used to check each step of a work process in advanceto understand and predict potential hazards, thereby enhancing safety.

A 3D model simulation

Business Strategies

The actual completed structure■ Unique Communication that Improves Safety and Team Unity

Sustainability

The Nishi-Nihon Regional Office has started sending all team members
Komachi Tsuushin, which are communications aimed at improving safety
awareness. Female administrative staff, who usually stay at office, use
social media to send safety awareness messages to construction sites
every Monday. This raises their interest in the sites and fosters greater unity
among the entire team, including administrative departments. At the sametime, the regional office’s Safety Management Section is sending Safety
Alerts that inform workers of potential onsite hazards identified from theweekly construction schedule as a way to encourage the sharing of
information and realize a greater alertness to danger among all employees.
Through these daily initiatives, we aim to foster an organization-widesafety culture by facilitating communication and building trust.

What is the SHO-BOND Group?

Main Initiatives

Komachi Tsuushin messages sent throughsocial media

Corporate GovernanceT o p i c s

Training for Young Employees

An experience-based training session

SHO-BOND 2022 Integrated ReportCompany Information

As a leading company for repair and reinforcement work, we position human resource development,
particularly the development of young employees and passing down of skills, as an important issue.
We are focusing on developing young engineers by leveraging the experience of senior employees inconstruction, sales, and engineering departments to implement experience-based training programs.
Content includes operational methods used at construction sites and ways to solve technical issues. We
are also actively working to further advance this training by incorporating environmental improvements(including DX).

34

Feature

Various Repair and Reinforcement Construction Projects

Expressways■ Large-scale Expressway Renewal and Repair Project■ Passing on Social Infrastructure to Next Generation

There are many structures that have been in use for over 50 years
and as they age, damage and deformities of these structures are
becoming apparent. Therefore, expressway companies arelaunching the large-scale renewal and repair project in order torestore these structures to their original state and even enhance
performance and functionality, thereby ensuring the long-termsoundness of the expressways. One of the main characteristics ofrenewal work is that it has a large impact on society because traffic
needs to be restricted and sometimes detours are set up for longsections of road during long construction periods. Also,
construction on expressways in urban areas is often difficult due torestrictions such as limited working space where the expressway
passes directly over a major arterial road.

Due to the social importance of expressways, carrying out
construction work while they are in operation involves various
restrictions, including in terms of safety and scheduling.
Advancing construction on a structure involves a wide range ofdifferent organizations, such as the organizations managing theroads leading in and out the section of road and other roads thatrun alongside it. Coordinating all these organizations requires a
great deal of time. Despite these difficult conditions, once work
has been safely completed and the structure is in sound condition
for use, it becomes social infrastructure that can be passed on to
next generation, which is enormously satisfying.

■ PR Representative for Expressway Renewal Work
Expressway renewal work is carried out on a section of a majortransportation network so it has a considerable effect on society.
Therefore, we work to gain the understanding of road andtransportation administrators regarding the importance of renewal
work, and request their cooperation with publicity activities aimed
at regular road users, including by posting notices of construction
work on electric signs and distributing leaflets. We also open
sections of our construction sites to visitors such as the press
and educational institutions in order to communicate the current
status of social infrastructure to wider society and promote theimportance of renewal work.

Renewal work underway

Local Governments■ Overview of Construction Works for Local■ Receiving Double Awards

There are approximately 730,000 bridges in Japan and about 90%of these are managed by local governments. Mino Bridge is a
116-meter-long steel stiffened suspension bridge which crosses the
Nagara River in Mino City, Gifu Prefecture. It started service in 1916,
giving it significant historical and technological value as Japan’s
oldest modern suspension bridge. We were able to participate in the
repair of the valuable bridge. Although the contract for this project
was with Mino City, as the bridge is an Important Cultural Property,
construction was carried out under designs and supervision by theJapan Cultural Heritage Consultancy, a design company entrustedwith the project by the Agency for Cultural Affairs.

As an Important Cultural Property, the bridge needed to be repaired
without any changes to its original form under the Act on theProtection of Cultural Properties. Therefore, during the work we had
to be extremely careful, keeping records of the position of every
member that was removed and the diameter of each rivet, as wellas carefully sorting the separated members by type and organizingthem in a way that made it clear where and how it should bereattached. This required a large amount of time and manpower,
but we were able to repair and restore the bridge without losing anyof its value as a cultural property. As a result, the Group received
double awards for the first time in our history, the Japan Society of
Civil Engineers’ 2021 Tanaka Award (Renovation Category) and a2021 Japan Construction Engineers’ Association Award.

Governments – The Repair of Mino Bridge as a Case Study■ Unravelling the History
This project was the first large-scale repair work carried out on
Mino Bridge since its designation as an Important Cultural
Property. When checking the specifications of the steel parts, oneof the main themes of the Japan Cultural Heritage Consultancy’s
work was checking the roots and repair history of each memberof the structure. We actively contributed to these investigations.
The investigation was a success, with the results revealing thatthe initial steel members that are still in use today were
manufactured at the Imperial Steel Works in Yawata.
Mino Bridge (Photos: Japan Cultural Heritage Consultancy)

35

SHO-BOND 2022 Integrated Report

Ministry of Land, Infrastructure, Transport and Tourism

The Ministry of Land, Infrastructure, Transport and Tourism (MLIT) is
carrying out many projects under its Fundamental Plan for National
Resilience, including measures to tackle aging infrastructure andstrengthen seismic functions. We are engaging in these projects,
primarily for seismic strengthening work. We are focusing on tacklingthese projects not only from a technical perspective, but also by
raising efficiency and productivity through the introduction of
construction DX. We are actively incorporating measures for
improvement of construction industry advocated by MLIT, and in
FY2022, we were evaluated highly by the ministry and designated as
a company of excellence in construction by its several regional offices.

Seismic strengthening work involves attaching aseismic devices
using anchor bolts, so there is a risk that boring will damage
important members within a structure. There are many instances
when construction cannot go forward according to the originalcontracted plans because the interior of the existing structure is
not visible. As a company specializing in maintenance, coming
together and leveraging our ingenuity to overcome successive
problems like these is worthwhile work. In FY2022, we received
several awards from regional offices of MLIT due to our efforts inthis area.

What is Already There■ Maintaining and Managing Structures through Cooperation with Bridge Doctors

Business Strategies

In order to extend the service life of highway bridges, MLIT has
established the Bridge Doctor system, which aims to apply
technical guidance and advice from experienced academic
experts to infrastructure maintenance. We helped this initiative by
the attachment of sensors that continually monitor the damage
situation of a bridge and initial data collection. We are also
participating in social infrastructure maintenance andmanagement projects operated through industrial-governmentalacademic partnerships.

Management Strategies■ The Difficulty of Construction Work On

What is the SHO-BOND Group?

■ Measures for Building National Resilience

An inspection by a Bridge Doctor■ Combining Construction with Service

We provide a one-stop service that delivers solutions to issues
such as damage to harbor facilities and buildings caused byaging, revisions to laws and regulations, damage from natural
disasters, and changes to a structure’s purpose. This service
covers everything from investigations and diagnoses to designand construction work. In our construction efforts, we have raised
the value and extended the service life of the buildings we haveworked on by making them safe, secure, comfortable, andresilient to disasters. We have also contributed to conserving
Japan’s beautiful cultural heritage by participating in therenovation of historic buildings.

A large proportion of renovation works are carried out while a facility
is still in use, so we take a customer-first approach. Compared to
new construction, renewal work requires that more attention is paid
to curtailing public nuisances, such as vibrations and noise, andcontrolling waste emissions, and there are many other challenges,
including a tendency toward longer construction schedules.
Despite such difficulty, we work closely with our customers toensure that construction moves forward without issue and that we
can safely hand over the completed structure. Seeing our customers
using their renovated buildings brings us the greatest joy.

Corporate Governance■ Work on Private Sector Structures

Sustainability

Private Sector and Others■ Valuing Relationships of Trust with Customers

Company Information

We take a wide-ranging approach to the private sector customersof our group companies and other partner companies, and if any
issues arise, we go to the site to survey the actual situation andoffer a variety of solution proposals. By building in-person
relationships with customers in this way, we are able to detect
any issues at an early stage, contributing to extending the service
life of facilities. The relationships of trust we build with ourcustomers are long-lasting, including providing maintenance andoperational management support after renewal work has been
completed.

Reinforcement work in progress

SHO-BOND 2022 Integrated Report36Manufacturing and Sales of Construction Materials SHO-BOND MATERIAL CO., LTD.
We are contributing to maintaining and updating social infrastructure by supplying products with excellent
performance in relation to cost that can meet customers’ needs and earn their trust. We work to build
frameworks for safe and efficient production activities, highly reliable quality assurance activities and theaccurate supply (delivery) of products.

Shigeru Naraoka

President and Representative Director
SHO-BOND MATERIAL CO., LTD.

Overview of SHO-BOND MATERIAL CO., LTD.
SHO-BOND MATERIAL CO., LTD. is a core Group company that engages in the manufacturing and salesof construction materials. We were established in July 2016 through the merger of SHO-BOND Chemical
and SHO-BOND Coupling to become both a manufacturer and seller of resin products, construction
materials, and pipe joints. We produce new construction materials and methods that accurately respondto changes in the maintenance market and the needs of our customers by combining chemical and civilengineering technologies within a comprehensive framework spanning from design and development
through to manufacturing and sales. The product improvement and new construction method ideas wegain from hundreds of SHO-BOND CORPORATION construction sites across Japan are the driving force
behind our product development capabilities. We continuously evolve our resin products and construction
materials alongside construction sites and boast a broad lineup of products tailored for the various effects
of deterioration and damage that afflict structures.

Group Product Sales(Billion yen)
10

7.8
5.9

5.7

6.5

5

0

FY2018 FY2019 FY2020 FY2021 FY2022

Activity Report1

Diversifying Product Sales Methods
In February 2022, we independently acquired a construction license in order to expand sales of new
products and meets customer requests that we carry out work onsite. This has enabled us to take on
construction service contracts so that we have been accepting construction orders that incorporate
sales of our products. In particular, we had been having trouble growing sales of CPJ-L, a concrete witha low-elasticity latex and ability to harden very quickly that we added to our lineup in October 2020, as it
was difficult to meet customer needs through just product sales. However, being able to mix and apply
the product onsite ourselves using a specialized mixer has led to a large increase in sale volumes.
Furthermore, we are also able to leverage our advantage of selling adhesives for pouring concrete toconstruction joints. Going forward, we will develop sales of products paired with onsite construction
across Japan.

2

Stainless Steel Mechanical Pipe Joints (Straub Pipe Couplings)
We have been manufacturing and selling Straub couplings for 40 years, from 1982 to 2022, as
mechanical pipe joints for air conditioning and sanitary equipment piping. Over this period, we havedeveloped lightweight, improved fastening, high pressure-resistant, and other products in response tonumerous requests from our customers. These have greatly pleased workers and clients on actual
construction sites by saving labor and shortening construction schedules. We will continue striving tomeet the expectations of our customers.
As a measure to grow sales in new fields, we have jointly developed a fire-resistant coupling for
flammable gas pipes with the Japan Gas Association and five gas companies, and this is now being
launched to market. The product has been highly evaluated by gas-related work sites and has received
the Japan Gas Association’s 2022 Award for Engineering in recognition of its excellent workability. Also,
our couplings are made from stainless steel, giving them long service lives and semi-permanent
recyclability. This contributes to lowering environmental impact, including reduction of industrial waste
and CO2 emissions.

37

SHO-BOND 2022 Integrated Report

8.2

Construction site (CPJ-L)

Example of a Straub pipe coupling(Straub Grip G-type)Overseas Businesses SHO-BOND & MIT Infrastructure Maintenance Corporation

Overview of SB&M

of customers / administrators in Japan and other countries

Japan
Demand for needs

Customers / Administrators
Multifaceted (market sectors / customers)
approach for sales

Sales ofproducts

SHO-BOND

Technologies

Challenges
andInnovation

MITSUI & CO., LTD.

Network in Japanand other countries

Investigation
andDiagnosis

Proposals

Sales ofconstruction
methods

Sustainability

TechnologicalsupportInheriting andpassing on social
infrastructure to
the next generationin good condition

Export of maintenance technologies
New markets – Challenges and Innovation Demand for needs
Customers / Administrators

Business Strategies

Approaches for solving issues

Management Strategies

SB&M was established in April 2019 with a 51% investment by SHO-BOND Holdings Co., Ltd. and a 49% investment by MITSUI & CO., LTD. It is the first joint
venture company in the history of SHO-BOND. A total of nine employees seconded from both companies work together to develop new businesses incooperation with SHO-BOND Group companies and Mitsui. The company’s business represents a new challenge for the SHO-BOND Group. We are working tocreate new business areas both in Japan and overseas.
In November 2020, the company established a joint venture company (CPAC SB&M Lifetime Solution Co., Ltd.) with the Concrete Products and AggregateCo., Ltd. (CPAC), a subsidiary of the Siam Cement Group (SCG), a major conglomerate in Thailand, to develop infrastructure maintenance business inSoutheast Asian countries starting from Thailand.
SB&M is working to expand sales of products and construction methods, listening to structural maintenance issues of customers in Japan and overseas andtaking a problem-solving approach. Based on SHO-BOND’s technology, the company handles a wide range of products, including structural repair resin,
earthquake-resistant equipment and expansion equipment for bridges, and various pipe joints. It also introduces high-quality repair products from overseas into
Japan.
At the Thai joint venture company, two seconded employees are currently playing a leading role to transfer SHO-BOND’s technology. Thailand isexperiencing a stage where aging infrastructure issues are beginning to surface. We are conducting educational activities to raise maintenance awareness andsales activities to show maintenance benefits from the perspective of life cycle costs. SB&M cooperates with SHO-BOND Group companies to support local
businesses.
The company is also considering the development of new overseas businesses to contribute to other countries by exporting the technologies and knowledge
it has cultivated and gained in Japan.

What is the SHO-BOND Group?

SHO-BOND & MIT Infrastructure Maintenance Corporation (SB&M) combines SHO-BOND’s technological capabilities with the networkand business development capabilities of MITSUI & CO., LTD. (Mitsui) to provide solutions using SHO-BOND’s technology for
infrastructure and private facilities owned and managed by customers in Japan and overseas. The company builds and develops new
business foundations for the SHO-BOND Group and promotes activities that create a safe and secure social environment.

GlobalActivity Report

Scenes of operations in Thailand

Company Information

In FY2022, SHO-BOND and Mitsui, as well as SB&M and CPAC, worked together both in Japan andoverseas to advance business while leveraging their respective strengths.
Travel and behavioral restrictions during the protracted COVID-19 pandemic significantly impacted
our Thai and other overseas businesses. Even seconded employees of the Thai joint venturecompany could not visit sites or customers. However, we utilized web meetings connecting multiple
locations and developed sales operations by exchanging ideas between local and Japaneseemployees. We also secured repair projects for ports and cement factories with the support of thesales network of SCG, CPAC, and MITSUI & CO. (THAILAND) LTD.
Similarly, overseas business development in countries other than Thailand has made steadyprogress through the Web, taking advantage of Mitsui’s overseas network of offices in 62 countries
worldwide.
While overseas businesses faced difficulties, our sales activities in Japan increased even underbehavioral restrictions. We have been getting more and more positive feedback by responding flexibly
to customers’ needs, for example, by conducting online sales to new customers through Mitsui’s
network and repeating site visits to lead up to mockup (trial construction) and product sales.
SB&M will continue to make steady progress toward business growth by leveraging the strengthsof a joint venture and combining the capabilities of the Group and its partner companies.

Corporate GovernanceTaking Advantage of the Joint Venture’s Strengths toMove Forward Despite the COVID-19 Pandemic

A port repair site in Thailand

SHO-BOND 2022 Integrated Report38Research and Development

Technical Research InstituteAs a leading company in the structure maintenance business, we are contributing to realizing a safe society through our advanced
technological development capabilities. Our development themes are based on the diverse needs of customers in various fields andour construction sites. In cooperation with public and private research institutes, we use open innovation research and development
methods to enhance the results and speed up the process.

Overview of Technical Research Institute
The SHO-BOND Group has contributed to society through the research and development of its own repair technology, believing that the combination ofchemical and civil engineering technologies is important for effective infrastructure maintenance. Technical Research Institute played a central role in this effort.
In 1996, the year after the Great Hanshin-Awaji Earthquake, SHO-BOND opened its third research laboratory (with a site area of approximately 22,000 m²) inTsukuba Science City. We named the institute the Technical Research Institute based on the philosophy of raising repair skills to the level of scientific research.
The institute focuses on clarifying the mechanisms of structural deterioration and damage, improving fatigue durability against large vehicles, and researchingand developing effective reinforcement technology for earthquake disasters. The research facility specializing in the repair and reinforcement of structures andequipped with a lot of state-of-the-art equipment is unique in Japan, and many materials and construction methods developed have been adopted as standards
for repair methods. The research staff consists of researchers with backgrounds in chemistry (organic materials) and civil engineering (inorganic materials andstructures).

Specimen Preparation Building

Large Testing Laboratory

Main Building

Research Building

Training Bridge

Training Building

1st Wheel Load Running Test Laboratory

Wheel load running test

Exposure Testing Area

Inorganic Materials Research Building

Outdoor Exhibition Site

2nd Wheel Load Running Test Laboratory

Tsukuba Training Center

Technical Research Institute (SHO-BOND CORPORATION)
Example of EPMA analysis

Aerial view of the Technical Research Institute and Tsukuba Training Center

Various Research and Development Themes
In recent years, we have been working on the following researchand development themes:● Concrete coating methods with few work processes that canbe easily conducted by non-skilled workers, and one-pack type
coating materials that are easy to handle● A method to ensure that anticorrosive agents for reinforcing
bars penetrate from the surface of the concrete to the interior
as a preventive maintenance to be applied before thedeterioration of structures● Special anchors for adhesive injection and special concrete
placing systems for the surface replacement to repair deckslabs that have deteriorated significantly due to repeated heav ytraffic loading
In addition to these themes, we are constantly conducting
research and development on several other themes.
In Februar y 2022, the Institute received the Special Award at
the First Infrastructure Maintenance Awards from the Japan
Society of Civil Engineers (JSCE) for its longstanding researchand development activities that have contributed to thedevelopment of infrastructure maintenance.

CPJ-L demo attended by customers

Received the Special Award at
the First Infrastructure Maintenance Awards from JSCE

JSCE Infrastructure Maintenance Awards website (Japanese version only)
https://inframaintenance.jsce.or.jp/hyousyou/announcement1/

39

SHO-BOND 2022 Integrated Report

Bending test of deck slabs repaired byresin injection

Led by the Engineering Division, which gathers information on issues faced by customers and the Group, the Group conducts research and development at theTechnical Research Institute and commercializes products at SHO-BOND MATERIAL CO., LTD.
Feedback

Customers
SHO-BOND CORPORATIONGroup Companies

Request for ideasof research anddevelopment

Technical Research Institute

Progress report

SHO-BOND MATERIAL CO., LTD.
Commercialize

Development Examples
1

A High-performance Anti-falling Method with Excellent Transparency (SHO-BOND New Clear Cloth Method)

New Clear Cloth Resin
New Clear Cloth Putty
New Clear Cloth Primer

Conc

rete

Illustration of SHO-BOND New Clear Cloth Method

Life Extension Methods for Small and Medium-sized Bridges(CPJ-L, SBJT, and SB Primer)

Sustainability

2

New Clear Cloth Resin
New Clear ClothBusiness Strategies

With the aging of infrastructure constructed during the period of high economic growth, concrete pieces
falling from elevated bridges and other structures have become apparent, and anti-falling measures havebeen implemented. In addition, since the Sasago Tunnel Ceiling Collapse, inspections have become
mandatory every five years, and facility managers are required to conduct a close visual inspection. For
this reason, there is a need for a method that allows direct visual inspection of concrete conditions evenafter anti-falling measures are implemented, but the transparency has been insufficient with existing
methods.
To meet this demand, we have developed a high-performance anti-falling method that is transparent
and has excellent visibility of the substrate. The method combines excellent transparency withload-bearing performance and deformation performance to support falling objects and demonstrates
sufficient performance even in the temperature range of -30 to 50°C. We expect this method willcontribute to the maintenance and management of concrete structures and the prevention of third-party
damage.

Small and medium-sized bridges are important infrastructure for community roads regardless of
their traffic volume. However, they are often managed by local governments lacking both financial
and human resources, requiring general-purpose construction equipment, workability, andeconomic efficiency. To meet these needs, we have developed life extension methods that satisfy
these requirements and provide sufficient durability. This method involves removing the existing
pavement from the concrete deck slab, applying a highly permeable primer (SB Primer) and anadhesive for jointing (SBJT) to the top surface of the concrete deck slab, and then placing paving
and reinforcement material, a low-elasticity latex modified fast curing concrete (CPJ-L) mixed witha small mixer. The main material, CPJ-L, has various features, such as fast curing that leads to ashorter road closure time, durability, and load resistance. We expect it to become an effective
tool for local governments to promote longer bridge life.

Before construction

Corporate Governance

After construction

3

AI-based Repair Design Productivity Improvement System (AI Sindanshi *)*AI Shindanshi (“AI診断士 ”) is a registered trademark of SHO-BOND CORPORATION in Japanas of March 2023.

Photo data

Structural specifications
Location information

Refer to meteorological observatory information,
ASR aggregate distribution, separation distancefrom shore, latitude, etc.

Specification data

Location information(latitude and longitude: GPS)

Total judgment
AI-based image diagnostics

AI-based data diagnostics

Company Information

Traditionally, causes of deterioration of concrete structures have been identified
based on detailed site investigation and material analysis results of samples takenfrom deteriorated parts. In addition, the repair method had to be selected fromvarious choices corresponding to the identified causes of deterioration according tosite conditions.
As a tool to improve the productivity of this process, we have developed an
artificial intelligence (AI) system for diagnosing deterioration and selecting repair
methods (AI Shindanshi). The basic system is constructed by deep learning by AI
based on abundant in-house repair work examples. The system enables theidentification of deterioration factors and the immediate proposal of optimal repair
methods simply by providing deterioration images and location information of thetarget structure. We plan to utilize “AI Shindanshi” as a tool for making technicalproposals in planning for extending the life of structures of customers and otheractivities to contribute to improving business efficiency.

Management Strategies

Provide repair and reinforcement
materials and methods

Engineering Division
Research and Development Meeting

Request for
research anddevelopment

What is the SHO-BOND Group?

Cooperation Among Divisions and Group Companies

AI-based countermeasure method selection

Diagram of AI diagnosis
SHO-BOND 2022 Integrated Report40

Tsukuba Training Center
Motivation for Establishment
Providing Learning Opportunities Based on Practical Training
Recently, a wide variety of structural repair methods, including preventive
maintenance, anti-deterioration, seismic reinforcement, and component
replacement methods have been developed. Materials have also become
diverse, including concrete, steel, resin materials, and new materials suchas aramid and carbon fiber. Familiarity with these methods and materials isessential to ensure construction quality. In addition, the Group’s abundant
proprietary methods and materials are valuable assets, and we consider it
an important task to ensure that these technologies are passed on to thenext generation. In order for all employees to master these technologies,
we decided that a full-scale training center would be necessary because
the existing classroom lectures and on-the-job training at construction sites
were insufficient. For these reasons, in October 2021 we established the
Tsukuba Training Center with an area of approximately 5,000m2 near theTechnical Research Institute.

Full view of Tsukuba Training Center

Concept of the Facilities
The concept of the facilities is to provide classroom lectures on the intentionof adopting each construction method and material, points to note inconstruction, safety, and others, and then to provide practical training
during the training period to consolidate the knowledge. With an eye on
training not only for our employees but also for employees of domestic andoverseas partner companies that have little experience in repair work, we
use the same repair objects and materials in the practical training as thoseat the construction site so that they can experience the feeling of the site.
The main facilities are a seminar room, a construction training room, asafety training room (with a real scaffold, mannequins, danger experienceequipment, and VR danger experience equipment), and a full-scale training
bridge (a two-span simply supported three I-girder bridge).

Training bridge

Overview of the Facilities■ Training building (total floor space of approx. 1,000m²)● Seminar room: A classroom for up to 54 participants● Construction training room: A seminar room where participants can learn how tohandle repair materials● Safety training room: A seminar room where participants can experience the significance ofsafety activities■ Training bridge (10m x 20m)

41

Hanging experience of a safety belt

Classroom seminar

Morning meeting practice

Practical training in applying organic materials

Practical training in installing bridge fall prevention equipment(at the training bridge)

Practical training in finding rebars location

SHO-BOND 2022 Integrated ReportInvestigation / Diagnosis / Design Maintenance Technology Inc.
What is the SHO-BOND Group?

Overview of Maintenance Technology Inc.
Maintenance Technology Inc., established in 2011, is the only company in the Group
engaging in construction consulting services. As of July 2022, the company has 23
employees and three sales offices: Tokyo, Nagoya, and Osaka. The breakdown of thecompany’s operations is 75% consulting services and 25% operations within the Group.
The consulting services include investigation, diagnosis, analysis, and repair design ofbridges, tunnels, and other public structures. The operations within the Group mainly
include a shape measurement of structures using 3D scanners, a photographic
measurement using digital cameras, and an analysis of SHO-BOND resin products.

Management Strategies

Site investigation

Introduction of Operations
The following are two representative operations of Maintenance Technology Inc.

Business Strategies

1

Structure Measurement and 3D-CAD Data Preparation Using 3D Scanners

Repair and reinforcement work consists primarily of installing or replacing members on
existing structures. For this reason, accurate measurement is often difficult when existing
structures have complex shapes or narrow spaces. In response to this problem,
Maintenance Technology Inc. has begun using a recently developed high-performance 3D
scanner device to measure the dimensional relationships of existing structures accurately,safely, and quickly. We also convert the point cloud data obtained from 3D scanners into
3D-CAD data to check the degree of interference between members and the scope of
construction.

2

Sustainability

Structure measurement using a 3D scannerPhotographic Measurement Using Digital Cameras

Corporate GovernanceAs the scale of construction projects increases, it is difficult to ensure measurement accuracy using the conventional method of manually measuring the drilling
position of concrete. Accordingly, we calculate 2D and 3D coordinate positions using photographic measurement technology with a digital camera to accurately
determine the coordinate positions to be found, such as the drilling position of concrete. Based on the measurement results, members are manufactured infactories.

Company Information

Photographic measurement

The above two measurement operations involve technologies for accurately measuring existing structures, which are very important for repair and reinforcement work.
We will stay up-to-date with the latest trends in new technologies, and contribute to improving the construction quality on sites.

SHO-BOND 2022 Integrated Report42Sus t ainabilit y of
SHO -BOND

Basic Concept for Sustainability
With its Corporate Philosophy at the core of management, the Group has
designated material issues (Materialities) to get close to its vision. Four
designated Materialities involve internal activities and how businessactivities affect society. We believe that all of these activities are
sustainability management that contributes to accomplishing the SDGs andachieving our Corporate Philosophy. We have established a Sustainability
Policy and ESG-related policies to provide guidelines for constant activities
in accordance with materiality priorities. In August 2022, we set KPIs foreach of the priorities to measure their progress and disclosed targets andresults.
We will enhance our corporate value over the medium to long term andcontribute to creating a sustainable society by continuing to upgradesustainability initiatives with the input of our internal and external
stakeholders. Specifically, we will improve our promotion framework,
consider measures, and regularly review them to upgrade the initiatives.

43

SHO-BOND 2022 Integrated Report■ Sustainability Philosophy

Corporate Philosophy
Our Vision
Materiality
Sustainability PolicyE
Environmental
PolicyS
Quality Policy
Health and Safety Policy
Human Rights Policy
Procurement PolicyGAnti-Bribery Policy

The Group has established a Sustainability Committee, chaired by President and Representative Director and composed of all inside and outside directors. The
Committee meets once a year as a general rule to discuss and decide on sustainability issues including social and environmental issues. The Committee also
submits and reports the results of discussion on important matters to the Executive Committee and the Board of Directors. The Committee mainly discusses
general important matters related to sustainability such as the development of policies and measures related to sustainability, the identification, assessment, andmanagement of climate-related risks and opportunities, and the management of KPIs for non-financial information.
We have also established an ESG Promotion Office as an office to integrate activities related to sustainability. The ESG Promotion Office holds meetings asnecessary with those charged with ESG in respective departments and at Group companies to work together at the practical level across the Group. Under
such a structure, we are committed to staying and becoming more sustainable by organically cooperating among the management team, the ESG Promotion
Office, respective departments, and Group companies.

Materiality
Contribution to
the development ofsustainable cities

KPIs■

Comprehensive
maintenance systembacked by
the organizational
capabilities

0

Rate of reduction in CO2 emissions intensity*1(Scope1 and 2)*2
(vs. FY2022 [6.5 t-CO2 / 100 million yen])-25%[4.9 t-CO2 / 100 million yen]±0%
[6.5 t-CO2 /100 million yen]

Average scores for contractor performance
evaluation in construction industry

MLIT：78 or higher
NEXCO：80 or higher

MLIT：80.0
NEXCO：86.0

100%

85.9%

0

0

0.7 or lower

0.67

Percentage of construction sites where“8 days off in 4 weeks” is achieved*3(according to the Japan Federation of Construction Contractors)
Number of fatal accidents■

Lost Time Injury (LTI) frequency rate■

Achievement rate of annual overtime limit of 720 hours*4

100%

100%

■

Percentage of female employees in regular recruiting

15% or more

9.5%

■

Percentage of employees with disabilities

2.4% or more

3.3%

■

Rate of response to safety confirmation

100%

100%

■

Compliance training participation rate

100%

98.8%

■

Number of serious violations of laws and regulations

0

0

■

Information security training participation rate

100%

90.3%

Company Information■

Corporate GovernanceSound governance andmeasures formore improvements■

0

Sustainability

Productivity improvement
throughtechnology development■

Number of violations of environmental laws andregulations

Business Strategies■

FY2022

Management Strategies■ KPIs Related to Sustainability

What is the SHO-BOND Group?

Strengthening Our Sustainability Promotion Framework*1 CO2 emissions per consolidated net sales (100 million yen)
When to achieve: *2 FY2031; *3 FY2024; *4 FY2024

SHO-BOND 2022 Integrated Report44Efforts for Environment
Climate-related Financial Disclosure Based on the TCFD Recommendations
The SHO-BOND Group (the “Group”) expressed its support for the TCFD recommendations and joined
the TCFD Consortium in July 2022. Based on its corporate philosophy of “Inheriting and passing onsocial infrastructure to the next generation in good condition,” the Group is committed to “contribution to
the development of sustainable cities” as one of its Materialities and is aware that combatting climatechange is an important management challenge.
Based on the recognition that a longer service life of infrastructure contributes to reducing greenhouse gas emissions, we will make efforts so that we cancontribute to realizing a sustainable society. These efforts include information disclosure and other initiatives related to climate change, in addition to corebusiness activities as an infrastructure maintenance specialist.

■ Strategy
The Group conducted a scenario analysis to identify and assess the impact on its overall business management of the risks and opportunities associated withthe “transition” to a low-carbon economy and those associated with the “physical” changes brought about by climate change.
As assumptions for the scenario analysis, we selected the 2℃ or lower and 4℃ scenarios by referring to several existing scenarios published by theInternational Energy Agency (IEA), the Intergovernmental Panel on Climate Change (IPCC), and other organizations. Businesses subject to the analysis
are the domestic construction business and the manufacturing and sales business of repair and reinforcement materials; the time horizon is assumed
to be up to the year 2030. For the climate-related risks and opportunities identified, we have sorted out necessary countermeasures as shown in thetable below.
By implementing the countermeasures identified in this report, we will contribute to developing sustainable cities and will achieve sustainablegrowth by enhancing the resilience of our business.

Risks / Opportunities covered
Countermeasures
Changes expected
Changes in reputation
among shareholders
and investors

Description

Opportunity• Increased ESG investment in the SHO-BOND Group as
an infrastructure maintenance specialist due to being
highly regarded for its low CO₂ emissions• Disclose information about CO₂
emissions (Scope 1, 2, and 3) andinitiatives aimed at reducing CO₂
emissions intensity* (Scope 1 and 2)• Increased procurement costs for energy and materials• Decreased transactions due to our inability to adequately
respond to customers’ requests for reducing CO₂ emissions

Introduction of carbon
pricing
Introduction of moreaggressive targets /policies for CO₂
emissions reduction bycountries around the
world

Risks

• Increased demand for watershed flood control anddisaster restoration work, rather than seismic
reinforcement work and service life extension work, inthe face of growing severity of weather disasters

Changes in customer
behaviors
Rises in raw materials
costs• Surges in the purchase prices of resin-based materials and steel
materials as a result of decreased production of naphtha and iron ore

Opportunities

Acceleration of national
resilience measures• Increased price competitiveness with the delivery of
low-carbon construction services and products in thefield of repair and reinforcement• Due to CO₂ emissions regulations, the number oflife-extending works of buildings and infrastructures
increases while the amount of overall investments inconstruction decreases

Risks• Increased costs for improving working environment andintroducing equipment, etc. to prevent heat stroke• Worsening worker shortages due to deteriorating
outdoor working conditions• Increased costs due to process delays at disaster-stricken sites

Growing severity of
weather disasters

Risks• Supply chain disruption• Damage to or shutdown of operations at disaster-stricken
own factories or contracted manufacturing plants*CO2 emissions per consolidated net sales (100 million yen)

45

SHO-BOND 2022 Integrated Report• Switch to renewable energy andpromote energy conservation
during construction• Invest in solar power generation forown consumption, etc.
• Develop low-carbon anddecarbonization technologies• Develop new technologies that
support the preventive
maintenance of infrastructure• Increased demand for infrastructure maintenance tocounter natural disasters• Decreased productivity in line with increased heatstroke cases among on-site workers

Increase in averagetemperature• Promote green procurement,
including switching to low-carbon
materials• Develop technologies for improving
on-site working environments andimplement heat stroke
countermeasures• Work together with the entire supply
chain to strengthen BCP measuresin preparation for disasters• Manage sanitation related to waterin a sustainable mannerTo realize a decarbonized society—the basic principle underlying the Act on Promotion of Global Warming Countermeasures, the Group has set targets ofreducing its CO2 emissions intensity (Scope 1 and 2) 25% from FY2022 levels by FY2031 and ultimately achieving carbon neutrality by FY2051.

■ CO ₂ Emissions Reduction Targets
Metrics(Scope 1 and 2)

Base year

Base year result

6.5

FY2022t-CO₂ /100 million yen

Target year

Targets

FY2031-25%

FY2051Net zeroCategory

Unit

FY2022

Scope1

2,667
t-CO₂

Scope2

2,571

Total of Scope1 and 2

5,238

CO₂ emissions intensity
Scope3t-CO₂/100
million yen

t-CO₂

6.5
110,008

Management Strategies

CO₂ emissions
intensity■ CO ₂ Emissions (Scope 1, 2, and 3)

What is the SHO-BOND Group?

■ Metrics and Targets

115,246

Total of Scope1, 2, and 3

See our website below for more details.
https://www.sho-bondhd.jp/english/csr/tcfd/

Business Strategies

Coverage: Domestic group companies

Managing Sanitation Related to Water in a Sustainable Manner
Sustainability

Circulation-type hand wash station
installed at a site

Corporate Governance
Company Information

At construction sites of repair and reinforcement projects undertaken by
the Group, we use a huge amount of water. We use water mainly forworkers to break up existing concrete, spray water as a dust control
measure, and wash their hands. However, we are often unable to draw
water to construction sites and we need to take special control
measures when discharging used water. Drawing and discharging waterat construction sites are big issues. Based on this background, we placeemphasis on managing sanitation related to water in a sustainable
manner.
As one of initiatives to solve the issues, we started using acirculation-type hand wash station at our construction sites. This station
is a system that filters the water used by workers to wash their hands.
The station enables them to wash their hands with clean water at any
time while saving them the time of drawing water. Maintaining sanitation
at construction sites helps prevent the spread of infectious diseases andeliminate inconvenience for workers. In addition, we consider donating
this circulation-type hand wash station to a nearby designated shelter ora developing country after completing construction work.
Further, we distributed high-performance and handy water purifiers toour employees to help protect them and their families when a disasterstruck. This water purifier can help people ensure life-sustaining water at
the time of a disaster because it can turn rainwater and muddy water into
drinking water without electricity.
Through such initiatives, we will continue to help achieve the SDGs
while increasing the health and safety of our employees.

Handy water purifier

SHO-BOND 2022 Integrated Report46Feature

Curbing CO2 Emissions by Repair Work

We have positioned “contribution to the development of sustainable cities” as one of our Materialities, and recognizing that a longer
service life of infrastructure contributes to curb CO₂ emissions, we have formulated an action policy for mitigating climate change
through our business in a way that leverages our strengths as an infrastructure maintenance specialist. In this feature, we take a lookat the restoration of the Showa Ohashi Bridge, which was a project of significance to the Group, to check what effect the restoration
work had on CO₂ emissions. We have done this by estimating the CO₂ emissions volumes generated by new materials and waste in a
scenario where the earthquake-damaged deck slabs were repaired and a scenario where they were disposed of and replaced.

Overview of the Repair and Restoration WorkWork Process 1

Injecting adhesives into the cracks

27.64mDiagram of Cracks in the Concrete Deck Slab (D-Beams)●

Injection devices were set up at
approximately 12,000 places(bonded using SHO-BOND #101)● The adhesive was injected at alow pressure so that it filled up thecracks (SHO-BOND Grout SS)

The impact from the collapse
caused hairline cracks with a
combined length of 2,427
meters along five of the bridge’s
deck slabs●◀ The state of the cracks viewed◀ Injecting grout

from directly below the deck slabs

24m◀ Illustration ofa collapsed bridge deck slab

Work Process 2

Dividing and joining the deck slabs
At the time, it was notpossible to lift the collapsed
deck slabs using a crane, sothey had to be divided into
three parts and carried to land
● Crack repair (work process
1) was carried out on thedivided deck slab parts●

Once the repaired deck slabs
had been put back in place,the severed reinforcing bars
were reconnected● Formworks were set up in
preparation for concrete
placement to join together
collapsed members that
had been divided into three●▲ Setting up concrete forms

47

SHO-BOND 2022 Integrated Report●

SHO-BOND #202
was used as anadhesive to join theoriginal concrete andnew concrete◀ Applying #202●

Concrete placement
and asphalt
pavement◀ Concrete placement

Restoration

Materials and Waste Volumes – Estimate Assumptions

Bridge length of 306.5 m

Repair and Reuse

Replace▲ The actual earthquake collapsed five of the 12 deck slabs

repair or disposal and replacement of five deck slabs

Management Strategies

The comparison scenarios cover the

What is the SHO-BOND Group?

DisposeComparison of CO2 Emissions(Scope 3, Categories 1 + 5)

163.1t2011.2 t

43.7 t-CO 2

404.2 t-CO 2

Sustainability

CO2 emissions

Disposal andReplacement

Business Strategies

Volume of new materials(concrete, reinforcing bars, wooden forms, adhesives, etc.)

RepairCO2 emissions higher
by a factor of

9.2

Corporate GovernanceAs you can see above, the estimates show that the CO₂ volumes (Scope 3) generated by new materials and waste in the disposal andreplacement scenario was 9.2 times higher than in the scenario where the five deck slabs were repaired. When considering actual
construction, in addition to CO₂ emissions from new materials and waste (Scope 3), you also need to factor in Scope 1 and Scope 2
emissions from sources such as construction machinery, heavy machinery, and various transportation vehicles, and it is estimated that
this will make the difference even greater.
We will continue to contribute to mitigating climate change through our main business of repair and reinforcement construction.

Notes About the Estimates ● The estimates do not take the bridge beams (steel frame) into consideration.
●

SHO-BOND 2022 Integrated ReportCompany Information

The size of the deck slabs was: a total width of 24.8m, slab width (road and pavement) of 24m, beam length of 27.54m, slab thickness of 18cm,
and paving thickness of 5cm (based on documents from the time).
For the replacement scenario, the volume of main new materials was 1,516 tons of concrete, 380 tons of asphalt paving, 97 tons of reinforcing
bars, and 18 tons of wooden formworks.
● For the repair scenario, the volume of main new materials was 117 tons of concrete, 35 tons of asphalt paving, 9 tons of reinforcing bars, 2 tons ofwooden formworks, and 1 ton of adhesive materials.
● For the replacement scenario, the volume of waste was estimated as the volume of the replaced deck slabs.
● The estimates do not include the materials’ packaging, etc.
● The volume of reinforcing bars, etc., found in the deck slabs have been estimated using specifications from 1964.
● In order to make a fair comparison with repair work carried out in 1964, the volume of materials used for new construction has been estimatedbased on construction methods used at the time.
● The CO 2 emission factors used in the estimates are derived from the databases of the Ministry of the Environment and various other sources.
● Emissions from the processes of recovering and reinstalling the collapsed deck slabs are deemed to be roughly equal for both scenarios and havetherefore been omitted from the estimates.
●48

Efforts to Develop Talent and Improve the Workplace Environment
Talent Development
Juniormanagers

General staff
Training for new employees

Middlemanagers

Seniormanagers

Executive
officers

Training for managers

Follow-up training

Rank-specific training
Job-specific training

Employees are the most valuable asset of the Group.
To play a role in the creation of a sustainable society,we must have a workforce with highly advanced skills
along with environments that allow these people tofully utilize this knowledge.
Experience is a critical component of repair andreinforcement construction activities. For this reason,on-the-job training is a key element of measures todevelop employees’ skills. Young people areassigned responsible tasks. This process gives thesepeople the ability to solve problems on their own inbusiness activities.
Employees are given the opportunity to acquireknow-how and technologies that match each stageof their advancement at the Group. People progressto the next level in a well-planned and effective
manner. We develop the skills of everyone at theGroup from a long-term perspective.

Training outside the group
Training for marketing and sales staff
Training for construction staff
Training for engineers
Safety training

OJT
Self-development■

Interviewing system■

Skill and performance evaluation system■

Self-declaration system■

Job rotation■

Supporting for getting public qualifications■

Introducing correspondence courses■

Recommending reference books

■

Other

■

Introducing correspondence courses■

Recommending reference books

■

Other

■ Training for New Employees
Training for new employees is designed as a first phase to let them acquire know-how essential for working at the Group and develop them tobecome the core workforce. This one-year training consists of introductory training provided mainly in the form of classroom lectures and practicaltraining provided at workplaces to which new employees are temporarily assigned.

[Introductory training]
The main purposes of the 45-day introductory training that new employees immediately enter are to (1) let them become aware of being a member of
a company, (2) let them acquire basic knowledge about their jobs, and (3) foster a sense of solidarity among them as an employee of the SHO-BOND
Group.
Many of newly hired graduates majored in civil engineering and construction at college or university, but most of them learn the maintenance field
for their first time. We design training programs in a way that allows them to acquire fundamental knowledge until they enter the practical training.

[Practical training]
The practical training accounts for the majority ofthe one-year training for new employees. This
practical training is an important process for new
employees to put the knowledge they haveacquired during the introductory training into
practice under the direction of senior employees.
We believe that the fundamentals of any kind of
job at the Group lie at work sites, no matter what
careers new employees will choose in the future.
This is why the practical training is basicallyprovided in work sites where new employees
learn repair and reinforcement construction
activities.

49

SHO-BOND 2022 Integrated Report

Technical training at the Technical Research Institute

New employee learning on-site practices froma senior employee who has entered his sixth year ofworking at the GroupEfforts to Improve the Workplace Environment
https://www.sho-bondhd.jp/english/csr/environment/■ Changes in Turnover

SHO-BOND Group
Average in Japan

(%)
20.0

0.0

(10.8)(10.8)

8.7

5.6(10.9)

3.8

FY2013

FY2014FY2015(10.7)(11.1)

2.3

2.6

2.3

FY2016FY2017FY2018(10.4)(11.5)

1.5
FY2019(10.1)(10.1)

2.8
FY20201.2
FY2021

2.2
FY2022■ Supporting Employees in Balancing Work and

The Proper Working Time Project was started in 2014 with measures that
include improvements to the rules of employment and the initiation of no
overtime days to prevent excessive working hours and encourage
employees to take time off.
In 2017, the Group started using a new system for recording working
time. This framework allows efficiently monitoring the number of hours on
the job and when individuals go to work on a weekend or holiday.
We continued to take measures to raise awareness of the paid leavesystem among employees, such as designation of a month where
encouraging them to take paid holidays. In FY2022, we achieved the target
that all employees take 100 or more days off per year. For the fiscal year
ending June 30, 2023, we increased the target number of days off to 110
and are continuing to encourage the use of vacation time.

We provide employee assistance programs more than required by law andpromote the use of them to allow employees to balance work andchild-rearing and/or nursing care with confidence. To increase the use bymen of time off for child care, a new system for encouraging the use ofsuch programs started in 2019. A Child Care Leave Promotion Pamphlet
has been prepared to raise the awareness and use of the programs. Thishas contributed to an increase in the use of child care leave by male
employees. In FY2022, all male employees who were entitled to take childcare leave actually took it.
In 2020, SHO-BOND CORPORATION received Kurumin certification as
a company that supports child care.

Child-rearing and/or Nursing Care

■ Percentage of Employees Taking 100 or More Days Off per Year

89.6

90

98.9

100.0

Percentage
of men who
took childcare leave

FY2019FY2020

FY2021

0.0%

45.8%

80.0%

65.0% 100.0%

FY2022

Sustainability

(%)
100

FY2018Business Strategies■ Maintaining Proper Working Hours

Management Strategies

Group companies exercise care to ensure that their people canstay in company for a long time, doing their jobs with confidence
and good health. Workplaces are structured to enable people todevelop and take full advantage of their skills.
We started to maintain proper working hours earlier than mostcompanies. Thanks to this effort, our employees’ awareness has
improved significantly and their working hours have accordingly
become proper around the time when work style reforms haveprogressed at other companies. Our turnover remains low atpresent.
We keep a high employee retention rate by continuing to
improve workplace environments based on employees’ needs
about child-rearing, nursing care, transfers to different locations,and other employment matters.

What is the SHO-BOND Group?

Creating Employee-friendly Workplaces

84.9

80

■ Selection of Employment Type and

70

The Group gives employees the flexibility to choose an employment typewith or without transfers to different locations. Many individuals change this
employment type to reflect the current stage of their lives. Every year, there
are employees who ask to be shifted to or from status that allows transfers.
The self-declaration system allows individuals to confirm their employment
type and job status once every year.

the Self-declaration System

FY2014FY2016FY2018FY2020

FY2022

Diversity and Inclusion
The Group aims to increase the percentage of female engineers in regular
recruiting to 15% or higher, and seeks to ensure more female engineers.
We keep a high female employee retention rate by providing training
programs targeted at female engineers and conducting a monthly survey of
how their minds have changed, in addition to making their workplaceenvironments more employee-friendly. We will continue to recruit anddevelop more female engineers to have a higher retention rate and produce
more female managers in the future.

Changes in thenumber of female
engineers

FY2018FY2019FY2020

FY2021

FY2022

14

16

18

23

26

SHO-BOND 2022 Integrated ReportCompany Information■ Promoting Women’s Active Engagement and Advancement in Workplaces

Corporate Governance

66.6
60

50

Efforts for Health and Safety
Based on the philosophy that our highest priorities are the protection of life and the safety of construction activities, not only will the
SHO-BOND Group comply with laws and regulations related to occupational health and safety but all of its officers and employees will
also work to eliminate workplace accidents as well as make efforts to maintain and promote good health. What is more, we will further
aim to create comfortable working environments.

Initiatives for Creating SHO-BOND Culture of Safety
Project Overview● Health and Safety Policy

We believe that safe and secure workplace environments without anaccident will be created by upgrading the Group’s safety culture from thedependent model that workers do what they are told to the independentand mutually enlightening model that workers can proactively do their jobs
without being told and mutually pay attention. Based on this belief, we
promote initiatives for creating SHO-BOND culture of safety to realize ahigher-level safety culture that aligns with our Health and Safety Policy.

1. We will achieve a safety culture that is of an even higher level.
2. We will establish a health and safety management system.
3. We will ensure the steady implementation of risk assessments.
4. We will carry out measures for the reduction of occupational accidents
involving third parties and severe workplace accidents.
5. We will execute thoroughgoing health and safety education toward ourown employees and the staff of our partner companies.
6. We will ensure thorough preventive measures for occupational diseases.
7. We will promote work style reforms for the prevention of health disorders
caused by overwork.
8. We will thoroughly ensure the prevention of property damage accidents.

Roadmap
for initiatives
for creating
SHO-BOND
culture ofsafetyConduct a safety perception
survey targeted at Group
companies and their partnercompanies to compare theirsafety culture maturity levelwith the world-class level2020.7

Safety perception
surveyHave each regional
office draw up an action
plan toward the creationof safety culture

Decide on a Group-wideroadmap by the senior
management

FY2021

Action plan ateach regional office

Have each regional
office implement its
action plan according to
its schedule

2021.4

Group-wideroadmap

Check the effectivenessof the action plan using
KPIs and carry out
activities for
improvement
FY2022–FY2024

Implementation

Activities tomaintain and improve
SurveyAction Plan
Roadmap

Implementation

Activities tomaintain andimprove■ Awarding Workers for their Outstanding Health■ Safety Training

We award workers who have earnestly participated in health and safety
activities on construction sites to raise safety awareness among
employees.

We provide on-site workers and other construction personnel withhands-on safety training on site to help them deepen their understanding ofhealth and safety activities and naturally have safe behavior, mindset, andvalues.

Awarding a worker for his outstanding health and safety commitment at construction sites

On-site safety training

and Safety Commitment

51

FY2025–

SHO-BOND 2022 Integrated ReportWhat is the SHO-BOND Group?

■ Digital Transformation (DX) in Health and Safety Activities
The Group drives the DX in health and safety activities to improve theireffectiveness and reduce on-site workers’ workloads. To this end, weformed a DX Promotion Working Team for safety. While identifying areas for
improvement in the current health and safety activities, we are working topromote the DX by setting targets.
We installed 93 wearable video cameras in the Group’s construction
sites nationwide to enable workers to watch live streams and monitor the
progress of projects from a regional office, branch, or on-site office. Such asystem also enables an on-site worker and a client to connect on a
livestreaming platform and enables the client to be present remotely.

■ Health and Safety Patrols
President, General Managers of Regional Offices and Branches, and other senior members occasionally go out on health and safety patrols to eliminate
workplace accidents and improve the health and safety levels. They conducted a total of 3,950 patrols nationwide in FY2022.

Management Strategies

Remote monitoring of construction sites using wearable video cameras

Business Strategies

Health and safety patrol by General Manager of Branch

Sustainability

Health and safety patrol by President

Health and Safety Classes
Corporate Governance

The Group provides safety training programs to employees of the Construction Department, Marketing and Sales Department, and Engineering Department inJuly every year. In FY2022, the programs were provided in seven installments, all of which were online due in part to the COVID-19 pandemic. Contents of the
programs included the overviews of workplace accidents and property damage accidents occurred in FY2022 and priority actions to take in FY2023. We also
provided special education and health and safety classes by in-house lecturers to our engineers and a total of 444 employees from 81 partner companies in
FY2022.
At the Tsukuba Training Center completed in October 2021, we started providing education through which employees can acquire knowledge about healthand safety and experience safety hazards using VR headsets. Going forward, we will expand the scope of trainees to include employees of partner companies
and other personnel, and provide practical health and safety classes to improve each trainee’s risk perception and foster their awareness of health and safety,
including values, decision criteria, and beliefs.

Company Information

VR hands-on experience of safety hazards (VR video on the left [for illustrative purposes] and employees wearing VR headsets on the right)

SHO-BOND 2022 Integrated Report52Corporate Governance
Basic Views
The SHO-BOND Group positions corporate governance as one of the highest management priorities to realize our corporate philosophy “With a sense of
mission of ‘Inheriting and passing on social infrastructure to the next generation in good condition,’ we will contribute to the realization of a safe and affluent
society by utilizing our advanced technological development capability as a leading company in the structure maintenance business.”
By fulfilling our social responsibility as a company that specializes in the maintenance business, we will work together with our shareholders and all otherstakeholders to achieve sustainable growth and enhance our corporate value over the medium to long-term. In addition, we will aim for a highly sound andtransparent management by developing and promoting a corporate governance system that enables swift and decisive decision-making.

Progress in Strengthening Corporate Governance
We transitioned to the holding company system ahead of our industry
peers and later became a company with an Audit and Supervisory
Committee to strengthen corporate governance. We will continue
maintaining a proper governance system while keeping a close eye onsocial circumstances.

Date

Event

January 2008

Transitioned to the holding company system

September 2015

Transitioned to a company with an Audit and Supervisory
Committee and shortened directors’ term of office to one year

September 2017

Increased the number of Outside Directors to three

July 2018

Started evaluating the effectiveness of the Board of Directors

November 2018

Established the Nomination and Remuneration Advisory Committee

August 2022

Established the Sustainability Committee■ Overview of Corporate Governance System■ Board of Directors■ Executive Committee

The Board of Directors has eight members including four directors who aremembers of the Audit and Supervisory Committee. The directors discussand reach decisions about important matters involving management asprescribed by laws and regulations and the rules for the Board of Directors.
As a rule, the board meets once every month and meets at other times asneeded in order to reach decisions quickly.
(Number of meetings in FY2022: 13 times)

The President and Representative Director presides over the Executive
Committee as a body to assist his decision-making in management. This
committee consists of directors who are not members of the Audit andSupervisory Committee and senior executives, including the executives of
SHO-BOND subsidiaries, nominated by the President. As a rule, thecommittee meets twice every month and meets at other times as neededin order to reach decisions quickly.
(Number of meetings in FY2022: 22 times)■ Audit and Supervisory Committee■ Internal Committees

SHO-BOND is a company with Audit and Supervisory Committee. The
Audit and Supervisory Committee has four members, of whom three are
Outside Directors. As a rule, the committee meets once every month andmeets at other times as needed. The Audit and Supervisory Committee, as
an independent body, audits and supervises the performance of directors
who are not members of the Audit and Supervisory Committee. The
committee also prepares audit reports and reaches decisions about
matters prescribed based on laws and regulations, the Articles ofIncorporation, and Audit and Supervisory Committee rules and audit
standards. The Audit and Supervisory Committee works with theaccounting auditor and the Audit Office to perform audits efficiently.
(Number of meetings in FY2022: 11 times)

Major committees related to business execution include the Risk
Management Committee, Sustainability Committee, Internal Control
Committee and the Asset Management Committee. Important management
issues are continuously discussed by theme at these committees, andsubmitted and reported to the Executive Committee as needed.

■ Overview of Corporate Governance System

General Meeting of Shareholders
Appointment / Dismissal

Appointment /Dismissal

Accounting
Auditor■ Nomination and Remuneration Advisory Committee
The Nomination and Remuneration Advisory Committee has four members;
three Outside Directors and the President and Representative Director. This
committee is actively involved in formation and execution of the succession
plan for the President, has adequate discussions about matters on
directors’ nomination and remuneration and gives opinions and advice tothe Board of Directors.
(Number of meetings in FY2022: 3 times)

Accounting
audit

ReportCooperation

Instruction

Respective departments /Group companies

SHO-BOND 2022 Integrated Report

Audit /
Supervision

Cooperation

Internal audit

53

Audit and Supervisory
Committee

Cooperation

Audit OfficeAppointment / Dismissal

Instruction
ReportAudit

Board ofDirectors

Inquiry
Response
Nomination and Remuneration
Advisory Committee
Appointment / Dismissal / Supervision

President
Executive Committee
Submission / Report
Risk Management Committee
Sustainability Committee
Internal Control Committee
Asset Management CommitteeCorporate Governancehttps://www.sho-bondhd.jp/english/csr/governance/

To evaluate the effectiveness of the Board of Directors, a third-party external adviser is used in order to ensure objectivity every other year. The evaluation is
performed by asking all directors, including members of the Audit and Supervisory Committee, to complete self-evaluation questionnaires. The Board of
Directors reviews the one-year efforts to address the recognized issues, and conducts self-analysis and evaluation in the year after the evaluation byquestionnaire.

■ Summary of Evaluation Results

SHO-BOND’s Outside Directors

Activity

Information meetings forindividual shareholders*Frequency (FY2022)
We refrained from holding
the meetings due tothe COVID-19 pandemic.

2 times

One-to-one meetings by
Chief Financial Officer

102 times

Company Information

Information meeting for
institutional investors(attended by President
and Chief Financial Officer)

Corporate Governance

The Group places importance on information disclosure and dialogue with shareholders, institutional investors, analysts, and other interested parties. For
institutional investors, we hold an information meeting about financial results twice a year as well as one-to-one meetings held every quarter. In addition to such
one-to-one meetings more than 100 times a year, we hold a small meeting attended by President after announcing the full-year financial results. For individual
shareholders, we hold information meetings in Tokyo and Osaka in March every year after transitioning to the holding company system in 2008. Dialogues are
consistent with the spirit of fair disclosure, and care is exercised to prevent the disclosure of insider information. The Executive Committee and the Board of
Directors regularly receive feedback periodically concerning the opinions and concerns of shareholders. This information helps management take actions aimed
at achieving sustained growth.
The basic policy for investor relations is to provide accurate, fair and timely information about our management strategies, business activities, financial
condition, and other items. The purpose is to build long-term relationships rooted in trust and receive a proper evaluation from all stakeholders. This policy isposted on our website.

Sustainability

Dialogue with Shareholders and Investors

Business Strategies

The Company elects three Outside Directors who are Audit and Supervisory Committee members.
Mr. Satoru Miura has knowledge and experience as a certified public accountant as well as considerable experience as a corporate accounting advisor. Mr.
Akira Hongo has knowledge and experience as an attorney as well as considerable experience as a corporate consulting attorney. Ms. Reiko Kuwano has
considerable academic expertise and experience in the field of civil engineering as a professor at the University of Tokyo. These persons play a role in ensuring
the properness of the business execution of the Company by drawing on their respective knowledge and experience and providing oversight and advice froman independent standpoint as an Outside Director. None of the three Outside Directors have personal, capital or business relationships or any other special
interests with the Company. In addition, the standards for Independent Outside Directors in the Company’s Corporate Governance Guidelines comply with theindependence standards of financial instruments exchanges. We seek to provide the Outside Directors with information in an efficient and in-depth manner sothat they can fully understand the Group and exercise their abilities to the fullest in management. When the Outside Directors make inquiries, relevant executive
officers directly give explanations to them as necessary, promoting smooth communication with them.

Management Strategies

For the fiscal year ended June 2022, a third-party external adviser is used to conduct a survey of all directors, including members of the Audit and Supervisory
Committee. As a result, the evaluation based on the analysis of the responses confirmed the effectiveness of the Board of Directors.
One of the issues that needed to be addressed in FY2022 was offering better executive training. To address this issue, we held three directors’ study
sessions to improve their knowledge and abilities as directors. We will continue to improve the effectiveness of the Board of Directors by further deepening
discussions on sustainability management and continually enhancing executive training.

What is the SHO-BOND Group?

Method of Evaluating Effectiveness of the Board of Directors*The meetings are held in Tokyo and Osaka in March every year.

SHO-BOND 2022 Integrated Report

54Corporate Governance
Details of Compensation for Directors (and Other Officers)
At Board of Directors meeting held on September 26, 2019, the SHO-BOND Group resolved the policy regarding decisions on the details of the compensation,etc. for each individual Director (excluding Directors serving as Audit and Supervisory Committee Members; hereinafter “Directors”), and the details of such are as
follows:
As the Company is a holding company that is in charge of supervising Group companies, the compensation for the Company’s Directors comprises basic
compensation only. Furthermore, the payment of basic compensation shall be monthly fixed compensation in cash.
All of the Company’s Directors, other than Outside Directors, concurrently serves as Director or Auditor of a subsidiary. Compensation is determined byproportionately taking into consideration the weight of the business of both the Company and subsidiaries, and multiplying it by the monthly compensation
amount of subsidiaries. Furthermore, bonuses, which are paid depending on financial results, are paid by the subsidiaries to which the Directors belong. In
determining compensation, etc., the President and Representative Director prepares a compensation proposal, including the portion to be paid by subsidiaries,that is determined at a Board of Directors meeting after consulting the Nomination and Remuneration Advisory Committee, which comprises the Company’s
Outside Directors and the President and Representative Director.
In determining the details of individual compensation, etc. for Directors pertaining to the fiscal year ended June 30, 2022, the Company judged that it is in linewith this policy as the Nomination and Remuneration Advisory Committee carried out a multifaceted investigation of the original proposal, and the Board of
Directors made the determination after taking into consideration the report from the Nomination and Remuneration Advisory Committee.
The upper limit on compensation to Directors is ¥350 million per year (not including employee salaries), and the upper limit on compensation to Directors
serving as Audit and Supervisory Committee Members is ¥50 million per year, both of which were resolved at the 8th Annual General Meeting of Shareholders
held on September 25, 2015.

■ Total Amount of Compensation, etc. for the Fiscal Year Ended June 30, 2022 (Million Yen Unless Otherwise Stated)

Category

Number of Directors (persons)AmountTotal amount of remuneration by type:
Basic remuneration

Directors (excluding Directors serving as Audit
and Supervisory Committee Members)[of which, Outside Directors]

5
[–]

83
[–]

83
[–]

Directors (Audit and Supervisory
Committee Members)[of which, Outside Directors]

4
[3]

24
[19]

24
[19]

Total

9
[3]

107
[19]

107
[19]

Note: The above number of directors includes one director serving as Audit and Supervisory Committee member who retired at the closing of the 14th Annual General Meeting of
Shareholders held on September 28, 2021.

Cross-shareholdings
As a rule, the Group does not purchase or hold the stock of suppliers and other business partners with the exception of cases where purchasing and holding
stock helps conduct business operations efficiently and maintain and strengthen business relationships, thereby contributing to the medium- to long-term
growth of its corporate value.
Holdings of the stock of other companies are examined individually by taking into consideration of qualitative and quantitative benefits and risk factors,
including holding purposes, the amount of transactions with these companies, their operating environment, results of operations and financial position, dividend
yields as a return of investments and stock price fluctuation risks. Holdings are reduced when there is little need to continue owning the stock in accordancewith the current Medium-term Business Plan.
Voting decisions concerning the stock of other companies are based on the goals of increasing shareholder value and contributing to the long-term growthof the corporate value of them.

Internal Control
The SHO-BOND Group has a system of internal controls for ensuring that all business operations are conducted properly in accordance with the Companies
Act and Ordinance for Enforcement of the Companies Act. In addition, the Board of Directors has established The Basic Policy for Constructing an Internal
Control System that has the goals of efficient business activities, reliable reports, strict compliance with laws and regulations, and other items.
We are taking various measures, including the establishment of an Internal Control Committee and a department in charge of promoting internal control in
FY2019, in order to further strengthen internal control within the Group and permanently ensure a favorable control environment.

55

SHO-BOND 2022 Integrated ReportPresident andRepresentative Director

Director and General Manager
of Technology Promotion Department

Tatsuya Kishimoto

Koyo Takeo

April 2001
April 2011

April 1979
Joined SHO-BOND CORPORATION
January 2010 Director and Executive Officer, and General
Manager of Kyushu Regional Office
April 2011
Director and Executive Officer, and General
Manager of Engineering Department at Head
Office, Marketing and Sales Division
July 2012
Director and Managing Executive Officer, andGeneral Manager of Engineering Division of
SHO-BOND CORPORATION
September 2013 Director and General Manager of Technology Promotion
Department of the Company (current position)
April 2014
Senior Managing Director and General Manager ofEngineering Division of SHO-BOND CORPORATION
April 2017
Senior Managing Director, General Manager ofEngineering Division, and Director of TechnicalResearch Institute
April 2019
Executive Vice President and Representative
Director, and General Manager of TechnicalResearch Institute (current position)

Director and General Manager
of Sales Management Department

Yasuhiro Sekiguchi
April 1989
Joined The Mitsubishi Bank, Ltd. (currently MUFG Bank, Ltd.)May 2014
General Manager of Strategic Investment Division
July 2017
Joined SHO-BOND CORPORATION
December 2017 Director, Deputy General Manager of Corporate
Administration Division and General Manager of Corporate
Planning Department of SHO-BOND CORPORATION
September 2018 Director and General Manager of Corporate
Planning Department (current position)
April 2020
Managing Director, Deputy General Manager ofCorporate Administration Division and General
Manager of Corporate Planning Department of
SHO-BOND CORPORATION
September 2022 Managing Director, General Manager of Corporate
Administration Division, General Manager ofCorporate Planning Department, and General
Manager of ESG Promotion Office, Corporate
Planning Department (current position)

Director and Full-time Audit andSupervisory Committee Member

Business Strategies

Shunya Tojo

Shigeru Naraoka

November 1990 Joined SHO-BOND CORPORATION
July 2012
Director and General Manager of Administration and Human
Resources Department of SHO-BOND CORPORATION
April 2014
Managing Director, General Manager of Corporate
Planning Division, and General Manager of
Administration and Human Resources Department
September 2015 Director, General Manager of General Affairs Department,
and General Manager of Compliance Department
September 2017 Managing Director, General Manager of Corporate Administration
Division, and General Manager of Administration and Human
Resources Department of SHO-BOND CORPORATION
Director and General Manager of Public Relations Department of
the Company
April 2019
Senior Managing Director, General Manager of Corporate Administration
Division, and General Manager of Administration and Human Resources
Department of SHO-BOND CORPORATION
Director and General Manager of General Affairs Department of the Company
September 2022 Director (Full-time Audit and Supervisory Committee
Member) of the Company (current position)

May 1989
July 2012

Joined SHO-BOND CORPORATION
Director and Executive Officer, and General
Manager of Chubu Regional OfficeDirector and General Manager of SalesManagement Department of SHO-BOND
MATERIAL CO., LTD.
April 2017
Director and General Manager of Marketing andSales Department, Marketing and Sales Division of
SHO-BOND CORPORATION
April 2018
President and Representative Director of
SHO-BOND MATERIAL CO., LTD. (current position)
April 2019
Director and General Manager of SalesManagement Department, Marketing and Sales
Division of SHO-BOND CORPORATION
September 2019 Director and General Manager of Sales Management
Department of the Company (current position)
July 2016

Outside Director

Outside Director

Audit andSupervisory Committee Member

Audit andSupervisory Committee Member

Akira Hongo

April 1981
June 1990
February 2015

April 1988
Registered as attorney at law (to present)
April 1995
Established Hongo sogo Law Office (to present)
April 2010
Professor of Keio University Law School (current position)
September 2017 Outside Director (Audit and Supervisory Committee
Member) of the Company (current position)

April 1989
Joined TAISEI CORPORATIONMarch 1999 Research Associate of the University of Tokyo
October 2001 Senior Researcher of Public Works Research Institute
April 2006
Associate Professor, Institute of Industrial Scienceof the University of Tokyo
July 2013
Professor (current position)
September 2017 Outside Director (Audit and Supervisory Committee
Member) of the Company (current position)■ Knowledge, Experience, Skills, etc. of Each Director (Skill Matrix)

1
2

4
5
6
7
8

InsideCorporate
Outside management

Tatsuya
Kishimoto Inside
Koyo
InsideTakeo
Yasuhiro Inside
Sekiguchi
Shigeru
Naraoka Inside
ShunyaInsideTojo
SatoruOutside
Miura
Akira
Outside
Hongo
Reiko
Kuwano Outside

Finance /Accounting

HR

Legal affairs /Compliance /Risk management

GlobalTechnology /R&D

Skill items

Details

Corporate
management

Contributes to management based on experience taking part incorporate management, making of significant corporate decisions, etc.

Finance /Accounting

Contributes to management based on experience and knowledge
related to finance and accountingHR

HR refers to Human Resources. Contributes to management based on knowledge
and experience related to the formulation of human resource strategies, humanresource development and training, diversity, working style reforms, etc.

Legal affairs /Contributes to management based on knowledge and experience
Compliance /Risk management related to legal affairs, compliance and risk management
GlobalContributes to management based on knowledge and experience
related to overseas business development, etc.

Technology /R&D

R&D refers to Research and Development
Contributes to management based on knowledge and experience
related to technology and R&D

Company Information

3

Name

Corporate GovernanceRegistered as certified public accountant (to present)
Established Miura C.P.A. Office (to present)
Outside Corporate Auditor of NODACORPORATION (current position)
March 2015 Corporate Auditor of Toukei Computer Co., Ltd.
March 2017 Outside Director (Audit and Supervisory Committee
Member)
September 2017 Outside Director (Audit and Supervisory Committee
Member) of the Company (current position)
September 2021 Auditor of SHO-BOND CORPORATION

Reiko Kuwano

Sustainability

Outside Director

Audit andSupervisory Committee Member

Satoru Miura

No.

Management Strategies

Joined SHO-BOND CORPORATION
Director and Executive Officer, and General
Manager of Kinki Regional Office
July 2012
Senior Managing Director and General Manager of Kinki Regional Office
September 2012 Director of the Company
April 2013
Senior Managing Director and General Manager ofMarketing and Sales Division of SHO-BOND
CORPORATION
April 2015
Executive Vice President and Director
April 2017
President and Representative Director
Director and General Manager of Corporate
Planning Department of the Company
May 2017
President of General Incorporated Foundation
Ueda Memorial Foundation (current position)
September 2017 President and Representative Director of theCompany (current position)
July 2021
President and Representative Director, andGeneral Manager of Marketing and Sales Divisionof SHO-BOND CORPORATION (current position)

Director and General Manager
of Corporate Planning Department

What is the SHO-BOND Group?

Directors

Note: The table is not indicative of all the expertise and experience possessed by the Directors.

SHO-BOND 2022 Integrated Report

56

Risk Management
Risk Management Framework
The Group has risk management rules and a Risk Management Committee to be prepared for events that can have a major impact on business activities andreduce exposure to these risk factors. Risk management also includes measures to minimize damage and losses if a crisis occurs and to prevent incidents fromhappening again.
The Risk Management Committee plays a central role in risk management at the Group. The Committee chaired by President and Representative Director
meets once a quarter as a general rule. The Committee puts together individual risks discussed in other internal committees to (1) identify risks and implement
preventive measures, (2) act as an emergency response headquarters when a crisis may occur, and (3) develop actions to prevent incidents from happening
again across the Group. The Committee periodically evaluates risk factors according to the established process, and constantly reexamines the risk
management process itself to reflect current changes in the social and business environment.

■ Risk Management Framework Chart■ Risk Management Process

Board of Directors

Process

Explanation

1

Business risk factors of the SHO-BOND Group are divided into Risk Categories andspecific potential problems are identified for each risk factor.
Magnitude of risk is defined as “the impact of an incident” multiplied by “theprobability of the incident happening.”

2

Studies to determine numerical and other indicators for individual risk factors and the methods formonitoring them.
Monitoring for changes in “the impact of an incident” and “the probability of the incident happening.”
Estimates of changes in risk exposure by using a qualitative analysis of changes in regulations, amendments
to laws, government financial policies and other items that are difficult to measure numerically.

Executive Committee

Risk identification

Risk Management Committee
Risk analysis
and monitoring

Other Risks

Quality Management Committee

IT Promotion Committee

Asset Management CommitteeIntellectual Property Committee

Safety and Health Committee

Sustainability Committee

Group Companies

3

Risk control

4

Risk evaluation

Responses
to incidents

Information Security Measures
With the acceleration of DX and changes in the usage environment of
information systems, information security risk has been increasing thesedays, such as the growing sophistication of external cyberattacks. In theconstruction industry in particular, ensuring information security is anurgent issue as construction site offices are exposed to major information
security risks. We therefore raise awareness of these risks among
employees by taking such measures as having all employees including theexecutive officers complete e-learning courses, conducting a phishing drill,and distributing awareness posters to our construction sites across Japan.
Going forward, we will prevent unauthorized access from outside theGroup and computer viruses by sequentially taking more defensive anddetective network security measures.

57

SHO-BOND 2022 Integrated Report5

Prepare lists of business tasks that every business unit performs periodically in order
to measure and monitor risk factors. Next, check to confirm that risk factors arebeing controlled by these business tasks.
By using the reports from business units, the executive in charge of risk management assesses
the magnitude of every risk factor and submits a report to the Risk Management Committee.
The Risk Management Committee determines priorities concerning the magnitude andcategories of risk factors and discusses methods for the efficient management of risk.
Emergency response manuals to be prepared for incidents.
Perform studies concerning crisis management activities, such as direct responses toincidents, crisis management meetings, reports to government offices and agencies,
public announcements about emergencies, and other responses to incidents.

Business Continuity Plan
The Group has a business continuity plan (BCP) to address disaster risksuch as a great earthquake. We strive to improve our capability to continue
business operations based on the BCP on a regular basis to avoid thedisruption of key operations as much as possible in the event of a majordisaster and to return to normal operations early if disrupted.
We periodically conduct an evacuation drill and first aid training on theassumption that a great earthquake has occurred. We also conduct a drillof responding to a safety confirmation email and have each site regularly
check the items of an emergency kit. We will continue to upgrade the BCP
and expand the scope of areas covered by it to reduce disaster risk.

Compliance
The SHO-BOND Group believes that a sound compliance framework isvital to conducting business activities that meet high standards of social
responsibility and are capable of sustainable growth. The SHO-BOND
Group Code of Conduct enables all employees to do their jobs based on athorough understanding of socially acceptable behavior, laws andregulations, internal rules and other guidelines.
All employees at the group are dedicated to the achievement of theaction principles “Corporate Credo” and the Corporate Philosophy by using
a broad range of activities for earning the trust of society and all
stakeholders.

■ The SHO-BOND Group Code of Conduct
Social mission
1. Earn customer satisfaction and trust
We will fulfill all of our contractual obligations with customers and,based on sound communications with customers, provide the best
possible construction services and products by making proper andtimely decisions.
2. Provide outstanding technologies and quality
We will constantly develop new technologies and aim for even higher
quality.

Compliance Promotion Framework

Compliance Training*Follow-up training is targeted at employees for their second year and those who havejust got promoted.

Whistleblowing Contact Points

Establishment of Anti-bribery Policy

8. Contribute to maintaining a pleasant and productive workplace environment
We will maintain healthy and safe workplace environments throughmeasures to improve employment terms and other working conditions.
9. Show respect for human rights
We will never allow discrimination or other improper treatment of ouremployees regarding employment and compensation based on theirnationality, gender, beliefs or other personal characteristics.
10. Play a role in placing the right people in the right jobs
We will perform fair and appropriate performance evaluations andprovide compensation and training with the goal of enabling our
employees to fully utilize their capabilities.
Contribute to society
11. Participate in community involvement
We will increase opportunities for communications with communities
in order to participate in many programs for contributing to society.
12. Be part of environmental conservation activities
We will reduce the environmental impact of our construction projects
through many activities in order to combat global warming, conserve
energy and protect the environment in other ways.

Company Information

The Group has sought to maintain sound business practices. In August
2022, we established an Anti-bribery Policy to clarify our anti-corruption
philosophy from a sustainability perspective. Based on the SHO-BOND
Group Code of Conduct, we will continue to uphold high ethical standards
to prevent bribery, and continue to ensure fair and sound relationships withour customers and all other stakeholders.

Corporate Governance

The Group has internal and external contact points for whistleblowers toreport any kind of violation they detect, regardless of its agent (individual ororganization) and the type of regulations violated (applicable laws, the rulesof employment, the SHO-BOND Group Code of Conduct, etc.). The
purpose is to investigate and eradicate such violations as soon as we can.
We pay due care so that whistleblowers will remain anonymous as a
general rule and will not suffer any disadvantages.

Unify the workplace
Sustainability

The Group provides compliance education as part of training for new
employees and follow-up training* provided each year. In the training, we
give a general compliance lecture and urge employees to observe the
SHO-BOND Group Code of Conduct. We also ensure that employees areaware of the Construction Business Act that must be observed as aconstruction company.
We seek to create an employee-friendly work environment by
periodically having all employees do a self-check and providing them withe-learning to prevent all forms of harassment.

Business Strategies

The Group implements a compliance program. The SHO-BOND Group
Code of Conduct clearly states the rules of behavior that its employees are
expected to follow. We also have a compliance manual to ensure that all
employees are aware of the importance of compliance.
In addition, we have close cooperation among Group companies by
establishing a Compliance Office responsible for compliance matters andassigning a compliance leader to each site.
Further, we provide education and training to all employees of theGroup to raise compliance awareness.

Management Strategies

Take responsibility for your actions
3. Perform sales activities properly
We refuse to engage in collusion, bribes, dumping and other improper
activities for receiving orders and will never accept any invitation toparticipate in these types of activities. We will work closely withproject owners and prime contractors in order to receive orders in afair manner and to clearly define contract terms.
4. Remain focused on suitable construction operations and safety
At all projects, we will establish a framework for compliance with theConstruction Business Act and other construction laws andregulations, preventing accidents, and facilitating mutual
understanding and cooperation with partner companies and suppliers.
5. Ensure that accounting procedures and disclosure activities are proper
We will establish and adhere to fair and appropriate procedures foraccounting activities to ensure the reliability of financial reports anddisclose information required by our stakeholders.
6. Eliminate antisocial forces
We refuse to respond to improper requests from antisocial forces andwill never have any relationship with antisocial forces.
7. Maintain a sound crisis management framework
We have an organizational crisis management framework in order to
respond immediately to a natural disaster, cyberattack, terrorism orother crisis.

What is the SHO-BOND Group?

Basic Concept for Compliance

SHO-BOND 2022 Integrated Report58

11-Year Data
FY2012FY2013

FY2015

Orders(million yen)

51,54547,22955,54654,811Net Sales(million yen)

44,36851,792

49,59952,124Gross Profit(million yen)

9,652

10,30010,614

12,643

(％)

21.8

19.9

21.4

24.3

Selling, General and Administrative Expenses(million yen)

3,120

3,443

3,078

3,499

Operating Profit(million yen)

6,532

6,856

7,535

9,144

(％)

14.7

13.2

15.2

17.5

Ordinary Profit(million yen)

6,867

7,221

7,932

9,480

Profit Attributable to Owners of Parent(million yen)

3,687

4,349

5,008

5,926

Total Assets(million yen)

64,36470,25970,70875,784

Net Assets(million yen)

47,801

51,79756,081

61,470Equity Ratio

(％)

74.3

73.7

79.3

81.1

ROE

(％)

7.9

8.7

9.3

10.1

ROA

(％)

6.0

6.5

7.1

8.1

Net Cash Provided by (Used In) Operating Activities(million yen)

4,591

4,058

4,835

4,804

Net Cash Provided by (Used In) Investing Activities(million yen)-706

-1,511-4,807-690

Net Cash Provided by (Used In) Financing Activities(million yen)

-1,208-1,370-1,503-1,801

Cash and Cash Equivalents at End of Period(million yen)

15,09016,277

14,803

17,127

Basic Earnings per Share

(yen)

68.50

80.79

93.05

110.11Net Assets per Share(yen)

887.98962.22

1,041.82

1,141.93

Dividend per Share

(yen)

25.00

27.50

32.00

39.00

Dividend Payout Ratio

(％)

36.5

34.0

34.4

35.4

(times)

16.9

24.2

24.9

23.2

753

755

744

752

Gross Profit Margin

Operating Profit Margin

PER

Number of Employees

Note: The Company has conducted a stock split of two common shares for everyone common share on July 1, 2019.

59

FY2014

SHO-BOND 2022 Integrated Report

FY2017

FY2018FY2019FY2020

FY2021

FY202274,54896,06552,33453,25059,68260,824

67,59080,065

81,193

12,70913,797

14,781

16,082

17,31920,782

22,555

24.3

25.9

24.8

26.4

25.6

26.0

27.8

3,406

3,637

4,000

4,354

4,389

5,050

5,288

9,303

10,16010,781

11,727

12,93015,732

17,267

17.8

19.1

18.1

19.3

19.1

19.6

21.3

9,648

10,516

11,187

12,165

13,507

16,302

17,669

6,267

6,997

7,301

8,080

9,005

11,34012,366

77,327

84,26690,976

94,595

102,667

109,807

117,423

63,701

69,24374,096

78,10883,61790,96094,247

82.4

82.2

81.4

82.5

81.4

82.8

80.2

10.0

10.5

10.2

10.6

11.1

13.0

13.4

8.2

8.7

8.3

8.7

9.1

10.7

10.9

4,386

7,484

1,734

4,550

4,540

2,737

7,834

-2,365-3,793-2,063-5,572

16,778-2,6385,315-2,152-2,606-3,147-3,312-4,179-4,485-9,177

16,981

18,073

14,594

10,25627,39523,012

27,023116.43130.00135.64150.11167.30210.68231.06

1,183.40

1,286.36

1,376.52

1,450.27

1,553.10

1,688.64

1,768.42

43.50

52.00

62.50

67.50

79.50

105.50118.00

37.4

40.0

46.1

45.0

47.5

50.1

51.1

19.9

21.8

28.4

25.3

28.5

22.0

25.8

759

788

819

855

881

916

951

SHO-BOND 2022 Integrated ReportCompany Information

84,436

Corporate Governance

74,380

Sustainability

67,859Business Strategies

60,536

Management Strategies

53,509What is the SHO-BOND Group?

FY201660

Company Profile/Stock Information(As of June 30, 2022)■ Major Bases
Domestic● SHO-BOND Holdings Co., Ltd.
● SHO-BOND CORPORATIONHead Office
Technical Research InstituteKita-Nihon Regional Office
Hokkaido Branch
Kita-Tohoku Branch
Minami-Tohoku Branch
Shutoken Hokuriku Regional Office
Tokyo Branch
Chiba Branch
Kanto Branch
Hokuriku Branch

Chubu Regional Office
Nagoya Branch
Shizuoka Branch
Kinki Regional OfficeOsaka Branch
Kyoto Branch
Kobe Branch
Nishi-Nihon Regional Office
Chugoku Branch
Shikoku Branch
Kyushu Branch● SHO-BOND MATERIAL CO., LTD.

Head Office/Kawagoe Factory
Osaka BranchTokyo Branch/Overseas Business Department Misato Factory● SHO-BOND & MIT Infrastructure Maintenance Corporation● KAKO-GroupTOHOKU KAKO CORPORATIONKAKO CORPORATIONKANTO KAKO CORPORATIONYOKOHAMA KAKO CORPORATIONNIIGATA KAKO CORPORATIONCHUBU KAKO CORPORATIONKANSAI KAKO CORPORATIONCHUGOKU KAKO CORPORATIONSHIKOKU KAKO CORPORATION
KYUSHU KAKO CORPORATION● Kyna-Tech● Maintenance Technology Inc.

Overseas● SHO-BOND (HONG KONG) Ltd. [Hong Kong]● CPAC SB&M Lifetime Solution Co., Ltd. [Bangkok]■ Our Websites

SHO-BOND Holdings Co., Ltd.

https://www.sho-bondhd.jp/english/

SHO-BOND MATERIAL CO., LTD. (Japanese version only)

https://www.sb-material.co.jp/

61

SHO-BOND 2022 Integrated Report

SHO-BOND CORPORATION

https://www.sho-bond.co.jp/en/

SHO-BOND official channel (Japanese version only)

https://www.youtube.com/channel/UChNSBYmP9fe1gQvtHzWHvoA

Company name

SHO-BOND Holdings Co., Ltd.

Date of establishment

January 4, 2008

Total number of sharesauthorized to be issued

120,000,000 shares

Head office

7-8, Nihonbashihakozaki-cho, Chuo-ku, Tokyo, Japan

Total number of issued
shares56,745,180 sharesTEL+81-3-6892-7101 (Representative)

Stock exchange listing

Tokyo Stock Exchange Prime

President andRepresentative Director

Tatsuya Kishimoto

Amount of capital¥5.0 billion

Business

Establishment of corporate strategies, management, andrelated operation of businesses of subsidiaries engaged incivil engineering and construction work contracting, etc.

Number of employees

951 (consolidated basis)

Principal consolidated
subsidiaries

SHO-BOND CORPORATION
SHO-BOND MATERIAL CO., LTD.

1414
10,331

Accounting period

June 30, each year

Annual general meeting ofshareholders

September each year

Shareholder registryadministrator
Account management
institution for specific accounts

Mitsubishi UFJ Trust and Banking
Corporation■ Shareholders Ratio

Status of Major Shareholders

5,806

10.91

General Incorporated Foundation Ueda
Memorial Foundation

5,408

10.16

SSBTC CLIENT OMNIBUS ACCOUNT

4,983

9.36

Custody Bank of Japan, Ltd. (Trust account)

4,627

8.69

MUFG Bank, Ltd.

2,658

4.99

The Dai-ichi Life Insurance Company, Limited

2,420

4.54

Custody Bank of Japan, Ltd.
(Trust account 4)

2,027

3.81

NORTHERN TRUST CO. (AVFC) RE FIDELITY
FUNDS

1,996

3.75

Meiji Yasuda Life Insurance Company

1,584

2.97

SMBC Nikko Securities Inc.

1,025

1.92

Treasury shares

6.17%

Individuals and others

Financial
institutions

8.45%

38.61%

Foreigncorporations
and others

28.42%

Securities firms

Other corporations

16.00%

2.35%

Sustainability

The Master Trust Bank of Japan, Ltd.
(Trust account)(Percentage of Owned Shares)

Business Strategies

Number of shares Shareholding ratio(Thousand shares)(%)

Shareholder nameSecurities code
Number of shareholders

Management Strategies

Stock Information

What is the SHO-BOND Group?

Company Profile

Corporate Governance■ Stock Price
(yen)
7,000
6,000
5,000

Company Information

4,000
3,000
2,000
1,000
0

FY2012FY2013

FY2014FY2015FY2016FY2017FY2018FY2019FY2020

FY2021

FY2022

Note: The Company has conducted a stock split of two common shares for everyone common share on July 1, 2019.

SHO-BOND 2022 Integrated Report62

SHO-BOND Holdings Co., Ltd.
7-8 Nihonbashihakozaki-cho, Chuo-ku, Tokyo 103-0015, Japan
TEL.+81-3-6892-7101 (Representative)
https://www.sho-bondhd.jp/english/