Integrated Report
2023

SHO-BOND Holdings Co., Ltd.

Corporate Philosophy
With a sense of mission ofInheriting and passing on social
infrastructure to the next generationin good condition,
we will contribute to the realization of asafe and affluent society by utilizing ouradvanced technological development
capability as a leading company in the
structure maintenance business.

01

SHO-BOND 2023 Integrated Report

A Construction Company
that doesn’t Construct
We create the future of social infrastructures

02

Contents

Integrated Report
2022.7.1- 2023.6.30

01

Corporate Philosophy

03

Contents

About Us04

At a glance05

Broad Range of Structures We Work On

07

The Beliefs of the Founder

09

History of SHO-BOND

11

Comprehensive Maintenance System

13

Business Environment

15

Materiality

17

The Value Creation Process

Management Strategies

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

19

Top Message

25

Medium-term Business Plan

27

CFO Message

29

Financial and Non-financial Highlights

Business Strategies
31

Marketing and Sales Division

33

East Japan In-house Company

34

West Japan In-house Company

35

Engineering Division

37

Construction Division

operations create and our commitment to sustained growth.

39

Technical Research InstituteThis publication is based on the International <IR> Framework of the40

Tsukuba Training Center

IFRS Foundation and the Guidance for Collaborative Value Creation of41

Maintenance Technology Inc./Kyna-Tech

42

SHO-BOND MATERIAL CO., LTD.

43

Overseas Businesses

shall prevail.

Editorial policy
We decided to begin issuing this report from the fiscal year that
ended in June 2022 to explain to stakeholders the value our businessthe Ministry of Economy, Trade and Industry. For more information
about SHO-BOND, including news releases and other recent
announcements, please visit our website.

Period covered by this publication
FY2023 (July 1, 2022 to June 30, 2023)
This report uses the latest information that was available at the dateof publication.

Business Foundation
45

Sustainability of SHO-BOND

47

Efforts for Environment

49

Efforts to Develop Talent and Improve theWorkplace Environment

51

Feature: SHO-BOND Training Programs

53

Efforts for Health and Safety

57

Corporate Governance

61

Risk Management

62

Compliance

Organizations covered by this publication
SHO-BOND Holdings and its consolidated subsidiaries and affiliates

Date of issue
December 2023

Note regarding forward-looking statements
Plans, forecasts, strategies, and other forward-looking statements inthis report are based on information that is currently available and on
judgments believed to be reasonable by certain assumptions. Actual
results of operations may differ from these forward-looking
statements due to numerous risk factors and uncertainties.

03

SHO-BOND 2023 Integrated ReportCompany Information
63

11-Year Data

65

Company Profile/Stock Information

About Us

Management Strategies

Business Strategies

Business Foundation

Company Information

At a glance

At a glance

The SHO-BOND Group is a leading company in the structure maintenance business that has been specializing in
the field of repair and reinforcement of social infrastructure since its establishment.
Number of Employees:

985 (consolidated basis) Number of Group Companies: 18

KEY FIGURES

9Consecutive
Years of Sales
and Earnings
Growth14Consecutive
Years of
Dividend
Increase

Operating Profit Margin

21.6%
Total Return Ratio

PBR

ROE

13.4%
Equity Ratio

79.1% 3.07times 80.2%
Percentage of Construction
Sites where “8 Days Off in
4 Weeks” is Achieved

Turnover Rate

Average Annual Days Off

94.3% 3.5% 134.5 days
(As of June 30, 2023)

04

Broad Range of Structures We Work On
We play an important role in the sustainability of cities
by repairing and reinforcing a diverse array of structuresthat form the essential fabric of social infrastructure.

Harbor Quay
Protection from salt damage
Prevention of concrete degradation

Water Supply and
Sewer Systems
Protection from corrosion

05

SHO-BOND 2023 Integrated ReportAbout Us

Management Strategies

Business Strategies

Business Foundation

Company Information

Broad Range of Structures We Work On

BridgesTunnels

Seismic retrofitting
Prevention of concrete degradation

Prevention of ceiling and wall spalling
Stop groundwater leaks

Road structures
Repair of expansion joints
Noise reduction

Railways

Irrigation Channels

Repair of damage at elevated railways
Seismic retrofitting

Prevention of cracking
Prevention of water leaks

Buildings

Silo

Seismic retrofitting

Repair of wall surface degradation

06

The Beliefs of the Founder

Corporate Credo– Make thoughtful decisions– Take responsibility for your actions– Unify the workplace– Contribute to society
The credo of the SHO-BOND Group was established in June 1979 by
Akira Ueda, who was then the company president. The credo wasannounced at a SHO-BOND annual conference attended by all
employees to celebrate the company’s 21st anniversary. When making
the announcement, Mr. Ueda also stated that the company put agreat emphasis on the company’s benefits, which are supposed to
guide employees in making optimal decisions. Only a prosperous
company can invest more in promoting employees’ happiness.
Today, more than four decades after this event, SHO-BOND has
grown as a listed company with a commitment to the happiness of
employees as well as shareholders, customers, and all otherstakeholders. As expected, the Group’s focus goes beyond profit andencompasses elements including governance, internal controls,
transparency, and ethical conduct in our operations.
The thoughts at the time of its establishment and its modern
significance resonate with each other, and the company credo has
become the behavioural principle of all our executives and employees
to this day.

07

SHO-BOND 2023 Integrated ReportAbout Us

Management Strategies

Business Strategies

Business Foundation

Company Information

The Beliefs of the Founder“Change in itself is progress” is a mantra often used by our company’s
founder Mr. Ueda.
Mr. Ueda used this phrase repeatedly when telling everyone at the
SHO-BOND Group about the importance of aiming for ambitious goals andconstantly making improvements to achieve progress.

I like the phrase “change in itself is progress.”
Periods with no difficulties at all will always come to an end.
Change produces challenges as well as progress.
History has demonstrated that only companies able to alter
themselves to reflect changes in the business climate areable to compete and survive.
Excerpt of Mr. Ueda’s 1990 New Year message

The publication to celebrate SHO-BOND’s 40th anniversary included
the following reflections of Mr. Ueda in the past four decades.
“For the past 40 years, I have always demanded and put into
practice ‘high expectations’ when it comes to my company. In otherwords, I have set high goals and put them into practice based on thetwo slogans ‘Change in itself is progress’ and ‘company’s benefits are
the standard for decision-making.’ I have gritted my teeth and wantto encourage you all.”
By remaining true to his beliefs, Mr. Ueda saw his new company
grow from five people at a single factory to Japan’s leading company
in the field of infrastructure maintenance.

Mr. Ueda giving a speech at the 1972 Division
Managers Conference

The SHO-BOND Group will continue to take on new challenges
with the founder’s spirit of passion for constant progress.

08

History of SHO-BOND

1958-

Fusion of technologies in the fields ofchemistry and civil engineering
Our company was originated from Showa Kogyo Corporation,
established on June 4, 1958. Initially, our business was construction
using PVC components, but in the process, we discovered and put
into practical use the repair performance of concrete with epoxy
resin, which opened up a new market of synthetic resin adhesives forcivil engineering works.
The effectiveness of the company’s new method for repairingconcrete was demonstrated during work to repair damage to theShowa Ohashi Bridge caused by the 1964 Niigata Earthquake. This
was the start of the company’s reputation as an expert in repair andreinforcement work. In March 1965, trial installations started for the
Cut-off Joint, an expansion device
for highway bridges developed
and patented jointly with Japan
Highway Public Corporation. This
innovation was subsequently usedfrequently throughout Japan for
The Showa Ohashi Bridge in Niigata collapsed
the construction of expressways.

1995-

The rapid growth of seismic retrofitting
after the Great Hanshin-Awaji Earthquake
The powerful earthquake that devastated the Kobe region in January
1995 caused many deaths and severely damaged structures, such as
the collapse of expressway bridges. However, there was no damage
to the piers that SHO-BOND had reinforced shortly before thisdisaster. The reliability of SHO-BOND’s seismic retrofitting method was
widely recognized, resulting in a rapid increase in orders for theseprojects in all areas of Japan. As a result, our sales and earnings
increased significantly.
In 1996, operations began at the new Technical Research Institutein the city of Tsukuba in Ibaraki prefecture. Research involving devices
for earthquake resistance produced new products including the
Restraining Chain.

in 1964 during a powerful earthquake

1975-

Emergence of a comprehensive
maintenance system
Piers of the expressway bridges reinforced shortly before the 1995

In 1975, SHO-BOND was split into two companies: SHO-BOND
CORPORATION and SHO-BOND Chemical, which clarified our path to
growth as a special construction company.
The Central Technical Research Institute was relocated in 1977
and concentrated on creating products and construction methods
combining chemical and civilengineering technologies. These
activities reinforced SHO-BOND’sreputation as a technologyoriented organization. Reforming
its organization gave SHO-BOND
comprehensive maintenancecapabilities encompassing thedevelopment of technologies,
supply of construction materials,
and construction.

Kobe earthquake were not damaged by the powerful tremors

1995 The Great Hanshin-Awaji Earthquake

The Central Technical Research Institute was moved to Omiya(now the city of Saitama) in 1977

Net Sales

1964 Niigata Earthquake

1960

09

SHO-BOND 2023 Integrated Report

1970

1980

1990

About Us

Management Strategies

Business Strategies

Business Foundation

Company Information

History of SHO-BOND

2019-

Challenge overseas business2011-

A construction site of the Expressway Renewal Project in 2018

Unprecedented disasters highlight theneed for infrastructure maintenance

In April 2019, SHO-BOND and MITSUI & CO., LTD. established
SHO-BOND & MIT Infrastructure Maintenance Corporation (SB&M) to
operate an infrastructure maintenance business overseas. The aim is
to use SHO-BOND’s proven technologies to help solve problems inother countries involving aging infrastructure.
In Thailand, SB&M and CPAC, a member of the Siam Cement
Group, established CPAC SB&M Lifetime Solution Co., Ltd. in 2020. In
the United States, SB&M invested in Structural Technologies, LLC, an
infrastructure repair maintenance company, in July 2023.

Catastrophic disasters that occurred in Japan after 2010 further
highlighted the importance of seismic retrofitting and repairing aging
infrastructure. During this period, there was a large volume ofinfrastructure maintenance work in all areas.
Many maintenance and reinforcement projects have been
implemented in accordance with the Fundamental Plan for National
Resilience following the 2011 Great East Japan Earthquake. Currently,
activities are underway based on the Five-Year Acceleration Plan for
Disaster Prevention, Disaster Mitigation, and Building National
Resilience that began in 2021.
The collapse of the ceiling of the Chuo Expressway Sasago Tunnel
in 2012 again underscored the urgent need for repairing Japan’s
aging infrastructure. Based on a Japanese government Basic Plan forLife Extension of Infrastructure, the Expressway Renewal Project
started in 2015 and will continue until 2030.
To meet the demands of this new business climate, SHO-BOND
established the in-house company structure, strengthened theorder-taking and construction system through close collaboration
with partner companies, and increased emphasis on R&D for creating
new technologies. To build a stronger base for these activities,
training programs, reinforcement of the culture of safety, and othermeasures were given even more emphasis. Due to these initiatives,
sales and earnings increased along with the growth of theinfrastructure maintenance market.
2011 The Great East Japan Earthquake

The 2020 online signing ceremony with CPAC
for establishing a jointly-owned company

2012 Sasago Tunnel ceiling collapse on the Chuo Expressway
2013 · Amendment to the Road Act, and compilation of
the Basic Plan for Life Extension of Infrastructure
The First Year of Social Infrastructure Maintenance· Enactment of the Basic Act for National Resilience

(¥bn)
100

The 2023 signing ceremony with Structural Technologies
for an investment by SB&M

2015 Beginning of the Expressway
Renewal Project

80

60

40

20

2000

2010

2020

0

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 with services ranging from R&D of materials and construction methods, tomanufacturing and sales of developed materials and construction methods. The country’s foremost and comprehensive
maintenance system. This is SHO-BOND’s characteristic, our strength.
Maintenance Technology Inc.
Investigation /Diagnosis /DesignExact proposals based on accurate investigation

We propose optimal design and construction methods byinvestigating and diagnosing, combining abundant knowledge
and state-of-the-art technology in response to various structural
damage problems.

DesignMaintenance Technology Inc. > P41

Investigation /Diagnosis

Engineering Division > P35

Technical Research Institute (SHO-BOND CORPORATION)
Technology
Development

Development of new construction methods
and materials required by the times

We have a wide array of state-of-the-art research equipment specialized
in repair and reinforcement. Our researchers specializing in chemistry
and civil engineering work together with external research institutes todevelop new construction methods and materials that meet the needsof the coming age.

Technology
Development

Engineering Division > P35
Technical Research Institute > P39

SHO-BOND MATERIAL CO., LTD.
Manufacturing

Production system utilizing our factories
and contract manufacturing

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

SHO-BOND MATERIAL CO., LTD. > P42

11

SHO-BOND 2023 Integrated Report

ManufacturingAbout Us

Management Strategies

Business Strategies

Business Foundation

Company Information

Comprehensive Maintenance System

SHO-BOND CORPORATION / KAKO-Group / Kyna-TechConstruction
Work

Construction system that can handle
all types of construction

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

Construction Division > P37
East/West Japan In-house Company > P33-34
Kyna-Tech > P41

SB&M
GlobalBringing Japanese maintenancetechnology overseas
We take on the challenge of solving the social issue of aging
infrastructure faced by many countries by combining our technologicalexpertise in infrastructure maintenance with the network and businessdevelopment capabilities of MITSUI & CO., LTD.

Construction
Work

Overseas Businesses > P43

Group companies
Sales

Sales

Sales of a wide variety of repair andreinforcement products
Product sales and construction work are the two pillars of ourbusinesses. With a lineup of organic, inorganic, and structural materials,
our group companies approach a wide range of customers to expand
our sales channels.

Marketing and Sales Division > P31

SHO-BOND MATERIAL CO., LTD. > P42

Group Companies

SHO-BOND Holdings Co., Ltd.

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

SHO-BOND CORPORATION
Technical Research Institute Tsukuba Training Center

Kyna-Tech
Maintenance Technology Inc.

SHO-BOND MATERIAL CO., LTD.

SHO-BOND & MIT Infrastructure MaintenanceCorporation (SB&M)

SHO-BOND (HONG KONG) Ltd.

CPAC SB&M
Lifetime Solution Co., Ltd.

12

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 forappropriately maintaining, managing, and renewing infrastructure and extending the service life.

Number of Bridges
by Year of Construction

Total:Approx. 520,000 bridges

44 years

Average age:

Number of Tunnels
by Year of Construction

Total: Approx. 10,000 tunnels
Average age:

(As of 2023)(As of 2023)

150,000

2,500

120,000

2,000

90,0001,500

60,0001,000

30,000

500

0

1921

1930

1940

1950

1960

1970

1980

1990

2000

MLIT

2010

0

2020

Expressway companies

36 years

1921

1930

Prefectures

1940

1950

1960

1970

1980

1990

2000

2010

2020

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 210,000 bridges and 300 tunnels whose construction year is unknown.

Expressway Renewal Project[ Current Progress ]Act revision

Budget size

2014
Revision of Act on State’s Special Financial Measures on Road
Construction and Improvement Projects
Toll collection period for expressways
2005

2015-2030
Expressway Renewal Project(Total 6 expressway companies)

5.4 trillion

Extension to
Total

¥

Total

¥

2065

2050

2023
Revision of Act on State’s Special Financial
Measures on Road Construction and
Improvement Projects
Toll collection period for expressways

2023
Additional Plans(Total 5 expressway companies)

Re-extension to
2115

2065

2005

¥

1.5 trillion

6.8 trillion is required in addition to the above(The National Diet Record of April 5, 2023)
Source: Prepared by SHO-BOND based on MLIT data

[ Percentage of total length covered by the project ]14%
Current Renewal Project4.03 trillion

5%¥(1,360km)

Additional Plans

20%

Current Renewal Project

930 billion¥(64km)The Three NEXCOs

10,000 km

1.00 trillion¥(500km)Additional Plans

300 billion¥(22km)

Metropolitan
Expressway

327 kmCurrent Renewal Project

420 billion¥(91km)

7%

Additional Plans

200 billion¥(22km)

35%
Hanshin
Expressway

258 km9%

Source: Prepared by SHO-BOND based on MLIT data

13

SHO-BOND 2023 Integrated ReportAbout Us

Management Strategies

Business Strategies

Business Foundation

Company Information

Business Environment

Percentage of Structural Infrastructures Built More Than 50 Years Ago

Road bridge[730,000 bridges]

2020

2040

30 %

75%

Examples of aging infrastructure

Concrete spalling and exposed
reinforcing bars

Aging bridge
bearingTunnel[11,000 tunnels]

Harbor quay
[61,000 facilities]

22 %

53%

21%

66 %
Salt damage

Sewer pipe
[480,000 km]

5%

35 %
Sewer pipe corrosionRivermanagement
facility[46,000 facilities]

10%

38 %

14

Materiality
The SHO-BOND Group has designated four Materialities based on social demands and the expectations of stakeholders. The
Materialities are our priorities in order to achieve sustainable growth with our stakeholders as the Group plays a role in solving social
issues while continuing to increase corporate value. The Group will continue to leverage business activities for constant progressconcerning these Materialities in order to contribute to long-term sustainable growth and the development of a sustainable society.

To identify materiality, we first identified 55
social issues to be examined. This processincorporated the SHO-BOND Group’s
policies, social demands, the expectations

Process to Identify Materiality
In April 2020, the SHO-BOND Group identified materiality with theparticipation of employees, senior management and prominent
individuals outside the group.
The SHO-BOND Group will continue to upgrade Materiality
initiatives with the input of the group’s internal and external
stakeholders.

of stakeholders and other factors.

Identificationof socialissuesCorporate values/business strategy issues
Global framework/principles/guidelines*1
Japanese government policies*2
Evaluation by ESG assessment companies*3

55 issues
The 55 issues were ranked by using theEstablishmentof priorities

perspectives of stakeholders and thegroup’s businesses. The top 22 issues werethen chosen as the priority social issues.

The 22 issues were divided into four groups
based on their characteristics in order toestablish a materiality proposal.

Materiality
proposal

22 Social issues

The suitability of the materiality proposal,
including the process used to create theConfirmationof suitability

proposal, was checked with theparticipation of senior management andthe input of prominent individuals outside
the SHO-BOND Group.

Identificationand disclosureof materiality

Final conceptual diagram of materiality,with external input, and approval by the
Board of Directors.

*1 GRI standard, SASB standard, SDGs, ISO26000,
10 Principles of the UN Global Compact, OECD
Guidelines for Multinational Enterprises, and others*2 Policies of the Ministry of Land, Infrastructure, Transport
and Tourism for public works projects and other policies

15

SHO-BOND 2023 Integrated Report*3 MSCI, FTSE, Robeco SAM and othersAbout Us

Management Strategies

Business Strategies

Business Foundation

Company Information

Materiality

Materiality Matrix
To identify materiality, a materiality matrix was created by evaluatingsocial issues from the standpoints of the importance to stakeholders
and the importance to business operations. Then 22 social issues thatwere very important from both standpoints were selected as theissues that the SHO-BOND Group should target.
To determine importance to stakeholders, evaluations were

performed by using the perspectives of shareholders and otherinvestors in Japan and other countries, local governments, government
agencies and other sources of orders for the SHO-BOND Group,
manufacturers of building materials, chemicals and other materials
procured by the group, construction firms and other subcontractors,
residents near business sites and other members of society, government
actions and policies, and other stakeholders. For importance tobusiness operations, evaluations were performed by the group’s senior
management, including outside directors, and employees.

22 Social issues

E Environment

S Social

G GovernanceImportance to stakeholders● Sustainable use of● Establish a resilient● Employee retention and● Strengthen corporate● Assessment of● Leverage comprehensive● Improve economic● Strengthen risk

● Proper management of● Ensuring occupational● Measures involving Japan’s● Compliance with laws

resources

environmental impact
of projects

waste materials● Measures to combat
climate change

infrastructure

maintenance resources tocontribute to society

health and safety● Develop and use
technologies forsocial issues● Activities to increase
productivity● Recruiting and training
programs

sound labor relations

governancemanagement

performancefalling population● Develop sustainable cities● Health and safety ofcustomers and consumers● Community relationships

and regulations● Fair business practices● Information security

measures● Proper management ofintellectual property

Importance to business operations

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.

Comprehensive maintenancesystem backed by theorganizational capabilities

Productivity improvement
through technology
development

Sound governance andmeasures for more
improvements

Contribution to thedevelopment ofsustainable cities

Contribute to the developmentof social infrastructure by using
partner companies interactions
and the group’s aggregate
resources for all maintenanceprocesses, whether large or small.

Improve productivity by
combining chemical and civilengineering technologies tocreate new technologies andby conducting training andeducation programs.

Make sound and transparent
governance to maintain thefoundation for relationships
with all stakeholders.

Position the social
infrastructure maintenancebusiness as a key componentof the development ofsustainable cities that areenvironmentally responsible.

● Establish a resilient● Develop and use technologies● Strengthen corporate● Sustainable use of resources● Assessment of environmental

infrastructure● Leverage comprehensive
maintenance resources tocontribute to society● Ensuring occupational healthand safety

for social issues● Activities to increase
productivity● Recruiting and training
programs● Employee retention and soundlabor relations● Improve economic performance

governance● Strengthen risk management● Compliance with laws
and regulations● Fair business practices● Information security measures● Proper management ofintellectual property

impact of projects● Proper management ofwaste materials● Measures to combat

climate change● Measures involving Japan’s

falling population● Develop sustainable cities● Health and safety of customers

and consumers● Community relationships

Internal activities

Effects of business activities on society

16

The Value Creation Process
Our mission is to pass on social infrastructure to the next generation in good condition while bringing out the best in the distinctive
comprehensive infrastructure maintenance business model.
We are dedicated to playing a role in maintaining a safe and affluent society for everyone. Through a continual approach to the four
components of our Materiality, we provide solutions for social issues and create economic value, as well as promote the long-term
growth of corporate value.

DesignConstruction
Work

Social Issues
Investigation/
Diagnosis● Accelerated aging of infrastructure● Increasingly severe and frequentComprehensive
Maintenance Systemnatural disasters＞P11● Realization of a decarbonized society● Declining birthrate, aging population,and decreasing workforce

Technology
Development● Heightened geopolitical risks andchanges in economic conditions inJapan and overseas

Business Environment > P13

Manufacturing

Internal activities
Productivity improvement
through technology
development

Sound governance andmeasures for more
improvements

InputsFinancial capitalIntellectual capitalSocial and relationship capital● Sound financial base with high● Accumulated technological● Engagement with stakeholders

profitability

Manufactured capital● The Group’s strength forcomprehensive infrastructure
maintenance● Construction methods andmaterials specialized in repair
and reinforcement

17

SHO-BOND 2023 Integrated Reportdevelopment capabilities andknowledge centered on TechnicalResearch Institute

Human capital● Experienced and highly skilled

engineers● Multi-skilled workers with strengths
as maintenance specialists● Strong network with partnercompanies

Natural capital● Maintenance work with reduced

environmental impact

SalesAbout Us

Management Strategies

Business Strategies

Business Foundation

Company Information

The Value Creation Process

MissionInheriting and passing on social infrastructure
to the next generation in good condition

Our Vision● Fulfill our mission as a company specializing in maintenance● Be a technology-oriented organization

Outcomes

that combines chemical and civil engineering technologies
to create new materials and construction methods● Place priority on profitability and efficiency

Resolution of social issues● Measures against aging through preventive

infrastructure maintenance● Establishment of a safe and secure national,

regional, and economic society with resilience● Creation of sustainable and livable cities

Comprehensive
maintenance system backed
by the organizational
capabilities● Curbing of greenhouse gas emissions(Reduction of environmental impact)

Effects of businessactivities on society

Materiality ＞ P15

Creation of economic value¥83.9 billion● Sales
Contribution to thedevelopment ofsustainable cities● Profit attributable toowners of parent● ROE● Total return ratio¥12.9 billion
13.4%
79.1%

(FY2023)

Reutilization

18

Top Message

65 years of growth as a specialist
in infrastructure maintenance
We will steadfastly commit ourselves toan affluent and safe society worldwide
Tatsuya Kishimoto

19

SHO-BOND 2023 Integrated Report

President and Representative Director

About Us

Management Strategies

Business Strategies

Business Foundation

Company Information

Top Message

Guided by our mission of solvingsocial problems
Q. SHO-BOND reached its 65th anniversary on June 4,
2023. What are the main elements of the DNA that havedefined SHO-BOND’s operations since its inception?
A. Since the establishment of our company in 1958 by
Akira Ueda, we have grown as an organization
specializing in infrastructure maintenance. We are aconstruction company that does not build new
structures. Mr. Ueda was the company’s chairman when
I joined SHO-BOND. I was awed by his powerfulleadership and charisma emanating from his behavior.
Now I am in a position to lead the company aspresident. When I look back on the journey of growth
and think about the sentiments of our founder, I cansense a lot from his motto, “Change in itself is progress,”which he frequently said since the early days of ourcompany. As the world and markets change, SHO-BOND,
which specializes in repair and reinforcement without
new construction work, has been a maverick of theconstruction industry, maintaining its unique style. At
the time, we voluntarily surveyed and inspected bridges
for local governments, reporting on their deterioration
status and providing advice on necessary maintenancework. Governments and other organizations greatly
appreciated our ability to create proposals from theirperspectives, which boosted our growth. On the other
hand, we also encountered challenging situations, suchas unfavorable changes to bidding rules, which may
cause us unable to take on new projects. We must
survive and grow even amid such dramatic changes.
I believe that “change in itself is progress” embodies theunique beliefs of Mr. Ueda who has successfully
overcome many difficulties. Lacking the ability to change
or keenly adhering to the past will make us fall behind.
Now that infrastructure maintenance is in the spotlight,
we must constantly take on new challenges without
overconfidence. Bearing these in mind, this is how I am
leading the management of the Group.
Everyone in our group has a resolute commitment to

the DNA originated from Mr. Ueda of never losing in theinfrastructure repair and reinforcement market. I believe
this spirit is what makes us SHO-BOND. We know morethan our customers about the degradation of thestructures they manage. We also have a comprehensive
maintenance system that makes us a one-stop source ofservices in this sector. Leveraging these resources, we will
respond to all requests from our customers. The
dedication of our people to earning more and more trustfrom customers is the most valuable strength of the
SHO-BOND Group. >P07
Q. What do you think Mr. Ueda would think of theorganization that SHO-BOND has become today?
A. I think he would be happy to see how well we aredoing. I also think he would check to be certain we aremanaging operations properly. He would want toconfirm that we have been taking good care of longtime customers and doing a good job with small
projects because the original characteristics of ourgroup lie in steady sales activities that are close toclients and the accumulation of small-scale construction
projects. Nowadays, our sales and earnings are
increasing steadily mainly because of the large volume
of expressway orders. Conversely, I’m concerned that
our focus on securing large orders creates the risk oflosing relationships with other long-term customers. As
we make changes to cope with shifts in the operating
environment, we must retain our commitment to thedefining characteristics of our company. As the leader in
the infrastructure maintenance field, our mission is tocontinue expanding our operations to cover a broader
range of customers such as local governments and theprivate sectors at home, and even foreign markets,
where the potential needs for structure maintenanceremain to be met. I intend to develop our business witha sense of mission for the benefit of administrators andusers in need, not just in pursuit of profit.
Local governments are responsible for about 80% ofJapan’s infrastructure. As Japan’s population declines,
these governments are having difficulty hiring people

20and securing sufficient funds for infrastructure
maintenance. As one way to help deal with thisproblem of limited human and monetary resources at
local governments, we recently developed the SBLN
GEL. Applying this gel-like substance, which contains
lithium nitrite, to concrete slows down the rusting ofrebar within the concrete. This innovation is highly
anticipated by infrastructure managers because no
special skills are needed to apply the SBLN GEL. >P36
Infrastructure degrades in many ways. Some repairs
require a major project and others can be completed
quickly and inexpensively. If earnings are the only goal,
the best policy is to take on primarily large repair andreinforcement projects. However, we should be theoptimal maintenance provider who constantly develops
products and makes proposals from the customer’s
perspective. To pass on this thinking, skills, and thefulfillment of work to younger employees, we havetraining programs led by experienced personnel.

Strong performance in Japan.
Aiming to speed up growth overseas during
the next Medium-term Business Plan
Q. FY2023 was the second year of the current Mediumterm Business Plan. How do you assess last year’s
performance and what are your goals for the plan’s
final year?
A. I believe our operations in Japan have reached afairly high level. Large expressway orders are almost
70% of our business, which is more than we expected.
As a result, construction sales have been leveling off
quarterly. I think our success in strengthening training
programs for our employees and our network withpartner companies were mainly responsible for thisprogress. These accomplishments and the large orderbacklogs give us confidence in determining an outlook
for FY2025 and afterward.
In July 2023, we signed an investment and licensing
agreement with Structural Technologies, LLC, a U.S.
infrastructure repair maintenance company after a21

SHO-BOND 2023 Integrated Report>P44 In addition to expecting
five-year negotiation.    
an increase in profits through profit sharing, we also
hope to increase future earnings by obtaining quality
certification for SHO-BOND products in the UnitedStates, incorporating them into design, and providing
construction guidance through the company.
Addressing the problem of profitability in Thailand
is a pressing concern. Initially, the pandemic restrictedsales activities and caused delays in our plan to meet thedemand for infrastructure maintenance involving
airports, railroads, highways, and other sectors. Now
sales have slowly started to move up, backed partly by
maintenance orders for wharves and silos. While highly
skilled partner companies bring us high profitability inJapan, we have not yet sufficiently developed thesubcontractors’ network in Thailand and this is puttingpressure on profits. While steadily training local
workers, we will also focus on expanding thesubcontractors’ network by cooperating with the Siam
Cement Group, to achieve constant profitability.
To establish a solid base for starting the next
Medium-term Business Plan, we are developing anorganizational structure to speed up growth overseas.

Q. Please explain your strategy for growth based on atime frame of 5 to 10 years.
A. There are good prospects for more growth in the
demand for infrastructure maintenance. Current plansof Japan’s expressway companies indicate that there will
be a large volume of orders for at least the next decade.
Furthermore, the number of bridges in Japan that are
more than 50 years old will continue to increase,creating new sources of demand for repairs andreinforcement. >P13 As the leader in this industry, weare determined to continue growing at a rate thatkeeps us far ahead of all our competitors.
In order to add more sources of revenue, we aresowing the seeds of new business and steadily working
on potential sales and marketing activities. Ouroperations overseas are part of it. We are also paying
attention to the activation of maintenance activities byAbout Us

Management Strategies

Business Strategies

Business Foundation

Company Information

Top Message

local governments and the private sector. The need forinfrastructure maintenance is growing steadilyworldwide. Meeting all of these needs directly is notpossible with the current size of the SHO-BOND Group.
This is why we are exploring ways, including M&A, toexpand our business by leveraging our expertise as amaintenance specialist. In areas that we cannot cover byourselves, I want to deliver our considerable expertiseand cumulated know-how through licensing
agreements with other companies or utilizing AI
technology. We will create more innovative products,
such as our AI Shindanshi packed with know-how ondeterioration diagnosis of concrete structures, forcustomers to rent or purchase and provide support to
the infrastructure managers. I intend to continue taking
on such challenges steadfastly. >P32
Reinforcing our reputation as a technology-orientedorganization is another element of our strategy for
growth. Since our inception, the continuous cycle ofreplacements and updates of our construction materials
and methods has underpinned our growth. A series ofsheet methods preventing concrete from spalling andfalling is one illustration. Initially, a complex process withmanual steps was required. We solved this problem bydeveloping improved products one after another withour customers for more convenience and better
performance. Examples include the HYBRID SHEETMETHOD, which reduces the number of steps, atransparent sheet that makes subsequent inspections
easier, and a spray-type material for finishing work faster.
To ensure greater convenience, we will continue the cycleof developing and updating our materials and methods
based on customers’ needs.

Create a comprehensive sustainability
promotion framework across theentire group
Q. What types of activities are there at the SHO-BOND
Group involving sustainability?
A. Maintenance services for extending the life of

To ensure greater convenience, we willcontinue the cycle of developing andupdating our materials and methods basedon customers’ needs.

infrastructure make a big contribution to the reductionof greenhouse gases and waste materials by eliminating
the need for demolition and reconstruction. Playing arole in combating global warming is therefore anotherreason for our desire to deploy our technologies forrepairing and reinforcing aging infrastructures in every
corner of Japan and overseas.
In FY2024, we transferred the Corporate Planning
Department and ESG Promotion Office to the Holdings
function to comprehensively and cross-sectionallyaddress sustainability issues, not only for the core
operating company SHO-BOND CORPORATION but also
for SHO-BOND MATERIAL and SB&M.
Environment
Japan’s construction industry is developing manytechnologies, such as concrete that absorbs CO2, as partof activities to accomplish the national goal of carbon

22neutrality by 2050. On the other hand, we do not use
large quantities of concrete and other materials because
we work on only maintenance projects. To protect theenvironment, we are seeking ways to replacepetroleum-derived materials with biological materials in
resin-based materials that we manufacture and sell.
Lowering our use of water is another goal. We alreadyhave programs at construction sites for the recycling
and reuse of water for washing hands. Demonstration
tests and other activities are underway to determine a

Our younger employees are very active in
improving health and safety levels atconstruction sites, which motivates me toachieve more progress.

23

SHO-BOND 2023 Integrated Report

way to reuse the large amount of water required forthe use of water jets. We will continue to work on
solving the numerous obstacles one by one to create apractical water recycling system.
SocialAll construction companies in Japan are facing thechallenge of a severe labor shortage, including ourpartner companies. To reduce the burden in this respectand make full use of our Tsukuba Training Center, weare offering training programs that cover not only our
employees but also our partner companies. In addition,
we plan to expand the targets of our training programs
to trainees from other countries by coordinating with
JICA (the Japan International Cooperation Agency), andour customers’ engineers.
I also think workforce diversity is very important.
We are taking many initiatives including gender,
nationality, and career path. For our recruiting activities,
we make efforts to maintain at least a 15% regular
recruiting rate of females. We are generally hiring new
graduates as planned, partly due to the increasing
interest of students in infrastructure maintenance.
Furthermore, the number of employees from othercountries, mainly in Asia, is increasing as well. I hope to
see these international staff members filling key
positions in the future to support our global expansion.
Another priority is the continuation of recruiting people
with previous work experience who can be immediately
productive. These mid-career people are already morethan half of our workforce. Hiring people withexperience in large projects and projects in categories
new to our group will allow us to offer customers aneven broader selection of services. We diversify our
workforce actively to challenge new businesses andpromote the dissemination of the knowledge of ouremployees to create an environment where people
motivate each other to improve their skills and advancetheir careers. We use our internal publications,e-learning content, and other methods to make thethinking of outstanding and distinctive people in ourgroup accessible to everyone.

About Us

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Company Information

Top Message

Employee retention and workplace safety are two of
our highest priorities. In the old days, SHO-BOND mainly
took on subcontracted work, and there was a usual
practice to assign one engineer to several different
small job sites to earn more profits, which raised ourattrition rate because of the high volume of work andalso had a negative effect on safety. I experienced suchconditions myself and felt that was unsustainable. AfterI became the president, I declared safety and quality as
our vital issues and took steps to strengthen thedepartments supporting health and safety activities on
the construction sites. Meanwhile, a timely support
system was updated, by which managers attend thehealth and safety patrols to gather information about
issues through dialogues with workers, identify thehidden risks, and respond promptly before it may cause
serious troubles. In the conversation, managers and thesite engineers share various information, such as what
happened that day, what is planned for the next day, if
there are any job site problems, etc. I believe thesecommunications have improved the safety and qualityof our construction and lowered our workforce attrition
rate. I do a safety patrol once every month. Visiting
construction sites and talking with our staff are valuable
for reinforcing my confidence in our operations. In
addition, our younger employees are very active in
improving health and safety levels at construction sites,
which motivates me to achieve more progress.
GovernanceI believe that the Board of Directors has a well-balanced
composition as the whole Group, including outside
directors and directors of major subsidiaries. To assist
with the Group’s management, the three outside
directors frequently provide advice based on their
independent and objective perspectives and many yearsof experience in their professions.
The Group is now taking on a variety of newchallenges with activities that include equity allianceswith companies in Japan and other countries. At theBoard of Directors meeting, the outside directors
examine proposals for new actions and share points,

especially regarding potential risks. I believe that live
discussions, serving not only as an accelerator but also asa brake, are leading to improvements in the effectivenessof corporate governance. Outside directors have alsooffered useful input that we could not obtain internally,such as the public’s expectations of SHO-BOND, and theideal state of companies aspired by students, female
engineers, and others in general. As we aim for growthoverseas, we will consider adding outside directors with
global knowledge and experience as well as othermeasures to make our governance even stronger.

Corporate value growth backed by thespirit of “change in itself is progress”
Q. What is your message to shareholders and otherinvestors?
A. When I meet investors, I often hear about their
expectations for an even more aggressive stance for
growth as the market for structure maintenancecontinues to expand. Our business policy is to value
both operational and social aspects of our businessguided by the mission that has defined our activities
since our inception. With proper risk management andhuman resource development, we intend to take on
new challenges steadily for the diversification of our
profit structure and growth of business operations.
We are now in the final year of our current Mediumterm Business Plan. Work on formulating the next plan
has started. During this important year, everyone at the
SHO-BOND Group has a firm determination to leverage
our strengths as much as possible. We will focus on
measures embodying the spirit of “change in itself is
progress” to increase corporate value and meet the
expectations of all of our stakeholders. I appreciate yourcontinuing support.

24

Medium-term Business Plan (FY2022 - FY2024)

In the Medium-term Business Plan (FY2022 - FY2024), we areworking to achieve sustainable profit growth and enhance corporate
value under the basic policy of “honing the inherent strengths what itis that makes us SHO-BOND.” We defined the “inherent strengths” interms of business as “construction work capability,” “technologicaldevelopment capability” and “product sales capability,” and in termsof management as “profitability,” “financial soundness” and“shareholder returns.” Per the Medium-term Business Plan, we aretrying to refine SHO-BOND’s strengths and build a system ready forthe stage of further accelerated growth. In FY2022, we focused on
proactive measures, including “upgrade the order receipt strategy

utilizing the in-house company structure” and “more activities forlarge projects and construction work capability.” In FY2023, weachieved steady results from measures like “to become morecompetitive for capturing orders by developing human resources
capable of adapting to changing markets,” “personnel system
reforms that reflect the changing business environment,” and “astrong safety culture and rigorous on-site training” as stronger
foundations for growth. In particular, we believe the achievement ofzero fatal accidents, zero frequency rate, and zero severity rate ofoccupational accidents is the result of the company-wide Initiatives
for Creating a SHO-BOND Culture of Safety.

Basic policy“Honing our inherent
strengths what it is thatmakes us SHO-BOND”❶ Further initiatives for large-scale construction by reinforcing organizational
capabilities❷ Develop new technologies ahead of other companies and take on thechallenge of a new product sales strategy❸ Increase orders through human resource development that can respond tomarket changes and the increase of productivity❹ Manage both profitability and financial soundness and enhanceshareholder returns❺ More ESG activities and contributions to SDGs

A Stronger Foundation for GrowthBusiness Strategy
Strategic Initiatives

25

Progress in FY2023

Strategic Initiatives

Progress in FY2023

Upgrade the order receipt
strategy utilizing the in-housecompany structure

Each in-house company consolidates information onlarge-scale construction projects within their wide
operation areas, and holds meetings to select projects
for bidding, study measures to reduce construction
costs, and check the workforce framework involving
partner companies. They have taken strategic measures,such as reallocating engineers among regional offices
according to the status of orders in each region.

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

The workforce reached 985 at the end of June 2023. To
improve the capabilities of engineers, we strengthened
support for getting public qualifications and implemented
educational programs on the themes of 3D CAD and FEA(Finite Element Analysis). Each in-house company
conducted a variety of training programs for young
employees, female engineers, and others.

More activities for large projects
and construction work capability

For large construction projects of ¥2bn or more, theLarge-Scale Construction Management Committee isconvened, and each department at the head officeconfirms the details of the project before receiving anorder. Each regional office has made progress in having
existing partner companies work in larger areas andselecting new ones.

Personnel system reforms thatreflect the changing businessenvironment

We integrated measures related to work style reforms
and improvement of the work environment for female
employees into in-house systems. In addition, we
implemented a 3% salary increase for two straightfiscal years, as well as improved compensation forsenior employees. We are also preparing for the new
overtime cap that will take effect in the constructionindustry according to the revised Labor Standards Act
in 2024 and further discussing new personnel systems.

Challenge a new product sales
strategy by SB&M

The easing of the behavioral restrictions imposed
under the COVID-19 pandemic has enabled SB&M tocarry on a full-scale operation in Thailand. It hasreceived construction orders of around ¥100mn andsold products through JICA technical projects. In July,
SB&M reached an agreement to invest in Structural
Technologies, LLC, a U.S. civil infrastructure repair
company.

A strong safety culture andrigorous on-site training

Initiatives for Creating a SHO-BOND Culture of Safety
have resulted in zero fatalities, as well as zero LTI
frequency and severity rate in FY2023. Each regional
office is also implementing safety activities frequently,
raising awareness and moving closer to the
independent and mutually enlightening model of safety
culture.

More joint activities by increasing
cooperation among groupcompanies and other companies

Kyna-Tech's water jet (“WJ”) construction business has
been steadily increasing its performance, and in FY2024,
the aim is to strengthen its construction team engaged
in the WJ works. Maintenance Technology Inc. has also
gradually increased its contribution to the SHO-BOND
Group (the “Group”). SB&M is contributing to theGroup by achieving results in developing clients outside
the road sector. In addition, we have made progress instrengthening ties with various local partner companies.

Use of the digital transformation(DX) for higher productivity

In terms of on-site DX, the use of construction
management applications became more widespread asa result of staff training and each regional office’s
workshops. In addition to the design engineers at eachregional office acquiring 3D CAD skills, the conversionof in-house developed construction devices into 3D
data was completed to comply with the government's
request for the delivery of 3D models.

New technologies for preventive
infrastructure maintenance

As a new research theme, we have begun replacingorganic additives with plants and shells in considerationof the environment. The development of lithium nitrite
materials, a preventive maintenance method for concrete
structures, has been completed and advanced to thecommercialization stage.
Devices equipped with “AI Shindanshi,” an artificial
intelligence diagnosis system, were distributed to ourengineers and began to be used in actual operations.

Build a framework for
responding to ESG issues

We have enhanced the disclosure of non-financial
information and established internal systems related to
ESG and sustainability, including the release of related
KPIs, the publication of an integrated report, and theholding of a Sustainability Committee meeting. We will
promote disclosure of information on human capitaland diversity, etc.

SHO-BOND 2023 Integrated ReportAbout Us

Management Strategies

Business Strategies

Business Foundation

Company Information

Medium-term Business Plan
(FY2022 - FY2024)

Financial Targets
FY2022 Results

FY2023 Results

FY2024 Forecasts

FY2024 Targets (Mid-term Plan)

Net Sales

81.19 billion yen

83.92 billion yen

86.2 billion yen

87.5 billion yen

Operating Profit

17.26 billion yen

18.12 billion yen

18.6 billion yen

17.5 billion yen

21.3％

21.6%

21.6%

20.0%

12.36 billion yen

12.88 billion yen

13.3 billion yen

12.0 billion yen

13.4％

13.4%

13.0%

12.0%

Operating Profit Margin
Profit Attributable to
Owners of Parent
ROE

Operating profit was ¥18,124 million and profit attributable to ownersof parent was ¥12,887 million in FY2023. Due to this performance, thefinal year targets of the current Medium-term Business Plan wereachieved one year early. More growth is expected in FY2024. However,sales are forecasted to be below the Medium-term Business Plan goal
chiefly because the impact of the COVID-19 pandemic made it difficult
to expand our overseas operations as initially planned, especially thesales of construction materials.
The operating margin was above 21% and the ROE was above
13%, both well above the Medium-term Business Plan targets.
Selectively accepting orders, rigorously managing the cost of
construction, and others make this possible. This accomplishment
demonstrates the continuing progress with the high profitability thatis a defining characteristic of SHO-BOND.

Operating Profit
(¥bn)

(%)

20

21.6

22

21.6

21.3
Plan

18

21

19.6
16

20

14

19

12

15.7

17.3

18.6

18.1

17.5

18

10

8

17

FY2018

Capital Policy

FY2019FY2020

FY2021

Operating Profit

FY2022 FY2023 FY2024

FY202416

Operating Margin

FY2022 Results

FY2023 Results

FY2024 Forecasts

FY2024 Targets (Mid-term Plan)

Dividend Payout Ratio

51.1%

52.1%

50.0%

50.0%

Total Return Ratio

75.1%

79.1%

75.0%

75.0%

Our policy is to maintain a dividend payout ratio of 50% as the basis
for the continuous and stable distribution of earnings to shareholders.
In FY2023, shareholders received a commemorative dividend of ¥5 pershare to mark the 65th anniversary of the establishment of SHO-BOND
CORPORATION. The total dividend for the fiscal year was ¥127, with apayout ratio of 52.1%. In addition, the current Medium-term Business
Plan includes the purchase of treasury shares worth ¥10 billion. The
combination of dividends and the purchase of treasury shares will
increase the total return ratio to more than 75%.
Cross-shareholdings with a market value of ¥1,096 million weresold in the past two years. The intention is to reduce these holdings
as a proportion of net assets. However, this percentage has risen due
to the appreciation of the market value of the remaining crossshareholdings.

Cross-shareholdings

FY2022-FY2023 Result

(¥bn)

9

11.3

Sale*

-1.01

Changes inmarket value+1.81+0.8¥bn

(%)

12

8

8.0

7.5

8.2
8

7

Plan

8.4
7.3

6

8.1
7.1
4

5.8

5

4

FY2015 FY2016 FY2017 FY2018 FY2019 FY2020 FY2021 FY2022 FY2023 FY2024
Cross-shareholdings0

The Ratio of Cross-shareholdings to Net Assets* Based on the market value as of June 30, 2021

26

CFO Message
Sales and earnings have increased for nine consecutive years and we haveincreased the dividend for 14 consecutive years. I believe this achievement isdue to our steadfast adherence to the basic policy of “emphasizing profitability
and selectively accepting orders” while flexibly changing our internal structure
and ordering strategy in response to the expansion of the maintenance market.
Our policy is not to forcefully pursue sales scale, but rather secure profits bymaintaining high profit margins while considering the proper balance amongshareholder returns, growth investments, and internal reserves.

Yasuhiro Sekiguchi
Managing Director, CFO

Review of Performance
Sales and earnings increased for the ninth consecutive year in FY2023.
Sales increased by 3.4% to ¥83,924 million. The main reasons are
the steady progress of large projects and higher sales of expansion
joints, couplings, and other construction materials. Regarding profit, in
addition to the increase in sales, we were able to maintain a high grossprofit margin of 28%, so profit attributable to owners of parent
increased by 4.2% to ¥12,887 million. However, due to a decrease inorders for large-scale repair work from expressway companies, orders
received decreased by 18.9% from the previous year to ¥77,945 million.
Looking back at the past two years of the Medium-term Business
Plan (from FY2022 to FY2024), the two-year cumulative orders
received are regarded as having generally been in line with our plan,
given respect to the visible fluctuations depending on the status oforders for large-scale projects. Furthermore, the progress of every
three-year average orders in the past shows that we are steadily
upgrading our ability to capture orders. Construction sales have been
about the same as in our plan in each fiscal year but sales of
construction materials were lower than planned mainly because theimpact of the COVID-19 pandemic made it difficult to expand ouroverseas operations as initially planned.
Operating profit and profit attributable to owners of parent haveboth surpassed the plan’s goals for two consecutive years. Moreover,
our construction gross margin has been above 26% for two
consecutive years. Rigorous management of the construction cost andthe ability to receive additional orders for design changes, which is

Cross-shareholdings

due to our advanced technologies and construction management
skills, are the main reasons for this high profitability.

Net Sales/Profit Attributable to Owners of Parent（Profit Attributable to Owners of Parent/¥bn）(Net Sales/¥bn)100

11 consecutive years of earnings growth

15

12.9
80

12

60

9

40

6

83.9
9 consecutive years of sales growth

20

3

0

0
FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 FY2019 FY2020 FY2021 FY2022 FY2023 FY2024
Net Sales

Profit Attributable to Owners of Parent

Construction Orders and Construction Sales
(¥bn)

100

As a rule, the SHO-BOND Group does not purchase or hold the stockof suppliers and other business partners with the exception of cases
when purchasing and holding stock helps in conducting business
operations efficiently, maintaining and strengthening business
relationships, and thereby contributing to the medium- to long-term
growth of corporate value. When a company that holds our stock asa cross-shareholding notifies us of the intention to sell this stock, wewill never make any attempt to stop this sale. In the past two years,
we have sold cross-shareholding stock totaling ¥1,096 million basedon market value. As a result, the number of stocks we cross-holddecreased from 22 to 19. In FY2024, we plan to sell an extra ¥500
million in cross-shareholding stock.

79.3

80

71.1
60

75.1

54.9
69.1

40

20

0
FY2015 FY2016 FY2017 FY2018 FY2019 FY2020 FY2021 FY2022 FY2023 FY2024
Construction Orders

27

SHO-BOND 2023 Integrated ReportThree-year Average Construction Orders

Construction Sales

About Us

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Company Information

CFO Message

Shareholder Returns

Dividends/Purchase of Treasury Shares/Total Return Ratio
Shareholder distributions up
by about 380% over 8 years

(¥bn)

12

Distributing earnings to shareholders is one of our highest priorities.
The basic policy is to pay a dividend consistently that is based on the
results of operations. The dividend for FY2023 was ¥127 per share,with a 52.1% payout ratio, which includes a ¥5 commemorative
dividend for the 65th anniversary of the establishment of SHO-BOND
CORPORATION. We have increased the dividend for 14 consecutive
years. After adding the purchase of treasury shares for about ¥3.5
billion, the total return ratio was 79.1%. Over the eight years since
FY2015, when we announced a policy of raising the dividend payout
ratio by 2.5% every year, shareholder distributions have increased byapproximately 380%. In FY2024, the planned dividend payout ratio is50% and the purchase of treasury shares will be ¥3.5 billion, which
will bring a total return ratio to more than 75%.

(%)
80

79.1
10.2

10

60
8

40

6

4
20
2

0

0
FY2015 FY2016 FY2017 FY2018 FY2019 FY2020 FY2021 FY2022 FY2023 FY2024

Capital Policy

Dividends

Purchase of Treasury Shares

Total Return Ratio

PER·ROE·PBR
Among several indicators of corporate value, the Group conducts
management with PBR in mind. PBR is described as the product of
PER and ROE. The PER of our company rose to 28.5 in FY2020
because of the growth of Japan’s infrastructure maintenance market
and the increase of SHO-BOND’s sales and earnings. At the end ofJune 2023, PER is approximately 23. When reviewing our capital
policy in line with the Medium-term Business Plan, we establish thegoals for ROE after conducting thorough studies from various
perspectives to ensure a proper balance among shareholder returns,
investments for growth, and the equity ratio, while also considering
movements in the PER. According to the residual income model, ahigh PBR can be sustained by maintaining an equity spread (thedifference between ROE and the cost of equity). We focus on
reducing the cost of equity by enhancing the visibility of our business
operations for shareholders and other investors through proper
disclosure of financial and non-financial information, as well as
conducting sufficient IR activities.

23.5
13.4

3.07

FY2015 FY2016 FY2017 FY2018 FY2019 FY2020 FY2021 FY2022 FY2023
ROE (%)PER (times)

PBR (times)

Building a Base for the Next Medium-term Business Plan
The enactment in May 2023 of the Amended Act on Special Measuresconcerning Road Construction and Improvement extended the end of
the collection of expressway tolls in Japan from 2065 to as far away as
September 30, 2115. Toll revenue will be used for repair and renewal
works including the upkeep of aging highways and expanding
expressways to four lanes. According to the Ministry of Land,
Infrastructure, Transport and Tourism, expressway repairs andimprovements between now and 2115 will cost an estimated ¥8,300
billion. This does not include the cost of the large-scale renewal andrepair projects now underway by Japan’s expressway companies.
Meanwhile, Amendments to the Basic Act on National Resilience wereapproved in June 2023 in the Diet, in which the main content is tolegalize the formulation of the “Medium-term Action Plan for National
Resilience.” It means the efforts to build national resilience will bepromoted continuously and stably, even after the Five-Year Acceleration
Plan for Disaster Prevention, Disaster Mitigation, and Building National
Resilience that will end in 2025 with a budget of about ¥15,000 billion.
Furthermore, details and scale of particularly necessary measures areincluded in the “Medium-term Plan for National Resilience,” making it

possible to secure a budget for multiple years, similar to the current
five-year plan.
Demand for infrastructure maintenance in Japan is certain tocontinue for many more years because of these amendments andother activities. In the next Medium-term business plan, we would liketo strengthen our “sustainable earning power” by leveraging theaccomplishments of business strategies and foundation reinforcementin the current Medium-term (from June 2022 to June 2024). At theend of July 2023, SB&M, which is owned by SHO-BOND and MITSUI &CO., LTD., made an investment in U.S. infrastructure repair
maintenance company Structural Technologies, LLC. SHO-BOND plans
to use this partnership for the introduction of its broad range ofproven maintenance technologies into the United States, where
deterioration of infrastructure is becoming a serious social issue. The
Group also has a jointly-owned company in Thailand. Measures, suchas organizational change, are now being considered for strengthening
overseas operations in order to catch up after the slowdown caused inpart by the pandemic.

28

Financial and Non-financial Highlights

Financial
Orders(¥bn)
Constructions

Products(¥bn)

Constructions

Products

8.2

84.4
6.5

74.4

Net Sales

96.1

77.9

74.5

5.7

8.9

7.8

80.1

81.2

7.8

8.2

83.9
8.9

67.6
6.5

60.8
5.7

68.6

77.9

66.7

87.9

69.1

55.1

61.1

72.2

73.0

75.1

FY2019FY2020

FY2021

FY2022

FY2023

FY2019FY2020

FY2021

FY2022

FY2023Operating Profit / Operating Profit Margin
Operating Profit

Operating Profit Margin17.3(¥bn/%)

Profit Attributable to Owners of Parent / ROE
Profit Attributable to Owners of Parent

18.1

12.9

ROE

11.3
21.3

12.9

12.4

15.7

(¥bn/%)

13.4

13.4

FY2022

FY2023

13.0

21.6
9.0

11.7

8.1
19.6

19.3

19.1
11.1
10.6

FY2019FY2020

FY2021

FY2022

FY2023

Net Assets / Equity Ratio
Net Assets(¥bn/%)

Equity Ratio
91.0

94.2

FY2019FY2020

FY2021Dividend / Purchase of Treasury Shares /Total Return Ratio

98.1

Dividend(¥bn/%)
Total Return Ratio

Purchase of Treasury Shares

10.2

83.6
78.1

9.3
82.8

82.5

3.0

81.4
80.2

75.1

80.2

45.0

FY201929

FY2020

FY2021

SHO-BOND 2023 Integrated Report

FY2022

FY2023

47.5

79.1

3.5

50.1

3.6

4.3

5.7

6.3

6.7

FY2019FY2020

FY2021

FY2022

FY2023

About Us

Management Strategies

Business Strategies

Business Foundation

Company Information

Financial and Non-financial Highlights

Non-financial
Number of Employees
Male

855
91

Female881
94

Turnover Rate
Percentage of Female
916
98

951
103

985
124

12.6%

10.6%

10.7%

10.7%

10.8%
3.5%
2.8%
2.2%

764

787

818

848

861

1.5%

FY2019FY2020

FY2021

FY2022

FY2023

FY20191.2%
FY2020

FY2021

FY2022

FY2023(Voluntary turnover rate)

Average Annual Days Off(days)
134.3

Percentage of Construction Sites where“8 Days Off in 4 Weeks” is Achieved
94.3%

134.5
85.9%

129.4

77.1%

130.2

79.5%

127.0
48.3%

FY2019FY2020

FY2021

FY2022

FY2023

FY2018FY2019FY2020

FY2021

FY2022(According to the Japan Federation of Construction Contractors)

Lost Time Injury (LTI) Frequency Rate

Lost Time Injury (LTI) Severity Rate

3.29
2.01
0.90
0.21
FY2019FY2020

FY2021

0.67

FY20220.00

0.15

FY2023

FY2019(Lost work time of 4 or more days)

0.09
FY2020

FY2021

0.12

0.00

FY2022

FY2023(Lost work time of 4 or more days)

30

Marketing and Sales Division
Accomplishing the goals of the Medium-term Business Plan is the primary objective of
this division. Our main activities are planning and implementing strategies for capturing
orders for the whole Group while working with in-house companies.
One of our priorities is the receipt of large orders involving the Expressway Renewal
Project. Maintaining a relatively consistent level of quarterly construction sales is anothergoal. This requires the proper overall balance of orders while receiving small and midsize
orders from national and local governments concerning the policy of Building National
Resilience. I believe the business climate for new orders will be favorable in FY2024, withsome variations among different regions of Japan. We will continue to be selective
about the orders we receive by emphasizing profitability while optimizing theassignments of engineers as needed. We will also take on new challenges involving
technological advances and diversification of types of work in the field of infrastructure
maintenance. Activities are aimed at upgrading our technologies and our construction
capabilities as well as the skills of our people. Another key role of this division across theorganization is digital transformation initiatives for building an even stronger base forour business operations and managing construction sites more efficiently.

Takayasu Shimada
Director of Business Strategies,
SHO-BOND Holdings Co., Ltd.
Managing Director and General Manager ofMarketing and Sales Division,
SHO-BOND CORPORATION

Risk and Opportunity in the Japan Construction Business[ Risk factors ]● Shortage of construction workers due to Japan’s
falling population● Risk involving accidents and other aspects of safety● Quality management risk involving defects andother problems● Intense competition for orders in the Expressway
Renewal Project[ Opportunities ]● Growing demand for long-life construction due to accelerated
measures to address aging infrastructure.
● Growing demand for reinforcement due to the greater severity
and frequency of natural disasters● Increasing importance of infrastructure preventive
maintenance technologies

Strengths● Comprehensive infrastructure maintenance capabilities from a broad range of perspectives● Accomplishments spanning 65 years as a specialist in the field of infrastructure maintenance● Construction skills and technologies available to provide the best methods for repairing various types of damage

Materiality
Activities of the Marketing and Sales Division reinforce the comprehensive maintenance system
by utilizing the strengths of the entire organization of the SHO-BOND Group. In addition,
digital technologies are improving the efficiency and productivity of on-site management.

Major Activities
For large-scale construction projects of ¥2 billion or more, theLarge-Scale Construction Management Committee conducts
pre-order examinations within the Group. The approaches to using a
JV and challenging projects are also discussed. In FY2023, orders
were down significantly, partly due to a decline in bridge repair
work from some expressway companies. Despite this downturn,there was a construction gross profit mainly because of the receiptof additional orders caused by a large volume of design changes atongoing projects.

31

SHO-BOND 2023 Integrated Report

In FY2024, we will work on complex construction and JV projects
while maintaining our selective stance regarding new orders, aiming
to achieve our construction order plan of ¥81 billion. I believe the key
to accomplishing this goal are effective information acquisition andoptimized resource allocation.
To motivate employees to develop innovative materials andincrease sales, we have established several award systems. In addition,
we have built integrated sales channels within the Group to maximize
sales of construction materials.

About Us

Management Strategies

Business Strategies

Business Foundation

Company Information

Marketing and Sales Division

Digital Transformation Activities
The DX Promotion Office was established within the Marketing andSales Division in 2021 to keep up with the rapid speed of digitization.
Leading and supporting cross-departmental digitization to increase
the efficiency of construction site management and strengthening thebase for business operations are the main roles of this office.

A Stronger Foundation
Activities of the DX Promotion Office are centered on the effective
utilization of data accumulated within the Group and the use of AI.
The development of AI Shindanshi, an AI system that reproduces theadvanced deterioration diagnosis technology of the Group’s
engineers, was finished in FY2022. In the future, SHO-BOND hopes to
use AI Shindanshi to help local governments, private-sector
companies, and organizations in other countries that have a shortageof engineers to place construction orders.
Data science and AI programming training programs are helping
to increase the speed of the digital transformation at the Group.

Using AI Shindanshi at a job site

Events in other countries to explain AI Shindanshi’s features

Higher Efficiency to Respond to the New
Overtime Restrictions

An example of an AI Shindanshi display

Starting in April 2024, construction companies in Japan will have tocomply with a limit on overtime working hours. In the constructionindustry, companies are using IT to manage construction sites more
efficiently. This will require verifying and using new software as well
as developing applications specifically for the characteristics of theinfrastructure maintenance business.
Space is extremely limited at infrastructure maintenance job sites
because work must be done in tight spaces at a diverse array of
existing structures. Furthermore, this type of work is characterized byconstantly changing processes for completing projects. As a result,the use of machines and unified work processes is usually notpractical. At the Group, the digital transformation does not entail
large-scale initiatives like automated construction work and urban OS(a platform for data). The objective is to create a unique-style of thedigital transformation that unifies the common parts of various sitesof SHO-BOND.

32

East Japan In-house Company

During the current Medium-term Business Plan, our central goal is to build a robust
foundation for the future to become a company that can keep pace with changes in thebusiness climate. Under this basic policy, we have established and are pursuing a businessstrategy named “Triple P”: (1) large-scale projects (Projects), (2) unified actions throughout
our company (Policy), and (3) education and training programs (Progress). We will leverage
our technologies and aim for more progress that connects to future generations.
One aspect of these activities is joint ventures with bridge manufacturers to take onlarge expressway projects. This collaboration started in the Tokyo area and has been
producing benefits. We plan to expand collaboration activities to the Tohoku region
next. Progress will require a construction framework and technologies capable ofhandling large projects. The employees of partner companies are receiving construction
management training at SHO-BOND’s Tsukuba Training Center. In addition, we will
increase the emphasis of R&D activities on improving the efficiency of construction
processes and the quality of our work.

Noriyuki Hosaka
Senior Managing Director and General Managerof the East Japan In-house Company,
SHO-BOND CORPORATION

Major Activities
Recruiting and training people from other countries is an importantpart of “Triple P” activities concerning education and training
programs. There are currently five non-Japanese employees at the East
Japan In-house Company. They are assigned to three departments
including construction, sales, and technology, with the expectation tocope with future changes in the business environment and play wide
range of important roles, including in Japan and overseas.
An order for maintenance of the Tengu Bridge on the Tohoku
Expressway received by a SHO-BOND joint venture with a bridge
manufacturer demonstrates the benefits of measures taken forlarge-scale projects. The project involves a rigid frame bridge with
V-shaped piers in a mountainous location. We are making the best of

our technical skills and know-how to meet the demands of seismic
reinforcement to preserve the attractive profile of the bridge andensure the ease of subsequent maintenance work.

Non-Japanese employees

The Tengu Bridge on the Tohoku Expressway

Topic
SHO-BOND CORPORATIONThe East Japan In-house Company has a strong commitment to R&D
to improve construction site efficiency and quality. One highlight isthe development of a temporary support jack with a movement
restriction function, resulting from cooperation between job site
personnel and the Technical Research Institute. The jack is used toreplace bearings between the piers of a bridge and its deck. This
innovation greatly reduces the risk of a bridge deck collapse in theevent of an earthquake during the jacking process. Furthermore,construction is faster and less expensive because several bearings canbe replaced simultaneously. Increasing the use of this jack is expected
to further differentiate SHO-BOND from competitors.

An installed jack featuring a movement
restriction function

33

SHO-BOND 2023 Integrated Report

Group Companies

Kita-Nihon
Regional Office

Hokkaido Branch /Minami-Tohoku Branch /Kita-Tohoku Branch

TOHOKU KAKO CORPORATION

Shutoken Hokuriku
Regional Office

Tokyo Branch /Chiba Branch /Kanto Branch /Hokuriku Branch

KAKO CORPORATION /KANTO KAKO CORPORATION /YOKOHAMA KAKO CORPORATION /NIIGATA KAKO CORPORATION / Kyna-Tech
7 branches

Overview of East Japan
In-house Company
The East Japan In-house Company
consists of the Kita-Nihon Regional Office
and Shutoken Hokuriku Regional Office.
The operations of the regional offices
include KAKO-Group companies and the
Shutoken Hokuriku Regional Office also
encompasses Kyna-Tech. Overall, thiscompany is responsible for operations in
Hokkaido, Tohoku, Kanto, and Hokuriku.
Sales in FY2023 were ¥38.2 billion andthere were 405 employees as of the endof June 2023.

6 group companies

About Us

Management Strategies

Business Strategies

Business Foundation

Company Information

East Japan In-house Company /West Japan In-house Company

West Japan In-house Company

West Japan In-house Company is now in its fourth year of operation. Initially, ourprimary goal was fully utilizing the advantages of the in-house company structure to
improve order management and organizational operations to handle even larger
projects. Today, we are investing in human resources with emphasis on “maintaining
growth,” “strengthening our base,” and “educating employees.” I believe thatcreating and providing more pleasant and productive workplaces for each employee
will strengthen our base of operations and lead to further growth.
Large-scale orders from expressway companies are regarded as a project for theentire in-house company. These projects require an optimal construction frameworkand staffing. To accomplish this and provide outstanding quality, we will coordinate
closely with deployment technicians and partner companies, regardless of thejurisdictional areas of the three branch offices.

Tsuyoshi Koga
Senior Managing Director and General Managerof the West Japan In-house Company,
SHO-BOND CORPORATION

Major Activities
Human resource investments are one of the highest priorities of WestJapan In-house Company. Training programs and support for earning
professional qualifications are two major activities. Training by senior
employees in various fields is conducted face-to-face and online toachieve a better understanding. For qualification-earning support, wehave designed a system that allows employees to receive support andhelp from individuals who have passed the exams already.

This method enhances the motivation of both sides and contributes
to the advancement of the whole Group as well.
Furthermore, we aim to create a culture of safety with ourpartners by sending employees from SHO-BOND and partnercompanies to the Tsukuba Training Center to improve each other's
safety awareness and technical skills.

Topic
Overview of West Japan
In-house Company
The West Japan In-house Company has
three regional offices (Chubu, Kinki, andNishi-Nihon) and each office is affiliatedwith KAKO-Group companies. Operations
cover south and west Japan. Sales in
FY2023 were ¥36.2 billion and there
were 393 employees as of the end ofJune 2023.

SHO-BOND CORPORATIONGroup Companies

Chubu Regional Office

Nagoya Branch /Shizuoka Branch

CHUBU KAKO CORPORATION

Kinki Regional OfficeOsaka Branch / Kyoto Branch /Kobe Branch

KANSAI KAKO CORPORATION

Nishi-Nihon
Regional Office

Chugoku Branch /Shikoku Branch /Kyushu Branch

CHUGOKU KAKO CORPORATION /SHIKOKU KAKO CORPORATION /KYUSHU KAKO CORPORATION
8 branches

The West Japan In-house Company held its first symposium for
women in administrative positions. Participants came from the three
regional offices and the General Affairs Department of the head
office. Based on the results of a preliminary questionnaire,participants shared thoughts about working more efficiently, dealing
with various issues, working styles and career paths for women, andother subjects. There was also an opportunity to talk with thein-house company general manager. Participants reported learning
about the operations of other offices and changing their thinking
about career advancement after listening to the general manager
and the female General Affairs Department manager. More of these
activities will take place to enable women to realize their fullpotential and career goals.

5 group companies
The symposium for women in
administrative positions

34

Engineering Division

The roles of this division are collecting information about infrastructure maintenancetechnologies, developing new technologies, and overseeing the activities of technology
units throughout the SHO-BOND Group.
Constantly upgrading the technological skills of employees is essential as the Grouptakes on projects that are even larger and more complex. Advances are backed bymeasures for the fusion of existing technologies at the Group and digital technologies
through digital transformation. I think the Digital Transformation Technology
Committee, which was formed two years ago, is steadily producing benefits in terms ofimproving the technical level of employees. The development of new technologies takes
place mainly at the Technical Research Institute. We are creating organic/inorganic
materials and innovative construction methods in which these materials are utilized
while targeting the needs of job sites. We also aim for the realization of a decarbonizedsociety through our unique technological development activities.

Hiroshi Takemura
Director, General Manager of Engineering Division,and Director of Technical Research Institute,
SHO-BOND CORPORATION

Strengths● Combining chemical and civil engineering technologies to create new technologies● Construction methods and materials specialized in repair and reinforcement● Accumulated technological development capabilities and knowledge centered on the Technical Research InstituteMateriality

Starting with the unique perspective of the fusion of chemical and civil engineering
technologies, the Engineering Division utilizes 3D technology, AI, and many other advanced
technologies. All activities have the goal of more efficient construction processes and higher
productivity throughout the Group. The division has started programs involving the SDGs,
such as research involving environmentally responsible organic materials.

Major Activities
The scale and technological complexity of infrastructure maintenancework is increasing in Japan as progress continues with the Expressway
Renewal Project. To perform this type of work even better, SHO-BOND
established a committee to study and review how to deploy digitaltechnology in the infrastructure maintenance field and started a
program where employees can learn 3D CAD, finite element method(FEM) analysis and other advanced skills to raise the technical skills of
all employees and improve productivity. Next, we plan to learn how to
improve construction planning and management using 3D point
cloud data, AR, VR, and other technologies, as well as FEM nonlinear
analysis. At the same time, programs for earning professional
qualifications have been strengthened. There are also many types oftraining programs for mid-career and young employees, female
engineers, and other categories of employees.
For the deployment of AI, we developed a system called AI
Shindanshi, which is an AI diagnosis system incorporating AI that canhelp engineers without maintenance knowledge check the level ofdegradation of concrete structures. In the future, we will develop
other AI assistant tools for engineers at job sites.
In addition, by cooperating with the Technical Research Institute,
we are developing DIY construction methods and materials that allow

35

SHO-BOND 2023 Integrated Report

property management personnel and others at local governments
and companies to perform small repairs on their own.

SHO-BOND Group R&D Flowchart
Engineering Division
Technical Research Institute

Customers’
needs
Requests for
improvements

Commercialize
Joint research
projects

SHO-BOND MATERIAL CO., LTD.
Products and construction methods

Customers

SHO-BOND Group
construction sites

About Us

Management Strategies

Business Strategies

Business Foundation

Company Information

Engineering Division

SHO-BOND Innovations
Labor-Saving Surface Coating Method Using
Water-Based Resin (NEO LINER EX METHOD)
The corrosion of rebar and degradation of concrete, causing pieces tofall off, are problems with the aging infrastructure constructed in Japan
during the rapid economic growth period. Over the years, surface
coating and spalling-prevention methods have been used. However,the numerous and time-consuming steps required by these processes
make them unsuitable for bridges and other locations with time
restrictions. A new method that can be completed faster was needed.
SHO-BOND responded to this challenge by creating a
revolutionary labor-saving coating method with fewer than half thesteps required by conventional methods. Moreover, the use of thesame substance for surface coatings and spalling prevention reduces
the amount of unused and discarded materials. Using a weatherresistant water-based resin (NEO LINER EX), that can integrate anintermediate coating and top coating, shortens the process. Thismethod is also environmentally friendly because it reduces odors andvolatile organic compound (VOC) emissions.
This new coating method has much potential as a technique forextending the lives of concrete structures in a labor-saving andenvironmentally responsible manner.
NEO LINER EX LINING METHOD
for surface coatings

NEO LINER EX SHEET METHOD
to prevent spalling
NEO-LINER EX

NEO-LINER EX

NEO-LINER EX SHEET
NEO-LINER EX

NEO-PRIMER EX

NEO-PRIMER EX

Concr

ete

Concr

ete

Thickener Permeable Rust Prevention Agent for Rebar(SBLN GEL)
Less than 10 years from now, more than 60% of the highway bridges
in Japan will be at least 50 years old. Maintenance for a longer life isurgently needed. As one way to meet this need, SHO-BOND
developed SBLN GEL, a thickener permeable rust prevention agent
containing a large amount of lithium nitrite, which is effective atpreventing the rusting of rebar. The gel-like substance can be simply
applied to concrete. SBLN GEL then soaks into the concrete, resulting
in a large volume of lithium nitrite reaching the rebar quickly.
Corrosion of the rebar can be prevented for a long time, even in
concrete structures vulnerable to salt damage and carbonation. SBLNGEL received building construction technology certification from theJapan Construction Information Center (JACIC) in March 2023. Thereare expectations for this new technology to play an important role inextending the lives of many buildings and civil engineering structures.

Application of SBLN GEL on a concrete structure

Augmented Reality (AR) for More Efficient andLabor-Saving Construction Management
As the digital transformation of the infrastructure sector advances, theMinistry of Land, Infrastructure, Transport and Tourism made the useof building/construction information modeling (BIM/CIM) mandatory
in the 2023 fiscal year. As the use of BIM/CIM grows, almost anyone
at a construction site will soon be able to easily read blueprints andother drawings. At the Group, technicians are using 3D scanners tomeasure structures, generate point cloud data as polygon meshmodels, and create 3D data of fabricated parts to be installed on
existing structures. By displaying these data on-site using AR
technology, we can make construction management tasks more
efficient. For example, AR display at construction sites makes it
possible to confirm if different materials are interfering with eachother and to simulate the transportation of manufactured parts. In
repair and reinforcement projects, where the placement of largematerials and items with complex shapes at the construction site isoften required, AR simulations conducted before the actual work arevery helpful. AR displays that include results of FEM analysis give jobsite personnel a picture of how installation parts will function. Displays
also provide visualization of tasks requiring caution during construction
to make everyone aware of the need for safety measures.

3D CADNot visible

VisibleAR image36

Construction DivisionThis division is responsible for working with the regional offices that manage
construction sites to continue making improvements to the quality of our work andsafety at these sites. Construction staff assigned to construction sites are more than halfof the 985 employees of the SHO-BOND Group. These people perform the critical role ofinteracting directly with customers to complete projects that meet customers’
expectations and generate earnings for the Group.
Construction know-how acquired over many years of performing small repair andreinforcement projects is a major strength of SHO-BOND. As a specialist in maintenance,
we have decades of experience with earning a suitable profit from performing small
jobs. This gives us a corporate culture that differs greatly from those of otherconstruction companies. Construction projects have been becoming larger and longer
year after year. Nevertheless, small jobs are at the heart of repair and reinforcement
work. We are utilizing the expertise we acquired from these jobs to maintain a highprofit margin as we handle many large projects. I want to be certain to pass this
distinctive tradition on to our young engineers to maintain and strengthen ourcompetitive edge as a leader in the field of repairs and reinforcement.

Tsuneyuki Ashizawa
Senior Executive Officer,
General Manager of Construction Division,and Director of Tsukuba Training Center,
SHO-BOND CORPORATION

Strengths● A strong team of engineers capable of earning profits from even small projects● Large network of partner companies with experienced people covering a diverse array of construction skills● Close relationship with factories that fabricate steel components one by one to match the requirements of individual projects● Low cost of construction by performing projects requiring specialized skills without using subcontractors

Materiality
The Construction Division uses expertise accumulated over many years as a specialist in
infrastructure maintenance to create construction plans that are safe and efficient. In addition,
we perform special construction internally and use other strengths to hold down the cost of
construction and raise productivity. Our mission is to use the best methods for maintenanceand repair projects of all sizes, from large expressway bridges to small pedestrian bridges, tocontribute to the development of sustainable cities.

Major Activities
All companies of the Group place priority on passing on repair andreinforcement technologies backed by many years of experience to thenext generation of construction engineers. The Tsukuba Training
Center offers many types of training programs for newly hired
employees, partner company employees and others. In FY2023, we
conducted more than 100 training programs. Successful repair andreinforcement work requires the efficient planning and execution forsmall projects. Giving engineers the skills to carefully plan andconstruct each stage of a project and make it profitable will lead tothe efficient management of large-scale construction projects.
Furthermore, as many employees are assigned to large projects, each
person’s role must be clearly defined. The site manager is responsible

37

SHO-BOND 2023 Integrated Reportfor the oversight and guidance of younger engineers. To pass on
construction skills efficiently, education programs are customized tomatch specific projects. Cost reduction in repair and reinforcement
projects is another priority. One way is to perform internally specialized
construction methods for repair and reinforcement tasks. Furthermore,
we analyze a broad range of construction processes to determine
cost-reduction methods for each one that can be used throughout theGroup. For example, the group company Kyna-Tech makes it possible
to perform work requiring high-pressure water jets internally.
Furthermore, we will use IT tools more widely to increase efficiency
and productivity, as well as to comply with the upper limit on overtime
work in construction industry that will begin in April 2024.

About Us

Management Strategies

Business Strategies

Business Foundation

Company Information

Construction Division

SHO-BOND Construction Sites
Replacement of Bridge Bearings
Bearings are a vital component of bridges
that link the deck of a bridge with its
piers. Timely replacements are essential
because the potential inability of oldbearings to withstand a major earthquake
could cause a bridge to collapse. For
safety, replacements must be done inaccordance with an earthquake-resistantplan. To replace bearings without
disrupting traffic on a bridge, work mustbe performed safely while raising the deckusing jacks and other equipment. Projectsof this type require highly advanced skills.
A bridge with new bearings in place

One step of the bridge-bearing
replacement process

Prevention of Concrete Spalling
As concrete ages, water, salt and othersubstances can seep in through cracks,
causing corrosion and expansion of rebar
within the concrete. If nothing is done,
this can result in an accident when chunksof concrete fall off. The Group has
performed a large number of projects thatinvolve the application of sheets toprevent this problem.

Applying a sheet to prevent chunks of concrete
from breaking off and falling

Removal of Old Bridges

A section of spalling concrete

Of the enormous number of expressway
overpasses in Japan, many were built morethan 50 years ago and retrofitting isneeded for safety during an earthquakeand other reasons. In some cases, overpass
bridges that are no longer needed areremoved instead. The SHO-BOND Group
uses its infrastructure repair andreinforcement technologies to dismantle
and remove these bridges safely andefficiently.

Removal of an expressway overpass bridge

38

Technical Research Institute

Overview of Technical Research Instituteof structural deterioration and damage, improving fatigue durability
against large vehicles, and researching and developing effective
reinforcement technology for earthquake disasters. The researchfacility 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 consistsof researchers with backgrounds in chemistry (organic materials) andcivil engineering (inorganic materials and structures).

The SHO-BOND Group has contributed to society through theresearch and development of its own repair technology, believing thatthe combination of chemical and civil engineering technologies isimportant for effective infrastructure maintenance. Technical ResearchInstitute played a central role in this effort. In 1996, the year after theGreat 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 ResearchInstitute based on the philosophy of raising repair skills to the level ofscientific research. The institute focuses on clarifying the mechanisms

Specimen Preparation Building

Large Testing Laboratory

Main Building

Research Building

Training Bridge

1st Wheel Load Running Test Laboratory

Wheel load running test

Training Building
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)
Aerial view of the Technical Research Institute and Tsukuba Training Center

Example of EPMA analysis

Various Research and Development Themes
In recent years, we have been working on the following research anddevelopment themes:● A transparent concrete spalling prevention method that uses a single
pack (pre-mixed) resin which is easy to use and has low cost andoutstanding workability● Development of a surface thickening method combining apermeable water resistance material, an adhesive, and low-elasticity
latex-modified fast-curing concrete (CPJ-L)● Wheel Load Running Test is conducted to confirm the fatigue
durability of bridge deck slabs after significantly thickening theirsurfaces, which have been weakened by years of heavy vehicle traffic

CPJ-L demo attended by customers

Wheel Load Running Test attended by customers

NEO-LINER EX demo attended by customers

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

In addition to these themes, we are constantly conducting researchand development on several other themes.
In February 2022, the Institute received the Special Award at theFirst Infrastructure Maintenance Awards from the Japan Society of
Civil Engineers (JSCE) for its longstanding research and development
activities that have contributed to the development of infrastructure
maintenance.

39

SHO-BOND 2023 Integrated ReportAbout Us

Management Strategies

Business Strategies

Business Foundation

Company Information

Technical Research Institute /Tsukuba Training Center

Tsukuba Training Center

Motivation for Establishment
Providing Learning Opportunities Based on
Practical Training

Training Center with an area of approximately 5,000m2 near theTechnical Research Institute.

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 such as aramid and carbon
fiber. Familiarity with these methods and materials is essential toensure 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 the next 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 lecturesand on-the-job training at construction sites were insufficient. For
these reasons, in October 2021 we established the Tsukuba
Full view of Tsukuba Training Center

Concept of the Facilities
The concept of the facilities is to provide classroom lectures on theintention of adopting each construction method and material, points
to note in construction, safety, and others, and then to provide
practical training during the training period to consolidate theknowledge. With an eye on training not only for our employees but
also for employees of domestic and overseas partner companies thathave little experience in repair work, we use the same repair objects
and materials in the practical training as those at the construction site
so that they can experience the feeling of the site. The main facilities
are a seminar room, a construction training room, a safety training
room (with a real scaffold, mannequins, danger experienceequipment, and VR danger experience equipment), and a full-scaletraining 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 canlearn how to handle repair materials● Safety training room: A seminar room where participants canexperience the significance of safety activities■ Training bridge (10m x 20m)

Practical training in jacking up bridges

Practical training in tightening
high-strength bolts

Practical training in making a photographic
record of construction work

Practical training in installing seismic
retrofitting equipment

Practical training in marking

40

Maintenance Technology Inc.
Overview
Maintenance Technology Inc., established in 2011, is the only
construction consulting company in the SHO-BOND Group. The
company has sales offices in Tokyo, Nagoya, and Osaka. The workforce
was 23 at the end of June 2023. The main activity is investigation,
diagnosis, analysis, repair plans, and other services involving bridges,

tunnels, and other public-sector structures under requests from otherconstruction consultants. We also measure structures, analyze resin
products, and perform other services to improve the quality of work at
our construction sites.

Operations
Structure measurements and 3D CAD data generation
using a 3D measuring instrument
Repair and reinforcement work consists primarily of installing or replacing various materials
in existing structures. Obtaining accurate measurements is often difficult because existing
structures have complex shapes and narrow spaces. We use a recently developed wide-area
3D measuring instrument capable of measuring existing structures quickly and accurately.
Furthermore, we also perform tasks such as converting point cloud data obtained from 3D
measurements into 2D and 3D CAD formats, enabling us to check data for components infabrication and component interference levels.
The status of measuring anchor bolt drilling positions
using a 3D measuring instrument

Kyna-Tech
Overview
Kyna-Tech became a wholly owned subsidiary of the SHO-BOND
CORPORATION in 2016 through acquisition, as part of the Group’s
strategy to increase profitability and diversify its operations. The
company is based in Saitama and had a workforce of 22 as of theend of June 2023. As a specialty construction company, Kyna-Techenhances the Group’s profitability through its expertise in advanced
machinery construction technology, including high-frequency coredrilling and water jets. Moreover, conducting water jet construction
in-house leads to cost reductions and contributes to the profitabilityof the entire Group.

Operations
High-frequency core drilling at concrete structure
Making anchor bolt holes using high-frequency core drilling is one of the primary activities
of Kyna-Tech. When reinforcing an existing concrete structure, holes are drilled for theplacement of reinforcing components to increase earthquake resistance. Kyna-Tech’s
high-frequency core drill can make holes up to 15 meters deep and in a direction that is
not possible with conventional machinery. Furthermore, holes are made about 2.5 times
faster. Another advantage is being fitted with a safety device, which eliminates the risk ofdamaging rebar in the concrete structure. Our outstanding technology is essential for
supporting the safety and security of infrastructures.
The use of high-frequency core drilling for anchor bolt holes

41

SHO-BOND 2023 Integrated ReportAbout Us

Management Strategies

Business Strategies

Business Foundation

Company Information

Maintenance Technology Inc. / Kyna-Tech /SHO-BOND MATERIAL CO., LTD.

SHO-BOND MATERIAL CO., LTD.

SHO-BOND MATERIAL is a manufacturer and trading company that supplies a large
lineup of products used in repair and reinforcement projects. The manufacture and saleof these construction materials is a key element of the SHO-BOND Group’s operations
along with the core construction business.
We are focusing on developing and expanding sales channels in new market sectors
and getting more customers to accomplish the current Medium-term Business Plan’s goalof penetrating and upgrading SHO-BOND technologies by taking on new challenges.
Besides standard products, we are focusing on developing customized products toprecisely meet customers’ requirements, as well as developing and modifying couplings(pipe joints) to cover a broad array of needs.
The demand for structure maintenance will continue to grow. It is our mission to
respond to a diverse array of needs related to emergency measures and permanent
responses to aging infrastructure and intensifying natural disasters internationally and tohelp protect these vital lifelines by solving the issues of our customers.

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

Risk and Opportunity in the Construction Materials Manufacturing and Sales Business[ Risk factors ]● High cost of energy, construction materials, and raw materials● Damage and disruption of operations caused by natural andother disasters at factories of SHO-BOND MATERIAL and its
contract suppliers● Measures needed to cope with the restriction on overtime work
concerning logistics starting in Japan in 2024

[ Opportunities ]● Growing demand for extending the life of infrastructure as
the pace of activities for repairing and reinforcing aging
infrastructure increases● Growing demand for reinforcement work as the frequency
and severity of natural disasters increase● Demand for environmentally friendly products

Strengths● As a specialist in repairs and reinforcement, the company has a diverse lineup of products for many types of degradation and damage● Group-wide development capabilities for customizing products to meet specific market demands● Asset-light manufacturing through a Fabless framework (for structural construction materials and pipe joints)● Flexible environmental response, such as using non-hazardous organic materials and plant-based ingredients for the fabrication of

products to reduce CO2 emissions.

Major Activities
In addition to conventional products, we are also focusing on sales of
new products and construction methods released in the past few
years. Shipments of CPJ-L, a low-elasticity latex-modified fast-curingconcrete for repairing the upper surface of concrete deck slabs,
increased significantly, mainly due to highway repair work by NEXCO.
In the future, we will expand the sales of CPJ-L nationwide, including
the national and local governments. The Galette Sandwich Method isused to repair concrete block walls along railway lines without
removing the existing wall. This reduces waste materials andaccommodates restrictions on time and workspaces that are common
at railway projects. An increasing number of companies have become
regular users of this method, indicating that sales will continue togrow. Regarding couplings, we are working on enhancing ourlarge-diameter couplings and increasing inventories, focusing on theneed for repairing water and sewage pipes and water pipe bridges,
and for emergency response after water leaks.
We are currently working on solving various challenges, such aslarge-scale renovation of expressways and railways, by not only
developing by ourselves but also collaborating with our customers. We

A railway concrete block wall reinforced
using the Galette Sandwich Method

A utility water pipe bridge
using SHO-BOND MATERIAL couplings

are looking forward to the products that we plan to release in the next
few years, and we aim for further growth with the Group companies.

Overview of SHO-BOND MATERIAL CO., LTD.
SHO-BOND MATERIAL CO., LTD. is a core company of the SHO-BOND
Group. It was established in July 2016 by the merger of SHO-BOND
Chemical and SHO-BOND Coupling and became a manufacturer andtrading company that produces and sells resin products, construction
materials, and couplings.

42

Overseas Businesses
SHO-BOND & MIT Infrastructure Maintenance Corporation
SHO-BOND & MIT Infrastructure Maintenance Corporation (SB&M) will leverage the synergy between SHO-BOND’s technologicalcapabilities and MITSUI & CO., LTD. (MITSUI) ’s network and business development capabilities to provide solutions for infrastructure
and private-sector facilities in Japan and overseas, build and develop a new business foundation for the SHO-BOND Group andpromote activities that create a safe and secure society.

Risk and Opportunity in Overseas Businesses[ Risk factors ]● Country risk due to economic and political instability● Uncertainty involving laws and regulations and logistics forshipments of products● Rising cost of materials and exportation and uncertainty about
foreign exchange rates● Cost competition with local companies and other entrants[ Opportunities ]● Increasing public awareness worldwide of the need formaintenance of aging infrastructure● Joint activities with other Japanese companies for the
dissemination of infrastructure technology proven in Japan● Growing need for protection against earthquakes, floods,
and other natural disasters around the world

Strengths● The technology development capacity of the SHO-BOND Group for the development and modification of construction methods andproducts to match the requirements of specific countries and regions● The global business network and overseas development and management capacity of MITSUI, in 63 countries and 128 business sites

Major Activities
SB&M was established in April 2019 with a 51% stake in SHO-BOND
and a 49% stake in MITSUI, with the aim of “creating a sustainableinfrastructure society in Japan and overseas with the technology of
SHO-BOND.” By leveraging the resources of the SHO-BOND Groupand MITSUI, in November 2020, we established a joint venture CPAC
SB&M Lifetime Solution Co., Ltd. (hereinafter referred to as CPAC
SB&M) with a local company in Thailand, and in July 2023, weinvested in a U.S. infrastructure repair maintenance company
Structural Technologies, LLC (hereinafter referred to as ST). Currently,
we are developing infrastructure maintenance business in the ASEAN
region and the United States, with the two bases in Thailand and theUnited States. In addition to supplying construction materials for JICA
projects in the ASEAN region and providing on-site construction
guidance by our engineers, as part of JICA’s international cooperation,
we accept trainees from overseas at the SHO-BOND CORPORATION’s
Technical Research Institute and Tsukuba Training Center to provide
lectures, practical training, and tours on the importance ofinfrastructure maintenance and repair methods.
As the need for structural repair, reinforcement, and seismic
countermeasures is attracting attention worldwide, we will create
greater synergies and expand our business by combining theknowledge and experience accumulated from operations in Thailand
and the United States with SHO-BOND’s technology development
capability and the business development capability of MITSUI. In
addition, amid an increasingly serious global environmental problem
and growing shortage of construction workers, we are also
promoting business development related to work efficiency throughdigital technology.

43

SHO-BOND 2023 Integrated Report

JICA trainees at the Technical Research Institute (above) and
SHO-BOND engineers guiding a construction site in Laos (below)

About Us

Management Strategies

Business Strategies

Business Foundation

Company Information

Overseas Businesses

Scene at the Site
ThailandUSA

Thailand is located in Southeast Asia with a land area of about
514,000km 2 (about 1.4 times that of Japan) and a population of
about 66.09 million (about half that of Japan). Many Japanesecompanies, primarily manufacturers, have operations inThailand. In Bangkok, the capital city where approximately 10%of the country’s population is concentrated, much of theinfrastructure was constructed at least 30 years ago, and the
problem of deterioration is becoming apparent.
CPAC, with which we established a joint venture in
November 2020, is a core company in the building material
business under the umbrella of Siam Cement Group (SCG), oneof Thailand’s leading conglomerates. CPAC SB&M’s office is in
the Bang Sue district, about 17km away from Bangkok’s
Japanese quarter. SCG’s head office building is also in this area
and in front of it is Bang Sue Grand Station, one of the largest
terminal railway stations in ASEAN.
We look forward to using Thailand as a base for the growthof the infrastructure maintenance business throughout
Southeast Asia.

A large percentage of the U.S. infrastructure was constructedmany decades ago with some parts dating back to the 1920s
and about 40% of the bridges in the United States are morethan 50 years old. Over the years, many large bridges havecollapsed. Today, there is widespread awareness of the need formaintenance. In some regions, particularly the West Coast,
there is also a need to reinforce structures to resist earthquakes.
ST, in which we invested in July 2023, is affiliated with
Structural Group, Inc. (SGI), the third-largest concrete
construction company in the U.S. by revenue, and specializes inbridges. SGI has a management philosophy of “Making
structures stronger and last longer” and has a high affinity with
SHO-BOND.
SHO-BOND plans to use its relationship with ST to utilize
technologies created and proven in Japan at infrastructure
maintenance projects in the United States.

CPAC Head Office

Structural Technologies Corporate Headquarters

A construction site meeting

A Structural Technologies construction site

44

Sustainability of SHO-BOND

Basic Concept for Sustainability
With its Corporate Philosophy at the core of management, the Grouphas designated material issues (Materialities) to get close to its vision.
Four designated Materialities involve internal activities and how
business activities affect society. We believe that all of these activities
are sustainability management that contributes to accomplishing theSDGs and achieving our Corporate Philosophy. We have established a
Sustainability Policy and ESG-related policies to provide guidelines forconstant activities in accordance with materiality priorities. In August
2022, we set KPIs for each of the priorities to measure their progressand disclosed targets and results.
We will enhance our corporate value over the medium to longterm and contribute to creating a sustainable society by continuing to
upgrade sustainability initiatives with the input of our internal andexternal stakeholders. Specifically, we will improve our promotion
framework, consider measures, and regularly review them to upgrade
the initiatives.

Strengthening Our Sustainability
Promotion Framework
The Group has established a Sustainability Committee, chaired by the
President and Representative Director and composed of all inside andoutside directors. The Committee meets once a year as a general rule
to discuss sustainability issues including social and environmental

KPIs Related to Sustainability

Materiality

KPIs
Number of violations of environmental
laws and regulations
CO2 emissions (Scope 1 and 2)(vs. FY2022 [5,238t])

Contribution to thedevelopment ofsustainable cities(CO2 emissions intensity*)
Average scores for contractor performance
evaluation in construction industry

Sustainability Philosophy

Percentage of construction sites where“8 days off in 4 weeks” is achieved(according to the Japan Federation ofConstruction Contractors)

Corporate Philosophy
Comprehensive
maintenance system backed
by the organizational
capabilities

Number of fatal accidents
Lost Time Injury (LTI) frequency rate
Achievement rate of annual overtime
limit of 720 hours

Our Vision

Percentage of female employees inregular recruiting
Productivity improvement
through technology
development

Materiality

Number of female engineers
Percentage of employees with disabilities
Childcare leave rate of new fathers

Sustainability Policy

45

Rate of response to safety confirmation

E

S

G

Environmental Policy

Quality Policy
Health and Safety Policy
Human Rights Policy
Procurement Policy

Anti-Bribery Policy

SHO-BOND 2023 Integrated ReportCompliance training participation rate

Sound governance andmeasures for more
improvements

Number of serious violations of laws
and regulations
Information security training
participation rate

About Us

Management Strategies

Business Strategies

Business Foundation

Company Information

Sustainability of SHO-BOND

Sustainability Policy

issues. The Committee also submits and reports the results ofdiscussions on important matters to the Executive Committee and theBoard of Directors. The Committee mainly discusses general importantmatters related to sustainability such as the development of policies
and measures related to sustainability, the identification, assessment,
and management of climate-related risks and opportunities, and the
management of KPIs for non-financial information.
We have also established an ESG Promotion Office to integrate
activities related to sustainability. The ESG Promotion Office holds

Target year

meetings with ESG promotors from each department and Group
company as needed to ensure that the Group as a whole collaborates
at the practical level. Under such a structure, we are committed to
staying and becoming more sustainable through organic cooperation
among the management team, the ESG Promotion Office, respective
departments, and Group companies.

FY2022

FY20230Every year003,929t[-25%]

FY20315,238t[±0.0%]

5,474t[+3.5%](6.5 t-CO2 / 100 million yen)

(6.5 t-CO2 / 100 million yen)

(4.9 t-CO2 / 100 million yen)
MLIT：78 or higher
NEXCO：80 or higher

Every year

MLIT：80.0
NEXCO：86.0

MLIT：80.6
NEXCO：86.5

100%

FY2024

85.9%

94.3%

0

Every year

000.7 or lower

Every year

0.67

0.00

100%

FY2024100%

100%

15% or more

Every year

9.5%

16.2%

38

FY202426

30

2.4% or more

Every year

3.3%

3.1%

100%

FY2024100.0%

74.0%

100%

Every year

100%

100%

100%

Every year

98.8%

100%

0

Every year

0

0

100%

Every year

90.3%

100%

* (Reference value) CO2 emissions per consolidated net sales (100 million yen)46

Efforts for Environment

Contribution to thedevelopment ofsustainable cities

Climate-related Financial Disclosure Based on the TCFD Recommendations
Strategy

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
on social infrastructure to the next generation in good condition,”
the Group is committed to “contribution to the development ofsustainable cities” as one of its Materialities and is aware that
combatting climate change is an important management challenge.
Based on the recognition that a longer service life of infrastructure
contributes to reducing greenhouse gas emissions, we will makeefforts so that we can contribute to realizing a sustainable society.
These efforts include information disclosure and other initiatives
related to climate change, in addition to core business activities as an
infrastructure maintenance specialist.

The Group conducted a scenario analysis to identify and assess theimpact on its overall business management of the risks andopportunities associated with the “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˚C orlower and 4˚C scenarios by referring to several existing scenarios
published by the International Energy Agency (IEA), theIntergovernmental Panel on Climate Change (IPCC), and otherorganizations. 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 beup to the year 2030. For the climate-related risks and opportunities
identified, we have sorted out necessary countermeasures as shownin the table below.
By implementing the countermeasures identified in this report, we
will contribute to developing sustainable cities and will achievesustainable growth by enhancing the resilience of our business.

Risks / Opportunities covered
Changes expected
Changes in reputation
among shareholders andinvestors

ncreased ESG investment in the SHO-BOND Group as an infrastructure•Imaintenancespecialist due to being highly regarded for its low CO
Opportunity

Changes in customer
behaviors
Rises in raw materials
costs

Growing severity of
weather disasters472

and 3) and initiatives aimed
at reducing CO2 emissions(Scope 1 and 2)

emissions•Increased procurement costs for energy and materials
ecreased transactions due to our inability to adequately respond to•Dcustomers’
requests for reducing CO emissions
urges in the purchase prices of resin-based materials and steel•Smaterials
as a result of decreased production of naphtha and iron ore
ncreased demand for watershed flood control and disaster restoration•Iwork,rather than seismic reinforcement work and service life
2

Risks

extension work, in the face of growing severity of weather disasters
price competitiveness with the delivery of low-carbon•Increased
construction services and products in the field of repair and reinforcement
to CO emissions regulations, the number of life-extending works•Dofuebuildings
and infrastructures increases while the amount of overall
Opportunities
2

Acceleration of national
resilience measures

Increase in averagetemperature

information about•DCOiscloseemissions (Scope 1, 2,

2Introduction of carbon
pricing
Introduction of moreaggressive targets /policies for CO2 emissions
reduction by countries
around the world

Countermeasures

Description

investments in construction decreases

ncreased demand for infrastructure maintenance to counter natural•Idisasters

Risks

ecreased productivity in line with increased heat stroke cases among•Don-site
workersncreased costs for improving working environment and introducing•Iequipment,
etc. to prevent heat stroke
orsening worker shortages due to deteriorating outdoor working•Wconditions

Risks•Increased costs due to process delays at disaster-stricken sites•Supply chain disruption
amage to or shutdown of operations at disaster-stricken own•Dfactories
or contracted manufacturing plants

SHO-BOND 2023 Integrated Reportromote green procurement,•Pincluding
switching to
low-carbon materials
Switch to renewable energy
and promote energy
conservation during
construction
Invest in solar power
generation for own
consumption, etc.
Develop low-carbon anddecarbonization technologies
Develop new technologies
that support the preventive
maintenance ofinfrastructure

•
•
•
•

evelop technologies for•Dimproving
on-site working
environments and implement
heat stroke countermeasures
ork together with the•Wentire
supply chain tostrengthen BCP measures in
preparation for disasters
Manage sanitation related towater in a sustainable manner•About Us

Management Strategies

Business Strategies

Business Foundation

Company Information

Efforts for Environment

Climate-Related Financial Disclosure Basedon the TCFD Recommendations

Metrics and Targets
CO2 Emissions Reduction Targets
Base year

Targets

Metrics

CO2 emissions（Scope1 and 2）

FY2022

FY2031FY2051

Total emissions

5,238t-CO2

3,929t-CO2(−25%)Net zero(CO2 emissions intensity*)(6.5t-CO2/100 million yen)

(4.9t-CO2/100 million yen)

* (Reference value) CO2 emissions per consolidated net sales (100 million yen)

To realize a decarbonized society—the basic principle underlying the
Act on Promotion of Global Warming Countermeasures, the Group
has set targets of reducing its CO2 emissions (Scope 1 and 2) 25%
from FY2022 levels by FY2031 and ultimately achieving carbon
neutrality by FY2051.

CO2 Emissions (Scope 1, 2, and 3)(Unit : t-CO2)

Category

FY2022

FY2023

Scope1

2,667

2,805

Scope2

2,571

2,669

Total of Scope1 and 2

5,238

5,474

6.5

6.5

CO2 emissions intensity(t-CO2/100 million yen)

Measures to Combat Climate Change
The operations of the SHO-BOND Group generate a relatively
small amount of CO2 emissions due to the characteristics of theinfrastructure maintenance business, which left us limited optionsfor Scope 1 and 2 reduction measures. Factoring in thesecircumstances, the Group examines various types of methods forCO2 emission reductions and carbon offsets mainly in the
Sustainability Committee.
The Kita-Nihon Regional Office of SHO-BOND CORPORATION,
which is in the city of Sendai in Miyagi prefecture, was relocated in
FY2023 to a building that received ZEB (Net Zero Emission Building)certification under the BELS (Building-Housing Energy-efficiency
Labeling System). ZEB certification requires zero or negative net
primary energy consumption annually by using energy-efficientfacilities and renewable energy sources. The Group assessed thedesign and equipment of the building including estimates ofcost-effectiveness based on the building’s location, sunshine
exposure, and other parameters.
The Group will continue activities to achieve carbon neutrality
by 2050 while examining a diverse array of measures.

Exterior of the Kita-Nihon Regional Office building

Scope3110,008

110,468

Total of Scope1, 2, and 3

115,246

115,942
The building’s spacious interior

Rooftop solar panels

Coverage: Domestic group companies

48

Efforts to Develop Talent and Improve
the Workplace Environment

Basic Views
Employees are the most valuable asset of the SHO-BOND Group. For
the Group to survive and grow while fulfilling its social responsibilities
and contributing to the development of a sustainable society, we
believe every employee of the Group must have a dream and feel asense of fulfillment by demonstrating their abilities.
Therefore, we aim to create a workplace where every employee ismentally and physically healthy and can continue their work for along time with confidence while having the opportunity to maximize
their abilities and potential.

Recruiting
Explaining the need for infrastructure repair and reinforcement andthe social significance of these activities is an effective way to attract
new university or technical college graduates, especially in the fieldsof civil engineering and architecture. For this purpose, SHO-BOND
invites students and instructors to visit the Technical Research Instituteand Tsukuba Training Center and send our engineers to give special
lectures on the campus regularly.
When it comes to hiring people with previous work experience,
we use many channels including an employee referral system todiversify our human resources.

Talent Development
Experience is a critical component of repair and reinforcement
construction activities. For this reason, we provide education mainly
through on-the-job training, and we are working to improve theirability to solve problems independently by delegating responsible
tasks and putting them in charge of them in their early stages.
As for off-job training, we select effective and efficient learning
methods for each theme, and offer our employees various training
opportunities according to their stage of growth, such as internal/
external education programs, e-learning, etc. In 2021, we opened the
Tsukuba Training Center, which is adjacent to the Technical ResearchInstitute, for hands-on training programs. We will continue to develop
the skills of everyone in the Group from a long-term perspective while
upgrading education programs and encouraging people to learn new
skills in a well-planned manner.

49

SHO-BOND 2023 Integrated Report

Productivity improvement
through technology
development

Junior/middlemanagers

General staff

Job-specifictraining
Rank-specifictraining

Department
managers andhigher positions

Training
for new employees
Follow-up training
Training outside the groupJob-specific training
Safety training● Interviewing system

OJT

Selfdevelopment● Self-declaration system● Skill and performance evaluation system● Job rotation● Support for earning public qualifications● Information about correspondence courses● Reference book recommendations● Information about

correspondence courses● Reference book

recommendations

Training for Specific Job Levels
SHO-BOND has training programs structured to give employees theknowledge and skills required depending on their specific job levels.
These follow-up training programs extend from education for new
employees to training for people with more experience, which coversubjects selected to enable the participants to advance to the next
step of their careers. Furthermore, the Tsukuba Training Center haslessons that are very similar to conditions at job sites and theemployees can obtain practical knowledge.

Support for Earning Certifications
The Group gives employees a variety of support for earning
professional qualifications and other certifications required for theirjobs. Not only is the cost of tests and registrations for certifications
covered but receiving certifications also raises the monthly income of
employees. For Professional Engineer and other difficult qualifications,
we have carried out measures including supplementary lessons by theemployees who have been certified and commendation at the time ofcertification. Through such promotion measures, the number of thosequalified has been steadily increasing.
We will continue to expand these programs in order to enable ourstaff to earn the certifications required for their work and evendifficult qualifications.

Employee Retention
SHO-BOND conducts monthly surveys of employee job satisfaction,
goals, and other items with an emphasis on younger employees andindividuals returning from leave. Using the results, human resources
personnel timely interview and support those in need with thecooperation of the supervisors and others. These activities let
employees know that there is a framework in place to help them deal
with various problems and relieve their anxiety.
In addition, we offer opportunities to work at home and selectstaggered working hours for more flexibility. Measures like these toconstantly improve the workplace environment based on theemployees’ needs result in a higher retention rate.

About Us

Management Strategies

Business Strategies

Business Foundation

Company Information

Efforts to Develop Talent and Improve
the Workplace Environment

Employee Surveys and Human Resources Interviews
Employee Surveys

Interviewsby human resources
personnel

Subjects(including
duplication)

Responses(including
duplications)

Response rate

Interviews(including duplications)

April 2021March 2022

1,468

1,429

97.3%

63

April 2022March 2023

2,385

2,297

96.3%

84

Time

childcare leave by male employees, we started a system of making
one-off payments when they return from childcare leave in 2019. To
raise awareness of that, we have made a pamphlet for introduction
and it has raised the number of male employees taking childcare
leave as well as the number with long-time childcare leave.
In 2020, SHO-BOND CORPORATION received Kurumin certification
as a company that supports childcare.

Childcare leave
rate of new
fathers

FY2019FY2020

FY2021

FY2022

FY2023

45.8%

80.0%

65.0%

100.0%

74.0%

Attrition Rate
(%)
12
10

11.0％

8.7％

8

All-industry average
The SHO-BOND Group

6

3.5％

4
2

Selection of Employment Category and the
Self-Declaration System
The Group gives employees the flexibility to choose an employment
category with or without transfers to different locations. Many
individuals change their status to reflect the current stage of their lives.
Every year, some employees ask to be shifted. The self-declaration
system allows individuals to confirm their employment category andjob status once every year.

Diversity and Inclusion0

FY2023

FY2013*Attrition rate only counts for employees who resign voluntarily. All-industry average isdetermined by SHO-BOND using Ministry of Health, Labour and Welfare data.

Workplace Environment Initiatives
Maintaining Proper Working Hours
The Proper Working Time Project was started in 2014 with measuresthat include improvements to the rules of employment and theinitiation of no overtime days to prevent excessive working hours andencourage employees to take time off.
In 2017, the Group started using a new system for recording
working time. This framework allows efficient monitoring of thenumber of job hours and the situation of weekend or holiday
attendance.
To promote the tendency to use vacation days more easily, we
have designated a month when employees are encouraged to takepaid holidays. In FY2023, we achieved the target of no employee
having fewer than 110 days off per year. We have continued to takeaction concerning paid leave, increasing the use of vacation time.
Starting in April 2024, construction companies in Japan will have tocomply with a limit on overtime working hours. We are committed tocomplying with these regulations by making continual improvements
such as reducing total working time and increasing the use of paid leave.

To maintain diversity in our workforce, the Group makes efforts torecruit diverse new employees as well as conduct the selection
process in a fair and non-discriminatory manner. In addition, theGroup selects management personnel based solely on eachindividual’s capabilities and performance.
To increase the participation of women in the workforce, we makeefforts to maintain at least a 15% regular recruiting rate of females,
and from a longer perspective, we hope to encourage the participationof more females in management and other higher levels of work. The
15% goal was achieved in FY2023. In addition, there are workplaceenvironment measures and a training program with follow-up surveys
for female engineers that result in a high retention rate.
To retain elder employees and continue benefiting from their
many years of experience, the remuneration for these people wasraised significantly in FY2021 and FY2023. Partly because of that, allemployees who reached their mandatory retirement age in FY2023
decided to remain at SHO-BOND.
For many years, we have hired large numbers of people with priorwork experience. At the end of June 2023, mid-career employees
were 52.3% of the entire workforce and 33.5% of all managers. We
remain committed to maintaining a diverse workforce.

FY2019FY2020

FY2021

FY2022

FY2023

Number of female
engineers

16

18

23

26

30

FY2019FY2020

FY2021

FY2022

FY2023

Percentage of female
employees in regular
recruiting

2.8%

5.3%

17.2%

9.5%

16.2%

127.0

129.4

130.2

134.3

134.5

Employee retention
after mandatory
retirement age

65.0%

86.0%

80.0%

88.0%

100.0%

Average annual
days off

Supporting Employees in Balancing
Work and Childcare and/or Nursing Care
We provide employee assistance programs thatexceed the legal requirements and promote
the use of these programs to allow employees
to balance work with childcare and nursing
care without anxiety. To increase the use of50

Feature

SHO-BOND
Training Programs
A new employee learning on-site practices from anexperienced individual now in his sixth year at the Group[ Training for new employees ][ The Group-wide Construction Engineering
Technology Conference ]Training for new employees is designed as a first phase to let themacquire know-how essential for working at the Group and become
the core members of the workforce. This one-year training consistsof an introductory course mainly in the form of classroom lecturesand practical training at workplaces where new employees aretemporarily assigned.
[ Introductory training ]The main purposes of the 45-day introductory training are to (1)give them the proper mindset as a businessperson, (2) acquirebasic knowledge about their jobs, and (3) foster a sense ofsolidarity among them as employees of the Group.
Many of the new employees have majored in civil engineering andconstruction in college or university but most of them are
introduced to the maintenance field for the first time at SHO-BOND.
We design training programs in a way that allows them to acquire
the fundamental knowledge needed to advance to the on-the-job
training phase.
[ On-the-job training ]On-the-job training accounts for the majority of the one-yeartraining for new employees. This training is an important process
for new employees to apply the knowledge acquired during the
introductory training under the guidance of experienced
employees.
We believe that the fundamentals of every job within the Groupare learned at work sites, regardless of future career paths. This is
why on-the-job training is provided mainly at construction sites
where new employees acquire repair and reinforcement skills.

Every year, SHO-BOND holds a Construction Engineering Technology
Conference at the head office to allow our employees to shareknowledge and experience and further upgrade their skills. The event
is attended by about 100 engineers of all ages from all areas of Japan.
Selected employees give presentations about timely themes andinnovations in maintenance work, which can cultivate the essential
ability of communication. Therefore, this event provides every
participant with valuable learning opportunities. After the pandemic
started, online links with regional offices nationwide have been used
to enable engineers unable to attend in person to participate.

Participants listen to a
construction engineering
presentation

Award winners pose with the Engineering
Division general manager[ Education matching the requirements of
in-house companies ]One of the goals of the Group’s current Medium-term Business Plan is
to upgrade the order receipt strategy utilizing the in-house company
structure and to increase activities for large projects and construction
work capability. One element of these activities is the reinforcementof training, field trips, and classes specifically for in-house companies.
Within the Group, the condition differs depending on workforce
composition, regional characteristics of projects, and other factors.
Training programs must reflect these differences. This is why we give
people practical know-how and skills that cover precise requirements.

Training at the Technical Research Institute51

SHO-BOND 2023 Integrated Report

A field trip for female engineers of the West Japan In-house Company

About Us

Management Strategies

Business Strategies

Business Foundation

Company Information

Feature: SHO-BOND Training Programs

New Employee Training – Hands-on Lessons for Practical Knowledge

The Sumida River, which flows
through downtown Tokyo, ishome to bridges of such diverse
designs and structures that it
can be said to be a “bridge
exhibition.” On their field trip
to this river, new employees
hear explanations of bridge
structures and components
from members of theEngineering Division. Seeing bridges from this perspective gives
everyone a sound understanding of the structure of bridges, which
will be part of their future maintenance activities.

As part of introductory training, new employees complete handson lessons at the Technical Research Institute and the Tsukuba
Training Center about construction site processes and quality andtasks involving safety management. The hands-on lessons include
special experience such as handling the same tools and materials
used at job sites, assembling scaffolding, etc., which enables
trainees to simulate the actual construction process.
New employees need to understand what types of work takeplace at construction sites, precautions that are required, andother points about their jobs. Giving them this practical knowledge
allows them to do their jobs at these sites with confidence. The
instructors are experienced engineers of SHO-BOND, mainly fromthe Technical Research Institute, Construction Division, and Safety
Management Department.

Activities centered on hands-on experiences are a distinctive feature of training at SHO-BOND as a specialist in infrastructure
maintenance. Using this methodology gives new employees the basic knowledge and skills needed for this field of construction
and the subsequent transition to actual job sites will also be smooth. We will continue to make further improvements to ourtraining programs to enhance the effectiveness of job introductions.

52

Efforts for Health and Safety
Comprehensive
maintenance system backed
by the organizational
capabilities

Basic Views

Productivity improvement
through technology
development

Health and Safety Policy
1. We will achieve a safety culture at an even higher level.
2. We will establish a health and safety management system.

In addition to complying with laws and regulations related tooccupational health and safety, the SHO-BOND Group aims to create
a comfortable working environment in which everyone strives toeliminate occupational accidents, while maintaining and improving
their health, based on the philosophy that “respect for human lifeand safe construction take precedence over everything else.”
Health and safety management is one of the most importantmanagement issues of the Group. In recent years, orders for largescale construction have expanded, and the number of high-difficulty
construction projects such as expressways has been increasing.
Completing these projects with no accidents demands a high level ofsafety skills along with a strong commitment to safety among
everyone at the Group and partner companies. Based on this stance,
we have established the following Health and Safety Policy for thethree years ending in June 2024. In addition, the president of
SHO-BOND directed in January 2020 the start of the Initiatives for
Creating a SHO-BOND Culture of Safety.

3. We will ensure the accurate 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 our own 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 healthdisorders caused by overwork.
8. We will thoroughly ensure the prevention of property damage
accidents.

Key Initiatives Based on the Health and Safety Policy
Priority Actions in FY2022 and FY2023
1. Promote the Initiatives for Creating a SHO-BOND Culture of Safety

Initiatives for Creating a SHO-BOND
Culture of Safety

2. Promote initiatives to motivate people involved in construction
projects, such as commending our employees and partnercompanies for their outstanding performance in health andsafety management
3. Promote digital transformation and other methods for more
effective and efficient health and safety management activities

Our goal is to raise the SHO-BOND culture of safety from a“dependent” structure, where supervisors oversee safety measures,to an “independent” and “interdependent” structure in which
individuals act independently and promote safety among themselves.
We believe these changes will establish accident-free workplaceenvironments where people can do their jobs with even greater safety
and confidence. To accomplish these goals, we are taking actions
based on the Initiatives for Creating a SHO-BOND Culture of Safety.

Priority Actions in FY2024
1. Ensure that a series of measures are taken, from the identification ofrisk factors that can cause serious accidents to the implementationof mitigation measures and confirmation of their implementation
2. Health and safety officers perform daily workplace patrols andnip accidents in the bud
3. Create comfortable and smart workplaces and construction sites

High

Instinct

Initial position

Bradley Curve(result of safety awareness survey)
Supervision

Goal

Injury
rate

Self
Team

Zero

Reactive

Independent

Interdependent

Progress with creating a culture of safety
Actions only after an
accident happens

53

Dependent

SHO-BOND 2023 Integrated Report

Follow rules because
they are mandatory

Individuals takeresponsibility for
their own safety

Care for others
Pride of belonging
to SHO-BOND

About Us

Management Strategies

Business Strategies

Business Foundation

Company Information

Efforts for Health and Safety

Targets and Accomplishments

Basic Responsibilities

The Group has set “zero fatal accidents” and “a lost time injury (LTI)
frequency rate of no more than 0.7” as KPIs related to health andsafety. In FY2023, we achieved zero fatal accidents and the workplace
accident frequency rate and severity rate were both zero. Both KPIs
were below the average of Japan’s general construction sector for thethird consecutive year.
Targets
Number of fatal accidents
Lost time injury (LTI)
frequency rate*

FY2022 results

FY2023 results

0

0

0

Maximum of 0.7

0.67

0.00

Determine the basic principles and set goals forhealth and safety management

President
General Managers
of Regional Offices

Set and publicize annual safety and healthmanagement plans for the regional office based on
the SHO-BOND Health and Safety Policy

Make and publicize the policy, and set goals for
Branch Managers construction health and safety
and Site Supervisors Create, implement, and improve construction healthand safety management plans
Partnercompanies

Create risk assessment procedure manuals* Lost work time of 4 or more days

Health and Safety Management System
SHO-BOND has a health and safety management system in which
everyone from the president to supervisors at all levels has clearly
defined roles, responsibilities, and authority. This structure is used toperform well-planned health and safety management activities at all
business sites.
We conduct health and safety patrols at construction sites toimprove the level of health and safety. In FY2023, the president,
regional and branch office general managers, and other senior
managers performed 3,791 patrols, which is an average of 1.5 patrols
per month at each construction site.

Health and safety patrols by the company president

Health and Safety Management Organization Chart

Head office

Health and Safety Policy

Safety management system guidelines

Regional office healthand safety management plans

Regional offices

Branches

Construction
sites

RA of the construction project
RA in the meeting with related managers
and site supervisors before construction

Health and safety management plans

Partnercompanies
Company A

Company B

RA procedure
manuals

RA procedure
manuals* RA = Risk assessment54

Major Activities
Health and Safety Training
The Group provides safety training programs to employees of theConstruction Department, Marketing and Sales Department, andEngineering Department in July every year. The July 2023
program included reports about workplace accidents andproperty damage caused by accidents during FY2023 and priority
actions for the next fiscal year. We also provided special
education as well as health and safety training by SHO-BOND
instructors to our engineers and 350 employees from 65 partnercompanies in FY2023.

Digital Transformation (DX) of Health and Safety Activities
The Group promotes DX in health and safety activities to improve
effectiveness and reduce on-site workers’ workloads. To
accomplish these goals, we formed a Safety DX Promotion
Working Team. While identifying areas for improvement in current
health and safety activities, we are working on specific initiatives
to promote DX, such as setting targets.
Using web conferences, chat tools, and other methods, we are
implementing initiatives such as early resolution promptly bychecking the status of work and sharing problems throughreal-time communications between regional and branch offices
and construction sites.

Training under the Initiatives for Creating a SHO-BOND
Culture of Safety Roadmap
Felt leadership training for new senior executives and managers
takes place at the Group, with the support of the external
consultants. In FY2024, felt leadership training will be expanded to
managers of partner companies and younger employees of
SHO-BOND.
This training aims to equip employees with the leadership skills
to demonstrate their strong
commitment to safety throughtheir actions so that an
improvement of awarenesswill spread to the people
around them, creating a
comfortable environment andorganization, and fostering aculture of safety.

Construction Site Health and Safety Patrols by
Administrative Personnel
Health and safety patrols are also performed by employees inadministrative departments, who do not have construction site
jobs. Some people go to the construction site for the first timethrough these patrols. It is expected to raise awareness of healthand safety throughout the Group while improving the level ofsafety and health on sites since they can see construction sites
from a viewpoint unlike that of construction personnel, which
creates synergies for further health and safety improvements.
Many office workers who visit construction sites are surprised
to see that these locations are
not dangerous nor dirty. They
are pleased to see the positive
atmosphere of theseworkplaces and impressedwith the numerous health andsafety measures that evenpeople with no construction
experience can notice.

55

SHO-BOND 2023 Integrated Report

Emergency Relief Training with Fire Departments andRescue Units
As part of on-site safety activities, we conducted joint rescue andevacuation drills with the local fire department and external
emergency response organizations.
We aim to enhance the understanding of health and safety
activities among construction workers through real experiences of
the whole process, including checking the contact list andevacuation sites, providing first aid for people requiring help,
requesting emergency services, and conducting ambulance
activities in case of an emergency. We also hope that eachindividual will develop their own safe behavior, thinking, and value
through such activities.

About Us

Management Strategies

Business Strategies

Business Foundation

Company Information

Efforts for Health and Safety

Somatosensory Health and Safety Education at the Tsukuba Training Center
The Tsukuba Training Center has a full range of facilities for
conducting effective health and safety education. To foster anawareness of health and safety, including risk perception, judgment
criteria, and beliefs, we conduct employee training at the time ofjoining the company and when they are promoted to a higher level. In
addition, we also provide hands-on education on health and safety topartner companies and overseas trainees, using actual training bridges
and scaffolding, as well as VR and other hands-on equipment.

Trial Dangle with a Torso Belt and Body Harness
Repairing and reinforcing bridges involves numerous tasks at elevatedheights, such as erecting and dismantling scaffolding. For the sake ofsafety, it is inevitable to equip safety belts or harnesses for fall
prevention. Therefore, ensuring everyone on-site using this safety
equipment properly is essential for health and safety management.
During training, participants are suspended by torso belts and bodyharnesses, so that they can tell the difference of the burden on theirbody, and learn how to help themselves relieve the burden they aretaking by using a supplementary leg support attachment while
waiting for help.

VR systems are used (right) to generate realistic views of accidents (left).

Training inside the scaffolding on the actual training bridge

Training participants are suspended by a harness (left) and torso belt (right).

Recreating Accidents with Mannequins

Simulating Falls with Mannequins

In the accident simulation area, actual accidents are reproduced using
mannequins to show the potential causes of accidents and theirsevere consequences.
There is a training corner where employees can learn how torecognize unsafe locations and unsafe behavior on scaffolding. We
also make it possible to intuitively learn about the dangers of disasters
by checking unsafe situations in which accidents have occurred, suchas accidents caused by vehicles for high lift work and accidents inwhich people injured their hands and feet while using a power tool.

What would happen if people fell without wearing a safety belt or if
the support rail for the harness hook was improperly placed? To
demonstrate such accidents, we use mannequins weighing the sameas typical workers. Experiencing the forceful shock firsthand,
individuals learn to appreciate the gravity of occupational accidents
and the importance of proper use of safety belts.

56

Corporate GovernanceSound governance andmeasures for more
improvements

Basic Views

Progress in Strengthening
Corporate Governance

The SHO-BOND Group positions corporate governance as one of thehighest 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 willcontribute 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 ourshareholders and all other stakeholders to achieve sustainable growthand enhance our corporate value over the medium to long term. In
addition, we will aim for highly sound and transparent management
by developing and promoting a corporate governance system thatenables swift and decisive decision-making.

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

Corporate Governance Structure
General Meeting of Shareholders
Appointment / Dismissal

Accounting
AuditorAppointment / Dismissal

ReportCooperation

Audit andSupervisory
Committee

Appointment / Dismissal

Board of Directors

Cooperation

Inquiry

Accounting
audit

Audit /
Supervision

Cooperation

Audit and Supervisory Committee
Response

Nomination andRemuneration
Advisory Committee

Instruction Audit Appointment / Dismissal /Supervision

Audit OfficeInstruction
ReportPresident
Executive Committee

Internal audit
Submission / Report

Respective departments /Group companies

57

SHO-BOND 2023 Integrated Report

The Board of Directors has eight members including four directors who
are members of the Audit and Supervisory Committee. The directors
discuss and reach decisions about important matters involving
management as prescribed by laws and regulations and the rules for
the Board of Directors. As a rule, the board meets once every monthand meets at other times as needed in order to reach decisions quickly.
(Number of meetings in FY2023: 13 times)

Risk Management Committee
Sustainability Committee
Internal Control Committee
Asset Management Committee

SHO-BOND is a company with an Audit and Supervisory Committee.
The Audit and Supervisory Committee has four members, of whomthree are Outside Directors. As a rule, the committee meets once
every month and meets at other times as needed. The Audit andSupervisory Committee, as an independent body, audits andsupervises the performance of directors who are not members of the
Audit and Supervisory Committee. The committee also prepares audit
reports and reaches decisions on other stipulated matters based onlaws and regulations, the Articles of Incorporation, and Audit andSupervisory Committee rules and audit standards. The Audit andSupervisory Committee works with the accounting auditor and the
Audit Office to perform audits efficiently.
(Number of meetings in FY2023: 12 times)

Nomination and Remuneration Advisory Committee
The Nomination and Remuneration Advisory Committee has four
members: three Outside Directors and the President andRepresentative Director. This committee is actively involved in theformation and execution of the succession plan for the President andhas adequate discussions on directors’ nomination and remuneration
while giving opinions and advice to the Board of Directors.
(Number of meetings in FY2023: 4 times)

About Us

Management Strategies

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Company Information

Corporate Governance

Executive Committee
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 outside the Audit and Supervisory
Committee and senior executives nominated by the President,
including the executives of SHO-BOND subsidiaries. As a rule, thecommittee meets twice every month and meets at other times asneeded in order to reach decisions quickly.
(Number of meetings in FY2023: 23 times)

Internal Committees
Major committees related to business execution include the Risk
Management Committee, Sustainability Committee, Internal Control
Committee, and Asset Management Committee. Importantmanagement issues are continuously discussed by theme at thesecommittees and submitted and reported to the Executive Committee
as needed.

Method of Evaluating Effectiveness of
the Board of Directors
To evaluate the effectiveness of the Board of Directors, a third-party
external adviser is invited every other year for objectivity
considerations. The evaluation is performed by asking all directors,
including members of the Audit and Supervisory Committee, tocomplete questionnaires, which will be analyzed and reviewed by the
Board of Directors. The issues recognized here will be approached andreviewed with self-analysis and evaluation in the next year.

Summary of Evaluation Results
For the fiscal year ended in June 2023, we confirmed the effectivenessof the Board of Directors as a result of the evaluation based on the
self-analysis, after implementing the action plan formulated based on
the results of the questionnaire conducted by an external advisor in
the previous fiscal year.
To address one of the issues in the action plan, which was offeringcontinuous training for executives, we held three directors’ study
sessions to improve their knowledge and abilities. We will continue toimprove the effectiveness of the Board of Directors by providing
further opportunities for dialogue, such as lunch meetings between
outside directors and senior managers, and providing more training
for executives.

SHO-BOND’s Outside Directors

providing oversight and advice from an independent standpoint
drawing on their respective knowledge and experience. None of thethree 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 andin-depth manner so that they can fully understand the Group andexercise their abilities to the fullest. In promoting smoothcommunication, relevant executive officers directly give explanations
to the outside directors as needed when they make inquiries.

Dialogue with Shareholders
and Investors
The Group places importance on information disclosure and dialogue
with shareholders, institutional investors, analysts, and otherinterested 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 the
President after announcing the full-year financial results. For
individual shareholders, we hold information meetings in Tokyo andOsaka in March every year after transitioning to the holding company
system in 2008. Dialogues are consistent with the spirit of fairdisclosure, and care is exercised to prevent the disclosure of insider
information. The Executive Committee and the Board of Directors
periodically receive feedback concerning the opinions and concerns ofshareholders, which help achieve sustainable growth.
The basic policy for investor relations is to provide accurate, fair,
and timely information about our management strategies, businessactivities, financial conditions, and other items. The purpose is tobuild long-term relationships rooted in trust and receive a proper
evaluation from all stakeholders. This policy is posted on our website.

ActivityFrequency (FY2023)

Information meetings for individual shareholders*

2 times

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

2 times

One-to-one meetings

114 times* The meetings are held in Tokyo and Osaka in March every year.

The Company elects three Outside Directors who are Audit andSupervisory Committee members.
Mr. Satoru Miura has knowledge and experience as a certified
public accountant as well as a corporate accounting advisor. Mr. Akira
Hongo has knowledge and experience as an attorney as well as acorporate 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. The three of them play a role inensuring the properness of the business execution of the Company by58

Details of Compensation for Directors(and Other Officers)
At the Board of Directors, the Company resolved the policy regarding
the details of the compensation, etc. for each 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 ofsupervising Group companies, the compensation for the Company’s
Directors comprises basic compensation only. Furthermore, the paymentof basic compensation shall be monthly fixed compensation in cash.
The Company’s Directors concurrently serve as Directors ofsubsidiaries. Compensation is determined by proportionately taking
into consideration the weight of the business of both the Company
and its subsidiaries, and multiplying it by the monthly compensationof 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 andRepresentative Director prepares a compensation proposal, including
the portion to be paid by subsidiaries, that is determined at a Boardof Directors meeting after consulting the Nomination andRemuneration Advisory Committee, which comprises the Company’s
Outside Directors and the President and Representative Director.

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

Internal Control
The SHO-BOND Group has a system of internal controls for ensuringthat all business operations are conducted properly in accordancewith the Companies Act and Ordinance for Enforcement of theCompanies 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 anInternal Control Committee and a department in charge of promotinginternal control in FY2019, in order to further strengthen internal
control within the Group and permanently ensure a favorable control
environment.

Total amount of compensation, etc. for the fiscal year ended June 30, 2023 (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

85

85

[–]

[–]

[–]

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

4

41

41

[3]

[21]

[21]

9

127

127

[3]

[21]

[21]

Total

59

SHO-BOND 2023 Integrated ReportAbout Us

Management Strategies

Business Strategies

Business Foundation

Company Information

Corporate GovernanceDirectors

Yasuhiro Sekiguchi

Tatsuya Kishimoto

Shigeru Naraoka

Managing Director
Chief Financial Officer
Corporate Administration

President andRepresentative Director
April 2001
April 2011

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 (current position)
Director and General Manager of Corporate Planning
Department of the Company
September 2017 President and Representative Director of the Company(current position)

April 1989

Joined The Mitsubishi Bank, Ltd.
(currently MUFG Bank, Ltd.)
General Manager of Strategic Investment Division
Joined SHO-BOND CORPORATION
Director, Deputy General Manager of Corporate
Administration Division, and General Manager ofCorporate Planning Department
September 2018 Director and General Manager of Corporate Planning
Department of the Company
Managing Director, Deputy General Manager of Corporate
April 2020
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 of Corporate
Planning Department, and General Manager of ESG
Promotion Office, Corporate Planning Department
September 2023 Managing Director, General Manager of Corporate
Administration Division of SHO-BOND CORPORATION(current position)
Managing Director of Corporate Administration andGeneral Manager of Corporate Planning Department of
the Company (current position)
May 2014
July 2017
December 2017

Takayasu Shimada

Shunya Tojo

Director
Business Strategies

Director and Full-time Audit andSupervisory Committee Member

April 1992
April 2017

Joined SHO-BOND CORPORATION
Executive Officer and General Manager of Chubu
Regional Office
April 2020
Director and General Manager of Chubu Regional
OfficeApril 2021
Director and General Manager of Shutoken Hokuriku
Regional Office
April 2023
Director, General Manager of Marketing and Sales
Division, and General Manager of DX Promotion Office
September 2023 Managing Director, General Manager of Marketingand Sales Division, and General Manager of DX
Promotion Office of SHO-BOND CORPORATION(current position)
Director of Business Strategies of the Company(current position)

Director
Sales Management
May 1989
July 2012

Joined SHO-BOND CORPORATION
Director and Executive Officer, and General Manager
of Chubu Regional Office
July 2016
Director and General Manager of Sales Management
Department of SHO-BOND MATERIAL CO., LTD.
April 2017
Director and General Manager of Marketing and Sales
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 Sales Management
Department, Marketing and Sales Division of
SHO-BOND CORPORATION
September 2019 Director and General Manager of Sales Management
Department of the Company
September 2023 Director of Sales Management (current position)

November 1990
July 2012

Joined SHO-BOND CORPORATION
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 ofCorporate 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)

Outside Director

Outside Director

Outside Director

Satoru Miura

Akira Hongo

Reiko Kuwano

Audit and Supervisory Committee Member

Audit and Supervisory Committee Member

Audit and Supervisory Committee Member

April 1981
June 1990
February 2015

Registered as certified public accountant (to present)
Established Miura C.P. A. Office (to present)
Outside Corporate Auditor of NODA CORPORATION(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

April 1988
April 1995
April 2010

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

April 1989
March 1999
October 2001
April 2006

Joined TAISEI CORPORATION
Research Associate of the University of Tokyo
Senior Researcher of Public Works Research Institute
Associate Professor, Institute of Industrial Science of
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)
Finance/
Accounting

HR

Legal affairs/
Compliance/
Risk management

●

●

No.

Name

InsideOutsideCorporate
management

1

Tatsuya Kishimoto

Inside●2

Yasuhiro Sekiguchi

Inside●3

Shigeru Naraoka

Inside●4

Takayasu Shimada

Inside●●●5

Shunya Tojo

Inside●●●6

Satoru Miura

Outside●7

Akira Hongo

Outside8

Reiko Kuwano

Outside●●●GlobalTechnology / R&D
●

●
●

●

●

●

●
●

●

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

60

Risk Management

Risk Management Framework Chart

Risk Management Framework

Board of Directors
Executive Committee
Risk Management Committee

Other Risks

Quality Management Committee

IT Promotion Committee

Asset Management CommitteeIntellectual Property Committee

Safety and Health Committee

The Group has risk management rules and a Risk Management
Committee to guide events that can have a major impact on businessactivities and reduce exposure to these risk factors. Risk management
also includes measures to minimize damage and losses if a crisis
occurs and to prevent incidents from happening again.
The Risk Management Committee plays a central role in risk
management at the Group. The Committee chaired by President andRepresentative 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.

Group Companies

Information Security Measures

Risk Management Process

61

Process

Explanation①
Risk
identification

Business risk factors of the SHO-BOND Group are divided
into Risk Categories and specific potential problems are
identified for each risk factor.
Magnitude of risk is defined as “the impact of an incident”
multiplied by “the probability of the incident happening.”②
Risk analysis
and monitoring

Studies to determine numerical and other indicators forindividual risk factors and the methods for monitoring 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.

③
Risk control

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 are being
controlled by these business tasks.

④
Risk evaluation

By using the reports from business units, the executive incharge of risk management assesses the magnitude ofevery risk factor and submits a report to the Risk
Management Committee.
The Risk Management Committee determines priorities
concerning the magnitude and categories of risk factors anddiscusses methods for the efficient management of risk.

⑤
Responses
to incidents

Emergency response manuals to be prepared for incidents.
Perform studies concerning crisis management activities,
such as direct responses to incidents, crisis management
meetings, reports to government offices and agencies,
public announcements about emergencies, and other
responses to incidents.

SHO-BOND 2023 Integrated Report

With the acceleration of DX and changes in the usage environment of
information systems, information security risk has been increasingthese days, such as the growing sophistication of externalcyberattacks. In the construction industry in particular, ensuring
information security is an urgent issue as construction site offices are
exposed to major information security risks. We therefore raiseawareness of these risks among employees by taking such measures
as having all employees including the executive officers completee-learning courses, conducting a phishing drill, and distributing
awareness posters to our construction sites across Japan. Goingforward, we will prevent unauthorized access from outside the Groupand computer viruses by sequentially taking more defensive anddetective network security measures.

Business Continuity Plan
The Group has a business continuity plan (BCP) to address disasterrisk such as a great earthquake. We strive to improve our capability tocontinue business operations based on the BCP on a regular basis to
avoid the disruption of key operations as much as possible in theevent of a major disaster and to return to normal operations early if
disrupted.
We periodically conduct an evacuation drill and first aid training
on the assumption that a great earthquake has occurred. We also
conduct a drill of responding to a safety confirmation email and haveeach site regularly check the items of an emergency kit. We willcontinue to upgrade the BCP and expand the scope of areas coveredby it to reduce disaster risk.

About Us

Management Strategies

Business Strategies

Business Foundation

Company Information

Risk Management / Compliance

Compliance

Basic Concept for Compliance
The SHO-BOND Group believes that a sound compliance framework
is vital to conducting business activities that meet high standards ofsocial responsibility and are capable of sustainable growth. The
SHO-BOND Group Code of Conduct enables all employees to do theirjobs based on a thorough understanding of socially acceptablebehavior, laws and regulations, internal rules and other guidelines.
All employees at the Group are dedicated to the achievement of
the action principles “Corporate Credo” and the Corporate
Philosophy by using a broad range of activities for earning the trust ofsociety and all stakeholders.

Compliance Promotion Framework
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 ofcompliance.
In addition, we have close cooperation among Group companies
by establishing a Compliance Office responsible for compliancematters and assigning a compliance leader to each site.
Further, we provide education and training to all employees of theGroup to raise compliance awareness.

Compliance Training
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 toobserve the SHO-BOND Group Code of Conduct. We also ensure that
employees are aware of the Construction Business Act that must be
observed as a construction company.
We seek to create an employee-friendly work environment by
periodically having all employees do a self-check and providing themwith e-learning to prevent all forms of harassment.
* Follow-up training is targeted at employees for their second year and those who have justgot promoted.

Establishment of Anti-bribery Policy
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 ethicalstandards to prevent bribery, and continue to ensure fair and soundrelationships with our customers and all other 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 and timely decisions.
2. Provide outstanding technologies and quality
We will constantly develop new technologies and aim for even higher quality.

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 to participate in thesetypes of activities. We will work closely with project owners and prime contractors
in order to receive orders in a fair 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 and regulations,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 for accounting
activities to ensure the reliability of financial reports and disclose information
required by our stakeholders.
6. Eliminate antisocial forces
We refuse to respond to improper requests from antisocial forces and will
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 or other crisis.

Unify the workplace
8. Contribute to maintaining a pleasant and productive workplaceenvironment
We will maintain healthy and safe workplace environments through measures
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 and provide
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 orderto 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 throughmany activities in order to combat global warming, conserve energy andprotect the environment in other ways.

Whistleblowing Contact Points
The Group has internal and external contact points for whistleblowers
to report any kind of violation they detect, regardless of its agent(individual or organization) and the type of regulations violated(applicable laws, the rules of 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 asa general rule and will not suffer any disadvantages.

62

11-Year Data

FY2013

FY2015FY2016

Orders(million yen)

47,22955,54654,81153,509Net Sales(million yen)

51,792

49,59952,124

52,334Gross Profit(million yen)

10,30010,614

12,643

12,709

(%)

19.9

21.4

24.3

24.3

Selling, General and Administrative Expenses(million yen)

3,443

3,078

3,499

3,406

Operating Profit(million yen)

6,856

7,535

9,144

9,303

(%)

13.2

15.2

17.5

17.8

Ordinary Profit(million yen)

7,221

7,932

9,480

9,648

Profit Attributable to Owners of Parent(million yen)

4,349

5,008

5,926

6,267

Total Assets(million yen)

70,25970,70875,784

77,327

Net Assets(million yen)

51,79756,081

61,47063,701Equity Ratio

(%)

73.7

79.3

81.1

82.4

ROE

(%)

8.7

9.3

10.1

10.0

ROA

(%)

6.5

7.1

8.1

8.2

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

4,058

4,835

4,804

4,386

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

-1,511-4,807-690-2,365Net Cash Provided by (Used In) Financing Activities (million yen)

-1,370-1,503-1,801-2,152

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

16,277

14,803

17,127

16,981

Basic Earnings per Share

(yen)

80.79

93.05

110.11116.43

Net Assets per Share(yen)

962.22

1,041.82

1,141.93

1,183.40

Dividend per Share

(yen)

27.50

32.00

39.00

43.50

Dividend Payout Ratio

(%)

34.0

34.4

35.4

37.4

Total Return Ratio

(%)

34.0

34.4

35.4

37.4

PER

(times)

24.2

24.9

23.2

19.9

PBR

(times)

2.03

2.22

2.24

1.96

755

744

752

759

Gross Profit Margin

Operating Profit Margin

Number of Employees

63

FY2014

SHO-BOND 2023 Integrated ReportAbout Us

Management Strategies

Business Strategies

Business Foundation

Company Information
11-Year Data

FY2017FY2018FY2019FY2020

FY2021

FY2022

FY202360,53667,85974,38084,43674,54896,06577,94553,25059,68260,824

67,59080,065

81,19383,924

13,797

14,781

16,082

17,31920,782

22,55523,470

25.9

24.8

26.4

25.6

26.0

27.8

28.0

3,637

4,000

4,354

4,389

5,050

5,288

5,346

10,16010,781

11,727

12,93015,732

17,267

18,124

19.1

18.1

19.3

19.1

19.6

21.3

21.6

10,516

11,187

12,165

13,507

16,302

17,66918,637

6,997

7,301

8,080

9,005

11,34012,366

12,887

84,26690,976

94,595

102,667

109,807

117,423

122,280

69,24374,096

78,10883,61790,96094,247

98,076

82.2

81.4

82.5

81.4

82.8

80.2

80.2

10.5

10.2

10.6

11.1

13.0

13.4

13.4

8.7

8.3

8.7

9.1

10.7

10.9

10.8

7,484

1,734

4,550

4,540

2,737

7,834

3,751

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

16,778-2,638

5,315

1,693

-2,606-3,147-3,312-4,179-4,485-9,177-9,894

18,073

14,594

10,25627,39523,012

27,023

22,587130.00135.64150.11167.30210.68231.06243.53

1,286.36

1,376.52

1,450.27

1,553.10

1,688.64

1,768.42

1,862.41

52.00

62.50

67.50

79.50

105.50118.00127.00

40.0

46.1

45.0

47.5

50.1

51.1

52.1

40.0

46.1

45.0

47.5

50.1

75.1

79.1

21.8

28.4

25.3

28.5

22.0

25.8

23.5

2.20

2.80

2.62

3.07

2.74

3.38

3.07

788

819

855

881

916

951

985

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

64

Company Profile/Stock Information (As of June 30, 2023)

Major Bases
Domestic● SHO-BOND Holdings Co., Ltd.
● SHO-BOND CORPORATIONHead Office
Shutoken Hokuriku Regional Office
Technical Research Institute	  Tokyo Branch
Kita-Nihon Regional Office	  Chiba Branch
Hokkaido Branch	  Kanto Branch
Kita-Tohoku Branch	  Hokuriku Branch
Minami-Tohoku Branch● SHO-BOND MATERIAL CO., LTD.

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 & MIT Infrastructure Maintenance Corporation

Head Office/Kawagoe FactoryTokyo Branch/Overseas Business Department
Osaka Branch
Misato Factory● 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.

65

SHO-BOND 2023 Integrated Report

SHO-BOND CORPORATION

About Us

Management Strategies

Business Strategies

Business Foundation

Company Information
Company Profile/Stock Information

Company Profile

Stock Information

Company name

SHO-BOND Holdings Co., Ltd.

Total number of shares authorized to be issued

120,000,000 shares

Date of establishment

January 4, 2008

Total number of issued shares

56,745,180 shares

Head office

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

Stock exchange listing

Tokyo Stock Exchange Prime

TEL+81-3-6892-7101 (Representative)

Securities code

1414

Number of shareholders

11,869President andRepresentative Director

Tatsuya Kishimoto

Accounting period

June 30, each year

Amount of capital¥5.0 billion

Annual general meeting of shareholders

September each year

Business

Establishment of corporate strategies, management,
and related operation of businesses of subsidiaries
engaged in civil engineering and construction work
contracting, etc.

Shareholder registryadministrator
Account management
institution for specific accounts

Mitsubishi UFJ Trust andBanking Corporation

Number of employees

985 (consolidated basis)

Principal consolidated
subsidiaries

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

Status of Major Shareholders

Shareholders Ratio (Percentage of Owned Shares)

Shareholder name

Number of shares(Thousand shares)

Shareholding
ratio (%)

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

6,548

12.45

SSBTC CLIENT OMNIBUS ACCOUNT

6,118

11.63

General Incorporated Foundation Ueda
Memorial Foundation

5,408

10.28

Custody Bank of Japan, Ltd. (Trust account)

3,826

7.27

MUFG Bank, Ltd.

2,658

5.05

The Dai-ichi Life Insurance Company, Limited

2,420

4.60

NORTHERN TRUST CO. (AVFC) RE FIDELITY FUNDS

1,874

3.56

Meiji Yasuda Life Insurance Company

1,584

3.01

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

1,456

2.76

612

1.16

Sompo Japan Insurance Inc.

Treasury shares

7.25%

Individuals
and others

Financial
institutions

9.20%

38.26%

Securities firms

Foreign corporations
and others

28.58%

Other corporations

1.45%

15.26%

Note: Treasury shares (4,116,264 shares) are excluded in the calculation of the shareholding ratio.

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

SHO-BOND official channel (Japanese version only)66

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/