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The COMSYS Group’s Management Philosophy

At the COMSYS Group, we are united as a Group and strive for strong partnership and collaboration
with diverse external players in achieving our management philosophy.

We will build a company that customers continue to choose throughthe construction of diverse infrastructure that carries our era forward.
We will contribute to our country and local communities bybuilding social infrastructure that supports affluent lifestyles.
We will continue with unrelenting reformin our aim to further increase corporate value.

COMSYS GROUP REPORT 2020
01

The COMSYS Group’s
Management Philosophy

02

Editorial Policy
Scope of Report
Period Covered
Reference Guidelines
Cautionary Statement
Regarding Forecasts

01

COMSYS GROUP REPORT 2020

OutlineStrategy

03

About the COMSYS Group

11

Message from Top Management

05

The COMSYS Group’s Strengths

19

Feature Article

07

Group Diversity and Management
Structure

09

Business Overview

Responding as a Group to
Changing Industry Needs
Brought about by 5G

◆ Editorial Policy◆ Period Covered

The embodiment of the Group’s basic philosophy and businessphilosophy requires an integrated approach that utilizes bothfinancial and non-financial capital, as well as integrated corporate activities based on rapid and accurate decision-making.
Furthermore, to gain the understanding of stakeholders, wefeel that it is important to ensure sincere disclosure of information related to those integrated approaches and corporate
activities. This Group Report, the first for COMSYS Holdings,
has been subject to multi-faceted and integrated editing covering all aspects of the COMSYS Group’s business activities,
including not only financial information but also environmental,social, and governance (ESG) aspects, based on the assumption that investors are the main readers. We will fulfill our
obligations for accountability by disclosing appropriate information at the appropriate time through this Report, as well asother media, including the Group’s corporate website, Annual
Securities Report, and business reports.

April 1, 2019 to March 31, 2020 (FY2019)(In some cases, information related to activities in FY2020 isalso included)◆ Scope of Report
To the greatest extent possible, this report covers COMSYSGroup companies in Japan included in consolidated settlementsof accounts, but the scope of the report differs depending on
the items in question.

◆ Reference Guidelines●GRI Sustainability Reporting Standards (2016)●International Integrated Reporting Council (IIRC);
International Integrated Reporting Framework●Ministry of Economy, Trade and Industry; Guidance forCollaborative Value Creation◆ Cautionary Statement Regarding Forecasts
This report includes plans and strategies related to the future of
COMSYS Holdings and its affiliate companies, as well as information on expectations and forecasts of business performance.
These descriptions or predictions are based not on past facts
but on the company’s beliefs and hypotheses, formed frominformation that is available when the report was written. They
also include risks and uncertainties with regard to economic
trends, personal consumption, market demand, taxation systems, and other systems. As such, actual future performance
may differ from the forecasts contained herein.
CONTENTS

Business Base

21

23
25

Environmental, Social, and Governance (ESG)

About COMSYS

Segment Information

27

ESG

39

Telecommunications Carrier Business(NTT Engineering Business / NCC
Engineering Business)

29

Financial and
Non-Financial Highlights

Pursuing More Efficient and Sincere
Corporate Activities

41

Status of the Company’s
Shares42

Corporate Information

IT Solutions BusinessSocial System-Related Business

35

Cultivating Human Resources

37

Promoting Safety and Quality

38

Helping to Build a Sustainable Society02About the COMSYS Group◆ History (The COMSYS Group’s Path)
Since its establishment nearly 70 years ago, the COMSYSGroup has evolved with telecommunications technologies andgrown with the telecommunications industry as a construction
company that supports Japan’s telecommunications infrastructures. Using the skills and experience that it has cultivatedthrough the construction of these infrastructures, today’s
COMSYS Group undertakes a critical mission of contributing to
infrastructures that support society, as a comprehensive engineering company that focuses on four business segments:
NTT Engineering Business: Builds telecommunications infrastructures for the NTT Group;
NCC* Engineering Business: Builds telecommunications infrastructures for KDDI, SoftBank, Rakuten Mobile, and other telecommunications carriers;
IT Solutions Business: Provides IT solutions and develops software for government agencies and private-sector companies;
andSocial System-Related Business: Handles electrical and telecommunications construction for government agencies andprivate-sector companies, urban environment enhancement
construction, and renewable energy facilities construction forgovernment agencies and private-sector companies.
Following the deregulation of telecommunications in 1985,
and amid the reorganization of the NTT Group and the entryof new players into the telecommunications business, the
COMSYS Group expanded the scale of its business over thecourse of 20 years through management integration with telecommunications construction companies throughout Japan.

Once investments in domestic telecommunications infrastructures leveled off, telecommunications carriers—COMSYS’s
primary customers—began providing not only communication
services, but also financial services and various content. In
response, the COMSYS Group and other telecommunications
construction companies need to expand beyond existing business frameworks, undertaking business reforms and expanding
their scope of operations to compete across the boundaries ofindustries.
Against this backdrop, COMSYS Holdings was establishedin September 2003 to promote management reforms aimed
at strengthening business foundations and improving efficiency. The company strengthened management as a prime
construction contractor and improved costs through a variety
of initiatives at its business companies, including the carefulselection of business fields, optimization of staff, consolidationof common operations, restructuring of business operations
in regional businesses (reorganization of consolidated subsidiaries), clarifying the division of roles with partner companies,
and reviewing the structure of multilayer subcontracting. From
2014, in addition to cost improvements through structuralreforms, the Group expanded its top line by positioning the IT
Solutions and the Social System-Related businesses as growthbusinesses. In October 2018, the Group undertook new mergers with NDS, SYSKEN, and Hokuriku Denwa Kouji, and iscurrently working to further expand its business and increase
corporate value based on its medium-term vision, “COMSYS
Vision Next Stage 2023.”*NCC = New common carrier

Corporate History

Oct. 2010

Nippon COMSYS

Sep. 2003

Est. 1951; listed on TSE First Section

TSUKEN
Est. 1951; listed on TSE Second Section

Consolidation with TSUKEN,
based on an exchange of shares

SANWA ELEC

Oct. 2018(Currently SANWA COMSYS Engineering)
Est. 1947; listed on TSE First Section

HIGASHI NIHON System
Construction(Currently TOSYS)
Est. 1960

COMSYS Holdings establishedthrough a share transfer
among three companies

Consolidation with NDS, SYSKEN,
and Hokuriku Denwa Kouji,
based on an exchange of shares
NDS
Est. 1954
Listed on TSE First Section and
NSE First Section

Oct. 2003

COMSYS Shared Services

SYSKEN

Est. 2003(Provides outsourcing services to the COMSYS Group)

Est. 1954
Listed on TSE Second Section andFukuoka Stock Exchange

Apr. 2009COMSYS JOHO SYSTEM
Est. 2009(Information systems business spun off from
Nippon COMSYS)

Notes: Nippon COMSYS and SANWA ELEC were delisted due to the listing of COMSYS Holdings.
TSUKEN, NDS, SYSKEN, and Hokuriku Denwa Kouji were delisted due to the consolidation with COMSYS Holdings.

03

COMSYS GROUP REPORT 2020

Hokuriku Denwa Kouji
Est. 1949; listed on TSE Second Section

Outline

Strategy

Business Base

ESG

About Us

◆ Business Model (Current COMSYS Group)
The core of the COMSYS Group’s business is the telecommunications construction business targeting telecommunications carriers. As a prime construction contractor under
the Construction Business Act, in order to build the facilities
required by customers, COMSYS Group companies undertake
all aspects of project management, including the creationof construction plans, design and quotations, securing theresources required for construction, compliance with laws andregulations, assigning specialized engineers, supervising construction work and managing progress, guaranteeing safety
and quality, and creating drawings and other documents. On
the front lines of construction, COMSYS Group employeessupervise and direct these operations, and complete the project
along with partner companies that handle on-site work.
From the customer’s perspective, outsourcing project management through a prime construction contractor offers theadvantages of reducing the work required for admin and contract-related tasks, and securing stable quality and the required
workforce. This arrangement is highly beneficial for partnercompanies as well, since the prime contractor takes on theburden of sales and negotiations with the telecommunications carriers placing the orders, secures specialized engineers,

provides the construction vehicles, contract systems, progress
management systems, and other resources required for construction, and secures the capital necessary to cover material
costs and personnel expenses. In this way, primary construction
contractors contribute to increasing efficiency and added value
for the industry as a whole, much the same way as wholesalers
in the distribution industry.
The COMSYS Group participates in construction projects as aprime contractor and also as a subcontractor, handling not only
the construction of facilities for telecommunications carriers,
but also civil engineering and the construction of electrical andtelecommunications facilities for government agencies and private-sector customers. Nevertheless, the COMSYS Group plays
essentially the same role in the NTT Engineering Business, the
NCC Engineering Business, the IT Solutions Business*, and theSocial System-Related Business.

*Even in the IT Solutions Business, the Group undertakes many projects involving construction processes such as installations and wiring for network devices and servers.
The Software Development Business is not a construction business as defined under
the Construction Business Act, but the prime contractor or subcontractor relationship isestablished with customers and partner companies just as in the case of the construction
business.

Operating Segments
Segment

Description of BusinessTelecommunications Carrier Business

Construction for Telecommunications CarriersNTT
Engineering
Business

COMSYS undertakes telecommunications construction to build wired
and wireless networks for the NTT
Group. In recent years, COMSYS
has also handled facility operations(maintenance and troubleshooting)in some areas.

Access construction

NCC
Engineering
Business
Network construction

Mobile facilities construction

Total Solutions in the IT Segment
IT Solutions Business
Server construction, Call-center maintenance, Data center construction,
Network integration, System integration, Software development

Urban Infrastructure Construction, Including Electrical and Civil EngineeringSocialSystem-Related
Business
Electrical facility construction, solar/wind power facility construction,
civil engineering for telecommunications, gas and water supply pipe construction

COMSYS undertakes telecommunications construction to build wired
and wireless networks for telecommunications carriers outside of the
NTT Group, as well as construction
involving cable TV and related
facilities.
W ith a nationwide execution
structure and many highly skilled
engineers, COMSYS provides total
IT solution services that are ideallysuited to the customers’ operations, from project proposals tomaintenance services.
COMSYS undertakes business
related to the environment andecosystems, including water supply
and sewerage construction and thedesign and construction of electrical and telecommunications facilities, as well as the constructionof gas-related facilities and solar
power / biomass power generation
facilities.

About the COMSYS Group04

The COMSYS Group’s Strengths
Here, we will explain the strengths of the COMSYS Group interms of positioning, resources, intangible capital, and corporate culture. By demonstrating core competence in these areas,
we will contribute to resolving a variety of issues faced by customers and society.
Each time telecommunications technologies evolve, telecommunications construction companies enjoy the benefitsof increased demand for the installation and replacement ofcommunications devices, and for the installation of mobile
phone base stations. Business continues to be brisk as communications carriers invest actively in fifth-generation mobile
communication systems (5G). Meanwhile, R&D targeting 6G
is already underway, and the implementation of 6G systems is
expected to give rise to new demand for the construction ofbase stations and other facilities. Competition in the telecommunications construction industry is limited due to significant
barriers to entry such as legal compliance and the maintenanceof resources, so the COMSYS Group is in a position to benefit
from increasingly advanced telecommunications technologies.
Stable growth is also expected in the IT Solutions Business andSocial System-Related Business fields, which have grown as aresult of skills cultivated through the telecommunications construction business.
COMSYS Group employees include the technical supervisors and licensed engineers required in construction work, in
addition to many employees with advanced qualifications as
professionals in cutting-edge technologies in the IT Solutions
Business. The Group has a nationwide network comprisingsales bases, construction bases, and partner companies toenable end-to-end execution of even nationwide construction
and maintenance projects, or projects that cut across multiple
engineering fields. For example, in the construction of solar
power plants, COMSYS has earned the trust of customers byundertaking all aspects of project operations itself, including
civil engineering and construction related to foundations andframes, electrical construction related to power generation
facilities, and telecommunications construction related to

FY2008FY2009FY2010controls and monitoring. In the IT Solutions Business as well,
COMSYS has built alliances with diverse hardware and software vendors, and so is able to provide customers with onestop solutions to a variety of issues.
Another source of COMSYS’s strength is the trust-based
relationships that it has built up over many years with the NTT
Group and other telecommunications carriers. The COMSYSGroup has an extensive track record of meeting the needs
and expectations of its customers. Its quality standards andengineering proficiency in the field of telecommunications
infrastructures has led to greater trust in the COMSYS Group
in other fields as well. COMSYS was a step ahead of competitors in consolidations with other companies in the industry and
M&A aimed at expanding business, providing an edge in establishing the expertise and systems required to generate consolidation synergy and in cost reduction initiatives. As a result,during the fiscal year ended March 2020, the COMSYS Groupboasted the highest operating margin of the three major telecommunications construction companies, at 6.9%.
One important factor in building trust-based relationships
with customers and partners is the determination of COMSYSGroup employees to “follow through to completion.” Amida corporate culture that could be seen as either “serious” or“stubborn,” depending on how you look at it, the stance ofcommitment to safety, quality, delivery schedules, and costs
forms the foundations of relationships with customers andpartners that have lasted for many years. Furthermore, a soundmanagement stance of avoiding excessive risk is reflected in
the financial structures that have proven more stable thanthose of competitors, and in a cautious stance with regard torisky overseas expansion.
Leveraging these strengths, we have implemented a variety
of initiatives over the past 10 years aimed at expanding business scale and increasing productivity. The COMSYS Group’s
activities have been recognized by financial markets as well, as
the Group’s market capitalization has more than tripled since
establishment.

FY2011FY2012FY2013FY20COMSYS WAY

Group Innovation 2010

Group innovation

Maintain and Deepen Structural Reforms● Exceed ￥20 billion in operating● Spin oﬀ information business; establish COMSYS JOHO SYSTEM● Build “COMSTAR” common platform● Standardize workﬂow● Merger of mobile and access business subsidiaries● Development of construction IT platforms● Introduction of consolidated tax payment system● Clarify roles with partner companies (two-tier structure)● Migrate to nationwide construction structure for network business● Group rollout of centralized purchasing● Institutio● Begin op● Consolid● Reduce Group-wide staﬀ by 500● Suitability evaluation of software assets● Sell oﬀ idle assets● Consolidation with TSUKEN● Reorganization of mobile andnetwork businesses

6.7
ROE（％）

236.1
120.2
Year-end market cap(Billions of yen)

05

COMSYS GROUP REPORT 2020

132.1

122.7

130.7

166.7

216

Outline

Strategy

Business Base

ESG

About Us

The COMSYS Group’s Basic Strategies

Intensifying competition fromnew players

Intensifying competition
Sluggish labor productivity

Shift to non-telecommunications
business

MaintenanceOutsourcing

Companies
Government agencies
Local governments

Telecommunications
carriers
Fully migrate
fixednetworks
to IP

Improve disastermeasures andnetwork reliability

Roll-out
5G networks

Industry
innovations
throughlocal 5G

Cloud migration
Promote DX

Expand PFI/
concession
busines

Expandintroduction ofrenewableenergyWorkstylereforms

One-stop response to social issues
and business opportunities with One Comsys

Fixed-line

Mobiletelecommunications businesstelecommunications business

Positionto enjoy the benefits oftechnology innovations

Social System-Related
Busines

IT Solutions Business
Trust relationships
with customers and partners(intangible capital)

Abundance of engineers(resources)

Robust and sincere
corporate culture

The COMSYS Group’s core competencies
We are aware that the Group’s weaknesses are “a businessstructure that tends to be influenced by trends in telecommunications carriers’ capital expenditures,” and “a corporate culturethat lacks flexibility and speed.” Capex at telecommunications
carriers is expected to decrease steadily in the medium tolong term. In this backdrop, customers continue to press the
COMSYS Group to reduce costs. By increasing the ratio of business targeting customers other than telecommunications carri-

014

FY2015FY2016FY2017COMSYS WAY α

FY2018● Surpass ￥30 billion in operating proﬁt

onalize nationwide staﬀ ﬂexibility
peration of construction IT platform
dation with Ecosystem Japan

6.7

Results of Structural Reforms

COMSYS VISION 20202010: Evolve structural reforms and increase the top line

g proﬁters, the COMSYS Group will break away from its dependency
on these customers, at the same time introducing new systems
to increase work efficiency. Meanwhile, through initiatives
designed to promote diversity and expand activities targetingnew business, we will gradually bring about a transformationin the corporate culture.

● Consolidation with Tokyo Hoso Kogyo● Aggregation of Access backyard operations● Aggregation of operation centers● Promotion of diversity and more active
participation by female employees

FY2019COMSYS Vision Next Stage 2023
● Record sales and operating proﬁt● Consolidation with NDS, SYSKEN, and Hokuriku Denwa Kouji

10.6● Resolve overlap in construction areas● Consolidate subsidiaries● Begin developing integrated IT platform

8.6
400.4

245.0

280.4

425.8

392.4

● Consolidation with Kando● Introduction of business company(virtual company) system● Commencement of workstyle innovations

The COMSYS Group’s Strengths

06Group Diversity and Management Structure
The COMSYS Group is a comprehensive engineering company
that is involved in a wide range of activities, from telecommunications construction to the maintenance of urban environments, ICT related construction, and the renewable energy
business, including solar power generation. Up to now, however, the company has been especially active in the reorganization of the telecommunications construction industry.
The COMSYS Group has a holding company structure comprising eight supervisory business companies handling business
operations, and Comsys Shared Services Corporation, whichhandles shared services for the Group, all under the umbrellaof COMSYS Holdings, which is a pure holding company.
The holding company format was adopted because it offers
numerous advantages; for example, there are minimal barriers
to participation in the Group, allowing rapid consolidations;management structures are not limited by the profits of any
one division; authority can be easily delegated to Group companies; and subsidiaries can be consolidated flexibly. Up tonow, the Group has generated maximum synergy under thisholding company structure, for example through numerous
consolidations, the integration of subsidiaries, and businessreorganizations. The reorganization of the telecommunications
construction industry has leveled off, but COMSYS intends toundertake M&A in growth businesses in the future, and we will
maintain the holding company structure for the foreseeable
future.
A holding company structure normally comprises a group ofbusinesses in different segments, but in the COMSYS Group,
almost all of the supervisory business companies are involvedin the telecommunications construction business. This is soeach company can enjoy the benefits of optimum personnel
and business structures in each region, leveraging the sales
base and brand strength cultivated in that region. On theother hand, one of the weaknesses of this framework is thatthe strength of resources is spread out when those companies
undertake their respective businesses in each region. For example, in the Tokyo area there is a growing demand surroundingsocial infrastructures, but when resources are lacking at a company located in Tokyo, there is a risk that it will be difficult toflexibly relocate engineers from outlying regions. Also, companies divide up resources among local businesses in each region,
so they do not have the abundant resources required to takeon more profitable large-scale projects.
To overcome these limitations and leverage the advantagesof a regional company, the COMSYS Group has strengthened
Group collaboration across companies in each business segment. Particularly in the IT Solutions Business and the Social
System-Related Business, which are growth businesses, it has
adopted a “virtual company” framework to supervise the businesses of each company across boundaries of organizations.
The general manager of Nippon COMSYS serves as the headof this virtual company, overseeing the integrated operationof businesses that span multiple organizations. For example,
in the Social System-Related Business, the resources of various
companies were combined to secure a project involving theconstruction of a mega-solar power plant, the largest in thehistory of the COMSYS Group. We will continue to pursue
increased sales and productivity by promoting this shift toward
management that strives for overall Group optimization in eachbusiness.

3

Group Collaboration Framework
Main businesscompany groups

6

2
1
4

5

NTT
Engineering
Business

NCC*
Engineering
BusinessIT
Solutions
Business

SocialSystem-Related
BusinessGroupcollaborationGroup
collaboration

Virtual company
systemVirtual company
system

●

●

●

●

❶

Nippon COMSYS Group❶SANWA COMSYSEngineering Group❷TOSYS Group

●

●

●

❸

TSUKEN Group

●

●

●

❹

NDS Group

●

●

●

●

❺

SYSKEN Group

●

●

●

●

❻

Hokuriku Denwa Kouji
Group

●

●

●

●

❶

COMSYS JOHO SYSTEM
Group

●
●

●
*NCC: New common carrier

07

COMSYS GROUP REPORT 2020

Outline

Strategy

Business Base

ESG

In 2018, the COMSYS Group merged with three companies:
NDS, SYSKEN, and Hokuriku Denwa Kouji. To maximize synergies from this consolidation, it is essential to put in place
an optimum business operation structure for the Group as awhole. The COMSYS Group has implemented a radical structural reform and a digital transformation to accelerate theoverall optimization of management.

◆ Pursuing Overall Optimization in the
COMSYS GroupUp to now, each company maintained its own full set of functions and bases, and promoted individual company optimization. Through radical structural reforms, this individual optimization will be transformed into overall optimization for the
COMSYS Group. To switch to optimum business structures andapproaches from a groupwide perspective, COMSYS has eliminated overlap in areas of operation and consolidated its subsidiaries, but moving forward, it will also centralize sales functions
and other shared functions. The various business companies
will leverage regional brands and further refine construction
capabilities to specialize in construction suited to each region.

About Us

Generating Consolidation Synergies

Radical Structural Reforms in Operations
Head office functions

Head office functions

Tokyo sales office

Tokyo sales office

Head office functions
Tokyo sales officeIT/social system-related

IT/social system-related

IT/social system-related

NTT businessNTT businessNTT business

Co. A

Co. B

Co. C

● Each company has a full set of functions,with redundant bases.
● Each company conducts sales activities andsecures projects separately.

Shift from individual optimization
to overall optimization

Centralize sales functions and locations
Integrated operation through a virtual company system
Aggregate backyard operations
Business operations that leverage local brands and wage systems

Co. A

Co. B

Co. C

● Share companywide resources and focus on
more proﬁtable projects.
● Local companies specialize in construction in each region.

◆ Transforming Operations by
Promoting Digital Transformation
To promote digital transformation (DX), the COMSYS Grouphas for some time been adopting information technologies
in the front lines and integrating its construction systems toincrease operating efficiency and improve the managementof safety and quality. These activities will be further refined toachieve a fundamental transformation to a business model thatmakes full use of IT and other digital technologies.
We have established a DX Promotion Department to establish
and put into practice the environment required to pursue DX,
thereby transforming operations and enhancing value provided
to customers. Specifically, we will analyze a variety of data generated through the use of IT, and establish data-driven methods
for transforming operations based on the results of those analyses. The insights derived from these analyses will be appliedin all businesses to enhance the value provided to customers,
and eventually, to support customers’ digital transformations as
well.

Support customers’ DX
Support operationaltransformations
Strengthen and enhance customer
relationships
Improve quality and delivery times

Support value
creation
Support new value creation
for customers

Implement COMSYS DX
Transform operations

Create valueStandardize and automate
operations

Enhance value provided tocustomers

Data-driven management

Transform business model

Enhance COMSYS DX environment
Corporatetransformation
Transformations in corporate culture,organizations, and processes

IT applications
IT platform integration
Strengthened security

Group Diversity and Management Structure08

Business Overview
In the telecommunications segment in FY2019, networks have
evolved to accommodate rapidly increasing communication
traffic, and fifth-generation mobile communication (5G), thenext generation of communication standards, is expected to
be a catalyst for industry innovations that will quickly lead to awave of new infrastructure projects. Both public and privatesector fields are expected to see growth in investments; forexample, social infrastructure investments targeting “national
resilience” in the face of intensifying natural disasters (disasterprevention and mitigation measures) and renewable energy
initiatives, as well as investments in ICT incorporating cloudtechnologies, IoT, and AI.
The COMSYS Group’s core business is the construction of
telecommunications platforms for telecommunications carriers, and in FY2019, the Telecommunications Carrier Business(NTT Engineering and NCC Engineering Businesses) accounted
for about 53% of total revenues. At the same time, in orderto prevent management from being overly influenced by thesteady decline in the telecommunications construction market and capital investments by telecommunications carriers,
COMSYS has expanded revenues in non-carrier businesses (ITSolutions and Social System-Related Businesses), which are
positioned as growth businesses, to account for 47% of thetotal. In FY2019, we achieved results far exceeding targets: inOrders Received / Net Sales (Consolidated)
FY2019Orders Received (Millions of yen)
Net Sales (Millions of yen)

FY2018590,718
560,882

the Telecommunications Carrier Business, the Group received
orders for construction of 5G infrastructures, and in growthbusinesses, we secured large-scale system construction projects in collaboration with alliance partners in the IT Solutions
Business, and secured a project in the Social System-Related
Business involving the construction of a mega solar power
plant in Kyushu that combines the construction capabilities of
the COMSYS Group.
Furthermore, to generate synergies from the consolidation
with NDS, SYSKEN, and Hokuriku Denwa Kouji in October
2018, we initiated an integration of consolidated subsidiaries, areview of sales and construction structures, and an integrationof operation systems.
As a result of the above initiatives, consolidated business performance in FY2019 improved substantially over the previous
year, with new orders valued at ¥590.71 billion (up 16.8% year
on year) and revenues of ¥560.88 billion (up 16.4%). In terms
of profits and losses, operating profit was ¥38.95 billion (up10.5%) and net income attributable to owners of the parent
company was ¥25.99 billion (down 7.2%). The decrease in net
income attributable to owners of parent was due in part to theeffects of gains on bargain purchases arising during the consolidation, posted as extraordinary income in the previous year.

Sales by Segment

NTT Engineering Business

505,558
481,783
402,229
380,024

FY2017

44.7%
Net Sales(FY2019)560,882

Operating Profit / Operating Margin (Consolidated)
FY2019Operating Profit (Millions of yen)

6.9

FY201838,953

17.5%
30.0%

7.3
8.0

30,347

Net income / Current Profit Margin (Consolidated) Attributable to Owners of Parent
FY2019Current Profit (Millions of yen)

4.6

25,994

Dividends per Share(Yen)

FY2019Current Profit Margin (%)

28,0185.8FY2017

5.4

20,390Earnings per Share (EPS)FY2018FY2017FY2019FY2018FY2017COMSYS GROUP REPORT 2020

75
60
50

Return on Equity (ROE)
(Yen)

09

IT Solutions BusinessSocial System-Related and Other

Operating Margin (%)

35,267FY2017FY2018(Millions of yen)

NCC Engineering Business

7.8%

202.97230.10178.64(%)

FY2019FY2018FY2017

8.6
10.6
9.4

Outline

Strategy

NTT Engineering Business
Both orders received and net sales increased substantially due to the effectsof consolidation, as well as to strong trends in orders received in the Accessbusiness and the startup of new orders received in 5G-related business in the
Mobile business. In FY2019, orders received were valued at ¥255.4 billion(+¥32.5 billion year on year; +¥22.9 billion versus the forecast), and net sales
were ¥250.4 billion (+¥23.6 billion year on year; +¥3.9 billion versus theforecast).
Business performance is dramatically influenced by the status of the NTT
Group’s capital expenditures. Investments in 5G by NTT DOCOMO are
expected to continue growing, but that growth is likely to bring with it anequivalent reduction in investments related to 4G, so the mobile businessis expected to see either no change or else a continued slight increase.
Nevertheless, there is a possibility that work in the construction of networks
and base stations could increase more than expected, in part as a result ofgovernment initiatives urging investments in 5G. On the other hand, thefixed-line business is expected to see a continued decrease in capital expenditures, particularly in the Access business, so given the limited potential for
growth in this business, a key issue will be finding ways of improving productivity and increasing profits.

NCC Engineering Business
Orders received in SoftBank business have been strong and new orders
from Rakuten Mobile have begun as well, but orders received from KDDI
have fallen off substantially due to the effects of selective investments in 4G
facilities, so the end result was a slight decrease in orders received, and anincrease in net sales. In FY2019, orders received were valued at ¥43.4 billion(minus ¥3.1 billion year on year; minus ¥4.5 billion versus the forecast), andnet sales were ¥43.7 billion (+¥0.6 billion year on year; minus¥0.7 billion
versus the forecast).
Demand is expected to increase as a result of the new entry by Rakuten
Mobile and investments by SoftBank in more advanced networks andincreasing network reliability. KDDI has also announced that it will installmore than 50,000 5G base stations by the end of March 2022. We expectthat more new base stations will be established by infrastructure sharing
vendors, and we will strive to expand our share in this market as well.

Business Base

About Us

[NTT Engineering Business] Orders Received / Net Sales

FY2019

255.4
250.4

Orders Received (¥billion)
Net Sales (¥billion)

FY2018

222.9
226.8

FY2017

184.5
185.9

[NCC Engineering Business] Orders Received / Net Sales

FY201943.4
43.7

Orders Received (¥billion)
Net Sales (¥billion)

FY201846.5
43.0

FY201739.2
35.7[IT Solutions Business] Orders Received / Net Sales

FY2019IT Solutions Business
Both orders received and net sales increased substantially due to the effectsof the consolidation and securing large-scale projects in the Corporate
Solutions and Software Development Businesses. In FY2019, orders received
were valued at ¥100.8 billion (+¥19.9 billion year on year; +¥13.8 billion
versus the forecast), and net sales were ¥98.1 billion (+¥23.0 billion year on
year; +¥15.6 billion versus the forecast).
We expect to see a steady increase in ICT investments overall, including AI,
IoT, and the cloud. The proliferation of teleworking and videoconferencing is
expected to bring about an increase in inquiries targeting security measuresand migration to cloud environments, and we will also work with partners
to secure projects related to the “GIGA School” concept put forward by the
Ministry of Education, Culture, Sports, Science and Technology.

ESG

Orders Received (¥billion)
Net Sales (¥billion)

1,00.898.1

FY201880.9
75.0

FY201760.4
59.0[Social System-Related and Other] Orders Received / Net Sales

Social System-Related Business
Both orders received and net sales increased substantially due to the effectsof the consolidation and having secured a large-scale solar power generation
project, as well as steady progress in abundant construction projects alreadysecured. In FY2019, orders received were valued at ¥190.9 billion (+¥35.8
billion year on year; +¥21.4 billion versus the forecast), and net sales were¥168.5 billion (+¥31.7 billion year on year; +¥2.0 billion versus the forecast).
Expectations continue for vigorous demand supported by national resilience measures and demand for renovations in aging infrastructures. At thesame time, however, we expect to see a rapid decline in demand for theconstruction of solar power plants, which has driven growth in this segment
up to now, so there is an urgent need to tap into and cultivate business tomake up for the shortfall in the solar power field.

FY2019Orders Received (Millions of yen)
Net Sales (Millions of yen)

1,909
1,685

FY2018

1,550
1,367

FY2017

1,180
992

Business Overview

10Message from Top Management◆ The Ideal Form of the COMSYS Group

Smart Infrastructure for the Future
The COMSYS Group has changed dramatically since its foundation, as a result of flexibly evolving its business operations
in keeping up with changes in technologies, society, and customer needs.
The form of telecommunications is constantly developing.
Just as the popularization of the Internet and smartphones has
substantially changed our life and work, developments in communications technologies will no doubt bring major changes to
our world.
For example, fifth-generation telecommunications systems(5G), for which the construction of facilities has now begun
in earnest, will further increase the speed of communications,while reducing latency. Advanced ICT, including AI and thesenext-generation communication technologies, will bring abouta new Industrial Revolution in the Japanese economy, which
has long suffered from poor labor productivity, and is expected
to contribute to greatly reducing costs and increasing added
value for companies.
The COMSYS Group creates and supports the communication infrastructures that will serve as the foundations for thisIndustrial Revolution, and at the same time will contribute to

Takashi Kagaya
President and Representative Director
COMSYS Holdings Corporation

resolving a variety of modern social issues, through a wide
range of activities, including disaster prevention and recovery
in communication facilities that have been damaged by natural disasters; repairs and renovations in aging water supply /sewage pipes and expressway facilities; disaster prevention andmitigation for National Resilience measures; the constructionof renewable energy power plants; and the construction ofadvanced networks and information processing platforms.
To continue embodying our Group principle of “contributing
to society through the creation of infrastructures,” we must
increase our value as a company and remain customers’ company of choice. This strong determination is an integral part ofour management philosophy.
Making this ideal a reality means never rejecting change andnever holding fast to established workstyles. The only sure
way of realizing the management philosophy is to constantly
change and evolve.
Up to now, we have worked to improve productivity andquality by introducing ICT on construction sites. Even now, we
are always actively studying ways of using new technologies

11

COMSYS GROUP REPORT 2020

Outline

Strategy

Business Base

ESG

About Us

such as AI, IoT, and drones in our work. This may be an exag-

facilities. Through this broad range of operations, the COMSYS

geration, but 50 years from now, work on construction sites

Group has fostered diverse engineers and acquired expertise inmight be done by robots equipped with AI functions rather

IT and networks in keeping with the evolution of telecommu-

than by humans. And if that happens, the core of the COMSYS

nications technologies. In part as a result of this background,Group’s work might be developing and managing those robots.

and to strengthen relationships with specific customers, many

Today’s organizations and workstyles are no more than aof the COMSYS Group’s past presidents and top management

method for achieving a goal. Technologies and the world

executives formerly worked in the NTT Group.

around us are constantly changing, so we must constantly

Based on this history, although the COMSYS Group is are-examine these methods, and sometimes dispense with thoseprivate-sector company, it has been said that the Group hasthat are no longer needed. We will embody our management

a rigid corporate culture. COMSYS values stability, reliability,

philosophy by steadily following through on this approach.

and employees emphasize teamwork, undertaking tasks with

We created a new slogan, “Smart Infrastructure for thea strong sense of responsibility. Leveraging the strength of thisFuture,” to illustrate this ideal form of the COMSYS Group. As

corporate culture, we have earned the trust of customers andsociety faces a variety of new challenges, we have seen an eventhe market in general.

greater diversification of the needs and challenges of telecom-

At times, however, this dependability can also engendermunications carriers’ customers and of corporate and public

weaknesses; for example, in a lack of flexibility or imagina-

customers. Using the core competencies that we have culti-tion, or in slowness to action or decision-making. Having beenvated over many years, we will combine the Group’s resources

focused for so long on the closed environment of the tele-

as “One COMSYS” to support customers in resolving issues,

communications construction business, we may at times lackand in doing so, we will secure new business opportunities.

the necessary aggressiveness in planning and selling our own
products and services. For this very reason, in the past, we havestruggled to establish new customers and develop original◆ COMSYS’s Strengths and Business Model

products and services in the IT Solutions Business.

Positioning to Enjoy the Benefits ofTelecommunications Technology
Innovations:
Valuing Reliability and Emphasizing
Teamwork

ant, but we must think very carefully about whether we can

Nippon Telecommunications Construction Co., Ltd., the pre-COMSYS Group is far from the only company that claims todecessor of Nippon COMSYS, which is at the core of theoffer “comprehensive engineering services,” so in order to con-COMSYS Group, was established in 1951 by leaders in Japan’stinue to grow in this highly competitive environment, we mustgovernment and business world to assist in rebuilding Japanesedemonstrate the planning and execution capabilities required

society after the war. Nippon Telegraph and Telephone Public

to create new business with customers and partners, and show

Corporation (currently NTT) was established in the followingthat we have the reliability, technologies, and cost structures

year, and since then, the COMSYS Group has been respon-

necessary to continue being chosen by those customers andsible for the construction of the NTT Group’s infrastructures.

partners. This requires true comprehensive capabilities, using

Even after the deregulation of telecommunications in 1985,

ICT to enable organic and yet ordered coordination across a

the COMSYS Group steadily expanded its business in keeping

broad range of organizations and business fields, and improv-

with the development of telecommunications services, within

ing productivity and quality through tireless improvements

the stable environment of the communications industry. The

and reforms. The COMSYS Group has both the positioning

construction of telecommunications infrastructures is a com-and the potential to become this kind of “super-subcontrac-

prehensive business comprising civil engineering and the con-tor.” To do this, however, we must first carry through on the

struction of buildings and electrical and telecommunications

reforms that lay before us. We will change our workstyles to

The work of building infrastructures will always be importremain content to just “Work earnestly at what customers tell
us to do.” In the midst of intense competition, telecommunications carriers, which are our primary customers, continue
to look for ways of transcending the boundaries of the communications business, so COMSYS must change as well. The

Message from Top Management

12Message from Top Management

improve productivity and increase the bottom line in our main

encouraging a friendly rivalry—organizations and workstyles

Telecommunications Carrier Business, and also expand into newthat were ideally suited to a single company must now be opti-

growth fields. Of course, changes present various challenges,

mized for the Group as a whole. This will take time, but weand so they take time. While undertaking a varied process ofmust forge ahead to achieve this end.

trial and error, we will bring about results by leveraging the

For example, even the same work will have a different

strength of the COMSYS Group, in its ability to move forward

approach and a different profit margin depending on thesteadily and with determination.

company. We will analyze success cases, and share the best
approach to the work throughout the Group. Work that could

Strengthening Competitiveness by
Expanding Scalenot be done by a single company can be secured by combin-

Various types of social infrastructures, including electrical facil-of ways to encourage each company to break away from aities and ICT, are essential to people’s lives, and our execution

company-centric approach and toward profits for the Group asof this business in and of itself contributes dramatically to aa whole; in other words, we will undertake a shift from individ-sustainable society. We have been actively involved in the reor-

ual company optimization to overall optimization.

ing the Group’s capabilities. We will build Group governance,
including accounting and personnel systems, and we will thinkganization of the telecommunications construction industry as
part of efforts to achieve continued growth based on this business model.
At one time, there were many telecommunications con-

The Market Environment Surrounding theGroupstruction companies throughout Japan supporting regional

Here, we will look at the current market environment surround-telephone networks offered by NTT East and West Japan. As

ing the COMSYS Group’s business. In the Telecommunicationsof 2018, these numerous companies had been fully consol-

Carrier Business, the fixed-line business is expected to see slug-

idated into three corporate groups, one of which was thegish growth in the medium to long term. In the mobile busi-

COMSYS Group, which itself consolidated with NDS, SYSKEN,

ness, although growth is expected in 5G services, we need toand Hokuriku Denwa Kouji. It is reasonable to say that theincrease productivity and reduce costs in construction, in part

expansion in scale resulting from this reorganization enabled

due to the unpredictability of capital investments.

us to lay the groundwork for expanding business foundations

In the IT Solutions Business, the scale of business has

to keep up with changes and progress at customer telecom-

increased amid market growth, but this business will likely bemunications carriers. At the same time, we have acquired theimpacted by the economic slowdown caused by COVID-19. We

ability to compete with general contractors and subcontractors

must determine whether it will be possible to provide added-

not only in telecommunications construction, but in electricalvalue services and maintain this growth.

construction and civil engineering segments as well. Moving

In the Social System-Related Business, we expect to see

forward, we will further contribute to the changing business ofstrong movement in the market environment, including

telecommunications carriers, and at the same time undertake

demand related to National Resilience measures, renovation

both competition and alliances across industry boundaries.

of aging infrastructures, and the renewable energy field. Key

This growth in scale, however, is not without its issues. Rival

points in this business will be improving productivity throughcompanies, each with its own different culture and history,

the use of IT and securing labor that can respond to theare gathered under one roof, so it can be difficult to bringincreasing complexity that results from the expansion of busi-

about synergy and keep the entire Group moving toward aness fields.

common goal. Ensuring that the COMSYS Group’s philosophy
and awareness of goals penetrate through to, and are firmly
entrenched in, upper and middle management at each company, and ultimately all Group employees; promoting a sharedunderstanding of the Group’s assets without suppressing eachcompany’s unique strengths and areas of specialization; and13

COMSYS GROUP REPORT 2020

◆ Medium-Term Vision

COMSYS Vision Next Stage 2023
In the midst of this market environment, during the last fiscal

Outline

Strategy

Business Base

ESG

About Us

Growth Investments and Capital Policies◆ Basic Approach to Financial Strategies

ments in FY2019 were ¥11.7 billion; the largest investment was in the

In order to continually increase corporate value, the COMSYS Groupmajor investments included system development costs and the purchaseundertakes management taking into account a balance of various indexes,of construction vehicles and tools. These investments are essential to theincluding profitability, efficiency, safety, and growth potential. Because weGroup’s future business continuity and development, and we expect thatare operating in the construction industry, there is no need for massive

capital investments will be made on a similar scale in the future as well.

R&D and capital expenditures as is the case in the manufacturing industry,

No doubt, there will be some who feel that we are not investing enoughbut we must secure trust as a primary construction contractor that needs

in growth, but the Group’s greatest operating capital is its people, and weto guarantee payments to employees and business partners during thewill continue to strengthen investments in the people who form the foun-construction period. For this reason, robust finances are extremely import-

dations of growth. To do this, for example, at Nippon COMSYS alone, weant, in terms of enabling the continued construction of infrastructures

have used approximately ¥1 billion for labor development, including neweven in the event of a natural disaster or other unexpected circumstances.

employee training, engineer training, and the construction and mainte-

As such, we have minimal interest-bearing debt (FY2019: ¥8.1 billion) andnance of training centers. In the case of M&A, treasury shares acquired

an equity ratio of 68%. In recent years, there has been a slight increase

as shareholder returns have been used in exchanges of shares, and actualin borrowings to guarantee operating capital in keeping with an increase

growth investments are even larger.

new construction of a parking lot in Minato Ward, Tokyo, while otherin large-scale projects in the Social System-Related Business, but in the
future as well, borrowings will be kept in line with operating capital, andwe will maintain the equity ratio at 60% or higher. Furthermore, COMSYS◆ Shareholder Return Target of 70%

Holdings has introduced a capital management system (CMS) for the effi-

Based on the above, and taking into account a balance of returning prof-

cient centralized management of Group capital, to reduce interest-bearing

its to shareholders and investments required for sustainable growth, thedebt and ensure effective use of cash deposits for the Group as a whole.

policy laid out in the medium-term vision is to invest approximately 30%

To the greatest extent possible, M&A and investments with a view towardof profits in future growth, and to allocate the remaining 70% to share-

the future will be executed using exchanges of shares and equity capital,

holder returns. We executed treasury share purchases valued at ¥8 billion

and even when cash is needed, we will look to borrowing first, rather

for five consecutive years up to FY2019, but we will gradually increase

than capital increases or issuing convertible bonds, which would lead to athe dividend ratio in the future. In October 2018, the COMSYS Groupdecrease in stock value.

completed a consolidation with NDS, SYSKEN, and Hokuriku Denwa Kouji
based on an exchange of shares, and the reorganization of the telecom-◆ Future Growth Investments

munications construction industry is complete, at least for the time being.

The COMSYS vision, “Nexe Stage 2023,” lays out goals as net sales ofterms of a dilution of stocks, but in the midst of growth in both business¥600 billion or more and operating profit of ¥50 billion or more in theperformance and share prices, this could also be seen in terms of an abil-fiscal year ending March 2024. The plan will be achieved by expanding

ity to make acquisitions with less cash on hand. (During the acquisition

the IT Solutions Business and the Social System-Related Business, and by

of NDS, SYSKEN, and Hokuriku Denwa Kouji, the increase in earnings perincreasing productivity in the Telecommunications Carrier Business. We

share (EPS) exceeded the dilution of stocks.) Future M&A will be consid-

expect that investments required for the above expansions will be madeered mainly in the context of growth businesses, but because we will not

through segregated portfolio companies (SPCs), capital and operational

necessarily be able to execute those M&A projects through an exchange

tie-ups based on investments in other companies, or M&A. Such actionsof shares, we plan to keep ownership of treasury shares at around 10% of

will be undertaken cautiously, however, to avoid any damage to corporate

issued shares, and to shift the weight of shareholder returns to dividends

value; for example, we are not planning any risky acquisitions of overseas

through a dividend increase. As a result, in FY2020, dividends will be ¥80

businesses, and decisions will be based on a comparison of capital costs

per share, a ¥5 increase compared to the previous year. The consolidated

vs. expected returns. In the Telecommunications Carrier Business, we are

payout ratio is expected to be about 40%, so we plan to acquire treasury

planning to integrate operating systems at the various Group companies,

shares on a level deemed necessary to achieve a total return ratio of about

and to invest in the liquidation and new establishment of business bases

70%.

A consolidation based on an exchange of shares has its drawbacks inin keeping with the reorganization of operation areas. Capital invest-

Message from Top Management

14Message from Top Management

year, the COMSYS Group published its medium-term vision,

particular as a significant business opportunity. We also plan to

Next Stage 2023. In it, we set goals as net sales of ¥600 billion

take on local 5G and the IoT business as new business fields,

or more and operating profit of ¥50 billion or more in the fis-and to develop new solutions in the software segment using

cal year ending March 2024. This Vision was created to serveAI.

as a compass for business during the first five years after the

In the Social System-Related Business, up to now we haveconsolidation, so the business goals are intended to lead the

been involved in the construction of large-scale solar power

COMSYS Group—including its three newly added members,

plants and data centers, applying the comprehensive strengths

NDS, SYSKEN, and Hokuriku Denwa Kouji—together toward ain civil engineering, electrical, telecommunications, and con-common goal. To achieve these business goals, we will invest in

struction that we have cultivated through the construction

systems, strengthen the hiring and training of engineers as theof telecommunications infrastructures. In the future, we willfoundation for expanding business, and undertake M&A. By

expand our areas of operation in water supply and sewer-

doing so, we will maintain a total return ratio of around 70%.

age construction and the construction of electrical facilities

Looking at consolidated financial results for FY2019, the firstfor expressways—both of which are fields that we specialize

year of Next Stage 2023, both net sales and operating profit

in—and at the same time seek out new business in the bio-

exceeded projections and the previous year’s figures. Net Sales

mass and wind power generation fields, which will serve as

were ¥560.8 billion, which is +¥79.0 billion year on year andalternatives when the solar power generation business hits a+¥20.8 billion above projections. Operating profit was ¥38.9

ceiling. We are also considering participation in the concession

billion, which is +¥3.6 billion year on year and ¥0.9 billion

business involving water supply and sewerage as well as con-above projections. We feel that we have gotten off to a goodstruction for the undergrounding of utility poles based on pri-start toward achieving the goals of Next Stage 2023.

vate finance initiative (PFI) business. In addition, we are always

How will we go about achieving these goals? There are limits

thinking about the possibility of undertaking M&A to expand

to what each company can do through its own efforts alone,both the IT Solutions Business and the Social System-Related

so we need to pursue overall optimization as a Group. To do

Business.

this, we will work toward “Increasing sales and expanding prof-

In growth businesses, we have adopted a “virtual company

its in growth businesses,” and “Reducing costs and improving

system” to maximize sales capabilities and achieve overall

productivity in the Telecommunications Carrier Business.”

optimization of management resources. The COMSYS Grouphas divisions and subsidiaries throughout Japan undertaking

15

Increasing Sales and Expanding Profits in
Growth Businesses

business related to IT Solutions and Social Systems, and up to

The COMSYS Group positions the IT Solutions Business and the

cept of the “virtual company” is to have all Group companies

Social System-Related Business as growth businesses. We plan

work together in sales activities, sharing sales information andto expand the top line to ¥310 billion or more in both of theseknow-how, rather than having each entity approach customers

businesses by expanding existing segments and entering into

separately. For example, in the IT Solutions Business, software

new business.

engineers currently located at bases in various regions would

now, these entities have each been successful in seeking out
customers and developing services on their own. The con-

The COMSYS Group’s IT Solutions Business is unique in thatbe virtually “gathered” across the boundaries of organizations,

it has few original products and solutions, but leverages its

thereby enabling the company to secure large-scale develop-

reliability through collaboration with alliance partners. We havement projects that could not have been secured in the past. At

steadily expanded orders received in our alliance business withthe same time, this enables us to control costs better than if

foreign capital vendors and NTT Group companies by mutually

we concentrated staff in Tokyo.

applying strengths and covering weaknesses. Moving forward,

The Group companies have networks with partner companies

we will strive to expand orders received for large national-scale

and brands that are rooted in their respective regions, so we

projects by leveraging construction capabilities in each region

have adopted an approach in which the names of each com-

as well as the resources that have been enhanced through thepany are left unchanged, while in reality they are connectedconsolidation. We are focusing on the GIGA School concept inwithin the Group as a virtual company. These activities contrib-

COMSYS GROUP REPORT 2020

Outline

Strategy

Business Base

ESG

About UsCOMSYS Vision, Next Stage 2023
Strong start in the first year
total return ratio:
Continue to aim for 70%

Performance in FY2019; change vs. FY2018

Net Sales: +¥79.0 billion (+¥61.6 billion)
Operating Profit: +¥3.6 billion (+¥3.1 billion)

Operating Profit: ¥50.0 billion or moretotal return ratio:
Continue to aim for 70%（ ）: Impact from consolidation anddecrease in consolidation expenses

Net Sales(Unit: ¥billion)

560.8

481.7

98.1

IT Solutions
Business

600.0 or more
120.0
Growth Businesses

75.0

Social System-Related
Business

136.7

Telecommunications
Carrier Business

269.9

Increase sales
and expand profits

168.5

294.2

Telecommunications Carrier Business
Increase productivity through structural reforms
and IT system integration

or more190.0
or moreMaintain
Net Sales

FY2018
performance

FY2019performance

FY2023targetOperating Profit

35.2 billion

38.9 billion

50.0 billion or more

Operating Margin

7.3%

6.9%

8.0%

ute to increased profits through cost reductions and improved
productivity.
The increased efficiency of sales activities is even more substantial. In the past, the companies in each region secured proj-

Cost Reductions and Productivity
Improvements in the
Telecommunications Carrier Businessects that they could handle within their respective resources.

Telecommunications carriers are planning to roll out 5G

Each company also had its own complete business structure,technologies without increasing the current level of total

from sales bases in Tokyo to construction bases in each region,

capital expenditures. The decrease in access-related workso from the perspective of the Group as a whole, there is con-is also expected to continue in the future. For this reason,siderable redundancy. By establishing a unified Group businessdespite the shift toward 5G, we predict that sales in theoperation structure, we can integrate sales activities in met-

Telecommunications Carrier Business will remain unchanged.

ropolitan areas, unify sales contact points for customers, andWe plan to maintain sales of about ¥290.0 billion in thefocus more on highly profitable, large-scale projects. At the

Telecommunications Carrier Business, while increasing operat-same time, in construction operations, we can effectively utilize

ing profit through cost reductions and improvements to pro-the resources of each company to maximize and optimize theductivity.

Group’s resources overall.

First, in the NTT fixed-line related business, we are integrat-

We will pursue overall optimization for the Group in thising IT platforms within the Group. System integration is no

way: By delineating a clear division of roles among Group com-more than the “method.” The “goal” is to achieve uniform

panies, and between urban and regional functions. Throughoperations and increase productivity. If operational processes

the One Comsys business structure, we will strive to achieve

are standardized, in addition to increasing the efficiency of pro-the goals of the COMSYS Vision Next Stage 2023, and further

curement operations and reducing SG&A expenses by consoli-

growth after that.

dating backyard operations, it also becomes easier to maintain

Message from Top Management

16Message from Top Management

flexibility in labor within the Group. Streamlining of businesscorporate value.

structures, such as construction areas and consolidated subsid-

Based on this awareness, we have laid out the “COMSYS

iaries, also goes more smoothly. Already, in FY2019, we reorga-

Group’s key themes,” namely “The pursuit of more efficient

nized construction areas in Kyushu and integrated consolidated

and sincere corporate activities,” “Fostering human resources,”

subsidiaries in Hokuriku, and in the future, we will reduce fixed“Promoting safety and quality, and “Helping to build a sustain-

costs by reorganizing operations, labor, and bases currently

able society.” These four key themes are central in contributing

overlapping among Group companies.

to future social infrastructures while continually increasing cor-

Although the Telecommunications Carrier Business will

porate value, and we will contribute to achieving Sustainableremain flat, we expect that some work will decrease while

Development Goals (SDGs) through business that focuses onother work will increase. For example, we predict that thethese four areas.

NCC Engineering Business will continue to see active demandfor construction due to the new entry by Rakuten Mobile.
Construction investments in data centers will likely also con-Strengthening Governancetinue to increase, due to increased communication traffic andGovernance, which ensures appropriate decision-making andthe evolution of IT services. In this context, if we limit ourselves

audits, is particularly important in the context of continuously

to the existing frameworks of NTT and NCC business, or toincreasing corporate value. In order to strengthen gover-

categories like fixed-line versus mobile systems, we put our-nance at COMSYS Holdings, we have made a transition to aselves at risk of missing out on projects waiting on the periph-“Company with an Audit and Supervisory Committee,” anderies or boundaries of the work we have done up to now.

at the same time we have designated five outside directors to

For this reason, we will conduct studies aimed at achieving

make up one-third of our 15-member Board of Directors. We

unified business operations in the Telecommunications Carrier

have appointed the most appropriate people possible to fillBusiness, boldly re-examining conventional organizational andthese outside director positions; for example, we have invited

operational frameworks with the “goal” of capturing projects

specialists including a lawyer and an accountant, as well aswith telecommunications carriers that are diversifying with thea former employee of a plant engineering company that isdevelopment of 5G and IoT, while continuing to increase pro-involved in the Social System-Related Business, which has been

ductivity in order to improve profitability.

identified as the COMSYS Group’s growth business.
With regard to governance, we will ensure diversity in our
Board of Directors, and actively consider the appointment of◆ Environmental, Social, and Governance (ESG)
Activities

female directors in particular. Compensation structures will not
be rigidly set, as in the case of the traditional “fixed salary +stock options.” Rather, we are studying flexible and appropri-

17

Policies Surrounding Environmental andSocial Issues (Four Key Themes)
Valuing Reliability and Emphasizing
Teamwork

ate incentive structures that are more closely linked to medi-

We are aware that given the nature of the construction ofcompanies to COMSYS Holdings mainly to undertake audits ofsocial infrastructures, the COMSYS Group’s business is a highlyGroup companies, except for the company with which they are

public business. As such, we undertake projects at appropriate

affiliated. In this way, we have secured a structure that enables

prices, create high-quality infrastructures without incident bystrict audits from a more objective viewpoint.

um-term management results.
We are also investing efforts into internal audits to promote
appropriate compliance. The unique feature of the COMSYSGroup’s internal audits is that staff are seconded from Groupthe designated deadline, pay appropriate outsourcing expenses

To ensure safety and quality, as well as information secu-

and personnel expenses, and secure an appropriate profit.

rity, we have established a Safety and Quality Management

In other words, we believe that the appropriate execution of

Headquarters at each Group company, along with a depart-business in and of itself contributes to the creation of social

ment in charge of safety and quality in each business division,

infrastructures for the future, and leads to continual growth into work at accident prevention.

COMSYS GROUP REPORT 2020

Outline

Strategy

Business Base

ESG

About Us

◆ Effects of COVID-19

the economic slowdown will be manifested in the second half

A Trigger for Fundamental Structural
Reforms

System-Related Business (the Renewable Energy segment),

The COMSYS Group is working to prevent COVID-19 infec-

now, but trends in cost reductions and efficiency increases aretions in compliance with government policies, and is taking

generally not on a par with the speed of growth. Viewing thisthe utmost care with regard to preventing the spread of thispandemic as a rare opportunity, we are planning to streamline

disease and protecting the health of all employees, including

procurement, review relationships with partner companies,

those at partner companies. At the same time, we are main-

promote Group collaboration, streamline business bases andtaining our business activities to meet the needs of society instructures, and introduce ICT in construction and management

the construction of telecommunications infrastructures anddivisions.

of the business year in the IT Solutions Business and the Social
which have particularly high ratio of private sector demand.
Both of these businesses have been growing steadily up tosocial infrastructures. Measures taken up to now have proveneffective—for example, the adoption of “teleworking,” thetransition to teleconferences and video conferences, and strict

Post-COVID Business Opportunities

requirements for health management and mask-wearing in the

Due to the effects of COVID-19, we have seen a rapid acceler-

workplace—and we are fortunate in that we have seen no sig-

ation in remote working both in companies and in local gov-

nificant impact on our business operations.

ernments, as well as online learning at educational institutions.

In some areas of business, there have been reports of delays

This trend toward online activities will be irreversible even if

in construction due to restrictions on entry into customers’

it settles down to some extent after the pandemic has been

facilities, and delays in the delivery of construction materials

resolved, and in fact we expect that it will gain even further

and equipment, but at this time, effects on business perfor-

momentum. If various social activities are to be conducted via

mance have been limited. There were concerns about impact

networks in the future, it will be necessary to connect all of

on settlements of accounts, but the announcement of financial

the component elements, including terminals, networks, andresults was made according to the original schedule. Impact

servers, as well as applications, access, and security, and alsothat has already become apparent has been incorporated into

to provide safe, smooth communications. The COMSYS Groupbusiness forecasts for the year, but if impact increases in thehas advanced skills in all of these component elements, andfuture, and expected conditions change dramatically—for

can use these resources flexibly and organically throughout

example, in the form of further cuts to investments or delays inJapan. Up to now, we have actively introduced IT systems toconstruction and in the delivery of materials—adjustments toincrease productivity on the front lines, and on July 1, 2020,

business forecasts will be appropriately disclosed.

we established the DX Promotion Department, to comprehen-

The COMSYS Group has been promoting workstyle inno-

sively analyze the data generated by systems used in various

vations for some time now, and as a result, we have been

businesses, and to accelerate operational transformations

successful in making a smooth transition to remote working

throughout the Group based on the results of those analyses.

in the midst of the pandemic. By using this as an opportunity

Through this type of data-driven management, we will increase

for a fundamental re-examination of workstyles, we will strivethe value provided to customers, and support their digital

to improve productivity throughout the Group as a whole. For

transformations (DX) as well. We will view the social transfor-

example, during this pandemic, we have realized that a large

mations arising “after corona” as an opportunity for reforms,

portion of head office operations can be undertaken remotely.

and work to further increase the value we provide based on

By adopting a “location-free” approach to workplaces, it will

overall Group operations, so that we can maximize our busi-

become easier to consolidate administrative tasks and otherness opportunities. We look forward to the continued invalu-

backyard operations.

able support of investors in this regard.

Although COVID-19 has only had a limited impact on the
COMSYS Group’s business, there is a risk that the impact fromdelays and cutbacks in customers’ investments resulting from

Message from Top Management

18Feature Article

Responding as a Groupto Changing Industry Needs Brought
about by 5G
The Status of Fifth-Generation
Mobile Communication Systems
In Japan, the frequency bands designatedfor use with 5G are 3.7GHz, 4.5GHz, and28GHz, and only four telecommunications carriers authorized by the Ministryof Internal Affairs and Communications
can provide commercial 5G services on anationwide scale. The 3.7GHz, 4.5GHz,
and 28GHz bands have been allocatedto NTT DOCOMO, while the 3.7GHz and
28GHz bands have been allocated toKDDI (au), SoftBank, and Rakuten Mobile,which is a new entry into the field. Eachof these companies is establishing basestations nationwide in preparation for
the full-scale rollout of 5G services. NTT
DOCOMO—Japan’s largest player, witha roughly 38% share of the Japanese
mobile phone market (excluding mobile
virtual network operators (MVNOs))*1—
has announced a plan to roll out 10,000
base stations nationwide by the end ofJune 2021, and 10,000 more by the endof March 2022. KDDI, which holds aroughly 28% share (excluding MVNO),

announced a plan to roll out approximately 10,000 base stations by the endof March 2021, and another 40,000 by
the end of March 2022. SoftBank, whichholds a roughly 22% share (excluding
MVNOs) has announced a similar plan
to establish 50,000 base stations by theend of March 2022. The reason that the
number of base stations shown in thegraph below is higher for both KDDIand SoftBank than for NTT DOCOMO
is most likely that they will provide 5G
services using 4G frequency bands (anew system for which preparations are
currently underway), and also because
each company has posted the number ofbase stations operating in a “shared use”
format, mainly in outlying regions. NTT
DOCOMO, on the other hand, is expected
to provide 5G services mainly through frequency bands allocated specifically for 5G,
because when using 4G frequency bands,
it will be unable to fully demonstrate thefunctions that set 5G apart, including
ultra-high speeds, ultra-low latency, andmultiple simultaneous connections.
Rakuten Mobile moved up the rollout

of 4G base stations by five years
ahead of the plan submitted to
the Ministry of Internal Affairs andCommunications, and is currently
moving forward with the constructionof base stations at a rapid pace, with
the intent to have its in-house network
offer a 96% service coverage ratio in thesummer of 2021* 2. It is also expected
to gradually roll out 5G services using its
4G network. The national governmentis currently using a variety of approaches
to bolster the proliferation of 5G, whichenables ultra-high-speed, high-capacity
communications, and will offer tax cutsfor the early construction of 5G base stations over the next two years, as well as
for local 5G facilities. It is also budgeting
subsidies for the installation of optic fiber
networks, which serve as the groundworkfor the proliferation of 5G and other highspeed communication services on remoteislands and in low population regions. In
the backdrop of these measures, plans forthe installation of 5G base stations havealso been accelerated, and the Ministryof Internal Affairs and Communications

5G Development Plans of Telecommunications Carriers

Accelerated Rollout due to the Government’s Increased Target Number of Base Stations and Expedited Schedules
Telecommunications Carrier’s Plans for the Rollout of 5G Base Stations(Unit: Stations)

SoftBank: 50,000
base stations *3

60,000*Where not clearly documented,
numbers of base stations are COMSYS estimates

30,000KDDI: Approx. 10,000
stations *2

20,000Use of 4G frequency bands
for 5G including 5G JAPANʼsshared-use stations

Use of 4G frequency bands
for 5G including 5G JAPANʼsshared-use stations

50,00040,000KDDI: 50,000
stations *4

NTT DOCOMO: 10,000
stations *1

NTT DOCOMO: 20,000
stations *1

10,0000(Plan submitted to
MIC implemented aheadof schedule)
5G rollout by upgrading
4G networks

MIC
Mar. 2020

MIC’s 5G
introduction
policyRollout of
local 5G

Rakuten Mobile:More than 15,000 stations(COMSYS estimate)Jun. 2020

Mar. 2021

Jun. 2021

Mar. 2022

Tax incentives for moving up rollout schedules
Institutionalized usage of 4G bands for 5G
Local 5G approval

Promoting rollout of 5G / local 5G

Expanding demonstration projects / use cases(agriculture, manufacturing, education, infrastructure monitoring, establishment of open labs)

Local 5G license applications (vendors, CATV, NTT East Japan, local governments, universities)*5
Increase to210,000 basestations inrollout plan forend of March2024 (including
use of 4G)*1: NTT DOCOMO materials for presentation of new 5G services and products; March 18, 2020 *2: KDDI press release materials; March 23, 2020 *3: SoftBank financial results briefing materials; FY ended March 2020 *4: KDDI General Meeting of Shareholders Q&A; FY2019 *5: Source: Ministry of Internal Affairs and Communications (MIC) Progress Report on the Master Plan on
the Regional Development of ICT Infrastructure (June 16, 2020)

19

COMSYS GROUP REPORT 2020

Outline

now has a policy to install 210,000 basestations by the end of FY2023, a number three times higher than the originalplan. Local 5G is being institutionalized,
and demonstration projects are being
conducted in various regions. “Local 5G”
refers to the use of 5G frequencies being
authorized for vendors other than the four
major telecommunications carriers within
a limited, closed area. Up to now, applications have been submitted by regional
municipalities, universities, communication device manufacturers, and NTT East
Japan. (The four major telecommunications carriers are prohibited from entering
local 5G markets.) Authorized vendors
are expected to build their own local 5G
networks, and to undertake activities
aimed at creating smart factories, smart
farms, and remote healthcare services thatleverage 5G’s ultra-high speeds, ultra-low
latency, and multiple simultaneous connections.

Outlook for the Rollout of 5G
5G uses high-frequency bands, so theradio waves are very straight, with shorttransmission distances. This makes it
necessary to construct large numbers ofsmall-zone base stations within a given
area. One way of thinking about it isthat 4G base stations are rolled out asa set of “planes,” while 5G is rolled out
as “points.” In order to streamline capital investments in outlying regions withfewer users and less communication traffic, multiple carriers are expected to adopt
an “infrastructure sharing” approach,characterized by the shared use of 5G
communications facilities. For example,
the venture company JTOWER, and 5GJAPAN, a joint venture between KDDI and
SoftBank, are preparing for the shared useof 5G infrastructures. The Tokyo ElectricPower Group is also collaborating with
telecommunications carriers to use existing utility poles for base station installations. The COMSYS Group and other telecommunications construction companies
are seeing new business opportunities in
the construction of networks and 5G basestations for these telecommunications carriers, but the scale of the market for this
5G business is dependent on investments
by telecommunications carriers in 5G
infrastructures. NTT DOCOMO and KDDIannounced in FY2018 that they would
invest ¥1 trillion in 5G network infrastructures over five years. SoftBank is planning
to invest about ¥500 billion, and Rakuten
Mobile is planning investments of about¥200 billion*3. These investments include
the costs of systems and devices provided

Strategy

Business Baseby vendors like NEC, Fujitsu, Nokia, andEricsson, so the COMSYS Group will becompeting with other construction companies for the remaining investments
in construction processes. Meanwhile,
total capital investments by telecommunications carriers are expected to remain
flat, so the increased investments in 5G
are expected to result in a proportionate decrease in 4G investments. For thisreason, even with the rollout of 5G, the
COMSYS Group’s sales in the mobile business are expected to remain unchanged,
or to increase only slightly. As base station
facilities become increasingly simple andcompact, it will become necessary to
install more base stations that are smaller
than before. This means that finding waysof increasing construction efficiency andmaintaining and improving profitability
will be a key management issue. A variety
of demonstration projects are underway
surrounding local 5G, but they have notyet shown the impact of introducing 5G,
or presented specific success models. The
future is still uncertain, in terms of which
services will gain popularity, and when. As
such, the COMSYS Group will participate
in advance plans and projects targetingthe creation of business in the field of
local 5G, and will continue to monitor
the latest conditions as we support thestartup of local 5G operations.

The COMSYS Group’s Activities
Just as in the past, we expect that theconstruction of 5G base stations for NTT
DOCOMO will be handled by the COMSYSGroup, the Kyowa Exeo Group, and the
MIRAIT Group. The COMSYS Group will
work even harder than before to increase
construction efficiency and prevent safety
and quality incidents in base station construction projects and other operations.
Until recently, the NTT mobile business
was mainly handled by Nippon COMSYS,
as the COMSYS Group has actively introduced ICT on the front lines and in backyard operations to increase safety, quality,
and construction efficiency. Since the consolidation in 2018, we have put in place
operational structures for the NTT mobile
business in each region, and have begun
expanding construction management
and support systems, as well as contract
management systems throughout theGroup as a whole. Increasing the efficiency of construction will be even more
important in the construction of 5G basestations, which will involve the installationof multiple small-scale facilities. With thisin mind, we are planning to gradually
start up the Group-wide operation of

ESG

About Us

construction management and support
systems from FY2021. System integration
will enable the standardization of work
methods, safety measures, quality checks,
and operational processes on a common
platform, which will in turn contribute toincreased productivity and cost reductions.
We will also expand sales targeting NTT
DOCOMO’s corporate business, to capture business opportunities in the various
peripheral industries created through theuse of 5G.
Telecommunications construction companies involved in the NCC Engineering
Business now share the field with many
new players, and competition is intensifying, but we will adopt a variety of measures to improve profitability, including the
introduction of construction systems, theautomation of routine tasks, and building
relationships with partner companies.
Rakuten Mobile’s entry into the market
and the rollout of 5G by KDDI, SoftBank,and Rakuten Mobile can be expected tobring about an increase in demand, so weplan to expand our share among these
Telecommunications carriers by making
full use of the resources that we havestrengthened through the consolidation.
The construction of 5G base stations in the
future will involve the construction of multiple small-scale facilities, and the COMSYSGroup has cultivated extensive experiencein this field through its work on FTTH and
Wi-Fi construction projects. We have also
accumulated expertise in negotiations andconsultations surrounding the constructionof mobile base stations that is unmatchedby other construction companies. Our goal
is to expand business by leveraging thesestrengths in the 5G base station construction business as well.
Right now, the operational structure isdivided into two parts—the NTT Mobile
business and the NCC Mobile business—but we are seeing a growing trend
toward infrastructure sharing, and weare considering unification of operationsin the future as the “Mobile Business,”so that we can respond more flexibly todemand from Telecommunications carriers. In outlying regions, we have begun“multi-skilling” of fixed line and mobile
staff, so that we can combine NTT’s fixedline engineering business with the mobile
business. In addition, in preparation for
the rollout of 5G, we are planning tosupport employees in obtaining high-levelengineering qualifications (Second-Class
Technical Radio Operator for On-TheGround Services), which are required in
the construction of some 5G base stations, and to strengthen training for thosealready holding these qualifications.

*1: Source: Ministry of Internal Affairs and Communications; publication of quarterly data on number of contracts and market share in electricalcommunication services; FY2019 2Q (end of September) *2: Source: Nikkei (dated Aug. 23, 2020) *3: Source: Nikkei (dated Apr. 9, 2019)
Feature Article: Responding as a Group to the demands of an industry changing due to 5G

20

Segment Information: Telecommunications Carrier Business(NTT Engineering Business / NCC Engineering Business)◆ Business Outline
The NTT Engineering Business, which comprises the Accessbusiness, the Network business, and the Mobile business, is themost important business in terms of revenues. These business
operations are handled in each region by all of the Group’s
supervisory business companies, with the exception of SANWACOMSYS Engineering and COMSYS JOHO SYSTEM. The main
customers in the Access and Network businesses are the NTT
East and West Japan Groups and the NTT Communications
Group, and the work mainly comprises construction and maintenance related to those customers’ fixed-line communication
networks. In the Access business, we install, replace, andremove communications cables (both metal and optic fiber)
installed on utility poles and in underground pipes, and also
handle the new installation and replacement of utility poles forcommunications. In the Network business, our work mainly
involves the installation, relocation, and removal of communication and information processing equipment in communication stations and data centers, as well as wiring installations
and the construction of electric power facilities. We also handle
configuration settings and troubleshooting for communications
equipment. Work in the Mobile business mainly comprises

the installation of mobile phone base stations for the NTT
DOCOMO Group, our biggest customer in this field, as well
as negotiations and consultations leading up to those projects(including negotiations with landowners and the design ofbase stations) and network construction related to mobile communications facilities. Following the deregulation of communications in the 1980s, new telecommunication vendors entering
the field came to be known as “new common carriers” (NCCs),and SANWA COMSYS Engineering has played a central role inthe construction of facilities for these NCC companies. Work in
the NCC Engineering Business is almost the same as in the NTTEngineering Business; we handle the construction of Access,Network, and Mobile facilities for NCC customers such as
KDDI, SoftBank, Rakuten Mobile, CATV companies, and electric
power companies, and undertake construction projects in collaboration with partner companies. The unique characteristicof the NCC Engineering Business is that the ratio of Mobilerelated operations is far greater than in the NTT Engineering
Business, and there are comparatively fewer Network- andAccess-related operations.

◆ Unique Features
Only information and telecommunications construction companies authorized by NTT are allowed to participate in the NTTEngineering Business, and as a result of the industry reorganization in 2018, this business is now characterized by a threegroup oligopoly comprising the COMSYS Group, the Kyowa
Exeo Group, and the MIRAIT Group. The work volumes are also
divided roughly into thirds in terms of orders placed, and theconstruction companies must provide high-quality construction
with no incidents or accidents, and must respond quickly in theevent of a disaster. In the Mobile business, there is an incentive
structure in which work volumes change based on evaluationsof construction quality, delivery times, improvement proposals,and cost reductions, and there are also penalties in the eventof serious accidents involving human injury, where subsequent
orders are shifted to the other two groups. On the whole,
however, all three groups maintain a roughly equal share. In
the NCC Engineering Business, competition has intensified
with even more construction companies entering the field. In

addition to information and telecommunications construction
companies, a significant share of this business is held by construction companies affiliated with electric power companies
and manufacturers that are the umbrealla investment organizations of NCCs. NCC companies also receive support from
communication system vendors in the design and developmentof network technologies, so in the NCC Network business inparticular, there are many cases in which we handle construction projects as a subcontractor for those vendors. The key toexpanding share is completing the project on time and at a low
cost, offering high quality, with no incidents or accidents. Given
the differences in the competitive environment, profitability in
the NTT Engineering Business is slightly higher than the NCC
Engineering Business, but even within the NTT Engineering
Business, given the continuing decline in capital investmentsin the fixed line business for access and networks in particular,
increasing productivity in these fields by generating synergies
from the consolidation will be a major issue.

◆ Market Trends
In the medium term, we expect that revenues in the telecommunications carrier business will remain flat. We predict that
the NTT East and NTT West Groups’ capital investments in
fixed-line communication networks will continue to taper off
as a result of declining income from fixed-line communications. Nevertheless, we believe that there are also new business
opportunities, such as work related to data centers to accommodate increases in communication traffic, electric powerbusiness related to the “smart energy business” announced byNTT, and business involving the installation and maintenance of
optic fiber networks in keeping with ongoing initiatives at the
Ministry of Internal Affairs and Communications supporting thepromotion of advanced wireless environments. In the Mobile
business and the NCC Engineering Business, amid the coming
full-scale rollout of 5G, telecommunications carrier companies

21

COMSYS GROUP REPORT 2020

have adopted policies promoting the construction of 5G networks within the framework of existing capital investments,
so although 5G-related investments will increase, there will
also be a decrease in 4G-related orders. As a result, we expectthat overall performance in these businesses will remain flat.
There have been concerns about a reduction in construction
processes due to the simplification and decrease in size of telecommunications facilities and the sharing of 5G base stations,mainly in outlying regions, to streamline capital investments.
There have been some positive trends as well, however—for
example, with Rakuten Mobile’s new entry into the field, government announcements of an increase in the planned numberof 5G base stations along with expedited schedules, and theinstitutionalization of local 5G—and these factors could lead toa greater increase in demand than expected.

Outline

Business Base

Strategy

ESG

About Us

◆ Rakuten Mobile’s New Entry into the Field
Rakuten Mobile—a new entry into the domestic mobile phonemarket as the fourth mobile network operator (MNO)—beganoffering full-scale services in April 2020. The COMSYS Grouphas combined its resources to undertake network construction and the nationwide rollout of Rakuten Mobile’s 4G basestations. Rakuten Mobile’s new arrival in this field represents a
substantial business opportunity in the carrier business, which
has been flat or on the decline for some time, but the simultaneous rollout of 5G by the various carriers could raise issues,

such as lost opportunities due to limited construction resources,
or increased pressure to reduce costs resulting from intensifying
competition among telecommunications carriers. The COMSYSGroup’s policy is to reinforce its structures by strengthening
collaboration among Group companies and improving staff
flexibility, thereby ensuring an optimal response to the needs of
Rakuten Mobile and other carrier companies, while also maintaining a balance in profitability.

◆ Contributing to the Medium-Term Vision and Related Issues
Based on an awareness of the market environment outlined
above, the forecast for the period of the medium-term vision(up to March 2024) is that net sales in the Telecommunications
Carrier Business will remain unchanged, at around ¥290 billion.
Our policy will be to make up for the decline in fixed-line business for access and networks by expanding new orders from
Rakuten Mobile and through the full-scale rollout of 5G in the
Mobile business and the NCC Engineering Business. We arealso seeing slow but trending growth in the Maintenance business for mobile base stations and network facilities from thevarious telecommunications carriers. The biggest issue in thetelecommunications carrier business is maintaining sales whileat the same time increasing productivity and improving profit
ratios by streamlining business operations. To increase profits,
we will need to demonstrate synergies from the consolidation
and build optimum business operation structures throughout
the Group as a whole, so in the NTT Engineering Business,
we are integrating construction systems and reorganizing
business structures in each region. System integration willlead to standardized workflows and a reduction in redundant
operations among Group companies, and will make it easier
to consolidate backyard operations and procurement operations. By unifying measures related to safety and quality, we
will be able to prevent accidents and human-initiated failures
more effectively. This will also facilitate a concerted push for
robotic process automation (RPA), which is being introduced
to improve productivity, and will contribute to optimizing labor
allocation. In parallel with system integration, we plan to reorganize construction and sales structures in each regional block,and to reduce fixed costs by consolidating subsidiaries. In the
NCC Engineering Business, in order to most effectively capture
demand for 5G construction among telecommunications carriers, we will promote maximum use of resources through business collaboration among Group companies, and at the sametime optimize sales and construction structures and consolidate
operations that are common throughout the telecommunications carrier business.

Business Strategies for the Telecommunications Carrier Business
The COMSYS Group’s
IT platforms

Net Sales (Consolidated)in the Telecommunications Carrier Business294.2 289.0
269.9

NTT
Fixed-Line

Styles unique toeach company(Billions of yen)Sales
maintained

About
290.0

TSUKEN

Hokuriku Denwa Kouji
COMSYS
style
style
TOSYS
SYSKENstyle
NipponNDS
COMSYSstyle

× Metal related

Future IT Initiatives

× New optic
ﬁber lines● Use document management tools toincrease reporting eﬃciency● Convert routine tasks to RPA〇 Maintenancebusiness

Standardize operations /Consolidate management resources

Planning Companywide Integration of Operation Systems in the NTT Engineering Business during FY2022
Increasing Operating Efficiency through the Further Use of IT

Groupware● Increase productivity● Increase IT investment eﬃciency● Optimum nationwide allocatioof resources

Use ofnext-generation
ERP Evolve bybuilding integrated
HR databases, etc.

Backbone Systems
Operation systems

Further increase construction
In-home service andmanagement efficiency
construction
management

Procurement

Access-related
construction
management

△ 4G

NTT
MobileConstruction
management
within NTT sites

Finances/
accounting〇 5G
Improve
operatingefficiency
using AI〇 5G

FY2019FY2020(forecast)

Photoinspection
center Upgrading

Security〇 Rakuten Mobile

NCC
FY2018

Photographic
inspection of
fixed line systems

HR
Mobile facilities
construction
management

FY2023(target)User
construction

Accessconstruction

Consider use ofwearable terminals

facilities“In-building” Mobile
construction
projects

Segment information: Telecommunications Carrier Business (NTT Engineering Business / NCC Engineering Business)

22Segment Information: IT Solutions Business◆ Business Outline
The COMSYS Group undertakes the IT Solutions Business basedon skills and experience that it cultivated through the introduction of IP and software technologies into telecommunications
networks. This business currently comprises three sub-segments: Solutions, Software Development, and Maintenance.
The “Solutions” segment accounts for about 70% of net
sales. We are involved in a wide range of activities in this field
for customers in various industries and businesses, from theconstruction of physical environments such as LAN and Wi-Fi
systems to comprehensive systems that include servers, storage facilities, and networks. Two notable drivers for growth in
the Solutions segment in recent years have been the “AllianceBusiness,” which involves collaboration with hardware andsoftware vendors, and corporate projects undertaken as a partner of the NTT Group.
In “Software Development,” which accounts for about
25% of net sales, we undertake software development projects under contracts mainly from the NTT Group and the NEC
Group, and are involved in the development of various systems.
We have extensive experience in the financial, public, andcommunications segments in particular, and recently, as part ofefforts to expand the service provision business, we have been
investing effort into seeking out new customers and developing original solutions using AI technologies. Maintenance operations, which account for the remaining 5%, include 24-hourmonitoring of abnormalities in servers and networks, as well as
call-center reception and on-site response. We are capable ofproviding these services on a nationwide scale.
The COMSYS Group has many public-sector and private-sector
customers as direct customers, and roughly 30% of all projects
that we handle are based on orders received directly from enduser customers. We have various competitors, but our maincompetitors in the solutions segment, in addition to othercompanies in the same industry as our own, are the engineering subsidiaries of major manufacturers and system integrators,
and in the Software development segment, our competitors
are medium-scale system development companies in general.
Rather than competing with major IT companies such as NEC,
Fujitsu, Hitachi, Unisys, and CTC, we more often collaborate
with these companies either as partners or as customers, andthe contracting fields differ from one project to the next.

◆ Unique Features
Our strengths are in “Multi-vendor response,” “Trust relationships with a broad range of alliance partners,” “One-stop
solutions,” and “Diverse engineering talent.” “Multi-vendor
response” refers to the ability to flexibly choose the best possible devices and systems for each customer in terms of functions
and costs, with no limiting capital ties to any specified vendors.
“Trust relationships with a broad range of alliance partners”
refers to years-long trust-based relationships with numerous
ICT companies that provide advanced services, including the
NTT Group, Dell, Microsoft, and Nutanix. In collaboration basedon these trust-based relationships, we are able to respond toa variety of customer needs, from hardware to applications,mutually covering any areas of weakness, and focusing onstrengths. “One-stop solutions” refers to a broad range of
operations that combine to form a comprehensive response,
including the construction of LANs/WANs, servers, and storage,
as well as software development and maintenance operations.

“Diverse engineering talent” means that we have engineers
and sales staff capable of multi-vendor response, who demonstrate expertise in devices and other products offered by various partners, and with a deep understanding of a wide range
of engineering and operational fields.
Our weakness could be seen as a lack of marketing anddirect sales capabilities, but we make up for these weaknesses
by establishing and deepening relationships with direct customers through collaboration with our alliance partners. On
the lower layer, which includes LAN/WAN construction—one of
our specialty fields—we need to expand our business to upper
layer protocol processes that offer high added value, including
not only construction but also maintenance operations, andensure higher profits. In the software development segment as
well, in order to expand profits, we will need to increase theratio of large-scale development contract projects and prime
development projects, and expand added value.

◆ Market Trends
In the IT infrastructure and services market, we expect thatinvestments in cloud services and data centers will continue
to grow steadily in the future. We are seeing steady growth in
new services that incorporate innovative technologies such as
IoT and 5G, mainly in relation to smart cities and smart factories. Due to the effects of COVID-19, there is a risk of a slowdown in market growth, but we expect that the domestic ICT
market will continue to be active in the medium and long term.
From a short-term perspective, we expect to see an increase in

23

COMSYS GROUP REPORT 2020

demand tied into the proliferation of teleworking and online
learning as well as the resulting need for strengthened security
and networks, migration to the cloud, and demand related
to the “GIGA School” concept put forward by the Ministryof Education, Culture, Sports, Science and Technology. In themedium and long term, we predict that new needs will cometo light in relation to the adoption of “smart applications”
using technologies such as local 5G, AI, and IoT, as well as thedigital transformations underway at many companies.

Outline

Strategy

Business Base

ESG

About Us

Growth Strategy for the IT Solutions Business

Net Sales (Consolidated)in the IT Solutions Business

98.1
27.1

Striving to Create “Excellent One and Only Businesses”(Full Layer x Full Life Cycle)(Billions of yen)

120.0
or more101.0

Software Development

Solutions● Expand contractdevelopment projects● Expand alliances● Local 5G● GIGA School● Secure DX projects● Develop IoT, AI,
and RPA products

27.0Core Competencies

750
SoftwareDevelopment● Expand acquisition ofoutsourcing contracts

One-Stop Solutions

Multi-vendor response

Maintain
at approx.
+6%/year

22.5

Maintenance● Expand managed
services

A broad range ofrobust alliances

Diverse engineering talent

Priority Measures for Achieving Goals
Top line

Solutions
48.2

65.9

● Further promote collaboration in sales and construction(by area, and in the software segment)● Promote alliances and expand/utilize partner companies● Expand business ﬁelds; e.g., through co-creation with customers(create services from PoC)

68.5

Bottom line
Maintenance
4.3

5.1

5.5

FY2018FY2019FY2020(forecast)

FY2023(target)● Standardize and enhance PMO activities, and promote horizontal rollout of
the accumulated expertise● Integrate and optimize maintenance platforms◆ Contributing to the Medium-Term Vision and Related Issues
In the COMSYS Vision, Next Stage 2023, we included expectations that the ratio of net sales in the IT Solutions Businessand the Social System-Related Business will exceed 50%, andwe are targeting net sales of ¥120 billion or more in the IT
Solutions Business in FY2023. This will require growth of 22%
over the net sales of ¥98.1 billion in FY2019. The key issues in
the IT Solutions Business in terms of achieving this target will
be strengthening Group collaboration to achieve overall optimization of the business structure, securing labor to accommodate cutting-edge technologies, and expanding added-value
businesses.
The COMSYS Group has many organizations involved in
IT-related business, and in the future, we will strengthen Group
collaboration with a view toward consolidating resources
and unifying organizations. Up to now, we have shared sales
information and undertaken construction collaboration innationwide projects, and in the future, we will unify sales andreorganize business operation structures and bases by area, toexpand the scale of new orders by further increasing sales efficiency and strengthening structures. In the rapidly changing ICT
industry, securing and training outstanding personnel is a critical issue, so in addition to strengthening both new and mid-career hires, we are investing efforts into securing personnel with
the qualifications needed to expand business in the future,including network specialists, virtualization engineers, security engineers, and project managers. We have demonstrated
results through construction collaboration and increased staff
flexibility aimed at maximizing the use of resources within theGroup, and we have been successful in strengthening development capabilities through “near-shore development” (in whichsoftware development utilizes engineers in various regions) andin securing projects on an unprecedented scale. In addition
to demand to build physical IT networks for customers, in the
future we anticipate new business opportunities in such areas
as accumulating and analyzing information from IT systems, aswell as demand for efficiency improvements; in other words,
for digital transformation (DX). Meeting these customer needs
will require comprehensive skills and expertise ranging fromnetworks, applications, and security to AI for information
analysis and processing. Leveraging the strengths of diverse
partners and engineers in the COMSYS Group’s broad rangeof business fields, we will actively undertake proof of concept(POC) targeting the adoption of smart technologies (e.g., smart
cities, smart factories, smart agriculture) in social infrastructures. Striving to develop new smart business and increasevalue proposed for customers through that business, from a DX
perspective, our policy will be to roll out solutions to outside
parties, incorporating the communication tools and RPA thathave been introduced and utilized within the Group.
We will also consider M&A and tie-ups with other companies
to secure labor as well as new technologies and products, andto strengthen the customer base.

Segment Information: IT Solutions Business24

Segment Information: Social System-Related Business◆ Business Outline
The COMSYS Group is involved in civil engineering construction of underground tunnels for telecommunication facilities,
the construction of telecommunication towers and buildings,
and electric power construction for the operation of switching
and transmission equipment. In that context, we have trainedengineers and accumulated experience in a broad range offields, and have expanded our Social System-Related Businessto secure civil engineering, electrical, and telecommunications
construction projects not only from telecommunications carriers, but from private and public sector customers as well.
The Social System-Related Business currently comprises threesub-segments: “Electric and Telecommunications Facilities,”“Renewable Energy,” and “Infrastructure and Other.”Electric and telecommunications facilities account for about
30% of net sales. This sub-segment mainly involves electricalconstruction and telecommunications construction for expressways (Tokyo Expressway and NEXCO), electrical and telecommunications construction for Ministry of Defense projects, electrical construction on water supply and sewerage processing
facilities for regional municipalities, and electrical and air-conditioning construction for data centers. Renewable energy
accounts for 20% of net sales, and has been a growth engine

for the Social System-Related Business since the introduction of
the feed-in tariff (FIT) system in FY2012. This business mainly
focuses on solar power plants, and includes the sales of solar
power generation facilities for detached homes by Ecosystem
Japan, a COMSYS subsidiary, and income from the sales ofelectricity at solar power plants owned by the COMSYS Group.
In recent years, we have also expanded into the biomass generation and wind power generation businesses. Infrastructure
and other accounts for about 50% of net sales, and the main
business activities include undergrounding of utility poles andcivil engineering construction related to water supply and sewerage for regional municipalities. In “infrastructure and other,
we have also posted results for Kando Co.’s gas facility construction business. About 80% of orders received, excluding
renewable energy, are public bid projects, and we complete
the projects for bids that we win in the capacity of prime construction contractor. By specializing in these target fields, weavoid unprofitable projects and increase our gross profit margin. For example, we take a cautious approach to large-scale
development projects in the private sector, which are preferred
by general contractors and electrical subcontractors, from theperspective of securing profits.

◆ Unique Features
We have many competitors. In the Infrastructure segment,these include the Kyowa Exeo Group and the MIRAIT Group,
along with major and secondary general contractors and local
construction companies. The same is true in electric and telecommunications facilities, although we also compete withelectrical subcontractors and air-conditioning subcontractors
for electric power related projects. In renewable energy, up tonow, our largest business has been in engineering, procurement, and construction (EPC) for solar power plants, where ourcompetitors are manufacturer-affiliated engineering companies
and plant engineering companies. In the future, even if weshift the focus of our business to the construction of biomass
and wind power generation plants, we do not expect to see asignificant change in the makeup of the competition.
Our strengths in this field are “Nationwide construction
and maintenance capabilities,” “Outstanding estimate andsupervision capabilities,” “Extensive track record and certified engineers,” and “An unparalleled construction lineup.”“Nationwide construction and maintenance capabilities”
refers to a structure that enables us to undertake projects
from Hokkaido in the north to Kyushu in the south. With theconsolidation, we have further strengthened our construction
and maintenance capabilities throughout Japan. “Outstanding
estimate and supervision capabilities” refers to our ability tosubmit accurate bids that win projects, and to complete thoseprojects within the deadline and projected costs, demonstrating high quality, with no incidents or accidents. Outstanding
reviews from many past customers represent an added advantage when bidding for projects, and this in turn leads to further improvements in profitability and the accuracy of winningbids. “Extensive track record and certified engineers” refers
to our many highly qualified employees and supervisory engineers with vast experience in fields such as civil engineering,
electrical work, and construction. Lastly, “An unparalleled construction lineup” refers to our abundant engineers combinedwith actively growing business in new domains, culminating inconstruction capabilities and experience in fields ranging from
communications and civil engineering to electricity, electric
power, gas, paving, construction, air-conditioning, and sanitation. The breadth of our construction lineup contributed substantially to securing EPC projects in the solar power generation business, where comprehensive capabilities are critical. Our
weaknesses are in the areas of sales capabilities and presencein the private sector, and in the limited number of engineers indomains such as electric power and air-conditioning. Moving
forward, we will bolster these weak points, keeping in mind
the possibility of M&A as well.

◆ Market Trends
In all three segments—“Electric and Telecommunications
Facilities,” “Renewable Energy,” and “Infrastructure andOther”—government agencies have implemented mediumand long-term plans for the new installation, modification,and maintenance of various infrastructure facilities, in lightof the aging of social infrastructures and increasingly severe
natural disasters. In the private-sector segment as well, there
are multiple plans for large-scale redevelopment projects, and25

COMSYS GROUP REPORT 2020

the current labor shortage and high level of activity in the construction market are expected to continue for some time. Ourpolicy is to focus on specialty segments, including water supply
and sewerage, undergrounding of utility poles, various typesof renewable energy, expressways, Ministry of Defense projects, and large-scale data centers, and to continue growing by
expanding the scope of contract operations and construction
areas in each of these businesses.

Outline

Business Base

Strategy

ESG

About Us

Growth Strategy in the Social System-Related Business

Net Sales (Consolidated)in the Social System-Related Business(Billions of yen)

190.0
or more168.5 170.0

136.7
90.9

93.0

Maintain
at approx.
+4%/yearTop line

39.0

48.3

FY2019

Electric andTelecommunications Facilities● Expanding areas● Large-scale data centers● Developing new domains

Unparalleled construction lineup

Outstanding estimate capabilities
Supervision capabilities

Extensive project credentials
Advanced technical capabilities

Priority Measures for Achieving Goals● Expand new domains (e.g.: water supply and sewerage processing facilities, rivers,
sea embankments, hydrogen-related)● Expand existing domains (e.g.: undergrounding PFIs, water supply and sewerage,
expressways, Ministry of Defense projects)

Bottom line

38.0

31.1
FY2018● Captive consumption-typesolar power● Biomass power generation● New energy businesses

Nationwide construction
Maintenance capabilities

Renewable
Energy30.3

Renewable Energy● Undergrounding PFIs
● Concessions● Disaster prevention /Disaster mitigation

Telecommunications Electricity, Water Supply Piping, Gas, Paving
Civil Engineering, Construction, A/C, Sanitation

75.3

Electric andTelecommunications
Facilities

Infrastructure and Other

Core Competencies

Infrastructure
and Other

29.3

Targeting One-Stop Comprehensive Engineering Business Nationwide(Infrastructure x Utilities x Renewable Energy x Telecommunications)

FY2020(forecast)

FY2023(target)● Reduce construction costs by reviewing procurement methods● Increase eﬃciency through new technologies and new construction methods● Maximize proﬁts based on proﬁt management metrics◆ Contributing to the Medium-Term Vision and Related Issues
Based on an awareness of the above market environment, we
expect that this segment will see the most growth during theperiod of the medium-term vision in both revenues and profits.
We are aiming for revenues of ¥190 billion or more, a 10%
increase over FY2019, but this segment could potentially groweven more, so we will strive to expand sales and improve profits, and to substantially increase operating profit.
Business growth takes into account the possibility of M&A,
but the largest part of the increase will result from organic
growth. In the renewable energy segment, the constructionof biomass power plants has begun as biomass supersedes
solar power generation, and we plan to expand this businesswith the No. 1 Makurazaki Power Plant as a starting point. We
will also consider capturing demand for renovations to windmills installed in the past, as well as participation in offshore
wind power generation projects with substantial development
potential. In the electric and telecommunications facilities segment, we will use our comprehensive capabilities to grow thedata center business by capturing all aspects of that businessat once, from building construction to electrical, A/C, and telecommunications construction. In the Infrastructure segment,
we will study the possibility of capturing the utility pole undergrounding private finance initiative (PFI) business and entering
the concession business for water supply and sewerage facilities.
The biggest issue in the expansion of business is the shortage of construction resources. We are strengthening both new
graduates and midcareer recruiting to secure engineers, but
amid a deepening labor shortfall in the market as a whole, we
are also utilizing flexible resources within the Group that lever-age “virtual company” frameworks. We are promoting joint
procurement and sharing construction expertise among Group
companies and information on affiliate companies, and this has
already generated impact in terms of cost reductions and anincrease in the number of successful bid projects secured.
Another issue is labor training to accommodate the increasing level and complexity of operations. Projects involving infrastructure maintenance based on private financing initiatives byregional municipalities, or targeting private-sector data centers and wind power generation, are large-scale projects that
extend over long periods of time, so they require collaboration
with other companies and studies regarding financing. The proliferation of IoT and AI demands technical responses that are
increasingly complex, so we will need to develop comprehensive production capabilities in terms of project planning, management, and collaboration inside and outside of the group.
More thorough governance is required on large-scale projects,
so we need to use indexes like capital costs to avoid disorderly
investments in businesses that do not contribute to increasing
corporate value, while at the same time ensuring that appropriate compliance is maintained at all times.
Securing profits even while expanding business domains is
yet another issue. In addition to increasing new orders throughthe Group collaboration described above, we will start up
Group-wide profit improvement projects, identify best practices
regarding management methods and outsourcing by comparing profits at Group companies in each construction field, andimprove the gross profit margin by promoting those practices
throughout the Group. We will also reduce fixed costs by consolidating sales bases and reorganizing construction areas.

Segment information: Social System-Related Business

26

ESG

◆ Basic Approach to Sustainability (Environmental, Social, and Governance [ESG] Policies)
The role of the COMSYS Group is to fundamentally support
sustainable, safe, secure, and rich community lifestyles throughthe construction of telecommunications infrastructures andsocial infrastructures, and the continuation of business in an
appropriate form ties into social contributions. Because of thehighly public nature of this business, we bear a great social
responsibility, and we are aware that continuous activities
aimed at increasing corporate value are essential to the continuation of our business.
Governance (G) that ensures appropriate business operations
is particularly important to the COMSYS Group. In keepingwith the transition to a company with an Audit and Supervisory
Committee, we designated five outside directors to make up
one-third of our 15-member Board of Directors. By incorporating this “outside perspective,” we guarantee appropriate andadequate management, while at the same time focusing efforts
on internal auditing activities to guarantee appropriate work
activities and compliance to prevent corruption in this highly
public business. We also conduct employee training designed
to educate employees and increase awareness of these issues.
The COMSYS brand is closely related to society (S), and asJapan faces an unprecedented decrease in the birthrate andincrease in the senior population, securing human resources
has become a critical issue in the continuation and expansionof business for the COMSYS Group, which sees people as its
greatest management resource. We are actively promoting
diversity and undertaking workstyle innovations to draw in andsecure more diverse, outstanding individuals. In addition to
conducting recruiting activities and in-house training with designated targets for the ratio of female new graduate hires andfemale managers, volunteers conduct Group activities to identify and resolve issues aimed at establishing an ideal work environment for women and for all other members of the COMSYSGroup’s increasingly diverse team. At the same time, we havereviewed the re-employment system so that seniors can remain

27

COMSYS GROUP REPORT 2020

active in the Group, and we are recruiting labor with various
nationalities.
In the construction industry, preventing work-related injuries and ensuring quality are top priority issues in terms of
maintaining business activities. The COMSYS Group makes
concerted efforts to eliminate work-related accidents througha variety of measures, including safety training; the adoption ofsafety equipment; exchanges of information with partner companies; and safety patrols on multiple levels, by the workplace
representatives, safety management staff, and managers. Our
quality improvement activities include thorough checks basedon laws and in-house regulations, and management of work
processes using smartphones and tablet terminals.
Increasingly severe natural disasters continue to threaten
sustainable community life. The COMSYS Group is actively
involved in disaster countermeasures and disaster recovery
construction, and entered the renewable energy business tocontribute to preventing global warming. Even within the company, we invest efforts into measures targeting environmental(E) issues, including the purchase of low pollution vehicles and“green electricity.” To help build safer and more secure cities,
we undertake earthquake-proofing construction and upgradesto aging facilities as part of disaster measures, and we combine
the Group’s resources in the recovery of telecommunications
facilities in regions affected by earthquakes and typhoons.
Based on this awareness, we have laid out the “COMSYSGroup’s key themes,” which comprise four elements: “Thepursuit of more efficient and sincere corporate activities”;“Fostering human resources”; “Promoting safety and Quality”;
and “Helping to build a sustainable society.” These four themes
are critical in contributing to the creation of social infrastructures for the future, while at the same time continuously
increasing corporate value.

Outline

Strategy

Business Base

ESG

About Us

◆ The COMSYS Group’s Four Key Themes and Activities

The COMSYS Group’s
Four Key Themes

Main Activities during
FY2019Main Improvement Items
and Results

Issues and Areas Requiring
Improvements in FY2020

Pursuing More Efficientand Sincere
Corporate Activities●Promoted consolidation(e.g., reorganized operational structures, began
system integration,
secured joint projectorders)●Begin system integration in the NTTEngineering Business●Reorganize operational structures in the
Kyushu area
●Reorganize consolidated subsidiaries in the
Hokuriku area
●Promote Group collaboration in the Rakuten
Mobile business●Continue to promote consolidation

Cultivating Human
Resources●Implemented diverse
workstyles (introduced
satellite offices, promoted teleworking)●Started up a Diversity
Promotion Project Team
(Nippon COMSYS)●Increase the ratio of female recruiting at new
graduate level (18.7%; down 0.2 percentage
point year on year)●Increase the ratio of female managers (1.4%;
no change)●Acquire new certification at the highest of
three grades in the MHLW’s “Eruboshi” system (Nippon COMSYS)●Increase hiring of non-Japanese employees(6; +5 year on year)●Study new workstyles toadapt to the “new normal”●Expand hiring of females
and persons with disabilities●Foster female managerial
candidates●Consider appointing female
officers

Promoting Safety
and Quality●Activities aimed at preventing accidents involving workers, equipment,
and vehicles●Conducted workplace
management trials using
wearable terminals●Reduce accidents involving workers (31;down 3 year on year)●Reduce accidents involving equipment andhuman-initiated failures (22; +2 year on year)●Reduce accidents involving vehicles (100;down 21 year on year)●Reduce incidents involving information(including loss and theft) (5; no change)●Conduct activities aimed atpreventing accidents●Build Group-wide safety
management structures●Continue to study the introduction of ICT in the frontlines

Helping to Builda Sustainable Society●Assisted in recovery following typhoons No. 15/ No. 19 (2019)●Introduced and promoted renewableenergy●Increased attention toenvironmental issues●Assist in recovery activities (total of 2,500
employees participated over two months)●Expand the Renewable Energy business (neworders: +70% year on year)●Reduce CO 2 emissions (Nippon COMSYS)(down 14.3 percentage points year on year)●Reduce industrial waste (Nippon COMSYS)(down 12.0 percentage points year on year)●Expand the “post-solar”
business

ESG

28

Pursuing More Efficient and Sincere Corporate Activities◆ Basic Approach to Corporate Governance
The COMSYS Group supports the foundations of community life through the execution of its core business—the construction of telecommunications and social infrastructures. Through the growing Renewable Energy and
IT Solutions businesses as well, we contribute to reducing
environmental impact and improving productivity in bothprivate- and public-sector services. As such, the COMSYSGroup’s business in and of itself contributes to and plays
an important role in society, but we are also aware of thegreat responsibility that comes with this role. To continue

to earn the trust of, and be selected by, a variety of stakeholders in the future—including customers, employees,
business partners, and regional society—we must ensure
appropriate management in accordance with laws andregulations, and at the same time make optimum management judgments that lead to increased corporate value. We
are aware that strengthening corporate governance, whichis the foundation for “legal” and “appropriate” management, is of paramount importance for the COMSYS Group.

◆ Corporate Governance Structure

Accounting auditors

In December 2017, the COMSYS Group made a transitionside directors, as an advisory function for the Board of
to a company with an Audit and Supervisory Committee,
Directors, to guarantee transparency in nomination andto strengthen transparency and accountability in the
remuneration decision processes.
company’s management. The COMSYS Group’s Board ofAudits by the Audit and Supervisory Committee are
Directors comprises 15 directors, six of whom are on the
conducted based on direct instructions to the Internal
Audit and Supervisory Committee, which includes five
Control Auditing Department, but when deemed necesoutside directors (as of June 26, 2020). Regular meetings
sary, the full-time auditors themselves conduct periodicof the Board of Directors are held based on the Board
investigations of the company’s operations and financialof Directors regulations, and extraordinary meetings arestatus. Furthermore, in accordance with the Financial
held as deemed necessary, to decide items stipulated
Instruments and Exchange Act (the Japanese version of
by law and important management-related items, andthe Sarbanes-Oxley Act), explanations are received fromalso to audit persons executing business. The Audit andaccounting auditors (CPAs) regarding the details of audit
Supervisory Committee audits the execution of operations
results.
Corporate Governance Structure
by directors not only from the perspective of legal compliance, but also fromthe perspective of appropriateness for
General Meeting of Shareholders
corporate management. This committee
Appointment/dismissal
Appointment/dismissal
Appointment/dismissal
also has the authority to express opinions on matters such as the appointment,
Directors
Directors(Audit and Supervisory
dismissal, and compensation of directors
Committee members)
who are not a part of the committee.
Comprising members
Comprising members / participation
The Audit and Supervisory Committee
Collaboration
Consultations
Nomination andcomprises six directors, five of whom are
Audit and Supervisory
Directors
Remuneration Advisory
Committee
Auditing/
outside directors whose status as indeReporting
Committee
supervisionpendent directors has been notified to
Auditing / supervision
Collaboration
Appointment/dismissal and supervision
the Tokyo Stock Exchange, to guarantee
more objective direction and monitoring
Instructions, reporting
Internal Control
Presidentof management. The Inter nal Control(management meetings)
Auditing Department
Auditing Department has been established
Instructions, reporting
Internal
to support the activities of the Audit andauditsSupervisory Committee. Internal auditing
Thorough dissemination
Business execution
activities offer advice and counsel to manCommittees
of information
divisionsagers on the results of operational audits
and accounting/financial audits at Group
companies, in addition to related improveManagement, monitoringments, as an Independent function within
COMSYS Group
Presidents meeting
Internal audits
Reviews /the organization. Members of the Internalreportingreporting
Auditing Office, who comprise employees
seconded from supervisory business companies, strive to strengthen independence
SANWA COMSYS
Nippon COMSYSTSUKEN GroupNDS Group
TOSYS GroupEngineerin
by conducting audits mainly for compaGroupGroup
nies other than the one with which they
were originally affiliated. Through the
Hokuriku
COMSYSCOMSYS
SYSKEN Group
Denwa Kouji GroupJOHO SYSTEM Group
Shared Services
transition to a company with an Audit andSupervisory Committee, we have established a Nomination and Remuneration
Advisory Committee that includes out-

29

COMSYS GROUP REPORT 2020

Outline

Strategy◆ Director Remuneration
Following are the basic policies for director remuneration, as
indicated in the COMSYS Corporate Governance Code.
（1）
Directors Who Are Not Members of the
Audit and Supervisory Committee●Remuneration structures that motivate continuing increases
in corporate value●Remuneration structures that allow for the promotion ofoutstanding directors who practice the corporate philosophy●Remuneration structures comprise “basic remuneration” (afixed amount), “stock remuneration” (long-term incentives),and “bonuses” (tied into performance)●Remuneration and related amounts are decided by the
Board of Directors, within the scope of limited amounts
approved at the General Meeting of Shareholders, andbased on reviews by the Nomination and Remuneration
Advisory Committee (including outside directors) to ensure
appropriateness and objectivity（２）
Directors Who Are Members of the
Audit and Supervisory Committee●Remuneration structures applicable to persons capable ofexecuting operations such as directing auditing operations
or business execution●Remuneration structures applicable to persons participating in management decisions and management judgments,
and persons capable of auditing and directing the appropriateness of those activities●As a rule, only “basic remuneration” (a fixed amount), fromthe perspective of ensuring appropriate operations bydirectors who are members of the Audit and Supervisory
Committee●Remuneration and related amounts are decided by the
Audit and Supervisory Committee, within the scope of limited amounts approved at general meetings of shareholders

ESG

Business Base

About Us

Directors’ Annual Remuneration (FY2019)
Categories

Number of
Officers

Payment
AmountDirectors (excluding Audit and Supervisory
Committee members)

12¥200 million

Directors (Audit and Supervisory
Committee members) (outside directors)

8 (6)¥52 million(¥37 million)Total(outside directors)

20 (6)¥252 million(¥37 million)(Notes)
1. Director remuneration is set based on a resolution at the 14th regular General Meetingof Shareholders held on June 29, 2017. The remuneration limit for directors (excluding
Audit and Supervisory Committee members) shall be within ¥400 million/year, and the
remuneration limit for directors (Audit and Supervisory Committee members) shall bewithin ¥80 million/year
2. The number of directors (excluding Audit and Supervisory Committee members) receiving the above payments includes three directors who retired as of June 25, 2019.
3. The number of directors (Audit and Supervisory Committee members) receiving theabove payments includes two directors (one of whom is an outside director) who
retired as of June 25, 2019.
4. The payment amounts for the above directors (excluding Audit and Supervisory
Committee members) includes expected amount of payments for director bonuses forthe business year in question.
5. The payment amounts for the above directors (excluding Audit and Supervisory
Committee members) includes amounts posted during the business year in question
in relation to subscription warrants provided as stock options (¥76 million, paid to 12
directors).

The Audit and Supervisory Committee is responsible for auditing the execution of operations by directors who are not members of the committee, as well as preventing undue losses in
the company’s profits. Given this role, COMSYS only provides
fixed remuneration as a stable remuneration structure; committee members are not paid bonuses that are tied into the company’s performance.
In securities reports, individual disclosure for people with aconsolidated remuneration of ¥100 million or more is obligatory, but none of COMSYS’s officers fall under this category.
COMSYS’s directors only received payment of director remuneration; they do not receive employee salaries as employee/
directors.
Regarding director remuneration at Group companies andother affiliate entities, monthly standard amounts are set
according to position and rank within the scope of a total
amount resolved at the General Meeting of Shareholders foreach company, and the final amount is decided through a
Board of Directors resolution based on that standard.

◆ Introduction of Remuneration System Based on Shares with Restrictions on Transfers
We introduced a remuneration system that allocates shareswith restrictions on transfers in place of the existing share
remuneration stock option system, to provide incentives todirectors who are not members of the Audit and Supervisory
Committee or outside directors (eligible directors) to continuously increase COMSYS’s corporate value.
Upper limits on remuneration amounts and the number ofshares under this system are as follows: total amounts paid toeligible directors: within ¥100 million/year and total numberof COMSYS’s ordinary shares issued or disposed of by eligible
directors: within 40,000 shares/year. Allocation of shares withrestrictions on transfers allocated to directors of all COMSYS
subsidiaries is also in accordance with this system.

◆ Cross-Shareholdings Policy
In order to increase the Group’s corporate value from a
medium- to long-term perspective, the COMSYS Group holds
shares in cases where it deems that such ownership offers
advantages in terms of maintaining and strengthening trustbased relationships with customers and business partners, aswell as through collaboration and expanding business transactions. Shares owned for the purpose of cross-shareholding areinspected by the Board of Directors to verify the significance ofownership for each brand, and to ensure that profits and risks
accompanying ownership are in line with capital costs.

Pursuing More Efficient and Sincere Corporate Activities

30

Pursuing More Efficient and Sincere Corporate Activities(As of June 26, 2020)◆ Board of Directors

Takashi Kagaya

Yoshihisa Omura

Shigemi Sakamoto

Satoshi Tamamura

Hitoshi Kumagai

President
and Representative Director(President and Representative Director of
Nippon COMSYS Corporation; Chairmanof the Nomination and Remuneration
Advisory Committee)

Director(President and Representative Directorof TSUKEN Corporation; in charge of
Hokkaido Block)

Director(President and Representative Directoro f S A N W A C O M S YS E n g i n e e r i n g
Corporation)

Director(President and CEO of NDS Co., Ltd.)

Director( Pe r s o n n e l D e p a r t m e n t G e n e r a l
Manager; in charge of Compliance and
COMSYS Shared Services; Member of theNomination and Remuneration Advisory
Committee)

Kenichi Sato

Hidehiko Ozaki

Hideyuki Noike

Kunihiko Uchide

Koichiro Kamiwaki

Director(In charge of the Telecommunications
Carrier Business, TOSYS Corporation,
Hokuriku Denwa Kouji Co., Ltd., and
SYSKEN Corporation)

Director(Manager of the Finance & Accounting
Department and Business Expansion
Strategy Office; in charge of IR, Internal
Controls/Auditing, and General Affairs)

Director(Manager of the Corporate Planning
Department; in charge of DX Promotion)

Director(In charge of Private Sector DemandBusiness and COMSYS JOHO SYSTEM
Corporation)

Director(Full-time Audit and Supervisory
Committee member)

Kenichi Narumiya

Masahiko Miyashita

Kazuyoshi Onohara

Kenichi Nakatogawa

Koichi Kawana

Outside Director(Audit and Supervisory Committee
member)Outside Director(Audit and Supervisory Committee
member, Nomination and Remuneration
Advisory Committee member)

Outside Director(Audit and Supervisory Committee
member, Nomination and Remuneration
Advisory Committee member)

Outside Director(Audit and Supervisory Committee
member)Outside Director(Audit and Supervisory Committee
member)◆ Appointment of Directors
COMSYS’s Board of Directors comprises 15 members, as stipulated in the Articles of Association. Policies for the appointment
of in-house directors (directors who are not members of the
Audit and Supervisory Committee) are stipulated in accordancewith standards laid out in the Corporate Governance Code,and are based on the premise that one third or more of theBoard of Directors shall be outside directors.

31

COMSYS GROUP REPORT 2020

In-House Directors
When naming candidates for directors who are not membersof the Audit and Supervisory Committee, suitable people shallbe named, taking into account overall suitability, including
abundant experience, knowledge, and diverse specialization.
Appointments for the current business year were made froma companywide standpoint, from the perspective of further
strengthening business promotion and governance, and taking

Outline

Strategy

ESG

Business Base

About Us

Overview of Governance Structures
into account a wide range of factors, including: (1) Experienceand past performance in the promotion of businesses in the
COMSYS Group’s key business domains (Telecommunications
Carrier Business, IT Solutions Business, and Social SystemRelated Business); (2) Knowledge and skills in corporate segments such as corporate management and direction; and (3)The scale of the supervisory business companies managed.
Outside Directors
When naming candidates for outside directors who are members of the Audit and Supervisory Committee, suitable people
shall be named, taking into account overall suitability, including
highly specialized knowledge of laws, finances, or corporate
management, as well as a diverse perspective, abundant experience, and advanced insights and specialization. COMSYS
has set no upper limits on the tenure of outside directors. The
tenure of outside directors who are members of the Audit andSupervisory Committee is two years, and decisions on whether
or not to request reappointment are made based on indepen-

Board of Directors
ChairmanPresident and Representative Director

Number of members (Tenure: 1 or 2 years)

15

outside directors (Independent Directors)

5 (5)Audit and Supervisory Committee
ChairmanIn-house Director

Number of members

6 (1 In-house director + 5 outside directors)

Full-time Committee members

1(As of June 26, 2020)

dence, and on the degree of contribution to deliberations at
meetings of the Board of Directors.
We are aware that COMSYS needs to ensure diversity in the
Board of Directors, and especially to appoint female directors,
but we have as yet been unable to secure a suitable candidate.
We will continue to put forth our utmost efforts to secure
diversity in COMSYS’s Board of Directors, from the perspectivesof both gender and nationality.
Reasons for Appointing Outside Directors

KenichiNarumiya

Mr. Narumiya has extensive experience in corporate management and specialized knowledge based on first-hand experience in the telecommunications industry. In our judgment, he provides appropriate advice from a multi-faceted perspective, and contributes to further
strengthening Group management and corporate governance. He fulfills all of the requirements of an independent director as stipulated
in the Tokyo Stock Exchange Guidelines concerning Listed Company Compliance, etc. He originally worked at Nippon Telegraph andTelephone East Corporation, but he did not serve as director, and he retired from that company in June 2004. Mr. Narumiya has been
designated as an “independent director” because transactions undertaken by COMSYS and its subsidiaries with Fujitsu Ltd. and Fujitsu
Telecom Networks Ltd., where he has held concurrent positions, are regular transactions as a general vendor, so there is no risk of a conflict of interest involving ordinary shareholders.

Masahiko
Miyashita

In our judgment, Mr. Miyashita contributes to further strengthening COMSYS’s Group management and corporate governance by providing appropriate advice from a multi-faceted perspective, based on advanced legal skills and insights as an attorney. He fulfills all of therequirements of an independent director as stipulated in the Tokyo Stock Exchange Guidelines concerning Listed Company Compliance,
etc., and has been designated as an “independent director” because there is no risk of a conflict of interest involving ordinary shareholders.

Kazuyoshi
OnoharaMr. Onohara has extensive experience and insights in corporate management and specialized knowledge based on long years of firsthand experience in the iron and steel industry. In our judgment, based on his knowledge, experience, and insights, he provides advice
and suggestions from a multi-faceted perspective, and contributes to further strengthening COMSYS’s corporate governance. He fulfills
all of the requirements of an independent director as stipulated in the Tokyo Stock Exchange Guidelines concerning Listed Company
Compliance, etc., and has been designated as an “independent director” because there is no risk of a conflict of interest involving ordinary shareholders.

KenichiNakatogawa

As a certified public accountant, Mr. Nakatogawa has advanced and specialized knowledge and insights in finances. In our judgment,
based on his knowledge and insights, he provides advice and suggestions from a multi-faceted perspective, and contributes to further
strengthening COMSYS’s corporate governance. He fulfills all of the requirements of an independent director as stipulated in the Tokyo
Stock Exchange Guidelines concerning Listed Company Compliance, etc., and has been designated as an “independent director” because
there is no risk of a conflict of interest involving ordinary shareholders.

KoichiKawanaMr. Kawana has extensive experience and insights in corporate management and specialized knowledge acquired through long years offirst-hand experience in the plant engineering industry, as well as a detailed understanding of overseas business, having worked as thehead of an overseas office. Based on his knowledge, experience, and insights, in our judgment, he provides advice and suggestions froma multi-faceted perspective, and contributes to further strengthening COMSYS’s corporate governance. He fulfills all of the requirementsof an independent director as stipulated in the Tokyo Stock Exchange Guidelines concerning Listed Company Compliance, etc., and has
been designated as an “independent director” because there is no risk of a conflict of interest involving ordinary shareholders.

◆ Evaluation of the Board of Directors’ EffectivenessWe conducted a survey of COMSYS’s directors regarding
an “Evaluation of the Board of Director’s effectiveness,”analyzed the survey output, discussed the analysis resultswith the Board of Directors, and deliberated on the
Board’s current status and effectiveness. In this way, we
confirmed that the effectiveness of COMSYS’s Board of

Directors has been secured. The Corporate Governance
Code requires disclosure of an outline of analysis andevaluation results regarding the effectiveness of the Boardof Directors as a whole, but it does not require disclosureof self-evaluations by each director, so these self-evaluations have not been disclosed.

Pursuing More Efficient and Sincere Corporate Activities

32

Pursuing More Efficient and Sincere Corporate Activities◆ Maintaining Internal Control Systems
Basic Policies for Internal Controls
COMSYS created basic policies for internal controls at a meeting of the Board of Directors in May 2006. At a meeting of
the Board of Directors in April 2015, it decided on partial
revisions to the details of those basic policies, in keeping with
amendments to the Companies Act and the Ordinance for
Enforcement of the Companies Act. At a meeting of the Boardof Directors in June 2017, it decided on further partial revisions
to the details of the basic policies, in keeping with the transition to a Company with an Audit and Supervisory Committee.
Based on these policies, we strive to maintain a structurethat ensures appropriate internal control operations, such as
strengthening corporate governance, maintaining compliant
structures, and strengthening risk management.
Specific details related to the structure of internal control
systems and an outline of their operational status can be foundon the COMSYS Holdings website (https://www.comsys-hd.
co.jp/company/outline/outline4.html) (in Japanese). These
internal control systems are decided and created to be in compliance with COMSYS Holdings, and improvements are madeas deemed necessary in keeping with the subsequent implementation and monitoring of those systems. Auditing methods
are recognized as being appropriate, covering the effectivenessof operations and the utility of system maintenance statusin accordance with the “Auditing standards related to internal control systems” created by the Audit and Supervisory
Committee in conformance with auditing standards stipulatedby the Japan Audit & Supervisory Board Members Association.
Status of Audit and Supervisory Committee Meetings
As a rule, meetings of the Audit and Supervisory Committee
are held on the same day as meetings of the Board of
Directors. Resolution items at Audit and Supervisory Committee
meetings include: The creation of auditing plans and auditing
reports; deciding opinions on the naming and remuneration of
directors who are not members of the Audit and Supervisory
Committee; the appointment and dismissal of accounting
auditors; and agreement on auditor remuneration. Deliberation
items include remuneration amounts for Audit and Supervisory
Committee members. Report items include information sharing on important meetings attended by full-time Audit andSupervisory Committee members (e.g., management meetings
and COMSYS Group auditor contact meetings); and the resultsof site audits by full-time Audit and Supervisory Committee
members. In FY2019, four outside Audit and Supervisory
Committee members were registered up to June 2019, and fivewere registered following the 16th regular General Meetingof Shareholders held in June 2019. These outside Audit and33

COMSYS GROUP REPORT 2020

Supervisory Committee members have attended all nine meetings of the Board of Directors and all 11 Audit and Supervisory
Committee meetings, making statements from the perspective
and position of an outside Audit and Supervisory Committee
member.
Full-time auditors at supervisory business companies (sevenauditors at seven main companies) regularly hold COMSYSGroup Full-time Auditor Contact Meetings (five in FY2019) toreport on management conditions for the COMSYS Group as awhole, and also request reports, mutually exchange opinions,and share information on management conditions and internal
controls at the supervisory business companies. Twice eachyear, they also receive explanations on all aspects of management from the presidents of the supervisory business companies.
The Group’s Internal Controls
As part of audits targeting “Status of execution of duty tobuild internal controls for directors,” the Audit and Supervisory
Committee is involved in checking and expressing opinions
on the results of internal control audits based on the Financial
Instruments and Exchange Act. The scope of internal control
evaluations is decided through deliberations with accounting
auditors. During FY2019, out of a total of 73 consolidated subsidiaries, evaluations covered eight supervisory business companies and nine subsidiaries.
Furthermore, to ensure the appropriateness of the COMSYSGroup’s operations, 13 members* of the COMSYS HoldingsInternal Auditing Office conduct internal audits for the Group
as a whole. [*Full-time staff (Division Manager; Seconded
employees): 13; Concurrent duties as heads of supervisorybusiness company organizations: 5; Concurrent duties in theInternal Control Office: 1; Total: 19]
Internal Controls Related to Financial Reporting
The Audit and Supervisory Committee receives explanations
from the company and accounting auditors regarding audit
results. Consequently, up to now, there have been no reportsof “serious omissions in disclosure,” and we recognize thatinternal controls related to financial reporting are effective. The
Audit and Supervisory Committee also receives reports fromaccounting auditors on the status and progress of internal
control audits in accordance with the Financial Instruments
and Exchange Act. In this case as well, there have been noreports of “serious omissions in disclosure,” and we recognizethat internal controls based on the Financial Instruments andExchange Act are effective.

Outline

Strategy◆ Basic Compliance Policies

Business Base

ESG

About Us

Compliance Promotion Structure
COMSYS Holdings

The COMSYS Group positions the establishment of legal compliance and other areas of corporate ethics as important management issues. Based on the “Compliance Program” createdin January 2004, we have instituted the “COMSYS Group Codeof Conduct” describing the conduct to be demonstrated byeach and every director and employee. Compliance Committee
meetings are also held on a regular basis. The Code of Conduct
clearly lays out guidelines for fair and transparent business
transactions placing top priority on compliance with laws
and social norms, prohibiting bribery and relationships with
anti-social forces, emphasizing respect for individual humanrights, and abolishing discrimination, and we have a policythat strictly prohibits harassment in any form. The Compliance
Committee, which is chaired by the president of COMSYS
Holdings, includes COMSYS’s executive officers, presidents ofsupervisory business companies, and members of the Audit
and Supervisory Committee, including outside members. It
oversees and deliberates on compliance structures for COMSYS
Holdings Corporation and the COMSYS Group, in an effort toimprove and cultivate a “compliance mindset” throughout theentire COMSYS Group. Specifically, cases arising at supervisorybusiness companies and incidents reported to consultation contact points are reviewed by the Compliance Committee at theManagement meetings
Instructions

Reporting / suggestion*Important casessCompliance Committee
Chairman: President of COMSYS HoldingsGroupwide notification

Reporting on activities

Compliance Committees at supervisory business companies
Groupwide notificationand guidance

Reporting on activities

Supervisory business companies
Groupwide notificationand guidance

Reporting on activities

Business companies

Outline of Compliance Committee Meetings
Main items reviewed: Compliance issues at Group companies; recurrence prevention measures; status of educational activities
Status of recent meetings: Four meetings held during FY2019

company in question, and the results of those reviews are thenreported to the Compliance Committee at COMSYS Holdings.
All Group companies are notified and thoroughly briefed
regarding important cases, as part of Group-wide measures toprevent recurrence.

◆ Internal Reporting System
The COMSYS Group positions compliance with the WhistleBlower Protection Act as an important part of building theInternal Control System, and has enacted Whistle-Blower
Protection regulations that stipulate strict compliance with theintent of the law, and rules for submitting and receiving whistleblower reports within the COMSYS Group. Internal reporting
systems are one effective way of preventing scandals in thecompany, and we believe that by identifying and weeding out
the “seeds of problems” early on from among many consultations and reports, we are able to prevent serious scandals
before they occur. The total number of internal reports, including consultations, for the Group as a whole was 97 in FY2019(26 violations) and 78 in FY2018 (21 violations).

◆ Prevention of Bribery
Bribery and corruption are in opposition to the business of the
COMSYS Group, which contributes to society and plays animportant role in society. Such behaviors are strictly prohibitedand controlled, regardless of the business situation. We havean ironclad rule that under no circumstances will we engage inbidding collusion or other corrupt practices in Japan. In global

business, because it is essential to enter contracts with subcontractors in various countries, there could be an increased riskof bribery or corruption in contract relationships, for example
in emerging countries, but because our business activities are
currently centered in Japan, in our view, there is little risk ofbribery incidents involving the COMSYS Group.

◆ Preventing Collusive Bidding
As part of measures to prevent the recurrence of corruption and scandal, we are working to strengthen compliancethrough systematic training for all employees. To prevent therecurrence of bidding collusion in particular, we hold seminars
every year, mainly for managers and employees handling government agencies, welcoming experts as instructors, to ensurecompliance with the Antimonopoly Law and the Construction

Business Act.
We hold training sessions where the Group’s newly appointed
executive officers receive guidance from lawyers and CPAs,
and we have introduced a compliance curriculum into thelevel-specific training for newly appointed managers, middle
level employees, and new employees to prevent corruption andscandals.

Pursuing More Efficient and Sincere Corporate Activities

34

Cultivating Human Resources◆ Basic Approach to Human Resources
The COMSYS Group’s greatest management resource is its
people. The Group’s business could not exist without engineers
who have national certifications and advanced knowledge
and experience, and the staff who support them. Amid drasticchanges in the environment surrounding the telecommunications industry, securing, training, and utilizing human resources
who can respond to these changes in the business environment
is an extremely important management theme. In Japanesesociety, however, where the labor shortage is a growing concern, it is becoming increasingly difficult to secure outstanding
labor. For this reason, the COMSYS Group is strengthening
recruitment of both new graduates and mid-career hires, making optimum use of human resources by increasing the flexibility of staff within the Group, and reviewing training systems foracquiring qualifications and improving management skills. In
addition, we are actively promoting diversity and undertaking
workstyle innovations to recruit and secure more outstanding
individuals from among an even more diverse range of candidates. We are revising personnel systems at Group companies,
encouraging personnel exchanges of executive employees
within the Group, and aligning operations among staff involvedin operations, safety, and quality.
Our training policies are designed to foster individuals who
can respond to new business environments; this includes level-specific training with a focus on developing management
skills, “multi-skilling” of engineers, and implementing various
systems to support employees in acquiring certifications. As
the COMSYS Group’s business domains expand, in addition toproject management as a primary construction contractor, ourwork demands comprehensive management skills ranging fromproject planning to building systems, collaboration with parties inside and outside of the Group, and studies of financing
schemes. Meanwhile, on the front lines, as telecommunications
carriers gradually reduce their capital investments and undergoa full-scale shift toward outsourcing, including maintenanceand operations, the key to improving productivity will be“multi-skilling” that is not limited by conventional frameworks.
In order to strengthen business foundations in the future, it willbe essential to expand the pool of engineers and employeeswith certifications in both IT and construction, who are vital to
the COMSYS Group’s business, so we will adopt a systematic
approach to fostering this type of labor.

◆ Hiring Policies
In April 2020, COMSYS Group’s nine supervisory businesscompanies hired a total of 241 new employees, mostly in
the Group’s core businesses: The Telecommunications Carrier
Business, the IT Solutions Business, and the Social SystemRelated Business. As part of measures to prevent the spreadof COVID-19 infection, recruiting activities targeting new
employees for April 2021 are being conducted through remoteexplanation meetings and remote interviews. We are planningto hire approximately 260 new employees at nine companies,
most of whom will be engineers required to strengthen theGroup’s businesses. In order to secure a broader range ofdiverse and outstanding personnel, rather than hiring all new

graduates at once, as has been the common practice in Japan,
we will continue hiring through the year; for example, targeting students returning to Japan from overseas studies in thesummer onward, as well as mid-career hires and recent graduates with one to three years of work experience. At the ninesupervisory business companies, there is an average turnoverrate of 8% for new graduate hires who leave the company
within the first three years. This is a high retention rate compared to the turnover rate for new university graduate hires in
the general workforce, at 32% (Ministry of Health, Labour andWelfare Materials on Turnover Rates: Persons graduating inMarch 2016).

◆ Mid-Career Hiring and Re-Employment System
The COMSYS Group conducts mid-career hiring of qualified
and experienced candidates who can contribute to business
immediately, in order to make up for the labor shortfall resulting from business expansion. Compensation for mid-careerhires is decided based on mutual agreement, taking into consideration all of the individual’s credentials, including skills and

35

COMSYS GROUP REPORT 2020

experience. We also conduct re-hiring after retirement, to best
utilize the experience and expertise of senior employees. For
example, Nippon COMSYS has increased the age for rehiringof senior employees to 70, so that employees can remain active
longer when there is mutual agreement between the employee
and the company.

Outline

Strategy

Business Base

ESG

About Us

◆ Promoting Diversity
The COMSYS Group promotes diversity based on the belief
that a diverse workforce is essential to continued growth.
Specifically, by promoting diversity, we feel that we can (1)Discover skilled labor; (2) Cultivate a corporate culture in which
all employees can generate novel ideas regardless of their background or gender; and (3) Respond to the changes and needsof society.
Because the COMSYS Group and the construction industry
in general have been typically male-centric societies, we first
focused on promoting active participation by women; forexample: (1) Reforms in the corporate environment throughpresident’s messages and training (employee awarenessreforms regarding diversity); (2) Supporting career development
for women (strengthening recruiting, career training for female
employees, and training for managers with female subordinates); and (3) Promoting work/life balance (providing support
in child raising, including short working hours and encouraging
male employees to take childcare leave; establishing satellite
offices for teleworking; and introducing flex-time and “working
from home” systems). As a result of these activities, an environment has been put in place to enable diverse workstyles thatserve as the foundations for promoting diversity, and employees better understand the meaning of diversity within thecompany. These activities have also gained recognition fromthe government; for example, in July 2019, Nippon COMSYS

acquired certification at the highest of three grades in the
Ministry of Health, Labour and Welfare’s “Eruboshi” system, arank awarded to companies demonstrating outstanding activities in accordance with the “Act on the Promotion of Female
Participation and Career Advancement in the Workplace.”
Issues still remain, however; for example, in the low numberof female hires, the small number of female candidates for
managerial positions, and the low ratio of female managers.
Nippon COMSYS therefore needs to promote activities in the
future aimed at achieving two goals by the end of FY2022:(1) Increase the ratio of new female hires to 30%; and (2) At
least double the current ratio of female managers. We are also
conducting studies on the hiring of non-Japanese employees;
six have already been hired at the nine supervisory businesscompanies. The number of male employees taking childcare
leave is gradually increasing, and we will strive to be a Group inwhich diverse employees can be actively involved, regardless ofgender, life stage, disabilities, or nationality.
Data on Diversity and Participation by Female Employees

Ratio of new female graduate hires (%)
Ratio of female managers (%)
Number of non-Japanese employees

End of
FY2016End of
FY2017

End of
FY2018End of
FY2019

14.7

18.5

18.9

18.7

1.6

1.5

1.4

1.4

1

0

1

6

◆ Workstyle Innovations
The COMSYS Group is promoting workstyle innovations as partof efforts to achieve diverse workstyles and increase productivity. Up to now, we have institutionalized telework and flextime
systems, and allowed employees to wear more comfortable
clothes in the workplace. In the future, based on telework
initiatives that have been encouraged to prevent the spreadof COVID-19 infection, we will begin to re-examine new workstyles and ideal office environments to accommodate the “newnormal.”We are also reducing total annual working hours from theperspective of health management for employees and reducing

labor costs, and a variety of other initiatives are being rolled out
at all Group entities. One example is the automation of routine
tasks through the use of robotics process automation(RPA). By
introducing around 100 RPA robots at Nippon COMSYS, wehave achieved a cumulative savings of approximately 28,000
labor hours over two years. We are making other efforts tooptimize labor time, for example by strengthening labor management, including systemized checks of work time, with aview toward March 2024, when the exemption on upper limits
for overtime in the construction industry expires.

◆ Engineer Training Policies in the Medium-Term Vision
Our goal is to evolve into a company that can provide a
one-stop response to the varied needs of customers in thetelecommunications industry, which is experiencing a rapid
wave of technology innovations. To do this, the COMSYSGroup will actively foster engineers and support them inacquiring new skills. We will undertake systematic recruiting and training to secure engineering talent in keepingwith the times. For example, in the Telecommunications
Carrier Business, we will increase the number of certified
engineers required for the construction of base stations
for fifth-generation mobile communication systems (5G),
which will see further growth in the future; in the IT
Solutions Business, we will promote vendor certifications

related to the cloud, virtual technologies, and other new
technologies; and in the Social System-Related Business,
we will recruit and train engineers to supervise electrical,
civil engineering, and piping construction.
To prevent accidents and improve quality, we will
strengthen the training of on-site agents; promote technical training through participation in skills competitions;offer skills training to all employees, including partnercompanies, at in-house educational and training facilities; and encourage senior employees to share theirexpert skills with their juniors. We will also invest efforts
in group activities and improvement proposal activities
aimed at increasing productivity.

Cultivating Human Resources36Promoting Safety and Quality◆ Basic Approaches to Safety
Safety, quality, and trust are top priority items in the COMSYSGroup’s business operations. The COMSYS Group emphasizes
three key points in terms of ensuring safety: (1) Entrenching
and carrying on a corporate culture in which securing safety
and quality are the top priority, regardless of the situation orenvironment; (2) Actively introducing tools and safety equipment to ensure a safe work environment; and (3) Continuallyoperating tools and equipment correctly. To ensure that thesethree activities do not become mere formalities, we review
them as required so that they evolve, and are subject to a continuous PDCA process.
In terms of specific accident prevention measures, in addition
to day-to-day meetings before starting work and safety patrols,

we have introduced vehicles equipped with automatic brakesystems and other safety equipment, provide traffic safety
guidance based on information recorded by onboard cameras,
provide training that incorporates “hazard experiences” using
VR technology, conduct safety conferences and accident prevention campaigns that include partner companies, and draw
attention to accident prevention using case studies of past
accidents both in the COMSYS Group and at other companies.
When an accident occurs, the background factors are thoroughly investigated based on fundamental principles for operating rules, prevention measures are studied, and the various
workplaces are advised of key points requiring attention andrules to be followed in the future.

◆ Work-Related Accidents
The COMSYS Group invests efforts into eliminating workplace
accidents, and the frequency rate*1 for these accidents falls
below the average for the construction industry. The severity
rate* 2 for work-related accidents in FY2019 exceeded theindustry average due to the unfortunate occurrence of one
fatal accident. We have analyzed the causes and implemented
thorough prevention measures, to ensure that such a tragic
accident is never repeated.

*1 Frequency rate: Expresses the frequency of work-related accidents based on the number of work-related injuries or deaths recorded for every 1 million work hours
Calculation method: (number of work-related injuries or deaths / total number ofwork hours) × 1,000,000*2 Severity rate: Expresses the severity of work-related accidents based on the number of
workdays lost due to workplace accidents, recorded for every 1,000 work hours
Calculation method: (Total number of workdays lost / total number of work hours) ×
1,000

Frequency Rate of Work-Related Accidents (Yearly Base)Severity Rate of Work-Related Accidents (Yearly Base)

1.00

1.00

0.92
0.79

0.80

Construction industry*

0.80

0.80

0.60

0.60

0.40

0.40

0.50
COMSYS Group

0.20

0.19

COMSYS Group

0.20
0.06

0.17

0

Construction industry*

0.14

0.00

Dec. 2017

Dec. 20180
Dec. 2017

Dec. 2018

Dec. 2019

0.18

0.28

0.20

Source: Ministry of Health, Labour and Welfare; 2019 Trends in Workplace Accidents;
March values

Dec. 2019(both in NTT Engineering Business)◆ Activities Aimed at Ensuring Qualityy
Multiple workplaces have obtained ISO 9001 certification, andquality management systems are in operation to meet goals
and enable continuous improvements on various themes set
by Group companies. Employees participate in kaizen activities
and skill competitions, construction systems have been put inplace for work process management, and photographic inspection systems have been introduced in the NTT Engineering

37

COMSYS GROUP REPORT 2020

Business as part of efforts to improve quality and prevent
human-initiated failures.
Facility Accidents and Human-Initiated Failures
FY2017FY201823

FY201920

22

Outline

Strategy

ESG

Business Base

About Us

Helping to Build a Sustainable Society◆ Information Security and Personal Information Protection
The COMSYS Group receives facility information, technicalinformation, and personal information from customers, andconducts its business based on that information. Preventing
information leaks is extremely important in securing the customers’ trust. To strengthen information security, we haveobtained information security management system (ISMS)
certification at all companies and divisions, always working toprotect personal information and business information, and torespond appropriately to cyber-attacks. Each year, we conduct
information security training for all employees, including contract employees and employees of partner companies, as partof unflagging efforts to protect customer information.
Serious Information-Related Incidents
FY2017FY20180

FY20190

1(Number of information-related incidents involving leaks of customer information or personal information as defined by COMSYS Holdings)◆ Expanding the Renewable Energy Business
The COMSYS Group has put forward “promoting the renewable energy business, including the solar power, wind power,
and biomass power generation businesses,” as one growthstrategy for achieving the Group’s medium-term goals. We
have increased the ratio of renewable energy business by about

70% compared to the previous year—in part by securing alarge-scale solar power generation project—and we will continue to contribute to reducing greenhouse gas emissions in
the future as well.

◆ Reducing Greenhouse Gases
The COMSYS Group promotes a variety of environmental protection
activities, including the introduction of low pollution vehicles, theintroduction of solar power generation systems in office buildings,
and increased purchases of “green power” derived from renewableenergy sources. We are working to reduce the consumption of bothgasoline and electricity, as part of efforts to cut greenhouse gas (CO2)emissions.

CO2 Emissions (Nippon COMSYS)(t)

FY2019FY20186,155.8
7,183.5◆ Disaster Countermeasures
Typhoon Nos. 15 and 19, which struck during September andOctober 2019, caused tremendous damage, mainly to EasternJapan. In Chiba Prefecture, the COMSYS Group combined allof its resources to assist in the rapid recovery of wireless basestations and telecommunication cable facilities that had beendamaged by Typhoon No. 15, undertaking construction on an
unprecedented scale.

◆ Basic Procurement Policies and Group Synergies
Outside vendors are selected from among companies involvedin ongoing transactions with the COMSYS Group, through aprocess of evaluation and vendor registration in keeping withreview standards established by the various supervisory business companies. These standards are based on factors such as
management status, construction related licenses, and statusof corporate insurance.

In order to optimize the COMSYS Group’s procurement operations, in 2019, we kicked off a “Procurement Optimization
Study Project” to enhance Group synergy. Among these studies
of Group strategies, we are examining material procurementthat leverages merits of scale, and price optimization throughthe collection and analysis of data.

◆ Strengthening Collaboration with Partner Companies
The COMSYS Group’s business activities are made possible
through collaboration with partner companies. Group companies that do business involving construction are working
to improve quality and safety in concert with these partnercompanies. Group companies conduct contact meetings withpartner companies once or twice each year, strengthening collaboration by creating opportunities to share information on
trends and policies related to the COMSYS Group’s business.

Promoting Safety and Peace of Mind / Helping to Build a Sustainable Society

38

Financial and Non-Financial Highlights(Unit: Millions of yen)

FY2009FY2010FY2011FY2012

ended
March 31, 2010

ended
March 31, 2011

ended
March 31, 2012

ended
March 31, 2013

Orders received

284,789

294,365

297,769

335,632

Net sales

293,086

315,480

295,851

316,092

Gross profits

32,791

31,052

31,11741,226

SG&A expenses

20,25019,266

18,525

18,679Operating profit

12,54011,785

12,592

22,547

Operating margin

13,113

12,14012,96922,914

Profit before income taxes

12,647

11,193

12,26721,093

Profit attributable to owners of parent

7,097

9,543

7,173

13,284

Cash and cash equivalents at end of year

23,005

17,63533,454

23,469Total net assets

151,768

161,768

164,574

173,411

Total assets

211,809237,436

228,135

240,602

Capital expenditure

12,470

5,780

6,330

8,360

Depreciation and amortization

4,951

5,043

4,640

4,486

11

8,173

1,520

1,660

Gross profit margin on net sales

11.2

9.8

10.5

13.0

Operating profit margin on net sales

4.3

3.7

4.3

7.1

Ordinary profit margin on net sales

4.5

3.8

4.4

7.2

Primary earnings margin on net sales

2.4

3.0

2.4

4.2

Return on equity (ROE)

4.7

6.1

4.4

7.9

Return on assets (ROA)

3.3

4.2

3.1

5.7

Return on invested capital (ROIC)

4.4

5.8

4.4

8.2

Equity ratio

71.2

67.7

71.7

71.6

Interest-bearing liabilities – (short-term borrowings + long-term borrowings)
Financial Indicators (%)

Stock Information
Dividends per share (Yen)

20.00

20.00

20.00

20.00

Consolidated payout ratio (%)

36.2

27.1

36.0

18.7

Total return ratio (%)

106.2

58.3

77.7

48.7

0.8

0.7

0.7

0.8

16.40

11.38

16.14

10.69

905

841

896

1,142

Total number of issued shares (Thousands of shares)

145,977

145,977

145,977

145,977

Number of treasury shares at end of period (Thousands of shares)

20,18015,43018,90822,745Market capitalization (Billions of yen)

132.1

122.7

130.7

166.7

8,407

10,012

9,758

9,798

Price-to-book ratio (PBR) (Multiples)
Price-to-earnings ratio (PER) (Multiples)
Total shareholder return (TSR) (%)
Closing price at end of period (Yen)Non-Financial Information
Number of employees (consolidated)
Ratio of new female hires (%); 9 main companies
Ratio of female managers (%); 9 main companies
Ratio of employees with disabilities (%); 9 main companies
Avg. number of annual paid holidays used (unit: days)
Notes: Figures for US dollars shown in the table are converted based on the exchange rate as of March 31, 2020: ¥108.83 / US$1.00. Total number of issued sharesfor the year ended March 31, 2016, shows a decrease due to the cancellation of 4,977,000 treasury shares, which resulted from a resolution at a meeting of
the Board of Directors held on November 6, 2015. Total return ratio = (Total Dividends + Total amount for treasury shares purchased) ÷ Profit

39

COMSYS GROUP REPORT 2020

Outline

Strategy

Business Base

About Us

ESG

FY2019FY2013

FY2014FY2015FY2016FY2017FY2018FY2019ended
March 31, 2014

ended
March 31, 2015

ended
March 31, 2016

ended
March 31, 2017

ended
March 31, 2018

ended
March 31, 2019

ended
March 31, 2020

ended
March 31, 2020

(unit: US$ 1,000)

327,981

336,973

331,986

370,198402,229505,558

590,718

5,427,897

331,341

328,631

320,654334,163

380,024

481,783

560,882

5,153,744

45,77047,93843,38945,72353,43365,25373,612

676,394

18,20020,264

19,54020,68623,08529,98534,658318,460

27,57027,674

23,84925,03630,34735,267

38,953357,925

28,07828,121

24,22325,34130,70636,07140,064368,134

27,07627,28324,04022,80730,861

39,60039,478362,749

16,38916,767

15,42014,485

20,39028,01825,994

238,850

30,91533,43528,81820,87928,957

27,77835,503326,224

179,414

194,038

196,543

202,943

231,767

301,459

310,6942,854,856

250,561

264,019

266,066

284,367

325,042439,926

450,043

4,135,284

8,200

7,820

6,200

9,620

14,43010,653

11,730107,783

4,426

4,672

5,009

5,723

5,866

7,444

9,150

84,076

1,270

100

114

113

106

11,756

8,145

74,841

13.8

14.6

13.5

13.7

14.1

13.5

13.1

−

8.3

8.4

7.4

7.5

8.0

7.3

6.9

−

8.5

8.6

7.6

7.6

8.1

7.5

7.1

−

4.9

5.1

4.8

4.3

5.4

5.8

4.6

−

9.4

9.0

7.9

7.3

9.4

10.6

8.6

−

6.7

6.5

5.8

5.3

6.7

7.3

5.8

−

9.1

8.7

7.5

8.1

8.5

7.5

7.9

−

71.1

73.0

73.4

70.9

70.8

67.8

68.3

−

25.00

30.00

35.00

40.00

50.00

60.00

75.00

−

18.4

21.0

25.6

30.8

28.0

26.1

36.8

−

66.9

66.2

77.2

85.6

67.5

54.5

67.5

−

1.1

0.9

1.0

1.1

1.4

1.3

1.1

−

11.89

10.41

12.71

15.30

15.90

13.12

13.71

−

119.4

139.0

194.9

215.8

204.9

−

1,618

1,485

1,738

1,989

2,840

3,020

2,783

−

145,977

145,977

141,000

141,000

141,000

141,000

141,000−

28,04431,32430,15931,825

26,382

12,29914,165

−

236.1

216.7

245.0

280.4

400.4

425.8

392.4

−

9,625

9,931

9,994

10,224

11,581

16,70016,844

−

14.7

18.5

18.9

18.7

−

1.6

1.5

1.4

1.4

−

1.4

1.9

2.0

2.1

−

11.2

11.2

12.6

13.0

−

Financial and Non-Financial highlights

40

Status of the Company’s Shares(As of March 31, 2020)

Major Shareholders*Number of
Shares Held(Thousands)

Name of Shareholder◆ Investor Information
Business Year:
April 1 to March 31 of the following year
Regular General Meeting of Shareholders:June of each year
Total Number of Issuable Shares:
580,000,000
Total Number of Issued Shares:
141,000,000
Number of Shareholders:
19,892
Date of Listing:

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

28,285

20.06

Custody Bank of Japan, Ltd.
(formerly Japan Trustee Services Bank, Ltd.) (Trust account)

15,640

11.09

Nippon Life Insurance Company

3,247

2.30

Custody Bank of Japan, Ltd.
(formerly Trust & Custody Services Bank, Ltd.)(securities investment trust account)

2,982

2.11

COMSYS Holdings Employee Shareholder Association

2,085

1.47

The Nomura Trust and Banking Co., Ltd.
(investment trust account)

2,066

1.46

JP MORGAN CHASE BANK 385151

1,978

1.40

Custody Bank of Japan, Ltd.
(formerly Japan Trustee Services Bank, Ltd.) (Trust account 5)

1,958

1.38

Custody Bank of Japan, Ltd.
(formerly Japan Trustee Services Bank, Ltd.) (Trust account 7)

1,737

1.23

Sumitomo Realty & Development Co., Ltd.

1,661

1.17

*As of March 31, 2020, COMSYS Holdings held 14,165,000 treasury shares (10.04%), but COMSYS Holdings is notincluded among the “major shareholders” above.

Shares by Shareholder Category

September 29, 2003
Listed Exchange:
Tokyo Stock Exchange (First Section)(TSE Code: 1721)
Shareholder Registry Administrator:
Mitsubishi UFJ Trust and Banking Corporation
Shareholder Registry Administrator Contact Address:
1-1 Nikko-cho, Fuchu City, Tokyo
Accounting Auditor:
Gyosei & Co.

Percentage

Component ratioof shares held(number of shareholders)

51.2%
2.1%
6.7%
14.6%
15.3%
10.1%

Financial institutions (82)Securities companies (44)Other corporate entities (322)Foreign corporate entities (343)
Individuals (19,100)
Treasury shares (1)Share Price and Trading Volume(Yen)(Shares)

3,600

50,000

3,100

40,0002,600
30,000
2,100
20,000
1,600

1,100

Apr
. ‘17
May
‘17
Jun.
‘17
Jul.
‘17
Aug
. ‘17
Sep
. ‘17
Oct
. ‘17
Nov
. ‘17
Dec
. ‘17
Jan.
‘18
Feb
. ‘18
Mar
. ‘18
Apr
. ‘18
May
‘18
Jun.
‘18
Jul.
‘18
Aug
. ‘18
Sep
. ‘18
Oct
. ‘18
Nov
. ‘18
Dec
. ‘18
Jan.
‘19
Feb
. ‘19
Mar
. ‘19
Apr
. ‘19
May
‘19
Jun.
‘19
Jul.
‘19
Aug
. ‘19
Sep
. ‘19
Oct
. ‘19
Nov
. ‘19
Dec
. ‘19
Jan.
‘20
Feb
. ‘20
Mar
. ‘20

600

41

COMSYS GROUP REPORT 2020

10,0000Outline

Strategy

Business Base

About Us

ESG

Corporate Information(as of March 31, 2020)◆ Company Outline
Company Name:(As of June 26, 2020)◆ Directors
President and Representative Director

Takashi Kagaya

Directors

Yoshihisa Omura
Shigemi Sakamoto
Satoshi Tamamura
Hitoshi Kumagai
Kenichi Sato
Hidehiko Ozaki
Hideyuki Noike
Kunihiko Uchide

Director

Koichiro Kamiwaki

COMSYS Holdings Corporation
Head Office:2-17-1 Higashi-Gotanda, Shinagawa-ku, Tokyo
141-8647
Tel: +81-3-3448-7100 (switchboard)
Website:https://www.comsys-hd.co.jp/
Description of Business:
Corporate management of subsidiaries involvedin the telecommunications construction business, electrical facilities construction business,(Full-Time Member of the Audit and Supervisory Committee)

and information processing related businessOutside Directors

Established:(Members of the Audit and Supervisory Committee)

September 29, 2003
Share Capital:¥10.0 billion
Number of Employees:

Kenichi Narumiya
Masahiko Miyashita
Kazuyoshi Onohara
Kenichi Nakatogawa
Koichi Kawana

16,844
Organizational Chart
Board of Directors

Nomination and Remuneration Advisory Committee

Audit and Supervisory Committee
President
Senior Management Committee

CSR Committee
Compliance Committee
Risk Management Committee
Personal Information Protection Committee

Management
Planning
Department

Business
Expansion
OfficeDX Promotion
Department

IR Department

Financial
Department

General Affairs
Department

HR
Department

Internal Control
Auditing
Department

Management
Planning Division

General Affairs
DivisionInternal Control
OfficeManagement
Strategy Division

Legal Affairs
DivisionInternal Audit
OfficeGroup Strategy
Division

PR Division
CSR Promotion
Office(As of June 26, 2020)

Status of the Company’s Shares / Corporate Information42

IR Department
2-17-1 Higashi-Gotanda, Shinagawa-ku, Tokyo
141-8647
TEL: +81-3-3448-7000 FAX: +81-3-3448-7001
Mail to: chd-ir@comsys.co.jp
URL: https://www.comsys-hd.co.jp/