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021
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REPO

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 through the construction of diverse infrastructure that carries our era forward.
●We will contribute to our country and local communities by building social infrastructure that supports
affluent lifestyles.
● We will continue with unrelenting reform in our aim to further increase corporate value.
●

COMSYS GROUP REPORT 2021
CONTENTS

outlineLeading the construction of telecommunications
infrastructures and social infrastructures

Comprehensive
Engineering Company

About the COMSYS Group P03-04

The COMSYS Group’s Management Philosophy / Contents …… 01
About the COMSYS Group………………………………………… 03
Background to the Medium-Term Management Plan …………… 05
The COMSYS Group’s Business Model…………………………… 07

Telecommunications Carrier Business

P19-20

Leading the construction of NTT’s telecommunications
networks for 70 years
NTT Fixed-Linestrategy

NTT Mobile

Message from Top Management…………………………………… 09

NCC

DX Strategy ………………………………………………………… 13
Message from the Finance & Accounting Manager ……………… 15
Message from the Personnel Manager …………………………… 16
Feature Article:
COMSYS’s Business, Responding to the Needs of Society……… 17
business base
Segment Information

IT Solutions Business
P21

Social System-Related
Business
P22

Software Development

Infrastructure

Telecommunications Carrier Business(NTT Engineering Business / NCC Engineering Business)………… 19

SolutionsElectric and Telecommunications Facilities

IT Solutions Business………………………………………………… 21

Maintenance

Renewable Energy

Social System-Related Business …………………………………… 22
ESG
ESG …………………………………………………………………… 23
Pursuing More Efficient and Sincere Corporate Activities………… 25
Cultivating Human Resources……………………………………… 31
Promoting Safety and Quality ……………………………………… 33
Helping to Build a Sustainable Society …………………………… 34
about usFinancial and Non-Financial Highlights …………………………… 35
Status of Company’s Shares ……………………………………… 37
Corporate Information / Editorial Policy …………………………… 38

01

COMSYS GROUP REPORT 2021

Providing one-stop
response to social issues and customer needs
nationwide
The COMSYS Group’s Network P04

outline

strategybusiness base

ESG

about us

Smart Infrastructure for the Future
Promoting Structural Reform and DX
to Realize Our Medium-Term Vision
Background to the Medium-Term Management Plan P05-06
Progress of NEXT STAGE 2023, the New Medium-Term Vision P05-06

The COMSYS Group’s Strengths

1. Positioning
2. Abundant resources
3. Strong trust relationships withbusiness partners
4. Robust corporate culture

Reducing costs
and improving
productivity throughthe integration of IT systems

Background to the Medium-Term Management Plan P05-06

DX Strategy P13-14

Business Model Leveraging project management capabilities tobuild infrastructures through
The COMSYS Group’s
Business Model
P07-08one-stop services

Record sales

Record operating profit

563.2

41.5

billion yen

Total return ratio
Aim forbillion yen(net sales in FY2020)

Message from Top Management P09-12

122

GWh ※

(FY2020)

ESG : Helping to Build a Sustainable Society P34%

Message from the Finance &Accounting Manager(operating profit in FY2020)

Power generation in the Renewable Energy Business

70

P15

Severity rate of work-related accidents

0.05

%

(CY2020)

ESG : Promoting Safety and Quality P33※ Total of IPP power generation and power generation from EPC projects completed during FY2020

The COMSYS Group’s Management Philosophy / Contents02About the COMSYS Group◆ As a Comprehensive Engineering Company
The COMSYS Group has evolved with telecommunications
technologies and grown with the telecommunications industry
as a telecommunications construction company that supports
Japan’s telecommunications infrastructures. Using the skills andexperience that it has cultivated over nearly 70 years throughthe construction of these infrastructures, along with resourcesthat it has expanded nationwide through mergers with telecommunications construction companies in various regions,
today’s COMSYS Group undertakes business as a comprehensive engineering company, securing orders in all aspectsof telecommunications and social infrastructures with a particular focus on four business segments: the NTT Engineering
Business, the NCC* Engineering Business, the IT Solutions
Business, and the Social System-Related Business.
The current telecommunications industry is seeing a trend
in which telecommunications carriers (the COMSYS Group’s
customers) are expanding their operations as providers, going
beyond simply telecommunications services to handle contents,
financial services, and other functions as well. To continue
responding to the needs of its customers, the COMSYS Group
must also undergo a business transformation, expanding its
operations beyond the scope of its current business fields.
The company will further increase its competitiveness throughactivities aimed at overall optimization of the Group andincreasing the added value of the services it provides. Based on
the management philosophy of “Being united as a Group andstriving for strong partnership and collaboration with diverse
external players,” we will contribute to three main stakeholders: customers, society, and shareholders and Group employees.
Sales by Segment

Net Sales

563.2
billion yen(FY2020)

43.0%
8.4%

NTT Engineering
Business
NCC Engineering
Business

18.7%
29.9%

IT Solutions BusinessSocial System-Related
and Other*NCC: New common carrier

Operating Segments
Segment

Description of BusinessTelecommunications Carrier Business

Construction for Telecommunications Carriers
NTT Engineering
Business

Access construction

COMSYS undertakes telecommunications construction to build wired andwireless networks for telecommunications carriers outside of the NTT
Group, as well as construction involving cable TV and related facilities.

NCC Engineering
Business
Network construction

Mobile facilities construction

Total Solution Service in the IT Segment

IT Solutions Business
Equipment wiring, LAN/WAN, network environments, audio systems, servers/storage, application development
proposals, construction, maintenance, and operations

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

03

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

COMSYS GROUP REPORT 2021

With a nationwide execution structure
and many highly skilled engineers,
COMSYS provides total IT solution
services that are ideally suited to thecustomers’ operations, from project
proposals to construction, development, maintenance, and operations.

COMSYS undertakes business related
to the environment and ecosystems,
including water supply and sewerage
construction and the design and construction of electrical and telecommunications facilities, as well as theconstruction of gas-related facilities
and solar power / biomass power
generation facilities.

outline

strategybusiness base

ESG

about us◆ The COMSYS Group’s Nationwide Network
This individual optimization will now be transformed into overall
optimization for the COMSYS Group as a whole. To switch to optimum business structures and approaches from a Groupwide perspective, COMSYS will centralize sales functions and other sharedfunctions. The various business companies will leverage regional
brands and further refine construction capabilities to specialize inconstruction suited to each region.

Even after the deregulation of telecommunications in 1985, amid
the entry of new players in the telecommunications field andthe reorganization of the NTT Group, the COMSYS Group has
expanded its business over the past 20 years, through mergers with
telecommunications construction companies in various regions.
In the past, each company maintained its own full set of functions and bases, and promoted individual company optimization.

Corporate History

Oct. 2010
Sep. 2003

Nippon COMSYSTSUKEN
Est. 1951;
listed on TSE Second Section

Est. 1951;
listed on TSE First Section

Consolidation with TSUKEN,
based on an exchange of shares

SANWA COMSYSEngineering Corporation

Oct. 2018(Formerly SANWA ELEC)
Est. 1947; listed on TSE First Section

TOSYS(Formerly HIGASHI NIHON System
Construction)
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

Hokuriku Denwa Kouji

Est. 2009(Information systems businessspun 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.

In order to leverage the sales base and brandstrength cultivated by business companies
in each region while optimizing resources
throughout the Group as a whole, the company is strengthening Group collaborations
across companies in each business segment.
In the IT Solutions and Social System-Related
Businesses in particular, which are growthbusinesses, the Group has adopted a “virtualcompany” system for virtual supervision ofeach company’s business. It has shifted to
management oriented toward overall Group
optimization, in pursuit of increased sales andgreater productivity.

Main businesscompany groups

Nippon COMSYS Group

Est. 1949;
listed on TSE Second Section

Group Collaboration Framework

NTT Engineering NCC* Engineering IT Solutions BusiBusinessBusiness
ness

Social SystemRelated Business

Virtual company
systemVirtual company
system●●●●Group collaboration●●

SANWA COMSYS EngineeringGroup
TOSYS Group

●

●

●

TSUKEN Group

●

●

●

NDS Group

●

●

●

●

SYSKEN Group

●

●

●

●

Hokuriku Denwa Kouji Group

●

●

●

●

COMSYS JOHO SYSTEM
Group●*NCC: New common carrier

About the COMSYS Group04

Background to the Medium-Term Management Plan
◆ The Medium-Term Vision, Keeping Pace with the Changing Times
In keeping with the rapid development of telecommunications technologies since the mid-1990s, communications
and IT have become essential elements not only of business but of social infrastructures as well. In this backdrop,
COMSYS has expanded its business fields from telecommunications construction targeting telecommunications
carriers into the IT Solutions Business targeting regularcompanies and government agencies. Telecommunications
carriers are cutting back on investments in fixed communication networks, and have shifted the focus of their business toward mobile communication services and various IT
services, leading to continued growth in the constructionof mobile phone base stations. This in turn has led tointensified competition among construction companies.
In line with these changes in the era, following theestablishment of COMSYS Holdings in September 2003,
the company promoted management reforms aimed atstrengthening business foundations and improving efficiency, expanding the scale of business through mergers
with telecommunications construction companies in various regions. It strengthened management as a prime contractor and improved costs through a variety of initiatives
at its business companies, including the careful selectionof business fields, optimization of staff, consolidation ofcommon operations, restructuring of regional business
operations (reorganization of consolidated subsidiaries),
clarifying the division of roles with partner companies, andreviewing 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 Social System-Related Businesses as
growth businesses. In October 2018, the Group undertook
new mergers with NDS, SYSKEN, and Hokuriku Denwa
Kouji, and it is currently working to further expand its
business and increase corporate value based on its medium-term vision, “COMSYS VISION NEXT STAGE 2023.”

1(billion yen)

2

3

Net Sales
Targets: 290.0 billion yen
Results: 307.4 billion yen

Net Sales
Targets: 320.0 billion yen
Results: 331.9 billion yen

Net SaTargetResults

Operating Proﬁt
Targets: 14.0 billion yen
Results: 16.3 billion yen

Operating Proﬁt
Targets: 17.5 billion yen
Results: 16.2 billion yen

Opera
TargetResults

600.0

500.0

400.0

300.0

200.0

100.0

0

2004.3

1

2005.32006.3First Medium-Term
Management Plan

2

2007.32008.3

Second Medium-Term
Management Plan

2009.32010.3

Third Medium-Term
Management Plan

Innovation 2010 (Nippon COMSYS)
Group Innovation 2010

Strength 1
Positioning

Strength 2Abundant resources

Strength 3
Strong trust relationships

Each time telecommunications technologies evolve, telecommunications construction companies enjoy the benefits ofadvanced telecommunications technologies
in the form of increased demand for the
installation and replacement of communications devices, and for the installation ofmobile phone base stations. Competitionin the telecommunications constructionindustry is limited due to significant barriers
to entry such as legal compliance and themaintenance of resources, so the COMSYSGroup’s positioning is a strength in and of
itself.

COMSYS Group employees include technical supervisors in addition to many
employees with advanced qualifications as
professionals in the IT Solutions Business.
The Group leverages a nationwide network
to handle projects on a national scale,and provides one-stop response to projects cutting across multiple engineering
fields, from civil engineering to electricalconstruction, including the construction ofsolar power plants.

The COMSYS Group has built up strong
trust relationships with the NTT Group andother telecommunications carriers, throughcontinued transactions lasting for many
years. Its extensive track record of meetingthe needs and expectations of its customers, along with its quality standards andengineering proficiency in the field of telecommunications infrastructures, has led toeven greater trust from customers.

COMSYS GROUP REPORT 2021

CO
W

Main
str

●Strengthen management as●Rebuild●Increase construction eﬃciency
a prime construction contractor
operatithrough “COMSYS Kaizen”●Advanc●Strengthen the IT Solutions Business ●Build shared platforms●Standardize workﬂow
new bu●Implement Group management●Build uniﬁed business operation
initiatives
structures●Strengthen the management base

◆ The COMSYS Group’s Strengths and Challenges

05

2011.33

outline

strategybusiness base

ESG

about us4ales
ts: 365.0 billion yen
s: 315.4 billion yen

Net Sales
Targets: 400.0 billion yen
Results: 481.7 billion yen

ating Proﬁt
ts: 19.5 billion yen
s: 11.7 billion yen

Operating Proﬁt
Targets: 30.0 billion yen
Results: 35.2 billion yen(billion yen)

60.0

Achieved 1 year ahead of schedule

50.0

5
Net sales target

600.0 billion yen
or moreOperating proﬁttarget50.0 billion yen
or more

40.0

Smart
Infrastructure for
the Future
30.0
20.0

10.0

2012.32013.3OMSYS
WAY

2014.32015.32016.32017.3COMSYS
WAY αntain and deepen
ructural reforms

Evolve structural reforms
and expand the top line

d Group businession structures
ced investments inusiness ﬁelds●Strengthen activities targetingnew business ﬁelds●Build construction IT platforms

Strength 4
Robust corporate culture
One other strength is the determinationof COMSYS Group employees to “follow
through to completion.” Amid a corporate culture that could be seen as either“serious” or “stubborn,” depending on
how you look at it, the stance of commitment to safety, quality, delivery schedules,
and costs forms the foundations of trust
relationships with customers and business
partners that have lasted for many years.
Furthermore, a sound management stanceof avoiding excessive risk has contributed
to stable a financial structure.

2018.32019.3

4COMSYSVISION 2020

●Introduce a BusinessCompany system●Workstyle innovations●Reorganization of thetelecommunications
construction industry

2020.352021.32022.32024.3COMSYS VISIONNEXT STAGE 2023

COMSYS VISION NEXT STAGE 2023

Accelerate telecommunications carrier business andgrowth business strategies, and achieve targets.

●In the carrier business, quickly establish optimum business structures
to increase productivity, and effectively capture business opportunities such as 5G●In growth businesses, expand the top line, including M&A, andimprove profit margins by concentrating on specialty fields●Strengthen the management base through DX and structural reforms

Challenge 1: A business structure that tends to be influenced by trends intelecommunications carriers’ capital expenditures
Amid expectations that capex at telecommunications carriers will decrease steadily in themedium to long term, customers continue to pressure the COMSYS Group to reduce
costs. By increasing the ratio of business targeting customers other than telecommunications carriers, the COMSYS Group is breaking away from its dependency on thesecustomers, and at the same time introducing new systems to increase work efficiency.
Challenge 2: A corporate culture that lacks flexibility and speed
A sound management stance of avoiding excessive risk contributes to a stable financial
structure, but at the same time, it can also result in a slow response to discontinuouschanges in society. Moving forward, through initiatives designed to promote diversity
and expand activities targeting new business, we will gradually bring about a transformation in the Group’s corporate culture.

Background to the Medium-Term Management Plan

06

The COMSYS Group’s Business Model
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, COMSYSGroup companies undertake all aspects of project management,
including the creation of construction plans, design and quotations,securing the resources required for construction, compliance withlaws and regulations, assigning specialized engineers, supervising
construction work and managing progress, guaranteeing safety
and quality, and creating drawings and other documents. On thefront lines of construction, COMSYS Group employees supervise
and direct these operations, and complete the project along withpartner companies that handle on-site work.
From the customer’s perspective, outsourcing project management

through a prime construction contractor offers the advantages 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 partner companies as well, since theprime contractor takes on the burden of sales and negotiations withthe telecommunications carriers placing the orders, secures specialized engineers, provides the construction vehicles, contract systems,
progress management systems, and other resources required forconstruction, and secures the capital necessary to cover material
costs and personnel expenses. In this way, prime construction contractors contribute to increasing efficiency and added value for theindustry as a whole, much the same way as wholesalers in the distribution industry.

Barriers to entry

The power of customers

L

M

H

S
Telecommunications carriers

NTT Engineering Business : H
NCC Engineering Business： M
IT Solutions Business : L
Social System-Related Business : M

Intensifying competition to secure end users, and controlson capex in telecommunications infrastructures resulting
from a focus on new fields

Private sector demand / Government agencies

It is not easy to allocate resources nationwide, secure andtrain engineers, accumulate a track record, and build relationships with partner companies

Selecting from multiple construction vendors, after making comprehensive judgments based on track record,
costs, and proposal details

Competitive environment
M

H

NTT Engineering Business : M NCC Engineering Business： H
IT Solutions Business : H Social System-Related Business : M
Competition based on costs (contract amount), construction capabilities, delivery schedules, safety and quality, track record in construction, and proposal capabilities

Threats from alternatives

The power of suppliers

L

L

Telecommunications Carrier Business/ Social System-Related BusinessTelecommunications Carrier BusinessAlthough efficiency has improved through new technologies and reductions in scale, manual construction work
will be required for some time.

IT Solutions Business H
High threat level. Cloud applications and software development are evolving, and the arena for competition isshifting from lower layer construction to the upper layers.

Telecommunications carriers select vendors. Need to
improve skills in the handling of influential vendors’ products.

IT Solutions BusinessIn addition to COMSYS’s engineering capabilities, roll out
IT solutions along with suppliers.

Social System-Related BusinessOn large-scale projects, need to collaborate with developers, consultants, landowners, and others.

Telecommunications Carrier BusinessAs customers gain more power, increasing productivity through in-house efforts is an issue.

IT Solutions BusinessOne of COMSYS’s strengths is in the construction of networks and other IT infrastructures, but
expanding high added value solutions, including upper layers, remains an issueSocial System-Related Business

The issue here is to build a track record and structures with a focus on COMSYS’s strengths, while
avoiding price competition in bids.
L

07

COMSYS GROUP REPORT 2021

Low

M

MediumH

High

S

Strongoutline

strategybusiness base

ESG

about us

Smart Infrastructure for the Future

Resolving social issues
Eliminating regional
Large-scale
Safe, secure
Promoting the
disparity indisastersocialproliferation of
telecommunications
countermeasures infrastructures
renewable energy
services

The Wave of Telecommunications
Technology Innovations
Strength 1: Positioning

Main customers

NTT Group, telecommunications carriers, companies, government agencies, local municipalities【Customers’ needs and expectations】
Outsource project management to reduce the burden of admin tasks and contract operations
Conduct stable, high-quality construction / Secure required labor capacity

Strength 3: Strong trust relationships

Creating value for customers

Resolving customers’ issues, proposing added value, and commitment todelivery schedules, quality, and costs

One-stop services in the infrastructure construction business

COMSYS GroupStrength 2: Abundant resources
Telecommunications
Carrier Business(NTT Engineering Business
NCC Engineering Business)

IT Solutions Business

Strength 4: Robust corporate culture

Social System-Related
Business

Four key issues●Cultivating Human Resources●Helping to Build a Sustainable Society●Promoting Safety and Quality●Pursuing More Efficient and Sincere Corporate Activities

Project management
Creating value for partner companies

Building trust relationships as partners, securing operating capital,and ensuring fair, transparent transactions
Strength 3: Strong trust relationships

Partner companies【Partner companies’ needs and expectations】
Confirming delivery schedules with parties placing orders, securing specialized engineers,sales agents, and cost negotiators, and securing resources required for construction

The COMSYS Group’s Business Model

08

Message from Top Management◆ Review of FY2020
Performance overview, progress in the Medium-termManagement Plan, and awareness of changes in thebusiness environment
In consolidated financial results for the fiscal year ended March
2021 (FY2020), COMSYS Holdings (“the COMSYS Group”)
posted its highest ever performance, with orders received at¥586.5 billion (minus ¥4.2 billion year on year), net sales of¥563.2 billion (+¥2.3 billion year on year), and operating profitof ¥41.5 billion (+¥2.6 billion year on year).
FY2020 was a year of significant social change, resulting
from the spread of the novel coronavirus infection. Delays insales activities and construction resulting from the novel coronavirus pandemic brought about a downturn in performancein the first half, but the effects of the pandemic diminishedin the second half, and in order to prevent the spread of theinfection and ensure business continuity, the COMSYS Group
implemented measures including a transition to teleworking
for backyard and shared operations and the introduction of
online meetings. The Group worked to secure projects andcomplete construction, including the construction of base stations for telecommunications carriers’ fifth-generation mobile
communication systems (5G), construction for the nationwide
expansion of Rakuten Mobile, which recently entered thefield, GIGA School projects targeting elementary and juniorhigh schools, and the installation and maintenance of optic
fiber networks in keeping with the Ministry of Internal Affairs
and Communications “Project on Promoting Advanced Radio

Takashi Kagaya
President and Representative Director
COMSYS Holdings Corporation

Progress of COMSYS VISION NEXT STAGE 2023
Aim to achieve goals by further growing sales and increasing productivity
Moderate growth in previous
ﬁscal year due to COVID-19

Assuming steady growthfor current ﬁscal year

FYE March 31, 2021 results YoY

Net Sales:
Operating Proﬁt:

Net Sales(Billions of yen)FYE March 31, 2022 targets

+0.4％
+6.7％

Net Sales:
Operating Proﬁt:

563.2

IT Solutions Business

98.1

105.5

+1.4%

107.0

Social System-Related
Business

168.5

168.2

+5.2%

177.0

294.2

289.4

+3.0％
+3.4％

NEXT STAGE 2023
(Billions of yen)

Net Sales:

At least 600.0

Operating Proﬁt:

At least 50.0

Total return ratio:

Maintain 70% target
At least 600.0
billion yen

580.0

560.8

Telecommunications
Carrier Business

COMSYS VISION NEXT STAGE 2023

+2.3%

296.0

Growth Businesses
Balance sales and proﬁt growth
Expand existing and new domains, promote M&As
Promote virtual company system

Maintain at At least 120.0
approx.
billion yen+6%/year
Maintain at At least 190.0
approx.
billion yen+4%/year

Telecommunications
Carrier Business
Reduce costs and improve productivity throughstructural reform and IT system integration

Maintain
Net sales

At least

50%

At most50%

Create synergies from consolidation
Ensure capture of business opportunities

09

Business YearFY March 2020
Results

FY March 2021
Results

FY March 2022
Targets

Operating Proﬁt

38.9 billion yen

41.5 billion yen

43.0 billion yen(Operating Margin)(6.9%)(7.4%)(7.4%)COMSYS GROUP REPORT 2021

FY March 2024
Targets+7.0 billion yen

At least50.0 billion yen(8.0%)

strategy

outlinebusiness base

ESG

about us

Business Strategy of COMSYS Group

Accelerate telecommunications carrier business and growth business strategies to achieve goals• In the telecommunications carrier business, establish optimal business structure as soon as possible to raise productivity
and maximize capture of 5G and other business opportunities• In growth business, expand the topline by means of M&A and other measures and concentrate on areas of COMSYS strength
to improve proﬁt margin• Strengthen the management basis through DX and structural reform
Increase
Proﬁtability

Topline Contraction• Gradual decrease intelecommunications carrier capex

Raise Productivity

NEXT STAGE 2023
Net Sales:

Expand Topline

Expand Topline

Raise Productivity• Initiatives in new domains(local 5G, AI, maintenance)• Expand partnering• Utilize i-Construction• Standardize proﬁt management
methods• Build optimal Group businessstructure• Integrate IT platforms andoptimize workﬂow

SocialSystem-Related
business

190.0

billion yen
NTT Fixed-Line
Related BusinessApprox.

Mobile BusinessApprox.

billion yen

billion yen

Raise Productivity
IT Solutions
business

FYE
March 2022
Targets

FYE March 2024 goals

Expand Topline• Capture 5G and other business
opportunities• Expand sales in NCC business(Rakuten)Raise Productivity• Integrate IT platforms andoptimize workﬂow• Pursue integrated and ﬂexible
management of business resources

Environment Improvements,” aimed at supporting the promotion of advanced wireless environments. At the same time, theGroup has promoted reductions in travel and transportation
expenses. As a result of these efforts, business performance forthe year exceeded figures for the previous fiscal year.
Regarding the COVID-19 pandemic, although an increasing
segment of the population has been vaccinated, we cannot let
our guard down, for example because of the appearance ofvirus variants. No doubt, the adoption of online activities in theeconomic sphere brought about by the pandemic will continue
unabated. Moving forward, in the so-called “post-corona society,” we expect to see a growing demand for local 5G solutions and projects involving enhanced and advanced networks.
We are aware that the COMSYS Group will need to respond toeven greater expectations for the rollout of business in a broad
range of fields, from solutions to social infrastructures, with
telecommunication network technologies at the core.
Telecommunications will play an increasingly important rolein society, and this in turn will bring about changes in thebusiness of telecommunications carriers, which represent the
COMSYS Group’s main customers. In keeping with requests
from the government to reduce telecommunications fees, various companies have announced new low-cost fee plans, and• Full-layer value-added proposals• Integrate maintenance platforms

120.0

billion yen

120.0

170.0

At least 600.0 billion yen

Operating Proﬁt: At least 50.0 billion yen• Expand business domains(business sectors, geographicalregions, greater added value)• M&AsExpandSales

In the NTT fixed-line related business, although sales havebeen on the decline, we will quickly build an optimum
business operation structure for the Group. The company’s
policy is to increase profitability and earnings by integrating IT platforms and standardizing the workflow.
In the mobile business, combining both NTT and NCC,
we will expand sales by implementing the full-scale rollout
of 5G base stations and by expanding share in the NCC
business. As in the case of the fixed-line related business,
we will increase profitability through the integration of IT
platforms and the unified use of resources.
In the IT Solutions Business and the Social SystemRelated Business, both of which are growth businesses,
the company’s policy is to expand the top line, and at
the same time to strengthen activities aimed at expanding high added value fields and improving productivity
through the use of IT, and also to dramatically increase
profitability. To support the execution of these businessstrategies, we will promote DX and structural reforms andstrengthen the management base throughout the Group
as a whole.

this has led to intensifying competition to secure new users. In
order to make up for the effects of reductions in telecommunications fees, these companies have been making an effort
to expand non-communications business by enhancing settlement, e-commerce, and content services. The same is true ofthe B2B field, where companies are investing efforts into providing corporate solutions that leverage IoT, AI, and the cloud.
Amid these changes, companies are investing in and promoting
tie-ups with other companies, leading to the gradual formation of a true ecosystem with telecommunication networks
at the core. Moving forward, we will likely see a shift fromcompetition focusing on telecommunications infrastructures
to competition in the ability to provide greater added value to
end-users throughout this entire ecosystem. In this backdrop,
NTT has converted NTT DoCoMo into a full subsidiary. NTT has
announced that its goal is to aggregate R&D targeting 6G,
and to optimize telecommunication infrastructure investments
throughout the group as a whole. We see this as an expressionof NTT’s intent to shift investments and resources away fromtelecommunications infrastructures and into growth fields.
The COMSYS Group also finds itself in the midst of significant changes in socio-economic activities and telecommunications carriers’ business models resulting from the coronavirus

Message from Top Management

10Message from Top Management
pandemic. It would not be an exaggeration to say that the
COMSYS Group’s survival will be dependent on its ability totake the lead in transforming itself, meet the needs of customers, and continue to fulfill its role as a corporate citizen. Even
having said this, the Group will make no major changes in thereform policies that it has implemented up to now. We understand that even more serious questions will be asked regarding whether the Group can quickly and reliably carry throughon initiatives such as strengthening its sales and construction
capabilities through overall optimization of business operations
structures throughout the Group, and also increasing productivity through the streamlining and standardization of workflows and the introduction of uniform, Groupwide businesssystems.
Based on the above, it is with unwavering resolve that wehead into the remaining three years of the COMSYS’s medium-term vision, NEXT STAGE 2023, determined to achieve
the goals laid out in this Vision. Although there are someconcerns about the recovery in private sector capex, we haveleft our sales target unchanged at ¥600 billion, based on an
expectation for increased investments in social infrastructuresand renewable energy. In addition to the abundant projects
currently ongoing, we will strive to achieve these goals by
aggressively securing new orders in the robust telecommunications carrier business, as well as the IT Solutions Business andthe Social System-Related Business, both of which continue
to demonstrate growth. We have set a target of ¥50 billion ormore in operating profit; because the figure was ¥41.5 billion
in FY2020, we will need to increase profits by approximately
20% in the remaining period, including FY2021. To achieve
this goal, we will strive to increase productivity, for example
through continued structural reforms and workstyle reforms.
We are already making steady progress in reducing fixed costs
and improving the profit ratio through management integration synergy in the telecommunications carrier business. We
are also promoting initiatives aimed at expanding both the
top and bottom lines through the Business Company systemin the IT Solutions Business and the Social System-Related
Business. Moving forward, we will continue to promote these
initiatives, quickly achieving optimum unified group operations
and increasing sales capabilities and productivity, to achieve thegoals of the Medium-Term Vision.

◆ The COMSYS Group’s ability to respondto change: Preparing for the post-COVID
society
Protecting employees and strengthening competitiveness through further structural reforms
The COMSYS Group’s business involves the creation and maintenance of telecommunications infrastructures and social infrastructures; in other words, the foundations that support socioeconomic activities. This business is essential to society, and wewill continue to undertake this business even in the midst of
the coronavirus pandemic, in collaboration with our customers.

11

COMSYS GROUP REPORT 2021

In order to effectively manage employees’ health and preventthe further spread of the infection, we have implemented atransition to teleworking wherever possible in Head Office andshared operations, and we undertake operations based onstrict measures in the workplace, including health monitoring,mask wearing, and maintaining social distancing. As a result, atthe time of this writing, there have been no significant COVID19 transmissions in the context of the COMSYS Group’s business operations.
The COMSYS Group enjoys an ideal position in terms of
new business opportunities involving DX and the introductionof digital technologies throughout society under the “newnormal.” At the same time, however, we have gained a newawareness that in the context of securing new business opportunities, repeating a never-ending cycle of seeking out andresolving issues will be essential if we are to further increase
our corporate value and guarantee our future survival.
The COMSYS Group’s business of building and maintaining
various infrastructures requires that we allocate bases andmanpower throughout Japan, and in that sense, our businessis dependent on people. This could be seen as a disadvantage
in terms of costs, but because of the challenges in securingand maintaining human resources, this could also be seen as astrength for the COMSYS Group and a barrier to entry by newcompetitors. We believe that further refining our strengths inundertaking various infrastructure-related projects on a nationwide scale, while improving on our weaknesses in terms ofhigh-cost structures and productivity, will enable the COMSYSGroup to make even greater leaps forward in the future.
One specific initiative is optimizing operational structures inthe telecommunications carrier business. Up to now, in the
COMSYS Group, Nippon COMSYS has played a central role assupervisory companies in each region have handled the NTTEngineering Business, while the NCC Engineering Business has
been handled mainly by SANWA COMSYS Engineering. Thereis a limit to what can be accomplished by this siloed structure,
given the growth of projects on a nationwide scale, including
the parallel rollout of 5G by multiple telecommunications carriers and projects aimed at putting in place advanced wirelesscommunication environments. As a result, the COMSYS Grouphas fallen behind its competitors in securing some orders in
the NCC Engineering Business. Our intention is to unify operations that can be conducted across the boundaries of businesscompanies and improve our productivity and sales capabilities,
without losing the customer trust that we have established up
to now. Our first goal will be to unify the operation of construction resources related to the NTT and NCC mobile businesses, and maximize our ability to build 5G base stations.
Another initiative will involve promoting DX and establishing
new work styles to accommodate the new normal. We havealready promoted a transition to teleworking as a means ofpreventing the spread of COVID-19, but rather than seeing
this change in workstyles as a temporary measure, the key
to success will be in tying these changes into increased productivity. In addition to adopting tools to promote paperless
operations and a transition to online meetings through theintroduction of communication platforms, it will be essential tooutline

strategybuild workflows that are suited to these new workstyles. We
are currently in the process of inventorying workflows, determining which tools should be introduced where, and studying
ways of quickly generating the maximum effects. At the sametime, we have begun revising in-house regulations and building in new workstyles starting with those that are expected togenerate the most impact. These types of workstyle reforms
not only increase productivity, but also encourage diversity,
which in turn ties into greater creativity and a revitalization of
in-house organizations. Specifically, it will become possible formore diverse talent to participate in the workforce, including
people who were unable to work regular office hours in thepast because they were raising children, people who found it
difficult to work fulltime due to limitations caused by illnesses,
or people who still wanted to work on a part-time basis evenafter reaching retirement age. The goals of DX and workstylereforms are not found in the reforms themselves, but rather
in achieving productivity and sales capabilities that overwhelm
the competition, and increasing corporate value. We will begin
by quickly implementing these initiatives, and then put in placebold measures as required to respond to the new challenges
that arise in the future.

◆ Strengthening Business Foundations(ESG Activities)
S t re n g t h e n i n g H R S t r a t e g i e s , E n v i ro n m e n t a lContributions, and Governance
As we have said up to now, the COMSYS Group’s business isessential to society. We are aware that under the new normal,
which is characterized by increasing online activities and digitalization, there are a growing number of fields where we cancontribute to creating a sustainable society.
Strengthening corporate governance is one of the mostimportant themes in terms of our ability to ensure the legal
and appropriate operation of these businesses, which comewith a huge social responsibility. In the COMSYS Group, aheadof amendments to the corporate code of governance, we
appointed five outside directors, which accounts for one thirdof the total. Moving forward, we will continue studies aimed atfurther strengthening the functions of outside directors, as well
as appointing female directors.
As a result of COVID-19, we have gained a new awarenessthat our economic activities and social activities are closely
linked with the global environment as a whole. Global environmental problems present huge risks in terms of long-termbusiness continuity, but they present opportunities as well. In
the management of industrial waste, in addition to compliance with laws and regulations, the COMSYS Group works to
reduce emissions and increase recycling rates. Furthermore, wehave positioned the renewable energy business as a growthfield; in addition to undertaking the construction of numerous
solar power plants up to now, we have also begun a new biomass power generation business. In the future, we will takeon the challenge of other new fields, such as hydrogen energy

business base

ESG

about usand wind power generation.
In keeping with the expansion of the COMSYS Group’s business scope and changes in the business environment, humanresources are becoming increasingly important. In the construction industry, a lack of qualified and experienced workers has
been a concern for many years. At the same time, telecommunications carriers, which are the Group’s main customers, aremaking a shift from competition in telecommunications networks to competition in ecosystems that encompass finance,
contents, e-commerce, and services. The needs of customers
other than telecommunications carriers are becoming increasingly advanced and complex, so the COMSYS Group must
go beyond simply “following through on what we are told todo,” and contribute to the customers’ business by resolving
the issues that they face. Employees are also required to takeon more complex roles in project management and business
management. In this environment, securing and training personnel is essential to the company’s survival. Up to now, wehave implemented projects to promote workstyle reforms anddiversity, but from this point onward, we will undertake a morein-depth review of the HR structure, based on the discoveries
that we have made and the advice that we have received.
Even having said that, securing safety and quality—one of
the greatest obligations of a prime construction contractor—
remains as important as ever. In 2020, there was one accident
that involved a fatality. We will analyze the causes and implement thorough preventative measures, to ensure that such a
tragic accident is never repeated.

◆ Realizing the Management Philosophy
Building a Sustainable Society and Enhancing
Corporate Value by Resolving Social Issues
The pandemic has accelerated the trend toward online activities
and digitalization, and in this backdrop, advanced and reliable
telecommunications networks will become increasingly important. Furthermore, amid the decreasing birthrate and increasing
senior population, social infrastructures must be more than justdurable and robust; they must also offer economy, efficiency,
and ease of maintenance, for example through preventative
maintenance. Contributions to resolving environmental problems will also be an important element. In the future, the useof AI and other information and communications technologies(ICT) will become increasingly familiar, to gather and analyze
data arising from various infrastructures, and to resolve issues
based on knowledge and experience.
The COMSYS Group is expanding its business from a focus ontelecommunications networks and other social infrastructures,such as renewable energy, electricity, gas, city and sewage
water, and roads, to encompass full layers that include ICT solutions. To create a richer future, through unwavering businessreforms and co-creation with customers, we will build smart
infrastructures and contribute to resolving a variety of social
issues. We look forward to the valued support and encouragement of shareholders and investors in the years to come.

Message from Top Management

12

DX Strategy
The COMSYS Group’s DX Vision
Up to now, by actively introducing IT systems in the front lines, the COMSYS Group has been working to increase operational efficiency and improve safety and quality management. At the same time, as part of these activities, we havebeen steadily integrating systems by building IT platforms that are shared across the entire COMSYS Group. In 2020, weestablished the DX Promotion Department to further strengthen DX, and are making maximum use of digital technologies
to pursue enhanced value and value creation throughout the Group as a whole. “Enhanced value” refers to constantly
refining the COMSYS Group’s strengths and dramatically increasing productivity in order to maximize value provided to customers. “Value creation” means flexibly reforming our own business models in keeping with customer needs, based on thefoundations of those refined strengths, to provide new value to customers.

“Enhancing value:” Refining Construction Capabilities through Group-Wide Optimization
The COMSYS Group has put forward as its management philosophy “Contributing to our country and local communities
by building telecommunications infrastructures and other social infrastructures.” To realize this philosophy, we have built
infrastructures throughout Japan, and have cultivated strengths in the form of construction capabilities; namely, the ability
to carry through on the construction work that we have undertaken. In the past, we cultivated these construction capabilities on the level of individual supervisory companies, but we are now promoting Group-wide optimization that transcends
the boundaries of companies, and are refining the construction capabilities of the Group as a whole.
We are currently investing the greatest part of our efforts into activities aimed at unifying three key initiatives: (1) System
integration transcending the boundaries of companies; (2) Standardization of operations triggered by that system integration; and (3) Consolidation and increased efficiency of standardized backyard operations on a nationwide scale. We will alsoutilize data obtained from integrated systems across Japan to further refine construction capabilities based on a data-driven
approach. By leveraging construction capabilities cultivated in this way, we will provide customers with even greater value
than ever before.

“Value Creation:” Responding to New Needs Based on the Foundation of Construction Capabilities
One of the effects of COVID-19 was the rapid acceleration of remote working among companies and municipalities, andremote education at various educational institutions. Based on the foundation of infrastructure construction capabilities, the
COMSYS Group has demonstrated the skills and expertise in all of the component elements required for the introductionof digital technologies; not only networks, but also terminals,
servers, applications, and security. In this way, we have contributed to digitalization efforts by companies, municipalities,
and educational institutions throughout Japan. We will makeeven broader contributions by responding flexibly to demands
for remote operations and digitalization, which are expected
to continue growing in the future.
In fields such as infrastructure, agriculture, and manufacturing as well, there has been a growing demand for IoT applica-

Support customersʼ DX
Support operational transformations
Strengthen and enhancecustomer relationships
Improve quality and delivery times

Support value creation
Support new value creation forcustomers

Implement COMSYS DX
Transform operations

Enhance corporate value/Create valueStandardize and automate operations
Data-driven management

Enhance value provided to customers
Transform business modeltions that include sensors and cameras, as well as the analysis
and use of the data gathered through those devices. Basedon a firm foundation of construction capabilities, we willaccumulate further skills and expertise in IoT terminals andlocal 5G, to respond to new needs and provide new value toEnhance COMSYS DX environment
Corporate transformation

IT applications

Transformations in corporate culture,organizations, and processes

IT platform integration
Strengthened security

customers.

The COMSYS Group’s Specific Initiatives Targeting DX

13

COMSYS GROUP REPORT 2021

strategy

outlinebusiness base

ESG

about us

◆ Unifying Three Elements to AchieveGroup-wide Optimization

be created by the backyard team, alleviating the burden on

As part of efforts to dramatically increase productivity, theprocess automation (RPA), which automatically incorporates

COMSYS Group is working to unify three elements of busi-

completed photos or reports from the front line into reportness and operations throughout the Group as a whole: (1)templates.

the construction team. The efficiency of the backyard team’s
operations has also been increased through the use of robotic

System integration; (2) Standardization of operations; and (3)Nationwide consolidation of operations.

In addition to increasing productivity through the standardization and consolidation of operations, we will strive

In the NTT Engineering business, we are leveraging digi-

to increase safety and quality. By comprehensively analyzing

tal technologies to minimize the burden of front-line tasks.

nationwide data obtained from integrated systems, we will

Specifically, we are narrowing down those areas of front-line

identify trends in each region that were not recognizable fromoperations that can only be conducted on the front lines, andwithin the confines of those regions, to effectively prevent acci-

consolidating backyard operations, which can be conducted indents and failures caused by human error.

remote locations, on a nationwide scale. This can be achieved
through the standardization of construction operations and theintegration of construction systems across multiple regions.
In terms of approaches to consolidating backyard operations,
we could look at the example of inspections of construction◆ Establishing Ideal Workplace Environments
through the Use of Digital Technologies:
Maximizing the Potential of Human Resourcesconditions. Rather than having inspectors visit each site to

Human resources are the Group’s greatest management

conduct inspections, photographs of construction conditions

resources for supporting increased value and value creation.

are aggregated at a photo inspection center, where veteran

The COMSYS Group will utilize digital technologies to achieveengineers check the status of construction and either give theirdiverse workstyles and establish ideal work environments. By

approval or provide instructions for reworking. The perspective

putting in place these environments, we will draw out theof the veteran engineers conducting photo judgments at the

maximum potential of human resources, tying this into evencenter can also be taught to AI systems, as a means of further

greater value increases and value creation.

increasing productivity through automation of the judgment

In response to the novel coronavirus pandemic that began

process. Up to now, construction teams had to return to thein 2020, the COMSYS Group has also worked to prevent theoffice to create construction reports, but these reports can now

spread of the infection by implementing remote work systems

Increasing Work Efficiency through System Integration
The COMSYS Groupʼs IT platforms

wherever possible. At the same time, we
implemented a variety of measures, including
systems and IT tools, to eliminate the factors hindering remote work. For example, interms of IT tools, we adopted online confer-

Styles unique toeach company

TSUKEN

Hokuriku
Denwa Kouji
style
SYSKEN
style

TOSYS

Future IT Initiatives

Groupware
User-related
construction
management

paperless operations, including electronic
invoice processing to replace conventional● Increase productivity● Increase IT investment eﬃciency● Optimum nationwide allocationof resources● Use document management tools toincrease reporting eﬃciency● Convert routine tasks to RPA

Backbone Systems
Operation systems

Use of next-generation
ERP Evolve by building integrated
HR databases, etc.

Further increase construction
management eﬃciency
Access-related
construction
management

Procurement

cations regardless of location, and promoted

management
resources

NipponCOMSYS

NDS
style

encing tools to enable stress-free communi-Standardize

COMSYS operations/style
Consolidate

HR

Finances/
accounting

Photographic
inspection ofﬁxed line systems

as a kind of emergency prevention measureduring the pandemic, we achieved flexible
workstyles for employees, and at the sametime, we were able to identify ways of further enhancing remote work approaches, notonly through IT tools, but also in terms ofMobile facilities
construction
management

Construction
management
within NTT sites

paper invoices. By adopting remote work

enhanced systems and management.
To establish workstyles for the new normal,
we will redefine “work” based on the premise of remote working, further promote activ-

User construction

Improve operatingeﬃciency using AI

Photoinspection
center Upgradingities aimed at entrenching remote work as
Mobile facilities construction

Security

Access construction

Consider use ofwearable terminals

an everyday work format, and steadily put inplace environments that will support diverse
workstyles for diverse human resources.

“In-building” projects

DX Strategy

14

Message from the Finance & Accounting Manager
We will promote steady management with an emphasis on financial stability, and return benefits targeting a total return ratio of70%.
Hidehiko Ozaki
Director
COMSYS Holdings Corporation◆ Status of Finances and Basic Approach to
Capital Policies
The COMSYS Group has maintained a high equity ratio and stable
cash flow. Many of the project orders received by the COMSYSGroup are small in scale with short construction periods in comparison to the large-scale development projects secured by major
general contractors. Furthermore, most of these projects involve
domestic business with low levels of credit risk, so the deposit cycle
tends to be stable as well. Labor costs and expenses for outsourcing to partner companies account for the largest part of cash outlay, so there is little need for large advance investments. As a result,
we have been able to generate stable free cash flow. In FY2020,
we achieved an equity ratio of 68.3% (interest-bearing debt: ¥5.6
billion), an operating margin of 7.4%, a current profit margin of
5.2%, and ROE at 9.2%.
In recent years, in keeping with the increase in large-scale projects with long construction periods, as in the case of solar power
plant construction, there has been a slight increase in loans tosecure operating capital, but we intend to maintain our policy ofusing short-term loans to secure only the amount that is needed,when it is needed. We understand that some have said we should
increase loans now, while interest rates are low, but financial stability is extremely important to the COMSYS Group, which supports
Japan’s telecommunications infrastructures and social infrastructures. Even in the midst of such an unpredictable situation as thecurrent pandemic, in order to maintain business continuity andguarantee payments to employees and business partners as aprime construction contractor, we will keep interest-bearing debt
on the level of operating capital, and secure an equity ratio of 60%
or more.

◆ Future Growth Investments
In terms of growth businesses, we undertake business with fullconsideration not only to growth potential, but also to profitability and safety. In the Social System-Related business, there arealso many large-scale projects with long construction periods, asin the case of mega solar power plant construction, and in the
IT Solutions business, unlike work targeting telecommunications
carriers, we need to procure servers, routers, and other devices inadvance, so there is a tendency for cash expenditures to come first.
In addition, we are considering participating in business throughinvestments in segregated portfolio companies (SPCs) as a formof growth investment, as well as M&As or capital tieups throughinvestments in other companies. Whenever we make investmentsor receive orders for these large-scale projects, we are conducting
extensive and careful studies to prevent damage to corporate value,
for example by comparing capital costs with expected returns.
Companies targeted for M&As are those that demonstrate astable management base with net sales on a scale of several billion

15

COMSYS GROUP REPORT 2021

to several tens of billions of yen in the IT Solutions business andthe Social System-Related business, which are considered growthbusinesses, and which can expect to see growth as a result of synergy with the COMSYS Group. We do not expect to make any riskyacquisitions of foreign companies, or to undertake high valuation
projects with little likelihood of returns. To the greatest extent possible, M&As will be executed using exchanges of shares, and evenwhen cash is needed, we will look to borrowing first, rather thancapital increases or issuing convertible bonds, which would lead toa decrease in stock value.
In the Telecommunications Carrier business, we are planning toinvest in building integrated IT platforms and the liquidation andintegration of business bases in order to build an optimum business
operation structure for the COMSYS Group. We assume that there
will be expenditures for the acquisition of land and buildings, aswell as for system construction, but we expect that capital expenditures will continue on roughly the same level as in the past, at¥12.8 billion (up 8.8% year on year). Of course, capital investments
are being undertaken based on the judgment that cost reductionsor the impact of increased productivity will exceed expenditures.

From the perspective of improving the COMSYS Group’s
governance, we regularly verify the impact of maintaining
cross-shareholdings as compared to capital costs. Crossshareholdings with returns that fall below capital costs arebeing sold off. As a rule, the COMSYS Group makes investments to expand business, and does not make investments forthe purpose of financial returns alone.

◆ Policies for Returns and Message
to Investors
We made a promise to shareholders that we will aim for a total
return ratio target of 70% during the period of the MediumTerm Vision. Returns are executed through a combination ofdividends and acquisition of treasury shares, but we plan togradually increase the dividend ratio by increasing dividends
each year. We will maintain treasury shares in preparation for
executing M&As in growth businesses through the exchangeof shares, but the ownership ratio will be kept at around
10%, and treasury shares will also be canceled as the situation
requires.
For the COMSYS Group, which is involved in the construction of telecommunications infrastructures and social infrastructures, trust relationships with shareholders and otherstakeholders are extremely important. We have received agreat deal of meaningful advice through extensive dialogs with
the investors that support the growth of the COMSYS Group
from a long-term perspective. We will continue our efforts toincrease corporate value by giving serious consideration to thevoices of investors, and by reflecting those ideas and opinions
in management.

outline

strategybusiness base

ESG

about usMessage from the Personnel Manager
We strive to provide solutions with greater added value by effectively utilizing human resources, which are the Group’s greatest
management resource.
Hitoshi Kumagai
Director
COMSYS Holdings Corporation◆ Human Resources:
Our Greatest Management Resource
In all of the COMSYS Group’s businesses, including the telecommunications network facilities business, the social infrastructure related business, and the IT Solutions business,“people” are our greatest management resource. The Group’sbusiness could not exist without individuals who have national
certifications and advanced knowledge and experience. We
invest in the training of skilled personnel, for example by allocating approximately ¥300 million to training expenses andrelated costs (FY2020; Nippon COMSYS unconsolidated figure).
Moving forward, our policy will be to continue to invest in
training and the acquisition of qualifications for onshore wireless technology engineers required in the construction of 5Gbase stations, supervisory engineers required in civil engineeringand electrical construction, and engineers involved in the cloudand virtual technologies essential to the latest IT solutions.
Amid an ongoing labor shortage in the construction industry
and the IT Solutions business overall, finding ways of securing,training, and effectively using outstanding personnel that can
respond to changes in the business environment is a major
challenge.

◆ Activities Aimed at Securing Personnel
To secure personnel, in addition to strengthening new graduate
hiring, we are actively undertaking midcareer hiring as well. At
the same time, in order to make the best possible use of current
human resources, we will ensure the optimum allocation of talent
by promoting fluidity of human resources within the Group.
We are also investigating ways of enhancing results-based
compensation to increase employee motivation. In addition to
the payment of bonuses that are tied into individual performance
evaluations, we are working to increase motivation by introducing
incentives linked to each team’s performance, and teams that havedemonstrated particularly notable results will receive a commendation in the form of the President’s Award. We are aware that in the
future, it may be necessary to establish a more involved incentive
structure to secure outstanding talent in preparation for expanding
the IT Solutions business and the Social System-Related businessin particular, but for the time being, the employee retention rate isholding steady at a high level.

◆ Activities Targeting Workstyle Reforms
In order to make optimum use of human resources and to cultivate creativity in the organization, we are working diligently topromote diversity and to implement the workstyle reforms thatform the foundations for that diversity. At Group companies,
we have kicked off project teams comprising employee volunteers to promote diversity in the workplace by discussing thebarriers that hinder activities by diverse talent and the types ofsystemic changes that are needed, and then providing concrete
advice to top management. From the perspective of securing
diversity to promote sustainable business, the COMSYS Group
undertakes activities with an emphasis on four key areas: (1)Promoting participation by female employees (e.g., increasing
the number of female new graduate hires and female managers, increasing the ratio of employees using maternity andchildcare leave, including male employees); (2) Hiring non-Japanese employees (8 as of April 2021); (3) Promoting the employment of employees with disabilities (tieups with companies
that support workers with disabilities); and (4) The active use of
seniors and mid-career hires.
Further, prompted by the widespread adoption of teleworkamid the pandemic, we intend to find and employ talented
individuals, including those living in regional areas and thoseseeking part-time work, who, prior to the pandemic, wereunable to work under the traditional work arrangements that
required onsite work. To promote a healthy work-life balance,
we actively encourage our employees to leave the office ontime, reduce working hours by individually managing employees working overtime, and allow employees with young children to work shorter hours. We have also made into policies
working from satellite offices and telework, and in March 2021,
34% of our administrative personnel were working remotely.

◆ Providing Solutions with Higher Added
Value
As a result of the expanded scope of the COMSYS Group’sbusiness and changes in the fields where telecommunications
carriers, which are key customers, have high expectations of
the COMSYS Group, employees are required to demonstrate
new and complex skills. The challenge will be meeting customers’ expectations in increasing the productivity of individual
employees, through the development of new skills and expanding the business, all at the same time.
Up to now, personnel training has focused on front-line
construction management, to effectively meet customers’
contracting requirements. From this point onward, we willneed to think about the ideal form of work and organizations
within a broader scope, and to execute activities with a view
toward increasing productivity. We will foster personnel withmanagement skills based on a broad perspective by ensuringthat employees experience a variety of organizations and cultures; for example, through personnel exchanges of executive
employees among Group companies, and offering opportunities to gain experience working in different business divisions.
We will strengthen each individual employee’s planning andexecution capabilities, and provide customers with optimum
solutions that demonstrate even greater added value, andin doing so, we will bring about the further growth of the
COMSYS Group.

Message from the Finance & Accounting Manager / Message from the Personnel Manager

16

COMSYS’s Business, Respondi

Feature Article

5G
The Progress of 5G Rollout
NTT Docomo, KDDI, and SoftBank beganrolling out 5G services in March 2020, andRakuten Mobile began offering these services in September of the same year. Eachof these companies planned to emphasize
the broad appeal of 5G services, creating
a popular trend and securing 5G users
at an early stage, but under the state of
emergency declaration resulting from thepandemic, sales outlets were required
to shorten their business hours, and thisresulted in a comparatively slow startup.
The COMSYS Group also felt theeffects of the pandemic in the first half of
FY2020, with construction being delayedby factors including restrictions on entry toconstruction sites that prevented staff fromentering buildings where 5G base stations
are installed. The effects of the pandemic
tapered off in the second half; the businessenvironment returned to normal, and now
construction work continues to be busy.
Despite being impacted by the pandemic, none of the mobile telecommunications carriers have changed theirplans for the rollout of 5G services. NTT
Docomo is planning to roll out 20,000
base stations (5G frequencies only) by

March 2022; KDDI and SoftBank are eachplanning 50,000 base stations (including
existing 4G frequencies and 5G applications), and Rakuten Mobile is planning
the rollout of 6,000 5G base stations
during this same period. In the “Master
Plan 3.0 on the Regional Developmentof ICT Infrastructure” (December 25,2020), the Ministry of Internal Affairs andCommunications laid out targets for thenumber of 5G base stations to be put inplace by the end of March 2024, aimingfor 280,000 stations, which is four times
the current number. In response to thisplan, carriers shifted the rollout of 5Gbase stations into full gear from the latter
half of FY2020, and are expected to continue this aggressive rollout in the current
fiscal year and beyond.
The COMSYS Group’s policy is to leverage the technologies and expertise thatit has cultivated up to now in meetingcustomers’ demands, and to provide maximum support for the nationwide rollout
of 5G networks.

Future Business Opportunities
in 5G-Related Fields
In the past, telecommunications net-

The Rapid Rollout of 5G Base Stations

Telecommunications Carriersʼ Plans for the Rollout of 5G Base Stations(Stations)

70,000docomoKDDI

SoftBank

Rakuten Mobile

・¥1 trillion over five years, up
to the end of March 2024

・¥1 trillion over five years, up
to the end of March 2024
・A cumulative total of ¥2
trillion, up to 2030 (including
R&D targeting 6G)・Approximately ¥500 billion,
up to the end of March 2024
・A cumulative total of ¥2.2
trillion, up to 2030 (including
R&D targeting 6G)・Approximately ¥200 billion,
up t o t he end of M ar c h2024 (expect a 30 to 40%
increase in 4G investments,from approximately ¥600
billion)60,00050,00050,00040,000docomoau（KDDI）SoftBank
Rakuten Mobile

30,00020,00032,000stations

stations

10,00010,000stations

6,000

10,00017

stations

Including stations
operated jointlywith 5G Japan

20,000stations

0

50,000stations

Including stations
operated jointlywith 5G Japan

13,000stations

stations

Mar. 2020

Jun. 2020

COMSYS GROUP REPORT 2021

Mar. 2021

Jun. 2021

Mar. 2022

Mar. 2023

works served merely as a platform forcommunications, but with the evolutionof the Internet and the popularizationof smartphones, these networks havebecome “lifestyle platforms.” In the 5G
society, intertwined with AI technologies,
telecommunications are expected to play
an even more important role as industrial
platforms. For example, the unique 5G
functions of ultra-high speed, ultralow
delay, and simultaneous multiple connections will be essential in the realizationof automatic driving. Going forward, we
can expect to see new and innovative
solutions in the fields of manufacturing,
agriculture, healthcare, and entertainment
as well.
The roles of telecommunications carriers
are also expected to grow, from the provision of telecommunications networks
to the provision of telecommunications
platforms that serve as the foundations
for innovations, and the formation of
ecosystems that incorporate various
peripheral fields. NTT has put forward
a new vision that it refers to as “B2B2X
Solutions,” involving collaboration andco-creation with diverse business entities,
and with total communications platforms
at the core. The COMSYS Group will also
strive to respond to expanding customer
needs by providing “full layer x full life
cycle” solutions that go beyond telecommunications construction to include
infrastructure construction, maintenance,and operations, through projects ranging
from physical construction to upper layer
system construction.
The COMSYS Group has also entered
the “local 5G” construction business, apart of the 5G system in Japan, in which
5G networks are constructed and communications are authorized within a limited
region. During FY2020, we constructed a
local 5G environment within the groundsof a university in Tokyo, and participatedin a next-generation training system project. We will leverage this experience toexpand the local 5G business in collaboration with various partners.

strategy

outlinebusiness base

ESG

about using to the Needs of Society
Renewable Energy Business
Future Trends in Demand for
Clean Energy
Global warming countermeasures represent an urgent issue on a global scale. In
Japan, hydro and solar power generationin particular have been gaining popularity, but since the Former Prime Minister
Suga announced his goal to achieve zero
greenhouse gas emissions in 2050, thetarget ratio for renewable energy in 2030
is being adjusted to 36–38%, which ismore than 10 points higher than the current level, so the demand for renewableenergy is expected to increase even further.
The COMSYS Group has been involvedin the renewable energy business forsome time now, notably the constructionof solar power generation facilities, butmoving forward, we will contribute to
the realization of a carbon-free society
by expanding into new domains, such as
wood biomass and wind power generation facilities, as well as the hydrogenenergy field.

generation. In Japan, not so much of thisland remains unused. As a means of overcoming this challenge, there have beenstudies of offshore wind and solar power
generation, but there are many issues still
to be resolved, in terms of both businesspotential and engineering. The COMSYSGroup’s policy is to establish a track record
in its specialty fields, such as laying undersea cables, and then to gradually expand
the scope of these operations.
The challenge of power systems is that
there is a limit to power transmission anddistribution capacity in regions suited
to renewable energy. In order to securebusiness opportunities, we will gradually
expand on new orders for the construction of power transmission and distribution facilities received from customer
power companies, with a particular focus
on Group companies.
The main challenge in terms of costs isthat the cost of power generation in thecontext of renewable energy is higher
than for power generation using fossil
fuels. In the case of solar power generation, prices decrease dramatically throughthe high-volume production of panels,
but in the case of offshore wind power orbiomass power generation, the costs ofputting in place systems to ensure stable
power supply are an issue. The COMSYSGroup will carefully monitor these typesof risks while gradually accumulating a
track record of success.

we opened our first in-house biomass
power plant, in Makurazaki, Kagoshima
Prefecture. The operation of a biomass
power plant requires an even broader
range of skills, including fuel procurement
and the selection of facilities, but by leveraging this track record and experience, wewill strive to secure further engineering,procurement, and construction (EPC) projects in the future.

Recent Implementation
ExamplesIn August 2019, the COMSYS Groupsecured a project for the construction oflarge-scale solar power generation facilities, with a capacity of 143MW, on a
192ha property in Kumamoto Prefecture.
Since then, we have received orders forother large-scale solar power generation
facility projects in Kochi, Mie, and Tochigi
Prefectures. In October 2020, we began
operation of the COMSYS Group’s firstwood biomass power generation facility
in Makurazaki, Kagoshima Prefecture.

Competitive Advantage in the
Renewable Energy Business

Future Challenges andCountermeasures

The COMSYS Group’s strength is in its
comprehensive capabilities; that is, its
ability to handle all aspects of the projectwith a one-stop approach, from the selection of land through negotiations, procedures with government agencies andelectric power companies, design and civilengineering, through to actual electricalconstruction work. In addition to designand construction capabilities cultivatedthrough the construction of telecommunications platforms, the COMSYS Grouphas been involved in development on
in-house projects from early on, in preparation for the introduction of the feed-in
tariff (FIT) system, thereby accumulating
experience and expertise in business configuration. As a result, we have gained
the trust of customers, and this has tied
into orders for major projects.
Leveraging our expertise and successexperience in solar power generation, we
have participated in the wood biomass
power business, and in October 2020,

Renewable energy presents three main
challenges: Available land for development, power systems, and costs.
Available land for development refers
to land that is suited to large-scale power

Opening up New Fields Aimed at Reducing GHG Emissions● The need for renewable energy is expected to increase even further, to reduce greenhouse gases (GHGs)● Leveraging track record and experience in IPP/EPC construction, open up new ﬁelds including biomass,wind power, and hydrogen

Increased scale/complexity

Geothermal power generation

Hydrogen manufacturing plants

Hydrogen stations

Secure large-scale projects

Oﬀshore wind power
generation

Biomass power generation(IPP/EPC)

Contract undersea cable installationand onshore facilities construction

Onshore wind power
generation
Secure replacement projects
Secure wind/solar hybrid projects
Mega-solar (IPP/EPC)

Now

Secure solar power generation/FIP/PPA/self-consignment projects

FY2022FutureFeature Article: COMSYS’s Business, Responding to the Needs of Society

18

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. The main customers in the
Access and Network businesses are the NTT East and WestJapan Groups and the NTT Communications Group, and thework mainly comprises construction and maintenance related
to those customers’ fixed-line communication networks. In the
Access business, we install, replace, and remove 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 for communications. 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 ofelectric 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 of base 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 “newcommon carriers” (NCCs), and SANWA COMSYS Engineering
has played a central role in the construction of facilities forthese NCC companies. Work in the NCC Engineering Businessis almost the same as in the NTT Engineering 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, andundertake construction projects in collaboration with partnercompanies. The unique characteristic of the NCC Engineering
Business is that the ratio of Mobile-related operations is greaterthan in the NTT Engineering Business, and there are comparatively fewer Network- and Access-related operations.

◆ Strengths, Opportunities, and Challenges
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 ExeoGroup, and the MIRAIT Group. The construction companies
must provide high-quality construction with no incidents or
accidents, and must respond quickly in the event of a disaster. In the Mobile business, there is an incentive structure inwhich work volumes change based on evaluations of construction quality, delivery times, improvement proposals, and cost
reductions. 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 isheld by construction companies affiliated with electric powercompanies and manufacturers that are the umbrella investment organizations of NCCs. NCC companies also receive
support from communication system vendors in the design anddevelopment of network technologies, so the key to expanding share is completing the project on time and at a low cost,offering high quality, with no incidents or accidents. In the NTTEngineering Business, given the continuing decline in capital
investments in the fixed line business for access and networks
in particular, increasing productivity in these fields will be amajor issue.

◆ Medium- to Long-term Market Trends
There are numerous new business opportunities, such as work
related to data centers to accommodate increases in communication traffic, electric power business related to the “smart
energy business” announced by NTT, and business involving the
installation and maintenance of optic fiber networks in keepingwith ongoing initiatives at the Ministry of Internal Affairs andCommunications supporting the implementation of high-speed
wireless environments. Nevertheless, we predict that the NTT
East and NTT West Groups’ capital investments in fixed-line
communication networks will continue to taper off, and we
expect to see a similar decline in the COMSYS Group’s profit inNTT’s fixed-line business. On the other hand, the Group’s business performance is expected to expand in the Mobile businessand the NCC Engineering business, as telecommunication car-

19

COMSYS GROUP REPORT 2021

rier companies undertake a full-scale rollout of 5G. There havebeen concerns about a reduction in construction processes
and a normalization of order amounts due to the simplification and decrease in size of telecommunications facilities andthe sharing of 5G base stations, mainly in outlying regions, tostreamline 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 anincrease in the planned number of 5G base stations along withexpedited schedules, and the institutionalization of local 5G.
Based on these factors, with increases in the Mobile and NCC
engineering businesses making up for the decrease in the NTT’s
fixed-line business, we expect that profit from the telecommunications carrier business will remain flat in the medium term.

outlinebusiness basestrategy

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 thesimultaneous rollout of 5G by the various carriers could raiseissues, such as increased pressure to reduce costs resulting
from intensifying competition among telecommunications carriers. The COMSYS Group’s policy is to reinforce its structuresby strengthening collaboration among Group companies andimproving staff flexibility, thereby ensuring an optimal responseto the needs of Rakuten Mobile and other carrier companies,
while also maintaining a balance in profitability.

◆ Strategies and Initiatives
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, weare integrating construction systems and reorganizing businessstructures in each region.
Amid the ongoing integration of IT systems based on DX
strategies, we are at the same time promoting structuralreforms. Up to now, each company maintained its own full set
of functions and bases, and promoted individual company optimization, but this individual optimization will be transformed
into overall optimization for the COMSYS Group to respondto these changes in the market. To switch to optimum business structures and approaches 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.

Business Strategies for the Telecommunications Carrier Business
Net Sales (Consolidated) in the
Telecommunications Carrier Business (Billions of yen)294.2 289.4 296.0

About

290.0
Sales
maintained

× Metal related△ New optic ﬁber lines〇 Maintenance businessNTT
Fixed-Line

Radical Structural Reforms in Operations
Head oﬃce functions

Head oﬃce functions

Head oﬃce functions

Tokyo sales oﬃce

Tokyo sales oﬃce

Tokyo sales oﬃce

NTT businessNTT businessNTT business

NCC business

NCC business

NCC 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

Integrated operation through a virtual company system
Aggregate backyard operations
Business operations that leverage local brands and wage systems〇 5G〇 Rakuten Mobile

NCC
FY2019Centralize sales functions and locations

△ 4G
〇 5G

NTT
MobileFY2020

FY2021(forecast)

Co. A
FY2023(target)

Co. B

Co. C

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

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

20

Segment Information: IT Solutions Business◆ Business Outline◆ Strengths, Opportunities, and Challenges

The IT Solutions Business comprises three sub-segments:
Solutions, Software Development, and Maintenance. Twonotable drivers for growth in the Solutions segment have been
the “Alliance Business” and corporate projects undertaken
as a partner of the NTT Group. “Software Development” ismainly undertaken under contract, with most of the company’sefforts focused on seeking out new customers and developing
solutions. Maintenance operations include server and network
monitoring, customer reception, on-site response, and operational support.

Our strengths are in “Multi-vendor response,” “Trust relationships with a broad range of alliance partners,” “One-stop
solutions,” and “Diverse engineering talent.” Leveraging thesestrengths, we will expand business fields through collaborations with partner companies, many of which are leading
companies in the IT field. Our main challenge will be in finding
ways of increasing added value for customers through various
operations, in order to further increase profit.

◆ Strategies and Initiatives
As part of efforts to achieve the goals of the COMSYS Vision,
Next Stage 2023, we will undertake the following three activities in the IT Solutions business. (1) Expanding high added value
business: We will expand managed services and other stockbusinesses in the cloud market, where robust growth continues, and in the AI/IoT and local 5G markets, where growth isexpected in the future. We will also provide high added value
solutions that leverage AI/IoT and local 5G, and work towardachieving DX for customer companies and society. (2) Securing
manpower capable of handling cutting-edge technologies: Inorder to secure outstanding manpower, in addition to strengthening new graduate and midcareer hiring, we will strengthen

the training of engineers in the key engineering fields that will
be required to expand business in the future (skills shifting andmulti-skilling). (3) Strengthening unified operations throughout the COMSYS Group as a whole: While clearly identifying“Business fields to be optimized and maximized in individual
areas leveraging the strength of supervisory companies,”and “Business fields to be targeted for overall optimization
throughout the COMSYS Group as a whole,” we will strive toexpand business and increase productivity, for example throughthe unification of sales and construction structures based on
the “one management” approach and overall optimization
leveraging maintenance and operation platforms.

Growth Strategy for the IT Solutions Business
Net Sales (Consolidated) in the
IT Solutions Business(Billions of yen)

120.0

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

or more105.5 107.0
98.1
SoftwareDevelopment

28.0

27.7

Software Development

Solutions

Maintenance● Expand contract development
projects● Develop IoT, AI,
and RPA products● Expanding collaborative
business● Local 5G● Secure DX projects● Expand managed services● Expand acquisition ofoutsourcing contracts

Core Competencies

27.1

72.0

71.1

Multi-Vendor Response

Maintain at
approx.
+6%/year

One-Stop Solutions
Diverse Engineering Talent

Nationwide Construction
Capabilities

Priority Measures for Achieving Goals
Top line

Solutions
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)

Bottom line
Maintenance
6.6
5.1
FY201921

FY2020● Standardize and enhance PMO activities, and promote horizontal rollout of the accumulated expertise● Integrate and optimize maintenance platforms

7.0
FY2021(forecast)

COMSYS GROUP REPORT 2021

FY2023(target)● Maximize proﬁts based on proﬁt management metrics

outlinebusiness basestrategy

ESG

about us

Segment Information: Social System-Related Business◆ Business Outline◆ Strengths, Opportunities, and Challenges

The Social System-Related Business comprises three sub-segments: “Electric and Telecommunications Facilities,”“Renewable Energy,” and “Infrastructure and Other.” In“Electric and Telecommunications Facilities,” we undertake
electrical construction and telecommunications construction for
expressways and for Ministry of Defense projects. In Renewable
Energy, we undertake the construction of solar power plants,
and in recent years, we have expanded into the biomass andwind power generation businesses. In “Infrastructure andOther,” our main business includes undergrounding of utility
poles and civil engineering construction related to water supply
and sewerage based on orders placed by regional municipalities and the national government.

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.”
Government agencies have implemented various infrastructure facilities, in light of the aging of social infrastructures andincreasingly severe natural disasters. In the private-sector segment as well, there are multiple plans for large-scale redevelopment projects. We still face challenges in terms of capitalizing
on business opportunities, for example in terms of sales capabilities in the private sector, and in the limited number of engineers in domains such as electric power and air-conditioning.
Moving forward, we will bolster these areas, keeping in mind
the possibility of M&A as well.

◆ Strategies and Initiatives
Amid increasing activities among various ministries aimed at
putting in place and maintaining social infrastructures, we
expect that the Social System-Related business will be thesegment demonstrating the highest level of growth during
the period of the Medium-Term Vision. Business growth takes
into account the possibility of M&A, but the largest part ofthe increase will result from organic growth. In the renewableenergy segment, the construction of biomass power plants has
begun as biomass supersedes solar power generation, and weplan to expand this business with the No. 1 Makurazaki Power
Plant as a starting point. In terms of wind power as well, we
will consider capturing demand for renovations to windmills, aswell as participation in offshore wind power generation projects. In the electric and telecommunications facilities segment,
we will use our comprehensive capabilities to grow the data
center business. 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 lack ofconstruction resources. We are strengthening both new graduate and midcareer recruiting to secure engineers, and we arealso utilizing flexible resources within the Group that leverage“virtual company” frameworks.
Growth Strategy in the Social System-Related Business

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

190.0

or more168.5 168.2

Infrastructure
and Other 86.7

177.0

93.0

90.9

Maintain at
approx.
+4%/yearTargeting One-Stop Comprehensive Engineering Business Nationwide(Infrastructure x Utilities x Renewable Energy x Telecommunications)

Infrastructure and Other

Renewable Energy● Undergrounding PFIs
● Concessions● Disaster prevention/
Disaster mitigation● Captive consumption-typesolar power● Biomass power generation● New energy businesses

Core Competencies
Communications Electrical

FY2019FY2020Gas
pipingRoadpaving

Civil
Constructionengineering

Advanced estimate capabilities
Supervision capabilities

HVAC

Sanitation

Extensive project credentials
Advanced technical capabilities

Priority Measures for Achieving Goals

43.0

Top line

29.3
Electric andTelecommunications
Facilities
48.3
43.2

● Expanding areas (expressways
and Ministry of Defense projects)● Large-scale data centers● Developing new domains

Competition-beating construction line-up
Water
supplypipingNationwide construction
Maintenance capabilities
Renewable
Energy38.3

Electric andTelecommunications Facilities● Expand new domains (e.g.: water supply and sewerage processing facilities,
run-oﬀ river basin management, hydrogen-related)● Expand existing domains (e.g.: undergrounding PFIs, water supply and sewerage, expressways,
Ministry of Defense projects)

Bottom line

41.0
FY2021(forecast)

FY2023● Reduce construction costs by reviewing procurement methods● Increase eﬃciency through DX and consolidation of operations● Maximize proﬁts based on proﬁt management metrics(target)*PFI：Private Finance Initiative
A new approach to the use of private sector capital and technical capabilities, for example in the construction, maintenance, and operation of public facilities
Activities aimed at strengthening collaborations with partner companies, and Group synergy
Segment Information: IT Solutions Business / Social System-Related Business

22

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 inand secure more diverse, outstanding individuals. In addition
to conducting recruiting activities and in-house training toincrease female new graduate hires and female managers,

23

COMSYS GROUP REPORT 2021

volunteers identify and resolve issues aimed at establishing an
ideal work environment for women and for all other membersof the COMSYS Group’s increasingly diverse team. At the sametime, we have reviewed the re-employment system so that
seniors can remain 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.” In addition, to help build safer and moresecure cities, we undertake earthquake-proofing construction
and upgrades to 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.

outline

strategy

ESGbusiness baseabout us◆ Establishing Key Themes
Management Philosophy

Activities aimed at continuously
increasing corporate value● Securing quality● Preventing work-related accidents

Promoting Safety
and Quality● Securing diverse, outstanding manpower

Cultivating Human
Resources

We will contribute to our country andlocal communities by building social
infrastructure that supports affluent
lifestyles.

● Large-scale natural disaster countermeasures● Preventing global warming

Helping to Builda Sustainable Society

We will continue with unrelenting
reform in our aim to further increase
corporate value.

● Building governance structures● Increasing awareness of compliancePursuing More
Efficient and Sincere
Corporate Activities

We will build a company that customers
continue to choose through the construction of diverse infrastructure thatcarries our era forward.

◆ The COMSYS Group’s Four Key Themes and Activities

The COMSYS Group’s
Four Key Themes

Main Activities during
FY2020Main Improvement Items
and Results

Issues and Areas Requiring
Improvements in FY2021

Pursuing More Efficientand Sincere Corporate
Activities●Promoted consolidation (e.g.,
reorganized operational structures, began system integration,
secured joint project orders)●Nationwide centralization of sales and backoffice functions●Test operations of mobile operation systems●Group collaborations 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 (18.8%; +0.1 percentage point year on year)●Increase the ratio of female managers (2.1%;+0.5 percentage point year on year)●Study new workstyles to adapt tothe “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 (4; down
27 year on year)●Reduce accidents involving equipment andhuman-initiated failures (13; down 9 year on
year)●Reduce accidents involving vehicles (46;down 54 year on year)●Reduce incidents involving information(including loss and theft) (3; down 2 year on
year)●Conduct activities aimed at preventing accidents●Build Group-wide safety management structures●Continue to study the introduction of ICT in the front lines

Helping to Build a
Sustainable Society●Assisted in recovery efforts following 2020 Kyushu floods●Introduced and promoted renewable energy●Increased attention to environmental issues●Assist in recovery activities (total of 7,100
employees participated over two months)●Expand the Renewable Energy business (neworders: +31% year on year)●Reduce CO 2 emissions (Nippon COMSYS)(down 9.2 percentage points year on year)●Reduce industrial waste (Nippon COMSYS)(down 6.2 percentage points year on year)●Expand the “post-solar” business

ESG

24

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. Throughthe growing Renewable Energy and IT Solutions businesses
as well, we contribute to reducing environmental impact andimproving productivity in both private- and public-sector services. As such, the COMSYS Group’s business in and of itself
contributes to and plays an important role in society, but weare also aware of the great responsibility that comes with thisrole. To continue to earn the trust of, and be selected by, avariety of stakeholders in the future—including customers,
employees, business partners, and regional society—we mustensure appropriate management in accordance with laws andregulations, and at the same time make optimum management judgments that lead to increased corporate value. We areaware that strengthening corporate governance, which is thefoundation for “legal” and “appropriate” management, is ofparamount importance for the COMSYS Group.

◆ Corporate Governance Structure

Accounting auditors

In December 2017, the COMSYS Group made a transition to a
Audits by the Audit and Supervisory Committee are conductedcompany with an Audit and Supervisory Committee, to strengthen
based on direct instructions to the Internal Control Auditingtransparency and accountability in the company’s management.
Department, but when deemed necessary, the full-time auditors
The COMSYS Group’s Board of Directors comprises 15 directors,
themselves conduct periodic investigations of the company’s opersix of whom are on the Audit and Supervisory Committee, whichations and financial status. Furthermore, in accordance with theincludes five outside directors (as of June 29, 2021). RegularFinancial Instruments and Exchange Act (the Japanese version of
meetings of the Board of Directors are held based on the Board
the Sarbanes-Oxley Act), explanations are received from accountingof Directors regulations, and extraordinary meetings are held asauditors (CPAs) regarding the details of audit results.
deemed necessary, to decide items stipulated by law and importantmanagement-related items, and also to audit persons executing
business. The Audit and Supervisory Committee audits the execution of operations by directors not only from the perspective ofCorporate Governance Structure
legal compliance, but also from the perspectiveof appropriateness for corporate management.
This committee also has the authority to express
General Meeting of Shareholders
opinions on matters such as the appointment,
Appointment/dismissal
Appointment/dismissal
Appointment/dismissal
dismissal, and compensation of directors who
Directors
are not a part of the committee. The Audit andDirectors(Audit and Supervisory
Supervisory Committee comprises six directors,
Committee members)
Comprising members
Comprising members / participation
five of whom are outside directors whose status
as independent directors has been notified toCollaboration
Consultations
Nomination and
Audit and Supervisory
Directors
Remuneration Advisory
the Tokyo Stock Exchange, to guarantee more
Committee
Auditing /ReportingCommittee
supervisionobjective direction and monitoring of manageAuditing / supervision
Collaboration
Appointment/dismissal
andsupervision
ment. The Internal Control Auditing Department
has been established to support the activities ofInstructions, reporting
the Audit and Supervisory Committee. InternalInternal Control
President(management meetings)
Auditing Department
auditing activities offer advice and counsel toInstructions, reporting
Internal
managers on the results of operational audits
auditsand accounting/financial audits at Group comThorough dissemination
Business execution
panies, in addition to related improvements, asCommittees
of information
divisionsan Independent function within the organization. Members of the Internal Auditing Office,Management,
who comprise employees seconded from supermonitoringvisory business companies, strive to strengthen
Accounting
Internal audits
Reviews /reportingauditsreportingindependence by conducting audits mainly forcompanies other than the one with which they
COMSYS Group
were originally affiliated. Through the transition
to a company with an Audit and Supervisory
SANWA COMSYS
Nippon COMSYSTSUKEN GroupNDS Group
TOSYS GroupEngineeringGroup
Committee, we have established a NominationGroupand Remuneration Advisory Committee that
Hokuriku
COMSYSCOMSYS
includes outside directors, as an advisory funcSYSKEN Group
Denwa Kouji GroupJOHO SYSTEM Group
Shared Services
tion for the Board of Directors, to guarantee
transparency in nomination and remuneration
decision processes.

25

COMSYS GROUP REPORT 2021

outline

strategybusiness base

ESG

about us(As of June 29, 2021)◆ Board of Directors

Number of owned shares on March 31, 2021

President, Representative Director

Director

Director(President, Representative Directorof Nippon COMSYS Corporation;
Chairman of the Nomination andRemuneration Advisory Committee)(President, Representative Directoro f S A N WA C O M S Y S E n g i n e e r i n g
Corporation)(President, Representative Director of
TSUKEN Corporation; in charge of
Hokkaido Block)

Director

Director

Takashi Kagaya

Kenichi Sato

Yoshihisa Omura

Satoshi Tamamura

Number of the Company’s shares
owned 25,600
Tenure as Director 6 years
Attendance at Board of Directors
Meetings 9/9 (100%)

Number of the Company’s shares
owned 7,200
Tenure as Director 6 years
Attendance at Board of Directors
Meetings 9/9 (100%)

Number of the Company’s shares
owned 8,000
Tenure as Director 5 years
Attendance at Board of Directors
Meetings 9/9 (100%)

Number of the Company’s shares
owned 7,900
Tenure as Director 2 years
Attendance at Board of Directors
Meetings 9/9 (100%)(President & CEO of NDS Co., Ltd.)(General Manager of Personnel
Department; in charge of Complianceand COMSYS Shared Services
Corporation; Member of the Nomination
and Remuneration Advisory Committee)

Hitoshi Kumagai
Number of the Company’s shares
owned 7,300
Tenure as Director 8 years
Attendance at Board of Directors
Meetings 9/9 (100%)

Director

Director

Director

Director

Director(General Manager of Finance &Accounting Department and Manager
of Business Expansion Strategy Office;in charge of IR, Internal Control and
Audit, and General Affairs)(In charge of Carrier Business
Promotion, TOSYS CORPORATION,
SYSKEN Corporation, Hokuriku Denwa
Kouji Co., Ltd.)(In charge of Consumer Demand and
COMSYS JOHO SYSTEM Corporation)(General Manager of DX Promotion
Department; in charge of Corporate
Planning Department)(Full T ime Audit and Supervisory
Committee Member)

Hideyuki Noike

Kunihiko Uchide

Takaya Kitaguchi

Atsushi Yasunaga

Number of the Company’s shares
owned 4,500
Tenure as Director 1 year
Attendance at Board of Directors
Meetings 7/7 (100%)

Number of the Company’s shares
owned 5,900
Tenure as Director 1 year
Attendance at Board of Directors
Meetings 7/7 (100%)

Number of the Company’s shares
owned 3,000
Tenure as Director --Attendance at Board of Directors
Meetings ---Number of the Company’s shares
owned 3,400
Tenure as Director --Attendance at Board of Directors
Meetings ---Hidehiko Ozaki
Number of the Company’s shares
owned 7,800
Tenure as Director 6 years
Attendance at Board of Directors
Meetings 9/9 (100%)

Outside Director

Outside Director

Outside Director

Outside Director

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

Kenichi Nakatogawa

Koichi Kawana

Hiroyuki Asai

Hideo Yamamoto

Number of the Company’s shares
owned 0Tenure as Director 4 years
Attendance at Board of Directors
Meetings 9/9 (100%)

Number of the Company’s shares
owned 0Tenure as Director 2 years
Attendance at Board of Directors
Meetings 9/9 (100%)

Number of the Company’s shares
owned 0Tenure as Director 2 years
Attendance at Board of Directors
Meetings 9/9 (100%)

Number of the Company’s shares
owned 0Tenure as Director --Attendance at Board of Directors
Meetings ---Number of the Company’s shares
owned 0Tenure as Director --Attendance at Board of Directors
Meetings ---Pursuing More Efficient and Sincere Corporate Activities

26

Pursuing More Efficient and Sincere Corporate Activities◆ 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.
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
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 independence, and on the degree of contribution to deliberations at
meetings of the Board of Directors.
Overview of Governance Structures
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 29, 2021)

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 perspectives of both gender and nationality.

Reasons for Appointing Outside Directors

27

Masahiko
Miyashita

As an attorney, based on advanced insights and skills in relation to laws and regulations, Mr. Miyashita provides appropriate advice from a multi-faceted perspective, in the capacity of outside director and member of the Audit and Supervisory Committee. He was selected as a candidate foroutside director and member of the Audit and Supervisory Committee because in our judgment, he is expected to continue contributing to further
strengthening the COMSYS Group’s management and corporate governance. Mr. Miyashita has no past experience contributing to a company’s
management in a capacity other than outside auditor and outside director, but for the reasons outlined above, we decided that he will be able toappropriately execute the duties of outside director and member of the Audit and Supervisory Committee.

KenichiNakatogawa

As a certified public accountant, Mr. Nakatogawa has advanced and specialized knowledge and insights in finances. He was selected as a candidatefor outside director and member of the Audit and Supervisory Committee because in our judgment, based on his knowledge and insights, he canbe expected to provide advice and suggestions from a multi-faceted perspective, and to contribute to further strengthening COMSYS’s corporate
governance. Mr. Nakatogawa has no past experience contributing to a company’s management in a capacity other than outside auditor and outside
director, but for the reasons outlined above, we decided that he will be able to execute the duties of outside director and member of the Audit andSupervisory Committee.

KoichiKawanaMr. Kawana has extensive experience and insights in corporate management and specialized knowledge acquired through long years of first-handexperience in the plant engineering industry, as well as a detailed understanding of overseas business, having worked as the head of an overseas
office. Based on this background, he was selected as a candidate for outside director and member of the Audit and Supervisory Committee because
in our judgment, he is expected to provide advice and suggestions from a multi-faceted perspective, and to contribute to further strengthening
COMSYS’s corporate governance.

Hiroyuki
Asai

Mr. Asai has extensive insights and experience in relation to corporate management and specialized knowledge based on years of experience in thenonferrous metals industry. He was selected as a candidate for outside director and member of the Audit and Supervisory Committee because in
our judgment, based on his experience and insights, he can be expected to provide advice and suggestions from a multi-faceted perspective, and tocontribute to further strengthening COMSYS’s corporate governance.

Hideo
Yamamoto

Mr. Yamamoto has specialized knowledge based on long years of first-hand experience in the life insurance industry, as well as advanced and specialized knowledge related to taxes as a certified tax accountant. He was selected as a candidate for outside director and member of the Audit andSupervisory Committee because in our judgment, based on his knowledge and insights, he can be expected to provide advice and suggestions froma multi-faceted perspective, and to contribute to further strengthening COMSYS’s corporate governance. Mr. Yamamoto has no past experience
contributing to a company’s management, but for the reasons outlined above, we decided that he will be able to execute the duties of outside
director and member of the Audit and Supervisory Committee.

COMSYS GROUP REPORT 2021

outline

strategy

ESGbusiness baseabout us◆ Director Remuneration
Following are the basic policies for director remuneration, as
indicated in the COMSYS Corporate Governance Code.
Directors Who Are Not Members of the Audit（1）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 Boardof Directors, within the scope of limited amounts approvedat the General Meeting of Shareholders, and based onreviews by the Nomination and Remuneration Advisory
Committee (including outside directors) to ensure appropriateness and objectivity
Directors Who Are Members of（2）
the Audit and Supervisory Committee●Remuneration structures applicable to persons capable ofexecuting operations such as directing auditing operations orbusiness execution●Remuneration structures applicable to persons participatingin management decisions and management judgments, andpersons capable of auditing and directing the appropriateness of those activities●As a rule, only “basic remuneration” (a fixed amount),from the 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
The Audit and Supervisory Committee is responsible for auditing the execution of operations by directors who are not mem-

Directors’ Annual Remuneration(FY2020)
Categories

Number of Officers

Payment Amount

Directors

14¥180 million

6(5)¥55 million(¥40 million)20(5)¥235 million(¥40 million)(excluding Audit and Supervisory Committee members)

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

Total(outside directors)(Notes)1. The above table includes two directors who retired upon the completion of the 17th regular
general meeting of shareholders held on June 26, 2020, and three directors who retired upon
the completion of the 16th regular general meeting of shareholders held on June 25, 2019.
2. The amounts of compensation tied to performance for the above directors (excluding Audit
and Supervisory Committee members) include expected amounts of payments for director
bonuses for the business year in question.
3. The long-term incentive compensation amounts for the above directors (excluding Audit andSupervisory Committee members) include cost amounts posted during the business year inquestion in relation to subscription warrants provided as share remuneration stock options (¥7
million, paid to 3 directors) based on resolution issued at the Board of Directors meeting heldon August 7, 2019. The share remuneration stock option system was eliminated at the 17th
regular meeting of shareholders held on June 26, 2020.

bers 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.

◆ 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.

◆ 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 results with the Boardof Directors, and deliberated on the Board’s current status andeffectiveness. 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 outlineof analysis and evaluation results regarding the effectiveness of
the Board of Directors as a whole, but it does not require disclosure of self-evaluations by each director, so these self-evaluations have not been disclosed.

Pursuing More Efficient and Sincere Corporate Activities

28

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 FY2020, there were five outside Audit and Supervisory

Committee members. These outside Audit and Supervisory
Committee members have attended all nine meetings of theBoard of Directors and all 10 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 FY2020) 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 each year,
they also receive explanations on all aspects of managementfrom 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 members are 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 withaccounting auditors. During FY2020, out of a total of 73 consolidated subsidiaries and COMSYS Holdings, evaluations covered eight supervisory business companies and ten 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: 6; Concurrent duties in theInternal Control Office: 1; Total: 20]
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.

*As of June 30, 2021. 0 persons from July 1, 2021 onward.

29

COMSYS GROUP REPORT 2021

outline

strategy◆ Basic Compliance Policies
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 thecompany in question, and the results of those reviews are thenreported to the Compliance Committee at COMSYS Holdings.

business base

ESG

about usCompliance Promotion Structure

COMSYS Holdings
Management meetings
Instructions

Reporting / suggestion*Important cases

Compliance 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 FY2020

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 83 in FY2020(18 violations) and 97 in FY2019 (26 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

30

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. In addition, we are actively promoting diversity and undertaking workstyle innovations with aview toward creating an attractive workplace environment, sothat we are able to recruit more outstanding individuals fromamong a diverse range of candidates. We are revising personnel systems at Group companies, and encouraging personnel
exchanges of executive employees within the Group.
Our training policies are designed to foster individuals who
can respond to new business environments; this includes levelspecific 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.
Through the mutual use of training items and other assets
put in place at COMSYS Group companies, we provide training
to diverse human resources. At the same time, we have created a “CHD human resource training platform” with the goalof fostering talent that can undertake the business operationsof the future, to provide human resource training through aGroup-wide operational system.

◆ Recruiting Plan
In April 2021, the COMSYS Group’s nine companies (eightsupervisory business companies and COMSYS Shared Services
Corporation) hired a total of 256 new graduate employees,
mostly in the Group’s core businesses: The Telecommunications
Carrier Business, the IT Solutions Business, and the Social
System-Related Business. In terms of hiring activities for new
employees entering the company in April 2022, remote explanation meetings and remote interviews are being conducted
as part of measures to prevent the spread of the COVID-19
infection, and we are planning to hire approximately 260 new
employees at nine companies, most of whom will be engineers
required to strengthen the Group’s businesses. In order tosecure a broader range of diverse and outstanding personnel,rather than hiring all new graduates at once, as has been thecommon practice in Japan, we will continue hiring through theyear; for example, targeting students returning to Japan fromoverseas studies in the summer onward, as well as mid-careerhires and recent graduates with one to three years of work
experience.
In terms of new graduate hiring in particular, we will work toprevent mismatching in employment, which is the most significant factor behind rapid turnover, for example by ensuring thatnew recruits have a full understanding of the duties involved
from the recruiting stage. At the nine supervisory businesscompanies, there is an average turnover rate of 4.1% for new
graduate hires who leave the company within the first three
years. This is a high retention rate compared to the turnoverrate for new university graduate hires in the general workforce,at 32.8% (Ministry of Health, Labour and Welfare Materials on
Turnover Rates: Persons graduating in March 2017).

◆ Mid-career Hiring and Re-employment System
The COMSYS Group actively undertakes mid-career hiring of
qualified and experienced candidates who can contribute tobusiness immediately, in order to make up for the labor shortfall resulting from business expansion. In order to respond totechnology innovations and the telecommunications technologies, which are evolving at a dizzying pace, each year, wehire a certain number of skilled engineers with knowledge andexperience in advanced and specialized technologies, as well as
managers with managerial experience. We also conduct re-hiring after retirement, to best utilize the experience and expertiseof senior employees.
In addition, with a view toward the aging society of the
future, we are considering the possibility of increasing the

31

COMSYS GROUP REPORT 2021

retirement age and the upper limit on the rehiring system. At
the same time, we will examine a variety of related issues; forexample, the handling of pensions and wages in keeping withthose changes; health issues surrounding rehiring employees;
and inequity in work assignments and possible loss of motivation that could result from a breakdown in the balance of age
configurations within the company.
To maintain and increase corporate competitiveness in the
future as well, we will strive to make maximum use of in-housemanpower, including rehired employees, increase the motivation to work even after retirement age, and form an in-houseenvironment where all employees can actively participate.

outline

strategybusiness 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, 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 needs of society.
Because the construction industry has typically been amale-centric society, the COMSYS Group first focused on
promoting active participation by women; for example: (1)Reforms in the corporate culture through president’s messages
and training (employee awareness reforms 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 takechildcare 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, and employees better
understand the meaning of diversity within the company.
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.

Regarding the hiring of female employees, the number offemale students in the sciences has always been smaller, and as
many companies compete to recruit these women, we will takemeasures to expand the scope of hiring regardless of academic
field, recruiting outstanding students in the humanities as well.
In this way, we will increase the ratio of female new graduate
hires, at the same time actively recruiting women in midcareer as well, in order to increase the ratio overall. In terms of
appointing female managers as well, we will increase the number of female managerial candidates and put in place appropriate human resource training and workplace environments toincrease the ratio of women in managerial positions.
We are also promoting the hiring of non-Japanese employees; eight have already been hired at the nine supervisorybusiness companies (as of April 2021). In terms of hiring persons with disabilities, we take into consideration the status ofeach person’s disability to put in place workplace environments
where all employees can participate actively and energetically,for example by collaborating with companies that support
workers with disabilities. The number of male employees taking
childcare leave is gradually increasing, and we will strive to bea Group in which diverse employees can be actively involved,
regardless of gender, life stage, disabilities, or nationality.

◆ 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 onestop response to the varied needs of customers in the telecommunications industry, which is experiencing a rapid waveof technology innovations. To do this, the COMSYS Groupwill actively foster engineers and support them in acquiring
new skills. We will undertake systematic recruiting and training to secure engineering talent in keeping with the times.
For example, in the Telecommunications Carrier Business, wewill increase the number of certified engineers required forthe construction of base stations for fifth-generation mobile
communication systems (5G), which will see further growthin 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 partner companies, at in-house educational and training facilities; and encourage senior employees
to share their expert skills with their juniors. We will also invest
efforts in group activities and improvement proposal activities
aimed at increasing productivity.

Cultivating Human Resources32

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 2020 exceeded the industry
average due to the unfortunate occurrence of one fatal accident. We have analyzed the causes and implemented thoroughprevention measures, to ensure that such a tragic accident isnever repeated.
Frequency Rate of Work-Related Accidents (Yearly Base)*1 Frequency rate: Expresses the frequency of work-related accidents based on the number ofwork-related injuries or deaths recorded for every 1 million work hours Calculation method:(number of work-related injuries or deaths / total number of work 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

Severity Rate of Work-Related Accidents (Yearly Base)
1.00

1.00
Construction industry*

0.80

0.79

0.80

0.81

0.80

0.60

0.60

0.40

0.40

0.20

0.06

0.17

COMSYS Group

0.05

Dec. 2018

Dec. 2019

Dec. 2020

0.28

0.20

0

0

0.19

Construction industry*

0.24

0.18

COMSYS Group

0.00
Dec. 2018

0.00
Dec. 2020

Dec. 2019

Source: Ministry of Health, Labour and Welfare; 2019 Trends in Workplace Accidents; March values(both in NTT Engineering Business)◆ Activities Aimed at Ensuring Quality
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

33

COMSYS GROUP REPORT 2021

Business as part of efforts to improve quality and prevent
human-initiated failures.
Facility Accidents and Human-Initiated Failures
FY2018FY201920

FY202022

13

outline

strategy

ESGbusiness baseabout us◆ 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 PrivacyMark and information security management
system (ISMS) certification at each company, 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
FY2018FY20190

FY2020
1

1(Number of information-related incidents involving leaks of customer
information or personal information as defined by COMSYS Holdings)

Helping to Build a Sustainable Society◆ Activities Targeting SDGs
Through its business activities, the COMSYS Group contributes
to achieving the United Nations’ sustainable development goals(SDGs), including Goal 7, “Affordable and clean energy”; Goal
9, “Industry, innovation, and infrastructure”; and Goal 13,“Climate action.”●Promoting 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 sales in the renewable energy business by about
12% 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.
●Maintaining social infrastructures
The undergrounding of utility poles is one aspect of the action
plan established by the Japanese government to prevent andmitigate the effects of disasters. The COMSYS Group has
already received orders for utility pole undergrounding throughPFIs*. By participating actively in this business, which is expanding nationwide, we will contribute to building a society thatminimizes damages from natural disasters.

In July 2020, torrential rains caused serious damage in the
Kyushu region, and especially in Kumamoto Prefecture. The
COMSYS Group combined all of its resources to assist in the
rapid recovery of wireless base stations and telecommunication
cable facilities in Kumamoto Prefecture that had been damagedby flooding, undertaking construction on an unprecedented
scale.
●Reducing greenhouse gases
The COMSYS Group promotes a variety of environmental
protection activities, including the introduction of low pollution vehicles and the introduction of solar power generation
systems in office buildings. We are working to reduce the consumption of both gasoline and electricity, as part of efforts to
cut greenhouse gas (CO2) emissions.

CO2 Emissions (Nippon COMSYS)（t）

FY2020FY20195,590.6
6,155.8※ PFI：Private Finance Initiative
A new approach to the use of private sector capital and technical capabilities, for example in the construction, maintenance, and operation of public facilities◆ Activities aimed at strengthening collaborations with partner companies, and Group synergy
Partner companies are selected from among companies
involved in ongoing transactions with the COMSYS Group,
through evaluations based on review standards established separately by each of the supervisory business companies. Thesestandards are based on factors such as management status,
construction related licenses, and status of corporate insurance.
Group companies conduct contact meetings with partner companies once or twice each year, strengthening collaboration bycreating opportunities to share information on trends related to
the COMSYS Group’s business and activities aimed at increasing quality and safety.
In 2019, the COMSYS Group kicked off a “Procurement
Optimization Study Project” to enhance Group synergy, to promote material procurement that leverages merits of scale, andprice optimization through the collection and analysis of data.

Promoting Safety and Quality / Helping to Build a Sustainable Society

34

Financial and Non-Financial Highlights
FY2010FY2011FY2012FY2013

ended
March 31, 2011

ended
March 31, 2012

ended
March 31, 2013

ended
March 31, 2014

Orders received

294,365

297,769

335,632

327,981Net sales

315,480

295,851

316,092

331,341

Gross profits

31,052

31,11741,22645,770

SG&A expenses

19,266

18,525

18,67918,200Operating profit

11,785

12,592

22,547

27,570Operating margin

12,14012,96922,91428,078

Profit before income taxes

11,193

12,26721,09327,076

Profit attributable to owners of parent

9,543

7,173

13,284

16,389Cash and cash equivalents at end of year

17,63533,454

23,46930,915

Total net assets

161,768

164,574

173,411

179,414

Total assets

237,436

228,135

240,602250,561

Capital expenditure

5,780

6,330

8,360

8,200

Depreciation and amortization

5,043

4,640

4,486

4,426

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

8,173

1,520

1,660

1,270

Gross profit margin on net sales

9.8

10.5

13.0

13.8

Operating profit margin on net sales

3.7

4.3

7.1

8.3

Ordinary profit margin on net sales

3.8

4.4

7.2

8.5

Primary earnings margin on net sales

3.0

2.4

4.2

4.9

Return on equity (ROE)

6.1

4.4

7.9

9.4

Return on assets (ROA)

4.2

3.1

5.7

6.7

Return on invested capital (ROIC)

5.8

4.4

8.2

9.1

Equity ratio

67.7

71.7

71.6

71.1

Dividends per share (yen)

20.00

20.00

20.00

25.00

Consolidated payout ratio (%)

27.1

36.0

18.7

18.4

Total return ratio (%)

58.3

77.7

48.7

66.9

Price-to-book ratio (PBR) (multiples)

0.7

0.7

0.8

1.1

11.38

16.14

10.69

11.89

Total shareholder return (TSR) (%)

−

−

−

−

Closing price at end of period (yen)

841

896

1,142

1,618

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)

15,43018,90822,74528,044Market capitalization (billions of yen)

122.7

130.7

166.7

236.1

(millions of yen)

Financial Indicators (%)

Stock Information

Price-to-earnings ratio (PER) (multiples)

Non-Financial Information
Number of employees (consolidated)

10,012

9,758

9,798

9,625

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, 2021: ¥110.71 / US$1.00. Total number of issued shares for the year ended March 31, 2016, showsa 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 + Totalamount for treasury shares purchased) ÷ Profit

35

COMSYS GROUP REPORT 2021

outline

strategybusiness baseabout usESG

FY2020FY2014FY2015FY2016FY2017FY2018FY2019FY2020ended
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, 2021

ended
March 31, 2021

(unit: US$ 1,000)

336,973

331,986

370,198402,229505,558

590,718

586,512

5,297,733

328,631

320,654334,163

380,024

481,783

560,882

563,252

5,087,634

47,93843,38945,72353,43365,25373,61275,989686,379

20,264

19,54020,68623,08529,98534,65834,417

310,875

27,674

23,84925,03630,34735,267

38,953

41,572375,504

28,121

24,22325,34130,70636,07140,06442,941

387,869

27,28324,04022,80730,861

39,60039,47843,264

390,787

16,767

15,42014,485

20,39028,01825,99429,369265,279

33,43528,81820,87928,957

27,77835,50332,936

297,498

194,038

196,543

202,943

231,767

301,459

310,694

330,8072,988,050

264,019

266,066

284,367

325,042439,926

450,043

479,419

4,330,404

7,820

6,200

9,620

14,43010,653

11,73012,764

115,292

4,672

5,009

5,723

5,866

7,444

9,150

9,279

83,814

100

114

113

106

11,756

8,145

5,605

50,628

14.6

13.5

13.7

14.1

13.5

13.1

13.5

−

8.4

7.4

7.5

8.0

7.3

6.9

7.4

−

8.6

7.6

7.6

8.1

7.5

7.1

7.6

−

5.1

4.8

4.3

5.4

5.8

4.6

5.2

−

9.0

7.9

7.3

9.4

10.6

8.6

9.2

−

6.5

5.8

5.3

6.7

7.3

5.8

6.3

−

8.7

7.5

8.1

8.5

7.5

7.9

8.6

−

73.0

73.4

70.9

70.8

67.8

68.3

68.3

−

30.00

35.00

40.00

50.00

60.00

75.00

85.00

−

21.0

25.6

30.8

28.0

26.1

37.0

36.5

−

66.2

77.2

85.6

67.5

54.5

67.5

60.2

−

0.9

1.0

1.1

1.4

1.3

1.1

1.3

−

10.41

12.71

15.30

15.90

13.12

13.71

14.65

−

76.8

122.1

138.7

164.4

99.9

104.9

99.6

−

1,485

1,738

1,989

2,840

3,020

2,783

3,410

−

145,977

141,000

141,000

141,000

141,000

141,000

141,000−

31,32430,15931,825

26,382

12,29914,165

15,961

−

216.7

245.0

280.4

400.4

425.8

392.4

426.4

−

9,931

9,994

10,224

11,581

16,70016,844

17,066

−

−

−

14.7

18.5

18.9

18.7

18.7

−

−

−

1.6

1.5

1.4

1.4

2.1

−

−

−

1.4

1.9

2.0

2.1

2.1

−

−

−

11.2

11.2

12.6

13.0

13.2

−

Financial and Non-Financial Highlights

36

Status of Company’s Shares◆ Investor Information
Major Shareholders
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:
17,737
Date of Listing:
September 29, 2003

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

28,93020.51

Custody Bank of Japan, Ltd. (Trust Account)

14,046

9.96

Nippon Life Insurance Company

3,247

2.30

Custody Bank of Japan, Ltd. (Money Trust Tax Account)

3,101

2.19

COMSYS Holdings Employee Shareholder Association

2,085

1.47

JP MORGAN CHASE BANK 380072

1,854

1.31

Sumitomo Realty & Development Co., Ltd.

1,661

1.17

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

1,580

1.12

Meiji Yasuda Life Insurance Co.

1,554

1.10

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

1,475

1.04

*As of March 31, 2021, COMSYS Holdings held 15,961,000 treasury shares (11.3%), but COMSYS Holdings is
not included among the “major shareholders” above.

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.

Number of
Shares Held Percentage(Thousands)

Name of Shareholder

Shares by Shareholder Category

Component ratio ofshares held(number of shareholders)

50.0%
3.1%
5.3%
16.2%
14.1%
11.3%

Financial institutions (90)Securities companies (42)Other corporate entities (310)Foreign corporate entities (352)
Individuals (16,942)
Treasury shares (1)Share Price and Trading Volume（Yen）（Thousands of shares）

3,600

50,000

3,100

40,0002,600
30,000
2,100
20,0001,600

10,000

1,100

600

37

Aug

. ʻ1
7
Sep
. ʻ1
7
Oc
t. ʻ1
7
No
v. ʻ1
7
Dec
. ʻ1
7
Jan
. ʻ1
8
Feb
. ʻ1
8
Ma
r. ʻ1
8
Apr
. ʻ1
8
Ma
y ʻ1
8
Jun
. ʻ1
8
Jul.
ʻ18
Aug
. ʻ1
8
Sep
. ʻ1
8
Oc
t. ʻ1
8
No
v. ʻ1
8
Dec
. ʻ1
8
Jan
. ʻ1
9
Feb
. ʻ1
9
Ma
r. ʻ1
9
Apr
. ʻ1
9
Ma
y ʻ1
9
Jun
. ʻ1
9
Jul.
ʻ19
Aug
. ʻ1
9
Sep
. ʻ1
9
Oc
t. ʻ1
9
No
v. ʻ1
9
Dec
. ʻ1
9
Jan
. ʻ2
0
Feb
. ʻ2
0
Ma
r. ʻ2
0
Ma
r. ʻ2
1

7

ʻ17

Jul.

. ʻ1

Jun

Ma
y

ʻ17

0

COMSYS GROUP REPORT 2021

outline

strategybusiness baseabout us

ESG

Corporate Information(as of March 31, 2021)◆ Company Outline

Company Name: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 involved in
the telecommunications construction business, electrical facilities construction business, and information
processing related business
Established:
September 29, 2003
Share Capital:¥10.0 billion
Number of Employees:(as of June 29, 2021)◆ Directors
President and Representative Director
Directors

Director(Full-Time Member of the Audit andSupervisory Committee)
Outside Directors(Members of the Audit and Supervisory Committee)

Takashi Kagaya
Kenichi Sato
Yoshihisa Omura
Satoshi Tamamura
Hitoshi Kumagai
Hidehiko Ozaki
Hideyuki Noike
Kunihiko Uchide
Takaya Kitaguchi
Atsushi Yasunaga

Masahiko Miyashita
Kenichi Nakatogawa
Koichi Kawana
Hiroyuki Asai
Hideo Yamamoto

17,066

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 29, 2021)

Editorial Policy
The embodiment of the Group’s basic philosophy and business philosophy requires
an integrated approach that utilizes both financial and non-financial capital, as wellas integrated corporate activities based on rapid and accurate decision-making.
Furthermore, to gain the understanding of stakeholders, we feel that it is important
to ensure sincere disclosure of information related to those integrated approaches
and corporate activities. This Group Report has been subject to multi-faceted andintegrated 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 as other media, including theGroup’s corporate website, Annual Securities Report, and business reports.
【Scope of Report】
To the greatest extent possible, this report covers COMSYS Group companies inJapan included in consolidated settlements of accounts, but the scope of the report
differs depending on the items in question.

【Period Covered】
April 1, 2020 to March 31, 2021 (FY2020) (In some cases, information related
to activities in FY2021 is also included)【Reference Guidelines】●GRI Sustainability Reporting Standards (2016)●International Integrated Reporting Council (IIRC); International Integrated
Reporting Framework●Ministry of Economy, Trade and Industry; Guidance for Collaborative 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 from information 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.

Status of Company’s Shares / Corporate Information / Editorial Policy38

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/