CHUDENKO Report

2022

Integrated Report
Year ended March 31, 2022

Change & Growth For All
https://www.chudenko.co.jp/

Change & Growth For All—Toward Sustainable Growth—Company Motto

Corporate Philosophy
Corporate mission

Change & Growth For All

As a general equipment engineering company, we contribute to the development of society
through creating value added to everyday life and the business environment for our customers.

Business mindset
1. Obtain trust from customers and shareholders and become the company of choice.
2. Be environmentally friendly while meeting strict quality standards.
3. Improve and enhance technical capability in general.
4. Be mindful of people and promote a working environment that is safe and energetic.
5. Maintain a strong business foundation by securing orders and promoting efficient management.

Corporate guidelines

Magokoro

1. Establish trust with customers with one’s whole heart, and always be aware of customer
satisfaction and results when taking action.
2. Be responsible and proactive when working, and aim for speedy decision making andaccelerating business processes.
3. Don’t stick to conventional methods; always be flexible and have that spirit of challenge.
4. Stick to social rules and be mindful of common sense in one’s actions.

Contents
02 Corporate Philosophy

28 ESG Initiatives

03 Overview of Chudenko

29 Chudenko Group Sustainability

05 History of Chudenko

30 Environment Initiatives

07 Financial/Non-Financial Highlights

35 Information Disclosure Based on TCFD Recommendations

09 Message From the President

37 Human Capital

15 Medium-Term Management Plan

41 Health and Safety Activities

17 Chudenko Group 2030 Vision

43 Quality

18 Overview of Business

44 Coexistence with Communities

19 Overview of Fiscal 2021
21 Indoor Electrical Work

45 Investment and Utilization of Intellectual Property andIntangible Assets

22 Air-Conditioning Piping Work

46 Corporate Governance23 Information Communication Equipment Work

51 Management Team

24 Distribution Line Work

53 Message From an Outside Director
55 Compliance / Risk Management

25 Underground Power Line Work for Power Transmission
and Distribution

57 11-Year Financial Summary (Consolidated)

26 Technology Development

59 Company Profile / Stock Information

27 Group Companies

Editorial policy
This integrated report describes the Chudenko Group’s basic
approach to its business activities as a whole, as well as results andother information pertaining to FYE 3/2022.
Period covered: FYE 3/2022 (April 1, 2021–March 31, 2022)
Note: This includes some activities that took placebeyond the period mentioned.
Scope:
Chudenko Corporation and its Group companies

01

CHUDENKO Report 2022

Cautionary note regarding forward-looking
statements
The forward-looking statements pertaining to earnings forecasts andother matters in this report are based on information available to andcertain assumptions judged reasonable by the Company at the timeof publication, and include potential risks and uncertainties. As such,actual earnings and other outcomes may differ from the content of
this report due to a variety of factors.

CHUDENKO Report 202202Overview of Chudenko

As a general equipment engineering
company, we contribute to achievinga sustainable society
Business domains

General Work BusinessElectric Power Business

Main customers: General contractors, manufacturing industry, hotels, hospitals, schools, public agencies, etc.

Main customers: Chugoku Electric Power Transmission & Distribution Company, Incorporated

46.2%

Indoor Electrical Work

Breakdown of
net sales (parent)

20.4%

Underground Power Line Work forPower Transmission and Distribution

This segment is responsible for the design, construction andmaintenance of air-conditioning, plumbing, firefighting, andother equipment. We also actively propose renewal plans thatutilize the latest energy-conserving systems to provide
customers with comfortable and efficient business environments.

Information Communication
Equipment Work

19.4%

This segment is responsible for new installations of overhead
distribution lines, replacement of electricity poles and other work.
We deliver a stable supply of electricity to our customers by
combining highly reliable construction techniques with advanced
technology. In the event of a natural disaster, we move swiftly to thesite of the incident to take on the task of restoring lifelines.

This segment is responsible for the design, construction, andmaintenance of various kinds of electrical equipment. We also
focus on environmental work such as renewable energy, aiming
to provide optimal electrical equipment that achieves evengreater comfort while conserving more energy.

Air-Conditioning Piping Work

Distribution Line Work

5.3%

This segment is responsible for the design, construction, andmaintenance of equipment for power transmission and distribution
and for underground power lines at Chugoku Electric Power
Transmission & Distribution Company, Incorporated, as well as for
special high-voltage power-receiving equipment for private use. Withextensive experience and a track record stretching back more than
50 years, we support the stable supply of electricity.

8.7%This segment is responsible for general work related to thesophisticated information and communication systems that are
essential to modern society. We work to create a richer living
environment and to ensure the safety and security of thecommunity, using cutting-edge technology to fulfill customer needs.

Business network

Orders received / net sales by region

Centered on the five prefectures of the Chugoku region, we have expanded our business to the Tokyo and Osaka urban areas, as well
as overseas.

Domestic

Overseas

67

Malaysia

CHUDENKO (Malaysia) Sdn. Bhd.

offices,with the core consisting ofnine branch companies
in the Chugoku region

NagoyaBranchOsaka
Headquarters

RYB Engineering(Singapore)
Indonesia

Tokyo Headquarters

Kyushu Branch

Yokohama Branch

In accordance with our medium-term management
plan, while further strengthening our business base in
the Chugoku region, we will move forward to establish
structures to tap urban areas where we expect demand.
Over the past few years, net sales in the Chugoku
region have been strong and are also trending upwards
in urban and other areas. Sales in metropolitan areas
and overseas in fiscal 2021 will exceed the previous
fiscal year, and we are steadily achieving results.
Going forward we will continue to strengthen ourbase in the Chugoku region while seeking to expand
our business in urban areas.

Consolidated net sales
2017(Billions of yen)

Urban areas / overseas aspercentage of net sales

2021

10% 24%
1,844
1,688

1,483
Urban area / 152
overseas→

1,533

236

1,906

398

458

236

Chugoku 1,330
region→

1,296

1,452

1,445

1,448

2017

2018

2019

2020

2021

Okinawa Branch

03

CHUDENKO Report 2022

(FY)

CHUDENKO Report 2022

04

The History of ChudenkoOver a history of more than 75 years,
we have achieved growth as a generalequipment engineering company byrepeatedly transforming ourselves

FY2024 target for
consolidated net sales¥210.0 bn.

2020 COVID-19 pandemic

1995 Great Hanshin-Awaji
Earthquake

2021 Consolidated net sales of1991 Bursting of the economic bubble¥190.6

Changed corporate emblem and flag (2004)bn.

2011 Great East Japan Earthquake

1944 Company is established2008 Lehman Brothers bankruptcy

At the order of the Ministry of Munitions, 12
companies involved in electrical work and locatedmainly in the five prefectures of the Chugoku region
were integrated into a single electrical work
company with capital of ¥1.5 million. This company,
named Chugoku Electrical Work Co., Ltd., wasestablished at 33 Komachi, Hiroshima City.

Ceremony to launch the business1964 Tokyo Olympics

Head office relocates to 6-12, Koamicho,
Naka-ku Hiroshima City (1996)

Constructed a new ZEB-compliant building
for the Okayama Supervising Branch (2019)1954 High-speed economic growth(Net sales over time)1944

1973 Oil shock

1950

1960

1970

1980

1990

2000

2010

2020

(FY)

Timeline
1944 Chugoku Electrical Work Co., Ltd. is established1949 Listed on Hiroshima Stock Exchange
1950 Tokyo Office (now Tokyo Headquarters) is opened
1956 Successfully develops construction method using
vinyl-sheathed vinyl-insulated flat cable (VVF)

1944—1960 Technician Training Center (now the Training
Center) is opened
1968 Listed on the 2nd Section of the Osaka Stock
Exchange
1969 Listed on Hiroshima Stock Exchange
1970 Listed on the Second Section of the Tokyo
Stock Exchange

1972 Listed on the First Section of the Tokyo
Stock Exchange / First Section of the
Osaka Stock Exchange
1980 Company motto “Magokoro” established

Our strength is our high level of technical capability

We use the technical expertise accumulated over more than half a century since the founding of the company to respond to a wide rangeof needs. Going forward, we will continue to gain the trust of customers with our quality and a high level of technical capability that keeps
up with the changing times, seeking to maintain our position as a company of choice.

1990 Company name changed to Chudenko
Corporation
1990 Marathon Team (now the Chudenko RunningTeam) is established1996 Head office relocates to 6-12, Koamicho,
Naka-ku Hiroshima City (current location)

2000—

2000 Obtained ISO 9001 certification
2001 Corporate Philosophy established2002 Obtained ISO 9001 certification

Expanding the business through M&As and establishingoverseas subsidiaries

As a forward-looking investment in sustainable growth, we are proceeding to establish structures in urban areas, expand the business,and pursue M&As. These varied measures have made a significant contribution to consolidated performance, and going forward we willcontinue to invest actively for growth with the aim of ensuring the further development of the Group.

1963

1979

1998

2010

2017

2020

Chudenko wins large order forrefinery in Saudi Arabia“Multi-functional vehicle for
distribution lines” wins
Shibusawa Prize

CHUDENKO (Malaysia)
Sdn. Bhd. established

2016

WorldSkills gold medal award
paradeAt the 12th WorldSkills Competition held in
Dublin, Ireland, Kazunori Kawai
represented Japan in the Electrical
Installations event, winning the gold medal.

In 1966, the company won its first overseas
business in the shape of an order forelectrical equipment work in South Korea. It
subsequently received orders in Pakistan,
the Philippines, and Saudi Arabia, with its
young and talented engineers making
significant contributions to these countries.

The company has won the Japan Electric
Association’s prestigious Shibusawa Prize a
total of 19 times between its first such win
in 1956, and 2021. This prize is awarded toorganizations for outstanding performancein the field of electrical safety.

Our first overseas subsidiary(Group company) wasestablished in the Malaysian
capital of Kuala Lumpur.

With the objective of expanding
work and extending services in
the Tokyo Metropolitan region
and the Kyoto, Osaka, and Kobe
area, we welcomed to the Grouptwo electrical work companies
with a high degree of expertiseand technical capabilities.

Aiming to expand the business inSoutheast Asia, we executed our
first overseas M&A to add
Singaporean electrical work
company RYB Engineering Pte.
Ltd. to the Group.

With the focus on providing highvalue-added services bycooperating and complementing
with regard to our marketing
activities, etc. in urban areas andby working together with our
Air-Conditioning Piping Workbusiness, we made Showa
Corporation part of the
Chudenko Group.

(Photo: Scene of the welcome parade in Hiroshima)(Photo: Riyadh Refinery in Saudi Arabia)(Photo: UOA BANGSAR Building
where the subsidiary is located)

Sugiyamakankousetsubi
Co., Ltd. andHayamizudenki Co., Ltd.
become Group companies(Top: Sugiyamakankousetsubi Co.,
Ltd.; Bottom: Hayamizudenki Co., Ltd.)05

2004 Changed corporate emblem and flag2008 Exhibited at the Japan Electrical Construction
Association (JECA) Fair for the first time2015 Opened practical safety training facility
2022 Listed on the Tokyo Stock Exchange Prime
Market

CHUDENKO Report 2022

RYB Engineering Pte. Ltd.
becomes part of GroupShowa Corporation
becomes part of Group

CHUDENKO Report 2022

06

Financial and Non-financial Highlights

Financial (consolidated)

Non-Financial (parent)

Net sales

Operating profit / Operating margin

190.6

10.4

Net sales (Billions of yen)

184.4

190.6

5.5% 6.6

Operating profit (Billions of yen)
Operating margin (%)

10.4

3.1%

Profit attributable to owners of parent (Billions of yen)
ROE (%)

9.4

168.8
148.3

Profit attributable to owners of parent /
ROE

8.5

153.3

8.3

4.9

5.1

2021

Parent net sales increased by ¥4.5 billion due
to an increase in Air-Conditioning Piping
Work and Information Communication
Equipment Work. Consolidated subsidiaries
also increased by ¥1.6 billion, resulting inconsolidated net sales growing ¥6.2 billion(3.4%) year on year to ¥190.6 billion.

Total assets / ROA

Total assets (Billions of yen)

267.1

2018

2019

2020

2021

Operating profit increased by ¥900 million(9.9%) year on year to ¥10.4 billion due toefforts to improve efficiency, thoroughly
control costs, and control SG&A expenses.,despite intense competition causing lower
profitability when winning orders. The
operating margin was 5.5%.

274.9

2017

119
2.9
2.2

2.3

2019

2020

2.8

2.7

2.5

2017

2018

2019

2020

2021

2.3

2.4

75.7

77.6

2019

2020

2021

2017

2018

2019

2020

1.94%

Free cash flow (Billions of yen)

86.0%

Dividend (yen)Dividend payout ratio (%)

216.3

104

104

2.04

-3.8

76.2

2.18

2.20

193

Re-employment for retired employees (%)
Number of re-employments

413

2.22

104

120.7

74.1%

Percentage of employees with disabilities (%)
Statutory employment rate (%)

94

2.30

373

2.07
94.9

2.00

271
214

1.94

67.3

86.0

83.9

71.2

1.8

81.5

2018

2019

2020

2021

Total assets increased by ¥3.2 billion year on
year to ¥279.7 billion. As result of thedecrease in profit attributable to owners ofparent, ROA* fell by 0.5 points to 2.4%.
* ROA: Return on Assets

07

CHUDENKO Report 2022

2017

2018

2019

2020

2021

Net assets decreased by ¥2.4 billion year on
year due to factors such as a decrease in thevaluation difference on available-for-salesecurities due to a decline in the valuation ofstocks held.

2017

2018

193

84.6

-15.4

2017

2021

104

94.4
2.9

2018

Re-employment for retired employees /Number of re-employments

3.6

2.9

2017

1.6

Percentage of employees with disabilities

0.2
80.2

4.5

2.3

Dividend / Dividend payout ratio

104

81.1

4.5

2.8

Free cash flow

279.7
212.0

7.4

2.9

* ROE: Return on equity

15.4
218.7

8.4

2.1

3.1

2021

9.4

2.8

We have formulated a code of conduct toenable a workplace environment in which
both men and women can express theirindividuality and demonstrate their ability, We
are also actively hiring women while making
efforts to advance the careers of existingfemale employees.

Equity ratio (%)

218.0

3.5

We are focused on securing and nurturing
the next generation of engineers. In addition,
we are working to increase hirings of female
employees.
In fiscal 2022, we will hire 116 people
through regular recruitment, with a ratio of
female hires of 7.8%.

ROA (%)

222.3

135

Capital expenditures increased ¥300 million(17.9%) year on year to ¥2.5 billion. These
disbursements were centered on maintenance/enhancements for work locations, as well as
upgrades to tools and office products, withthe aim of maintaining the working
environment, ensuring safety, and improving
general technical capabilities.
Depreciation was flat year on year, at¥2.8 billion.

76.2% 3.6

276.5

138

133

3.8

Profit attributable to owners of parent
decreased by ¥1.4 billion (17.7%) year on
year to ¥6.6 billion due to a decrease in gainon sales of investment securities andrecording of loss on valuation of shares ofaffiliated companies, despite an increase inordinary profit. As result of the decrease inprofit attributable to owners of parent, ROE*
fell by 0.7 points to 3.1%.

2.4% 216.3
Net assets (Billions of yen)

7.4% 3.5%

No. of regular hires
Ratio of female hires (%)

132

2.8

3.8

2018

Percentage of management roles
occupied by women

6.6

3.6

Net assets / Equity ratio

279.7
269.8

2017

Capital expenditures (Billions of yen)
Depreciation (Billions of yen)

5.5
2.8

2020

135

2.8

4.7
4.2

2019

2.5

8.1

7.8
6.1

5.8

2018

No. of regular hires / Ratio of female hires

4.5

6.4

2017

Capital expenditures / Depreciation

74.1
2019

2020

2021

Net cash provided by operating activities was¥7.9 billion, while net cash provided byinvesting activities was ¥4.3 billion, resulting
in free cash flow of ¥3.6 billion.
* Free cash flow = Net cash from operating activities +Net cash from investing activities

2017

2018

2019

2020

2021

In order to maintain stable and sustainabledividend payments, we have adopted thedividend on equity (DOE) approach todividends. In fiscal 2021, our policy was toaim for a DOE of around 2.7%. A dividend of¥104 was actually paid, resulting in a
dividend payout ratio of 86.0%.

2017

2018

2019

2020

2021

In order to fulfill our corporate social
responsibilities, we are taking steps to
employ persons with disabilities at a level
higher than the statutory employment rate.
In addition, the employment rate in fiscal
2022 will be 2.71% as a result of actively
working to employ people with disabilities
together with our subsidiary Berryne Co.,
Ltd., which was certified as a special
subsidiary in January 2022.

2017

2018

2019

2020

2021

For employees who remain eager to work at
Chudenko after retiring, we have establisheda re-employment system that enables avariety of work styles to suit the work-lifebalance of different individuals, and enables
them to continue to use the knowledge andskills they have accumulated over many years
in our operations.

CHUDENKO Report 2022

08

Message From the President

A Look Back at fiscal 2021

The challenge of
Change & Growth

Takafumi Shigeto
Representative Director and President

Q. Looking back at fiscal year 2021,
how would you rate it?

subsidiaries, in addition to Air-Conditioning Piping Work

The business environment in fiscal 2021 was¥900 million from the previous year, mainly due tocharacterized by intense competition for orders, labor

increased sales and thorough cost control efforts.

and Information Communication Equipment work.
Operating profit was ¥10.4 billion, an increase of

shortages, and soaring raw material prices, as well as

Ordinary profit was ¥11.9 billion, slightly higher year

concerns about the impact of COVID-19. Under theseon year.

circumstances, the Group has been taking various

Profit attributable to owners of parent decreased bymeasures, such as strengthening our foundation in the¥1.4 billion year-on-year to ¥6.6 billion due to a decrease

Chugoku region, expanding business in urban areas, andin gain on sales of investment securities and recording ofpromoting operational reforms, in accordance with theloss on valuation of shares of affiliated companies, despite

Medium-Term Management Plan 2024.

an increase in ordinary profit.

As a result, the Group recorded higher sales for the

As a result of this, in fiscal 2021, the first year of the10th consecutive year in fiscal 2021 and higher operating

Medium-Term Management Plan 2024, we achieved aprofit for the third consecutive year on a consolidated basis.

certain level of success with both net sales and operating

Net sales were ¥190.6 billion, up ¥6.2 billion year on

profit exceeded initial forecasts.

year, mainly due to an increase in sales at consolidated

FY2021 performance: income statement (consolidated)
FY2020Consolidated performance
Net sales

On leading the company

Gross profit(13.8%)

SG&A expenses

Q. How do you plan to manage the company?

Amid rapidly changing social and businessenvironment and an uncertain future outlook, we have

Operating profit(5.1%)

Ordinary profit(6.5%)(4.4%)

I have been involved in the Group’s business operations

formulated the CHUDENKO Group 2030 Vision with theas an outside auditor for the past three years, and now

aim of sharing our vision of what we want to be as a

Profit attributable to owners of parent company

that I am assuming responsibility for Group managementcompany and working as a unified group to achieve* Figures in ( ) are profit margins

as president, I feel a renewed sense of urgency about thesustainable growth and contribute to the realization of aweight of this responsibility.

sustainable society.

I will maintain this tension in a positive way as I work
together with all of our employees.
Last fiscal year, our group formulated theIn addition, the Group has been aiming for sustainable

anniversary of our founding. In order to respond more

Sustainability Policy as a guideline for the further progress

swiftly than ever to changes in the environment, we are

and development of these initiatives.

working on five core measures under the main theme ofIndoor Electrical

Air-Conditioning
Pipingnecessary and what we should do to realize sustainable“Strengthening sales and construction systems, andgrowth for our Group, while reiterating “Change &184.4

expanding profits” and “Promoting DX and decarbonization.”

Growth,” based on the newly-formulated CHUDENKOMy primary mission is to firmly manage the targets ofGroup 2030 Vision and CHUDENKO Group Fundamental

FY2020net sales

you, to achieve the goals of the medium-term

next medium-term management plan.

(6.3%)(3.5%)

Year on year

6.2
0.8
-0.1
0.9
0.0
-1.4

190.6
26.2
15.8
10.4
11.9
6.6

103%
103%
99%
110%
101%
82%

Information
Communication
Equipment+2.3

Consolidated subsidiaries (+¥1.6 billion)

Distribution Line

Underground PowerLine for Power
Transmission/Distribution

Chugoku region
subsidiaries (7)

+0.2

-0.0

+0.1

Urban area
subsidiaries (3)Overseassubsidiaries (3)

+0.5

190.6
FY2021
net sales+3.7“Change and Growth” and the sub-themes of

Sustainability Policy, and to formulate and implement the(5.5%)

Change+0.9

Another mission of mine is to think through what isthese major initiatives and do my utmost, together with

(13.8%)

Chudenko parent (+¥4.5 billion)

various measures in the medium-term management plan.
We established the CHUDENKO Group Fundamental

FY2021

Breakdown of year-on-year change in net sales (+¥6.2 billion)

growth and working to solve social issues by promoting

Medium-Term Management Plan 2024 to mark the 80th

184.4
25.4
15.9
9.4
11.8
8.1

(Billions of yen)

-1.6

management plan.

09

CHUDENKO Report 2020
2022

CHUDENKO Report 2022

10

Message From the President

Medium-Term Management Plan 2024 See page 15

FY2022 earnings forecasts (income statement, consolidated)
Consolidated performance

Theme“Change &Growth”

Core measures

Numerical targets
Consolidated net sales:

1) Expanding orders and strengthening
construction systems¥

2) Securing and expanding profits, andimproving competitiveness210.0

billionConsolidated operating profit:

¥

12.0

billion(Operating margin of 5.7%)

Q. Tell us about the progress of the various
measures in Medium-Term Management
Plan 2024.

3) Enhancing human resources
development and promoting work
style reforms

FY2021

FY2022190.6

Net sales

Regarding expanding the business by investing forYear on year

196.0

5.3

103%

(5.5%)

10.4(4.8%)

9.5

-0.9

91%

Ordinary profit(6.3%)

11.9(6.0%)

11.7

-0.2

98%

Profit attributable to owners of parent(3.5%)

6.6(3.6%)

7.0

0.3

105%

* Figures in ( ) are profit margins

Q. What are your thoughts on formulating
the long-term vision?

again formulated the CHUDENKO Group 2030 Vision

In recent years, social conditions have changed

and strive to enhance our corporate value so that we canredefinition, we will work to improve quality in allprocesses shared with customers.

ChangeOperating profit

4) Improving quality
5) Expanding the business by investingfor growth (M&A, equity stakes, etc.)(Billions of yen)under the theme of “Change & Growth.”
We will work as a unified group to realize this vision

dramatically, with growing interest in achieving SDGs andearn even greater trust and appreciation from all of our

growth (M&A, equity stakes, etc.), in addition to investingtransitioning to a decarbonized society and growing

stakeholders.

First, with respect to expanding orders and strengthening

in Samaiden Sdn. Bhd, a Malaysian solar power

diversity. In the construction industry, the businessthe construction systems, efforts to strengthen our

generation equipment construction company, we are inenvironment surrounding our group is severe and thefoundation in the Chugoku region and expand business inthe process of installing internal-consumption solar

future remains uncertain, with intensifying competition for

urban areas, as well as efforts to increase orders for

power facilities at our business sites in order toorders, soaring prices of construction materials andlarge-scale properties through collaboration among thedecarbonize our company.

equipment, and labor shortages.

Sales Division, Engineering Division, and Purchasing
Department, have yielded a certain level of success, andindividual orders received in FY2021 remained high at¥153.4 billion.
Next, with regard to securing and expanding profits,

promoting DX, and using IT, and we believe that thesemeasures are having an effect, as we secured operating
profit that exceeded the previous fiscal year’s level.
With regard to enhancing human resources
development and promoting work style reforms, ourefforts to provide flexible work styles, including education

Numerical targets

In order for the Group to continue to grow underOverview of Samaiden Group BerhadCompany name

Samaiden Group Berhad

Location

Malaysia

we are promoting various measures to improve
operational efficiency through frontloading initiatives,

CHUDENKO Group 2030 Vision See page 17

Business
description

Design, construction, O&M (operation andmaintenance) and environmental consulting
business for solar power generation facilities

Sales office

Malaysia

CapitalApproximately ¥960 million

Established2013

these circumstances, it is essential that we continue totake on the challenge to transform ourselves in response

Consolidated net sales:

to change, and that the Group’s sustainable growth will

¥

250.0
¥17.0

contribute to the realization of a sustainable society, andConsolidated operating profit:that it is our people, technology, and quality that will put(Operating margin of 6.8%)

this into practice. We must share this belief throughout
the Group and strengthen our efforts to achievesustainable growth. From this perspective, we have once

ROE:

billionbillion

5.0% or more

and support that contributes to the improvement ofconstruction capabilities, the establishment of career

As I have described, we achieved a certain level ofpaths for construction management positions in the

success in fiscal 2021, the first year of Medium-Termconstruction division, and a staggered workday system,

Management Plan 2024, but we expect the business

are having an impact.

environment to remain challenging in fiscal 2022

As for improving quality, the definition of quality used

and beyond.

to be “good workmanship, on-time delivery, and no

The entire group will work together to implement thecomplaints,” but we have redefined quality in the true

various measures of the Medium-Term Management Plansense of the word to mean “customer satisfaction at all

and we will do our utmost to achieve the goals of the plan.

stages of construction, from start to finish.” With this11

CHUDENKO Report 2022

CHUDENKO Report 2022

12

Message From the President

ESG Initiatives

A message to all stakeholders

Q. What are the achievements and challengesof our environmental efforts?

The entire company is united in its efforts to eradicate
industrial accidents and injuries based on the philosophyof “safety takes priority over everything.” We will continue

On April 28, 2022, we announced Challenge Toward
Carbon Neutrality by 2050 and Endorsement of TCFD
Recommendations.

Q. Could you remind us of your role inthe company and your expectations
for employees?

Q. Finally, what would be your message toshareholders and investors reading this?
I expect that we will continue to face a challenging

to emphasize the importance of safety at every opportunity.
The business environment is expected to remain

business environment in these uncertain times. However,Management Declaration and established the Healthchallenging due to the prolonged situation in Ukraine,by holding thorough discussions, thinking things through,Regarding health, in April 2022, we drafted the HealthManagement Promotion System. While we have beensoaring raw material prices, sharp exchange rate

and anticipating the future, we will take on the challenge

CO2 emissions in 2030 by at least 46% from fiscal 2013

promoting initiatives to maintain and promote the health offluctuations, and worsening business confidence, but weof “Change & Growth,” the theme of the Medium-Termlevels and to achieve carbon neutrality by 2050. To

employees, we will continue to create a workplace

will take concrete steps to improve construction

Management Plan 2024 and the CHUDENKO Group

achieve this goal, we are working to increase energy

environment in which all employees can work energeticallyefficiency, reduce costs, and increase productivity through2030 Vision.

efficiency and introduce renewable energy in theand actively, both physically and mentally.

DX to secure and expand profits and improve ourRegarding carbon neutrality, we aim to reduce ourworkplace by installing internal-consumption solar powercompetitiveness.

facilities and make company vehicles more fuel-efficientand electrically powered. We are also supporting ourcustomers’ decarbonization by proposing
energy-conserving and renewable energy facilities,
including PPA business and ZEB.
Through these efforts, the Chudenko Group aims torealize a decarbonized society.
Information on climate change based on TCFD
recommendations is disclosed in this report. (See page P.35)

Medium- and long-term targets forcarbon neutrality

CO2
emissions

Subject

Target year

Goal

Chudenko parent
Scope1 & 2(Emissions frombusiness sites
and company
vehicles)

2030

Reduced by
46% or abovefrom fiscal
2013 level

2050

CarbonneutralWhen I became president, I told all employees that the

Declaration of Health Management
As a general equipment engineering company, we believethat in order to contribute to the development of society
and achieve sustainable growth by creating living andbusiness environments with high added value, it is ofutmost importance that our employees remain healthy,
both physically and mentally.
For this reason, as a company, we will firmly support
each employee to manage their own health and work toaddress their mental and physical well-being, and we will
strive to create a workplace where all employees can work
energetically and actively, both physically and mentally.

I believe that accurately responding to change inthe world and linking it to the sustainable growth of theGroup will enable us to meet the expectations of allability to change oneself would be essential in the coming

stakeholders, including our customers, shareholders, andera. This is because I believe that in order to survive in aemployees. To this end, I will work together with ourworld that is changing at an extremely rapid pace and to

employees to devote all of our energies to theachieve sustainable growth even in a severe businessdevelopment of our business.

environment, it is important for each and every one of us
to have the ability to change by taking a hard look at

I humbly request your continued support andpatronage as we move forward with this program.

ourselves and our work and changing it for the better. At
the same time, I want to encourage employees to look

January 2023

forward to improving themselves and to have thepresence of mind to see things in a positive light.

Takafumi Shigeto
Representative Director and President

Q. What is your assessment of the current
status of governance and its
future challenges.
With respect to governance, we aim to be a company thatis trusted by all stakeholders, and we are continuously

Q. What are the achievements and challengesof our social initiatives?
With regard to developing human resources, we areworking to pursue and improve the best possible
corporate governance in order to achieve sustainablegrowth and further increase corporate value.
As for compliance, we will strive to foster and raise

offering specialized education according to job type, asawareness of compliance through different kinds ofwell as training to develop communication skills,

education and training opportunities, as well as prevent

leadership, and other skills to foster highly specialized

inappropriate incidents and foster an open workplacepersonnel and leaders who will support the future of theculture by establishing and strengthening internal control

company. At the same time, we are promoting thesystems and a whistle-blowing system.

development of a comfortable work environment by
establishing career paths in the construction division andintroducing a staggered workday system.
Safety and health are the foundation of ourcorporate operations.

13

CHUDENKO Report 2022

CHUDENKO Report 2022

14

Medium-Term Management Plan

Progress of medium-term
management plan
Attainment vs. numerical targets
Consolidated
Parent3. Enhancing human resources development and promoting work style reforms

190.6

196.0

210.0

37.6

42.0

48.0

Net sales(Billions of yen)

10.4

Operating profit(Billions of yen)

153.0

5.5%

12.0

9.5
154.0

4.8%

● Nurturing human resources with the aim of strengthening

162.0

5.7%

construction management● Securing and nurturing engineers/technicians across the Group asa whole● Continuing to practice work style reforms, and forming fulfilling
workplaces

4. Improving quality● Reliable contributions to the stable supply of electric power* % represents operating profit
on consolidated sales

FY2021 Results

FY2022 Forecast

FY2024 Target

FY2021 results
As part of human resource development to strengthen construction
management, we instituted group education, e-learning, andsmartphone-based education and support to increase the number ofqualified personnel. We also established a career path for construction
management positions in the construction division to create a system forcareer development and the early training of young employees. From
April 2021, we introduced flexible work style systems, such as staggered
working hours and telecommuting, in order to diversify work styles.

● Increase customer satisfaction

FY2021 achievements
We have improved customer satisfaction by revising the definition of
construction quality to ensure that the entire construction process, that
includes the process as well as the finished product, meets thecustomer’s requirements. We have also contributed to the stablesupply of electric power through such measures as prompt restorationin the event of a disaster.

Status of capital policy

5. Expanding the business by investing for growth (M&A, equity stakes, etc.)

Investment for sustainable growth● Decarbonizing our own company● Invest ¥40 billion for sustainable growth, including businessexpansion and securing and nurturing human resources● Promoting environmental businesses to support decarbonization

FY2021 results
Received five orders for PPA, including supermarkets and factories, andfour orders for ZEB, including offices, as a result of proactively
proposing PPA projects and ZEB to our customers. We will continue topropose environment-related businesses to customers who areinterested in decarbonization.

● Promotion of M&A with the aim of strengthening construction systems● Promoting technical research and development

FY2021 results
We made a roughly 15% investment in Samaiden, a Malaysian
renewable energy construction company. Going forward, we will
promote business collaboration with the company as a strategic partner
and work to expand renewable energy-related businesses overseas.
We have also started installing internal-consumption solar power
facilities at 11 of our company buildings. Our plan is to install them in a
total of 50 locations by fiscal 2022.

Shareholder returns● Focus on paying sustainable and stable dividends, targeting DOE(consolidated dividend on equity) of 2.7%
● Comprehensively review the business environment, etc. andimplement share buybacks as necessary

FY2021 results
Dividend per share: ¥104
Dividend payout ratio: 86.0%
Number of treasury shares to be purchased: 600,000 shares(acquisition price: ¥1.3 billion)
Total return ratio: 106.1%

Comment from a General Manager

The pride and joy of work

Status of core measures
1. Expanding orders and strengthening construction systems● Strengthening sales to expand orders● Strengthen and enhance our design capability through the use ofanalysis of actual data and BIM, etc.
● Strengthen and enhancing construction system● Cooperating more closely with group companies

FY2021 results
Consolidated net sales were ¥190.6 billion compared to the initial targetof ¥188.0 billion, mainly due to the strengthening of our foundation in
the Chugoku region, business expansion in urban areas, and increasedorders for large-scale properties through collaboration among the Sales
Division, Engineering Division, and Purchasing Department, as well as
increased sales by consolidated subsidiaries.

Takakazu Higashioka
General Manager,
Planning DivisionCorporate Planning
Department

2. Securing and expanding profits, and improving competitiveness● Using equalization and frontloading of work to raise construction

efficiency● Cost reductions involving cooperation between the company as awhole and group companies● Improving productivity through the promotion of DX

15

CHUDENKO Report 2022

FY2021 achievements
Consolidated operating profit was ¥10.4 billion, exceeding the initial
target of ¥9.7 billion. This was primarily due to more efficientconstruction through frontloading initiatives, cost reductions, DX
promotion, and promotion of measures to improve operational
efficiency through IT.

Group Business
Promotion Department
Planning
Division

Business Creation
Department
Overseas Business
Department
Accounting Department
Information Systems
Department

The Planning Division includes the Corporate Planning Department, the Group Business
Promotion Department, the Business Creation Department, the Overseas Business Department,
the Accounting Department, and the Information Systems Department. Together with theircompass role including offense and defense and control, it promotes the growth and expansion of
the entire group.
As one indicator, consolidated net sales have increased for 10 consecutive fiscal years, from¥110.3 billion in FY2011 to ¥190.6 billion in FY2021, and we intend to steadily continue thismomentum toward the goals of Medium-Term Management Plan 2024.
Recent trends such as sustainability and diversity are significantly changing the rules andsystems of society, so we have formulated the CHUDENKO Group 2030 Vision as the future
image of what the Chudenko Group should look like.
The theme of the vision, “Change & Growth For All―Toward Sustainable Growth―,” wasformulated to enable the Chudenko Group to quickly understand new trends and rules, such as
the SDGs and decarbonization, and to further expand and grow as a source of transformation.
One of the group’s goals is to “ensure all workers are proud and happy to take on the challengeof making reforms.” This is because we believe that people are more important than anything else
in our work involving social infrastructure and customer facilities. By increasing employee
engagement, will invigorate our human capital which will lead to greater corporate value.
We will broaden our vision with an eye toward sustainable growth and actively invest in growthand human capital with the aimg to be a group that develops together with society and in which
diverse individuals shine and play an active role.

CHUDENKO Report 2022

16

Creation of the Chudenko Group
2030 Vision
Social conditions and the business environment havemust share this belief throughout the Group and strengthenchanged rapidly in recent years, and the future is uncertain.

our efforts to achieve sustainable growth.

In order for the Group to continue to grow under these

From this perspective, we have once again formulated acircumstances, it is essential that we continue to take on the

new long-term vision for 2030 with the theme of “Change &challenge to transform ourselves in response to change, and

Growth.” We will work as a unified group to realize this visionthat the Group's sustainable growth will contribute to theand strive to enhance our corporate value so that we canrealization of a sustainable society, and that it is our people,

earn even greater trust and appreciation from all of ourtechnology, and quality that will put this into practice. We

stakeholders.

Chudenko Group 2030 Vision
Theme
Change & Growth For All—Toward sustainable growth—Group ideal
Achieve sustainable growth and contribute to the realization of a sustainable society

Overview of Business

Ensure all workers are proud and happy to take on the challenge of making reforms
Respond to society’s diverse needs with advanced technology and high quality

Overview of Fiscal 2021....................................................19
FY2030 Targets
2030 Vision● Consolidated financial results
FY2021 results

Net sales
Operating profit
ROE¥

190.6 billion¥

FY2030 Targets¥

10.4 billion
3.1%

250.0 billion¥

17.0 billion

5.0% or more

By Division (individual)■ Indoor Electrical Work ............................................................21■ Air-Conditioning Piping Work ............................................22■ Information Communication Equipment Work .......23■ Distribution Line Work .............................................................24■ Underground Power Line Work forPower Transmission and Distribution ...........................25

Technology development ..............................................26
Group companies .....................................................................27● CO2 emission reductions toward carbon neutrality: 46% or above(compared to the Company’s FY2013 levels)● Creating an environment that supports diverse personnel to play active rolesand diverse ways of working

17

CHUDENKO Report 2022

CHUDENKO Report 2022

18

Overview of Business

Overview of Fiscal 2021
FY2021 performance (orders received / net sales by division)

Net sales

Orders received¥

Using our advanced technology and high quality tocontribute to the development of communities

153.4 bn.

¥

153.0 bn.
Seiji Kawakami
General Manager,
Electricity Division■ Indoor Electrical Work77.2 bn.
¥30.9 bn.
¥

■ Air-Conditioning Piping Work■ Information Communication
Equipment Work■ Distribution Line Work
■ Underground Power LineWork for Power Transmission
and Distribution

8.7 bn.
¥29.5 bn.
¥

6.9 bn.

¥■ Air-Conditioning Piping Work70.6 bn.
¥31.1 bn.

■ Information Communication
Equipment Work¥

■ Indoor Electrical Work■ Distribution Line Work
■ Underground Power LineWork for Power Transmission
and Distribution¥

Distribution Department
Electricity
Division13.3 bn.
¥29.6 bn.

Distribution Safety &Quality Department
Underground
Power Line forTransmission andDistribution Department

8.1 bn.

¥Comments from General Managers

Jitsuo Taniguchi
General Manager,
Engineering Division
Electrical Engineering
Department
Engineering
Division

Air-Conditioning Piping
Engineering Department
Information Communication
Engineering Department
Engineering Planning
Department
Equipment Plant
Engineering Safety &Quality Department
Engineering Center

19

CHUDENKO Report 2022

The Electricity Division mainly undertakes the construction of new and additional power facilities
and inspection and maintenance work for the Chugoku Electric Power Transmission & Distribution
Company, Incorporated. We play a role in providing a stable supply of electricity, such being thefirst on the scene to quickly restore power when a natural disaster (typhoon, heavy rain, heavy
snow, earthquake, etc.) occurs. We strive to earn the trust of local residents through construction
work that always puts safety and quality first and that also takes the environment into
consideration.
In fiscal 2021, we worked to strengthen our construction system, including that of our partnercompanies, by focusing on the early training of construction managers and the enhancement ofspecial high-voltage cable connection engineers. We are also working day by day to ensure theefficient implementation of safe, high-quality construction work by promoting DX and proactively
developing and improving technologies and construction methods. The technical capabilities wehave built up in this way have garnered praise in the industry, as evidenced by the fact that wehave received the Shibusawa Prize for three consecutive years for our excellent performance inensuring electrical safety.
We have also been promoting the use of battery power for cherry pickers (97%) to reduce
CO2 emissions, thereby protecting the environment.
We will continue to strengthen our proposal-based sales activities in cooperation with theSales Division and the Engineering Division so that our technology and quality can be of service tocustomers. We will also work to increase orders for renewable energy-related work, special
high-voltage customer installation work, and the utility pole removal work. In particular, we will
focus on the installation of underground conduits and underground cables, as the removal ofutility poles will be increasingly promoted in order to improve the landscape as a tourist resource,enhance safety during natural disasters, and improve the reliability of information andtelecommunications networks.

Working together as one to improve safety and quality
and expand business

Proactive sales activities to secure and expand orders

The Engineering Division oversees general construction work (indoor electrical work,
air-conditioning piping work, and information communication work). In addition to improving safety
and quality and enhancing business performance, all employees work together on a daily basis toreform work style and resolve the mountain of issues we face, with compliance as the top priority.
The business environment for the fiscal year ended March 31, 2022, continued to be
characterized by intense competition for orders, labor shortages, rising material costs, and delays
in deliveries.
We are responding to this situation by placing orders for materials and equipment early,
front-loading, pre-processing equipment parts, and purchasing materials in advance and supplying
them to our business partners in case delivery delays or material price hikes were anticipated.
We will continue to work united in the Engineering Division on the theme of Change & Growth
and the sub-themes “Strengthening sales and construction systems, and expanding profits” and“Promoting DX and decarbonization” of Medium-Term Management Plan 2024.
We will consolidate and laterally deploy the wisdom and best practices of all employees, andthoroughly implement careful management at each and every job site.
Looking the market, we continue to receive inquiries as there are redevelopment andlogistics-related projects in Tokyo, as well as hotel and logistics-related projects in the Kansai andNagoya areas.
All of us in the Engineering Division will continue to work together to strengthen our foundationin the Chugoku region and to reinforce and expand our business in urban areas as we strive toachieve the goals of Medium-Term Management Plan 2024.

The Sales Division conducts sales activities mainly for private companies such as generalcontractors and manufacturers, as well as for government agencies. We are responsible for sellingelectrical, air-conditioning, plumbing, and communication equipment including optical fiberinternet cable, for buildings, factories, hospitals, and other structures, and for general construction
work, which accounts for about 75% of all orders received.
We have maintained a high level of orders over the past few years, and this trend is expected
to continue in fiscal 2022, but the environment for orders is extremely severe, as some projects
are difficult to secure profit margins from due to intensifying competition for orders and soaring
raw material prices.
In this environment, we will conduct proactive sales activities by taking advantage of ourdominance in the Chugoku region, while we are receiving an increasing number of inquiries fromgeneral contractors in the Tokyo, Osaka, and Nagoya metropolitan areas, where there are manylarge-scale redevelopment projects connected to Osaka/Kansai Expo, integrated resorts (IR),linear rail construction, and other projects that have garnered much praise. We are working tosecure and expand orders by gathering information at an early stage.
In addition, we have announced our commitment to becoming carbon neutral by 2050.
Against the backdrop of decarbonization and soaring electricity prices, we are strongly promoting
solar power PPA projects for internal consumption, and actively proposing ZEB projects making
use of subsidies to support our customers’ decarbonization.
We will continue to conduct company-wide sales activities to win orders, which are thegateway to sales, and strive to achieve the targets of Medium-Term Management Plan 2024.

Shuji Maehara
General Manager,
Sales Division
Sales Planning
Department
Sales
Division

Sales Department
Solution Sales
Department
Design Department

CHUDENKO Report 2022

20

Overview of Business

Lighting/outlet equipment

Power receiving/transforming equipment

Indoor Electrical Work
Overview of fiscal 2021 and outlook for fiscal 2022
Orders received totaled ¥77.2 billion, ¥9.5 billion higher than in
fiscal 2020, mainly due to orders for large-scale office and factory
construction projects, as a result of our efforts to secure andexpand orders amid signs of a recovery in private capital investment.
Net sales decreased ¥1.6 billion from fiscal 2020 to¥70.6 billion due to lower progress on some large projects,
postponement of construction schedules for individual projects,
and a decrease in factory construction, despite progress onlarge hospital construction projects as planned.
In fiscal 2022, we will continue our efforts to increase orders
for large-scale construction projects in urban areas, centered on
securing and expanding orders for medium-scale projects in the
Chugoku region, in accordance with the annual management
plan. In addition, we will work to secure and expand sales andprofits by building a company-wide construction system,
reducing costs by improving construction efficiency, and further
improving productivity and competitiveness by promoting DX.
In addition to our own decarbonization, we will promotesupport for the decarbonization our customers, such through ourinternal-consumption solar PPA business.
As a result of these measures, in fiscal 2022, we forecast¥75.8 billion in orders received and ¥75.6 billion in net sales.

Orders received / Net sales■ Orders received ■ Net sales(Billions of yen)
100
80

77.3

68.5

67.7

72.3

75.8 75.6

Air conditioning equipment

Plumbing and sanitary equipment

Plant equipment

Environmental equipment

Disaster prevention/firefighting equipment

View more of our indoor
electrical work here.
https://www.chudenko.co.jp/sales/case/New construction work for Ministry of the Environment building (21) electricalinstallation work (Chiyoda-ku, Tokyo)● Tokuyama Central Hospital, Japan Community Health Care Organization (Shunan
City, Yamaguchi Prefecture)● Road lighting installation work on Chuo Expressway Ina Interchange - Nakatsugawa
Interchange (Minowa Town, Kamiina-gun, Nagano Prefecture to Nakatsugawa City,
Gifu Prefecture)● Pacifico Energy Sanda Mega Solar Power Plant construction project (Sanda City,
Hyogo Prefecture)● Micron Memory Japan No. 2 transformer substation upgrade work
(Higashihiroshima City, Hiroshima Prefecture)●

Recent project
New construction of ESR Yokohama Sachiura Distribution Center 1(provisional name)Yokohama City, Kanagawa Prefecture

Construction period June 2020–March 2022
CustomerESR Sachiura DC1 Special Purpose Company

Summary

Phase 1 construction with a total site area of 800,000m2.
A multi-purpose large-scale warehouse with a total floor area ofapproximately 200,000m2, built at a favorable location approximately
10 minutes from the Namiki Interchange.

Voice

Yasuo Okamura

Construction Management Team Leader
Indoor Electrical Work Section 4,
Indoor Electrical Work Department,
Tokyo Headquarters

Orders received totaled ¥30.9 billion, down ¥1.2 billion fromfiscal 2020, despite our efforts to win orders for large-scaleconstruction projects in the Chugoku region as well as in themetropolitan areas centering on Tokyo and Osaka, where we arefocusing our efforts.
Net sales increased ¥3.7 billion from fiscal 2020 to¥31.1 billion due to the steady completion of large-scaleconstruction projects in various locations. More than
¥25.0 billion of construction work backlog will be carried over,maintaining a high level on par with previous years.
In fiscal 2022, we will further strengthen our construction
system with our partner companies and ensure stable
construction capabilities by revamping the “Chudenko
Association” arrangement implemented in fiscal 2021.
In addition, in order to respond to the expected demand forlarge-scale construction work, we are actively adopting
prefabrication and unit construction techniques for machineryand piping to reduce the amount of construction required. At thesame time, we are working to improve quality and applying DX tosite management with a view to enhancing productivity.
As a result of these measures, in fiscal 2022, we forecast¥31.7 billion in orders received and ¥31.8 billion in net sales.

Orders received / Net sales■ Orders received ■ Net sales(Billions of yen)
35
28

7

0

0

CHUDENKO Report 2022

Recent project
New East-West free passage construction at Shinjuku Station
Location

Shinjuku Ward, Tokyo

Construction period February 2019–January 2023
Customer

East Japan Railway Company

Summary

Construction to widen the north passage of the station and relocate
the ticket gates to make it a free passage. Construction of
air-conditioning equipment and smoke exhaust equipment for each
improved area of the ticket gate on floor B1 floor, the free passage
part, and the station premises

Voice

Nobuhide Tamura

Construction Management Manager
Air-Conditioning Piping Work Section 2
Air-Conditioning Piping Work Department
Tokyo Headquarters

The station itself was very old, and construction plans and drawings had to beprepared in consideration of existing structures. Moreover, since we were
working in a station where people are constantly coming and going and “buildingin place,” it was essential to take careful measures, especially from thestandpoint of safety. Although we had to work mainly at night and had to workwithin a limited time frame, we were able to complete the project successfully by
carefully planning construction to minimize the impact of our work, such as using
local point cloud data from a 3D scanner.
The station is absolutely vital to so many people. It was very rewarding to be
involved in the construction management of it. I hope to apply the knowledge I
gained from this project to my future work and pass on my experience and skills
to the next generation.

20

2022 forecast●

The satisfaction of working on a well-known property

14

2021

Soccer stadium development project (Hiroshima City, Hiroshima Prefecture)
New construction of S Museum (provisional name) (Otake City, Hiroshima Prefecture)
Design for new construction of MaxValu Nishinihon Okayama Center (Okayama City,
Okayama Prefecture)● New building project for International Christian University (provisional name) (Mitaka
City, Tokyo)● Koryukai Tama Kyuryo Hospital relocation and new construction (Machida City, Tokyo)● New construction of Kyoto Nishikujo Hotel (provisional name) (Kyoto City, Kyoto
Prefecture)●

In response to the recent rise in material costs, we proposed a design change to
use trunk line bus ducts and aluminum cables instead of copper cables. We also
proposed a better construction method by compiling good and bad examples
from other customer projects, which was praised as an advanced construction
technique. The floor of the warehouse was poured concrete, so we took greatcare not to leave tire marks from our work trucks.
Construction methods vary depending on the shape and use of the building.
We will continue to strive to understand the needs of our customers and to makeproposals and construction methods that meet their requirements.

40

2020

Main projects received●

Proposing the best solution to meet the requirements

21

2019

View more of our air-conditioning
piping work here.
https://www.chudenko.co.jp/sales/case/

Overview of fiscal 2021 and outlook for fiscal 2022

Main projects received

Location

Air-Conditioning
Piping Work

60

2018

21

73.3 74.6

77.2
70.6

Audio/Visual/TV/Broadcast Equipment

28.4 27.2

2018

30.3

32.0

32.1

30.9 31.1

31.7 31.8

2021

2022 forecast

27.3

2019

2020

CHUDENKO Report 2022

22

Overview of Business

Regional information communication andcable television transmission equipment

Wireless ICT solutions equipment

Road/river information equipment

Information Communication
Equipment Work
Overview of fiscal 2021 and outlook for fiscal 2022
Orders received totaled ¥8.7 billion due to orders for infrastructure
facilities construction by MLIT and NEXCO West Japan, althoughorders for FTTH (optical fiber) conversion work, which expanded
significantly in fiscal 2020, have completed and shrunk.
Net sales were ¥13.3 billion, significantly higher than theprevious year, on the back of construction work carried overfrom fiscal 2020.
We can expect continued demand for construction work in
the information and communications field as it plays a role intransforming society as a whole, such as regional revitalization
through ICT, information gathering and transmission using ICT,and maintenance and management of social infrastructure. In
order to secure orders for fiscal 2022, we are actively working on
new businesses such as leveraging AI, in addition to our existing
businesses. In order to secure net sales, we will also work toensure the steady execution of large-scale construction projects
through front-loading in addition to streamlining operations
through the promotion of DX.
As a result of these measures, in fiscal 2022, we forecast¥9.9 billion in orders received and ¥9.5 billion in net sales.

Mobile wirelesscommunication equipment

View more of our information
communication equipment work here.
https://www.chudenko.co.jp/sales/case/

Hagi City optical fiber installation project (Hagi City, Yamaguchi Prefecture)● FY2021 Chugoku Branch vehicle location monitoring equipment construction(Okayama City, Okayama Prefecture)● FY2021 construction of telecommunications equipment in Kurayoshi District(Kurayoshi City, Tottori Prefecture)● Large and small hall sound equipment upgrade work at Wood One Sakura Pia(Hatsukaichi City, Hiroshima Prefecture)● Asakuchi City mobile (broadcast use) radio equipment construction (Asakuchi City,
Okayama Prefecture)● FY2021 CCTV equipment construction for Okayama National Highway (Okayama
City, Okayama Prefecture)●

Recent project
Akiyoshido Cave wireless LAN installation work
Mine City, Yamaguchi Prefecture

Construction period December 2021–March 2022
Customer

Mine City

Summary

Creation of a Wi-Fi environment for the purpose of improving
convenience for tourists at Akiyoshido, Japan’s largest limestone cave.

Voice

Tokio Toyosaka

On-site representative
Information Communication Equipment Work
Section Facilities Construction Department
Yamaguchi Supervising Branch

Solving a community’s problem with information
communication equipment work
It was a challenge to select the best location to install the equipment because
the construction work was to be carried out in the special environment of a cave,where radio waves create complicated reflections. Moreover, because
Akiyoshido Cave is designated as a special natural monument, there were manythings to take into consideration besides the construction, such as the landscapeand ecology and obtaining expert opinions. The use of wireless equipment tominimize cabling as much as possible allowed us to perform the installation
without damaging the cave interior and also shortened the construction.
We will apply the know-how gained at work sites to future construction
projects and contribute to solving various issues in the community.

Orders received / Net sales■ Orders received ■ Net sales(Billions of yen)
20

16.8
15

13.3
11.0

10

7.0
5

8.7

7.9 8.3

Distribution Line WorkIn fiscal 2021, both orders and sales were at the same level as
the previous year due to the upgrading of aged facilities such aspoles and wires and the construction of renewable energy
interconnection lines, as in the previous year.
We continued our efforts to improve productivity bypromoting DX and developing new tools and construction
methods. In addition to the iPhone-based system for automatic
registration of photos of completed construction that was
introduced in the previous fiscal year as one of our DX promotion
initiatives, we started to digitize work plans and instructions tofurther improve the efficiency of our work processes. In addition,
we were awarded the Shibusawa Prize by the Japan Electric
Association for the second year in a row for the “Ground shortcircuit device and earth clamps for PD lines” developed for the
purpose of improving the safety of transformer replacement
work, which was praised for its safety and functionality. We wereawarded the prize last year for our vertical cable support arm.
Beyond fiscal 2022, demand for updating old equipment is
projected to continue, and by working to improve productivity
further on the assumption that safety and quality will be
guaranteed, we expect steady performance in orders received
and net sales with projected orders received of ¥29.6 billion andnet sales of ¥29.6 billion in fiscal 2022.

Orders received / Net sales■ Orders received ■ Net sales(Billions of yen)
35
28

26.9 26.0

27.9 28.6

29.4 29.4

29.5 29.6

29.6 29.6

2019

2020

2021

2022 forecast

Utility pole replacement work usinga vertical cable support arm

Ground short circuit device
and earth clamps for PD lines

View more of our distribution
line work here.
https://www.chudenko.co.jp/sales/case/

Main projects received
Kuraray water source overhead line equipment removal work (Kurashiki City,
Okayama Prefecture)
Construction of new 22kV overhead line (new construction of 22kV distribution line)(Masuda City, Shimane Prefecture)● New construction (poles/cables) on JR West Onomichi Line (Onomichi City,
Hiroshima Prefecture)● Upgrade work for aging power distribution equipment (all branches in the Chugoku
region)●●Recent project
Telephone pole replacement work
Location

Shimonoseki City, Yamaguchi Prefecture

Construction period August 2022–September 2022
Customer

Shimonoseki Network Center, Chugoku Electric Power Transmission &Distribution Company, Incorporated.

Summary

Replacement of obstructed electric poles
Old poles: Centrifugal reinforced concrete pole → New poles: High
waist composite pole

Voice

Yuta Okabayashi

On-site manager
Distribution Work Section
Shimonoseki Office
Yamaguchi Supervising Branch

Building customer trust with sincerity
In the course of construction work, we provide careful explanations to gain theunderstanding of nearby residents and passersby, and we thoroughly clean up
and tidy up every day.
We also take the initiative in communicating with our team members toenhance their sensitivity to danger in order to prevent work accidents.
The number of on-site workers has been getting younger in recent years.
With the passing on of skills becoming a top priority, we strive to train andinstruct junior workers and always think and act on how to proceed with work ina safe and smooth manner.
We will continue to take pride in our work as electrical construction
professionals and aim to exceed our customers' expectations.

21

9.9 9.5
14

5.8
7

0

0

2018

23

Emergency restoration work

Overview of fiscal 2021 and outlook for fiscal 2022

Main projects received

Location

Overhead distribution line work

CHUDENKO Report 2022

2019

2020

2021

2022 forecast

2018

CHUDENKO Report 2022

24

Overview of BusinessTechnology Development
Underground power line work

Overhead power line work

Underground PowerLine Work for Power
Transmission and Distribution
Overview of fiscal 2021 and outlook for fiscal 2022
In terms of orders received, we received orders for 500kV wire
replacement and substation 4-bus tie construction, but there
were few orders year on year for large-scale construction work
for Chugoku Electric Power Transmission & Distribution
Company, Incorporated, such as metal pylon reconstruction,and projects for private distribution line work related torenewable energy.
Net sales were almost the same as the previous year due to
steady construction progress management and the addition of
new underground power distribution line construction.
In fiscal 2022, as in the previous fiscal year, we will
strengthen activities to win orders for competitive properties,
including VE proposals, in order to obtain orders for large
properties from Chugoku Electric Power Transmission &Distribution Company, Incorporated. We will also promote DX insite management to improve productivity.
As a result of these measures, in fiscal 2022, we forecast¥10 billion in orders received and ¥7.5 billion in net sales.

Substation work

View more of our underground power line workfor power transmission and distribution here.
https://www.chudenko.co.jp/sales/case/

Main projects received
Shin-Okayama transformer substation 500/220kV bus 4-bus tie construction(Takahashi City, Okayama Prefecture)
Shin-Hiroshima trunk line replacement work (Phase 1) (Higashihiroshima City,
Hiroshima Prefecture)● UBE Corporation joint underground pipe installation work at 4 offices (Ube City,
Yamaguchi Prefecture)● 110kV Innoshima Line No. 58–59 metal pylon replacement and lead-in change work
(Onomichi City, Hiroshima Prefecture)● 110kV Yuni Okayama Line No. 64-73 old metal pylon replacement work (Okayama
City, Okayama Prefecture, etc.)● 66kV Shinko Kiki Kogyo Line No.3–6 old metal pylon replacement work (Kurayoshi
City, Tottori Prefecture)●

Recent project
National Highway No. 9 Yamaguchi Asada cable conduit
installation work
Location

Yamaguchi City, Yamaguchi Prefecture

Construction period October 2020–March 2022
Customer

Chugoku Electric Power Transmission & Distribution Company, Incorporated

SummaryLaying of approximately 5,000 m of high voltage underground cables /Laying of approximately 3,000 m of low voltage underground cables
Installation of on-road equipment 16 units

Voice

Keishiro Morita

Conducting safe and high-quality construction
management through repeated ingenuity■ Orders received ■ Net sales(Billions of yen)
10

10.0

9.4

7.5

6.9

6.5
5

8.1

8.2

5.2 5.4

7.5

5.6

2.5

0

2018

25

CHUDENKO Report 2022

2019

2020

2021

2022 forecast

Technology development case study

As a general equipment engineering company, Chudenko
resolves technical issues and requests from inside and outside
the Company, and also conducts R&D based on initiatives in
new fields to expand our business, targeting fields related tosafety, quality, and reducing labor.

<Labor saving> Luminance Intensity Measurement System
for Large SpaceWith conventional illuminance measurement, people must moveto the measurement point, take measurements, and record it,which takes time and results in fatigue.
As a way to save labor, we developed a Luminance Intensity
Measurement System for Large Space that autonomously runs
with simple instructions.

Safety related
We conduct research and development into safety
improvements and the prevention of human error with the aim ofpreventing industrial accidents.
In fiscal 2021, we worked on developing a safety
management system for working from heights, which detects
and notifies workers if they forget to wear safety belts whenworking at heights.

Autonomous driving, automatic measurement, report
creation assistance
Easy operation with a tablet or smartphone● Adjustable height of illuminance meter●

Systemfeatures●●

Construction Management Team Leader
Underground Line Section
Yamaguchi Electric Power Center

Orders received / Net sales

Technology development issues

The site was located on a busy arterial road, and we took careful measures toensure the safety of passersby and to secure entrances and exits to nearby
shops. Although there were times when we had to review our work process due
to difficulties in negotiating power outages with customers and smoothly
coordinating processes with the customer and related construction companies
during the power switchover work, we were able to complete the work without
any accidents, injuries, or complaints.
In construction work that regulates traffic on the road, there is a possibility
that trouble may develop if insufficient consideration is given for theneighborhood. We will continue to aim for higher quality construction
management and focus on the guidance and training of young employees.

Quality related
We conduct research and development into new systems to
improve construction quality.
In fiscal 2021, these included a Measuring Equipment Wiring
Image Recognition Inspection System that seeks to prevent
incorrect wiring of measuring equipment, and an Electric Outlet
Testing Method Using PLC Technology that aims to improve thequality of electric outlet testing.
Labor-saving initiatives
We conduct research and development into software and new
systems to reform, improve, and raise the efficiency ofoperations.
In fiscal 2021, we developed a Luminance Intensity
Measurement System for Large Spaces and a Construction Plan
Creation Support Tool, which are intended to reduce labor andraise the efficiency of measuring illuminance in large spaces. To
help expand our business, we developed a River Monitoring
System that measures the water level of rivers with AI.

Presentation of technology development results
By horizontally deploying to all branches the results of thetechnology that we have devised through our own ingenuity inthe course of our day-to-day operations, we contribute to thestrengthening of technical capabilities and help promotetechnical proposal-based sales. In addition, we hold events topresent the results of our technology development every yearwith the aim of motivating technical staff.
In fiscal 2021, we
announced 14 different
initiatives fortechnologies that open
the way to
improvements in safety,
customer satisfaction,
In order to prevent the spread of COVID-19 infections,the event was also held online for remote participants.
and quality of work.

Measurement
data

Driving
directions

Hovercraft
illuminancemeasuring device
TabletSmartphone<Business expansion> River Monitoring System
This is a system that automatically judges preset water levels by
cloud AI analysis of images acquired from river monitoring cameras.

Systemfeatures

No need to study individual rivers
Up to 5 arbitrary water level detection lines can be set● Graphical support for setting water level lines●●

System configuration

Image published
Wireless camera
Mobile phone
networkAI

Cloud AI analysis

Detection of risein water level

TOPIC
Awarded the 66th Shibusawa Prize
In November 2021, we were awarded the 66th (FY2021)
Shibusawa Prize from the Japan Electric Association forour development of a Ground short circuit device andearth clamps for PD lines.
This is a prestigious award that is recognized byvarious fields as the only electrical safety-related award in
the private sector.
→See the press release for details.
https://www.chudenko.co.jp/news/images/t211203_01.pdf

CHUDENKO Report 2022

26

Overview of BusinessGroup Companies
Hayamizudenki Co., Ltd.
As renewal work on expressways and local roads continues, vehicle
accidents and tragic accidents involving workers have occurred
more often than before. In addition, the average age of drivers isrising and leading to accidents caused by delayed decisions.
The question is how to ensure the safety of construction
workers and the convenience of road users. Hayamizudenki
shares a philosophy of “Safety takes priority over everything,” asa Chudenko Group company, and jointly developed Michi-Tera,a highly visible guidance light installed on road surfaces with amajor road-construction company.
Michi-Tera creates light to safely guide both vehicles andpeople by making full use of the technologies accumulated
through LED product development, such as GARASU LIGHT
and products used in amusement parks. It can be easily installedon road surfaces, and by controlling the light emission and colorof each light fixture, it is possible to control the flow of vehicles
and people smoothly and safely. It has already been used inmany construction projects and disaster recovery.
We will continue to develop and provide the Michi-Teraubiquitous road guidance light system that anyone can use
easily anywhere.

ESG Initiatives
Chudenko Group Sustainability ....................................29

Berryne Co., Ltd.
We are engaged in strawberry and grape picking tourism,production and sales of blueberries, manufacturing and sale ofprocessed products, and operating a cafe in Hamada City,
Shimane Prefecture.
We are also actively working to employ people withdisabilities, and in fiscal 2021 we were certified as a special
subsidiary. Through this project, we will contribute to therevitalization of hilly and mountainous areas in the Chugoku
region and fulfill our social responsibility as a place of
employment for people with disabilities.

Production, processing, and sale of fruit
We cultivate 5 varieties of strawberries (Benihoppe, Sachinoka,
Akihime, Yotsuboshi, and Moikko), 2 varieties of grapes (Pione
and Shine Muscat), and 17 varieties of blueberries, all of which
are highly rated for their quality. The fruit we harvest is also usedin processed products and in our cafe offerings. We are also
working on taking this one step further for diversifying its
management by developing fruit sauce as a main processed
product and starting online sales.

E

Environment
Environmental initiatives ..............................................................30
Disclosure of information based on
TCFD recommendations ...............................................................35

S

Society
Human capital ......................................................................................37
Health and safety activities ..........................................................41
Quality ........................................................................................................43
Coexistence with communities .................................................44

G

Investment and use of intellectual property
and intangible assets .......................................................................45

GovernanceCorporate governance ....................................................................46
Management team ............................................................................51
Message from an outside director ..........................................53
Compliance / Risk management .............................................55

27

CHUDENKO Report 2022

CHUDENKO Report 2022

28

Chudenko Group Sustainability
The Group has been aiming for sustainable growth and working
to solve social issues by promoting various measures in themedium-term management plan. As such, we established the

CHUDENKO Group Fundamental Sustainability Policy to further
evolve and develop these initiatives.

CHUDENKO Group Fundamental Sustainability Policy
The CHUDENKO Group, with the trust of the community as its basis, runs a sound business withreliable technology and quality. By doing so, it will take on the challenge of resolving
the various issues that society faces, with the aim of sustainable growth for the Group,
while also contributing to the realization of a sustainable society.

Creation of richer environmentE

ESG Initiatives

Environmental Initiatives
Basic policy
As a general equipment engineering company, Chudenko contributes to achieving a sustainable society bypromoting environmentally friendly business activities.

Action guidelines
1. We comply with environment-related laws and regulations, recognize our corporate social responsibility, andwork to reduce our impact on the environment.
2. We work to decarbonize our own company and support the decarbonization of our customers in order tobecome carbon neutral.
3. We engage in resource conservation activities such as controlling the amount of waste generated, reuse, andrecycling in order to realize a recycling oriented society.
4. We work to improve the environmental awareness of our employees through environmental education andlocal environmental conservation activities.

We will endeavor to become carbon neutral, to help mitigate climate change.
We will strive to bring about environmental conservation and a recycling oriented society.

Environmental management
Development of a dynamic company
We will respect diversity and promote the creation of rewarding workplaces.
We will construct a working environment where every employee can work in safety and good health.

Enhancement of technology and quality
We will pursue technology and quality that help build a resilient society and comfortable lives.
We will advance technology development and research and development to resolve society’s issues.

Sound business management
We will promote compliance focused management that adheres to laws, regulations, and societal norms.
We will continue to be a company that is trusted by all stakeholders,by ensuring highly transparent business management.

The head office divisions, which bring together and supervise
planning and results for management as a whole, make plans for
activities based on an environmental management approach thatis compliant with ISO 14001. By deploying these policies tobusiness locations, we ensure that all branches put
environmental activities into practice.

ISO 14001 registration status
Applicablestandards

ISO14001: 2015

Date registered

July 19, 2002

Registeredbusiness operator

Chudenko Corporation, Head Office

Scope of activities

Head office operations for a generalequipment engineering company (design,technology development, construction support)

Registration
numberJQA/EM2506

Certifying body

Japan Quality Assurance Organization

Operation of the environmental
management system
Important matters relating to the environmental management
system are deliberated and considered by the Environmental
Management Committee, the members of which are the generalmanagers of the various head office divisions.
The General Manager of the Safety, Sanitation, Quality, andEnvironmental Department submits regular reports to thepresident on the operational status of the environmental
management system, in turn receiving instructions for
improvement that drive the plan-do-check-act (PDCA) cycle.

President
General Managerof the Safety,
Sanitation,
Quality, andEnvironmental
Department

Head office divisions

CHUDENKO Report 2022

Chair:

General Managerof the Safety,
Sanitation, Quality,
and Environmental
Department
Members: General managers
of head officedivisions(Scope of ISO 14001 examination/registration)

Business
locations

29

Environmental
Management Committee

Understanding of environmental activities
practices/results

CHUDENKO Report 2022

30

E

ESG Initiatives

Challenges toward carbon neutrality in 2050
Chudenko considers efforts to achieve decarbonization to be
one of our management challenges, and are working to reduce
CO2 emissions as a sub-theme of Medium-Term Management
Plan 2024.

In April 2022, we drafted medium- to long-term targets (Seepage 35) and a roadmap for carbon neutrality.

Decarbonization of Chudenko

Roadmap to carbon neutrality in 2050

Expansionof energy
conservationand introductionof renewableenergy atbusiness
locations

Low fuel
consumption andelectrificationof company vehicles

Supporting ourcustomers’
decarbonization– 2020– 2030– 2050Initiatives to date

46% or more reduction (compared to FY2013)

Carbon neutral

Update facilities to
LED lighting, etc.

• Upgrade equipment to LED lighting, high-efficiency air
conditioning, etc.
• ZEB for new construction and large-scale refurbishments

Partial installation ofsolar power generationequipment during
new construction• Install as many solar power generation facilities as possible
at business locations (energy creation)• Install solar power generation facilities off-site, etc.
(energy creation)• Use green power and CO2-free power

Upgrade tofuel-efficient vehicles• Upgrade commercial vehicles, etc. to fuel-efficient andelectric vehicles• Upgrade construction vehicles to fuel-efficient vehicles,
and update to electric vehicles in line with development

Energy-saving equipment
such as LED lighting,conversion to ZEB
Solar power generationequipment, etc.

Installing solar power for internal use
at business locations
In preparation for reducing CO2 emissions related to electricity
use at business locations, it will be necessary to use electricity
derived from renewable sources.
We are generating our own renewable energy, and to use it,
we plan to deploy solar power generation facilities for internal use
at our business locations (gradual implementation scheduled to
begin in fiscal 2021).

• Propose energy-saving/renewable energy facilities• Energy-saving equipment such as LED lighting andconversion to ZEB• Install internal-consumption solar power facilities (PPA, etc.)

Okayama Supervising Branch’s new
ZEB-compliant building
In order to achieve the ZEB standard, in addition to passive
methods that use exterior insulation, natural ventilation, naturallighting, and active methods that use high-performanceequipment such as air conditioning and lighting, and vacancy
detection control, self-consumption solar power to adopt
renewable energy through installation, we plan and design
considering the scale of the business location, operational
status, etc., to realize ZEB.

Completed:
June 2021
Standard: ZEB
Total floor area:
1,094m2 (2 stories)

OkayamaSupervising BranchCompleted: April 2019
Standard: ZEB Ready
Total floor area:
4,836m2 (3 stories)

Supporting our customers’ decarbonization

Overhead lighting and natural ventilation

Kanagawa Kure

○

● ZEB

Buildings that achieved a renewable energy ratio of
100% or higher● Nearly ZEB Buildings that achieved a renewable energy ratio of
75% or higher● ZEB Ready Buildings that achieved a renewable energy ratio of
50% or higher

CHUDENKO Report 2022○

Key installations

Details

Exterior wallinsulation

Insulation materials with highinsulating performance are used forthe exterior walls and roof to reduce
the air conditioning load.

Low-E multipaned glass

Reduces air-conditioning load withheat insulating and solar blocking
effects.

○

Multi-paned glass

Has a heat insulating effect andreduces the air conditioning load.

○

High efficiency
lighting

Uses LED lighting, and the office iscontrolled by a daylight sensor to
reduce energy consumption.

High efficiency
air conditioning

Energy conservation by controlling
wind direction and capacity
automatic adjustment with sensors.

○○

Net Zero Energy Building (ZEB)

31

Total heat exchanger

ZEB-compliant business locations

ZEB refers to buildings that significantly reduce the amount of energy
consumed annually, maintaining a comfortable internal environmentby using a high degree of insulation and solar radiation shielding.
They also utilize renewable energy and highly efficient facilities tominimize energy consumption, as well as generating their own
energy from sources such as solar power.

Completed: June 2020
Standard: ZEB
Total floor area:
881m2 (2 stories)

Kure Distribution
CenterEnergy-conserving technology that contributes
to ZEB introduced at the Kanagawa Distribution
Center and Kure Distribution Center
Previously we had approached energy conservation bysystematically implementing upgrades to LED lighting andhigh-efficiency air conditioning equipment. But as we need tofurther strengthen the use of renewable energy in order to achieve
decarbonization, we will promote ZEB-compliance at businesslocations at the time of upgrades and major refurbishments.

Kanagawa |Distribution Center○○○

Total heatexchanger

Maintains a comfortable indoor
environment by efficiently ventilating
indoor and outdoor air.

○○High efficiency
ventilation fan

Saves energy by using a DC motor
fan with very low power
consumption.

○○

Solar panels

Installation of solar power forinternal consumption(Kure: Kanagawa:)

Customer awareness of decarbonization is rising sharply. In
order to respond to customer needs and to support customer’s
decarbonization, we are putting our efforts into proposals forconversion to ZEBs and for renewable energy such as solar
power generation for internal use (PPA, etc.).
We have been continuously taking advantage of theopportunities presented by upgrade initiatives to create
proposals that offer low energy consumption with the aim of
cutting running costs.
Based on our success in achieving ZEB Ready status for the
new building of the Okayama Supervising Branch, we haveregistered as a ZEB Leading Owner and acquired ZEB Plannercertification.
As a general equipment engineering company, we willleverage these strengths to accumulate consulting experience in
the ZEB conversion business, participating in numerous ZEB
conversion projects to facilitate and popularize the concept
going forward.

ZEB Leading Owner markZEB Planner mark

CHUDENKO Report 2022

32

E

ESG Initiatives

Changes in main environmental performance

Overview of environmental impact (FY2021 results)

INPUT● Electricity

7,308,000 kWh● Small amounts of other energy (gas, diesel, etc.)● Office paper● Water

119 t
46,000 m3

Reduction rate in energy consumption
on crude oil conversion basis

CO2 emissions*1

VehiclesOffices, etc.

● Fuel

1,979 kL

8,621t-CO

1.4％(t-CO2)(%)

2

Energy consumption at offices, etc.
Vehicle fuelAnnual average
reduction rate

Energy consumption on crude
oil conversion basis*2 (offices, etc.)

1.1% 1,904kL

Reduction rate (vs. previous year)
Annual average reduction rate (Base: FY2017)

4.9

Incidental/
indirect operations

Chudenkobusiness
activities

Equipment
needs

DesignPurchasing

Chudenko

Customer

Ease-of-use/
Comfort

4,870

4,937

0

4,887

1,869

1,926

1,904

2017

2018

2019

2020

2021

1.4

1.0
1.3

1.4

2018

2019

1.1

0

5,666

5,016

4,597

4,364

3,734

2013

2018

2019

2020

2021

2017

2020

2021

Energy consumed...etc.

Vehicle fuel economy*3
Gasoline vehicles

14.1

Industrial waste
km/L

Diesel vehicles(km/L)OUTPUT

1,920

−3.0

Running costs

Realizationof needs

Constructed

5,012

Customersatisfaction

2,019
2.6

6,087

Sales

(kL)

CO2

Waste

Others● 8,621 t-CO2● Industrial waste 20,738 t● Use of CFCs

13.5

Gasoline vehicles

13.6

13.8

4.8

Amount generated

13.9

14.1

20,738 t
Recycling rate

km/L

Diesel vehicles

Green purchasing rate(t)

Amount generated

80
84

80%

Recycling rate

79

80%
(%)

80

74

83

● Noise and exhaust gas caused byconstruction and vehicle usage79

FY2021 environmental goals and results
Goal

Item
Reduce ourown environmental
impactCustomer support

33

CHUDENKO Report 2022

ResultCO2 emissions-23% (compared to FY2013)-26%

Energy consumption on crude oil conversion basis-1% (average reduction rate for the last 5 years)-1.4%

Vehicle fuel economy

9.0km/L or more

8.9 km/L

Industrial waste recycling rate

Improved from the previous year (79% in FY2020)

80%

Amount of office paper purchased-20% (compared to FY2019)-24%

Green purchase rate (paper and stationery)

Improved from the previous year (83% in FY2020)

80%

Number of environmental accidents

00Implementation of local environmental conservation activities

Promoted in consideration of COVID-19

71 events

Number of energy conservation proposals for renovation work

750

1,027

Number of proposals for solar power for internal consumption

140

197

ZEB conversion proposals

10

18

5.1

5.2

5.2

5.0

4.8

16,53815,882

16,66820,961 20,738

2017

2018

2019

2020

2021

2017

2018

2019

2020

2021

2017

80

2018

81

2019

80

2020

2021

*1 CO2 emissions are calculated using energy and fuel consumption at offices and fuel used by vehicles (electricity purchased from electric power suppliers uses adjusted emission
coefficients).
*2 Energy consumption on a crude oil conversion basis is calculated for energy/fuel related to specified businesses as set forth in the Act on Rationalizing Energy Use.
*3 Diesel vehicle fuel efficiency will be changed to include cherry pickers from FY2021 (the same applies to FY2017 to FY2020 results).

CHUDENKO Report 2022

34

E

ESG Initiatives

Information Disclosure Based on
TCFD Recommendations
Important risks

Strategy

Chudenko announced its endorsement of the TCFD
recommendations on April 28, 2022, identified the risks andopportunities that climate change poses to our business, andconducted an analysis of the financial impact. Based on the
results, we will disclose information on climate change based on
the TCFD recommendations.

Governance
Chudenko is committed to sustainability that includes
responding to climate change. We have established theSustainability Promotion Team, led by the executive vicepresident, in order to address the issues facing us. The team iscomprised of relevant departments as an advisory body to theManagement Policy Council, which consists of the chair,president, and managing executive officers.
Of the deliberations of the Sustainability Promotion Team,they submit important matters to the Management Policy
Committee and the Board of Directors for a decision.

Governance structure for sustainability,
including climate changeWith regard to the impacts that may occur in the future due toclimate change, we assumed two world scenarios in 2050 of“1.5ºC” and “4ºC” warming, extracted important risks andopportunities, and identified items. (See page 36.)

Submission

Supervision

Management Policy Council
Submission

Guidance

Sustainability Promotion Team
Leader: Executive Vice President
Secretariat: Corporate Planning Department

35

CHUDENKO Report 2022

Policy/legal
regulation

Item

Impact on the company

Introduction ofcarbon tax

Increased tax burden due to carbon tax on CO2emissions from business activities

We have drafted risk management regulations, and theManagement Policy Council identifies, evaluates, and considers
measures for risks related to our operations and businesses, andreports to the Board of Directors. We also continuously manage
risk by reflecting it in management plans.
Risks related to climate change identified in accordance with
the TCFD recommendations are identified and evaluated by the
Sustainability Promotion Team and submitted to theManagement Policy Council and Board of Directors.

Transition

On April 28, 2022, we announced the “Challenge Toward
Carbon Neutrality by 2050” (see page 31), setting specifictargets for 2030 and 2050 and promoting activities.

Degree of impact

Response as a company

1.5˚C

4˚C

Medium- to
Mediumlong-term—

Making company facilities ZEB,
renewal of electric vehicles, andpurchasing green power

Sophisticated demands from customers forenvironmentally friendly construction

Medium- to
Mediumlong-term

Low

Rise in purchaseprice of materials

Adding a carbon price to the price of materials
to be procured

Medium- to
Mediumlong-term—

Improvement of ability to propose
products and services with highadded environmental value.

Reputation

Changes incustomerselection

Decrease in orders from customers due to alack of consideration for the environment, as
they select companies with advanced
environmental measures.

Medium- to
Mediumlong-term

Low

Promotion of decarbonization
initiatives and thorough information
disclosure to customers.

Reputation

Stakeholder
evaluation

Decline in corporate value (stock price) and
impact on securing human resources due toinadequate climate change measures such asefforts to reduce CO2 and insufficient
information disclosure.

Medium- to
Mediumlong-term

Low

Enhancement of information
disclosure and dialogue withstakeholders, promotion initiatives
to achieve goals

AcuteMore severe
weather

Suspension of business location functions due
to typhoons or flood damage

Medium- to
Medium High
long-term

Enhancement of BCP response
in times of disaster

Chronic

More severe
weather

Increased emergency response to social
infrastructure

Medium- tolong-term

Low

High

Maintenance of a system that can
respond in the event of a disaster.

Chronic

Rise intemperature

Increased risk of heatstroke and decreased
work efficiency
Shortage of personnel due to deteriorating
working environmentLong-term

Low

High

Enhancement of healthmanagement and Promotion oftechnology development toimprove the working environment

MarketIndicators and goals
Physical

Time
axis

Promotion of environment-friendly
material procurement andconstruction methods, anddevelopment and proposal of
construction technology with low
environmental impacts

Sophistication
Technology of customer
requests

Risk management(1) Chudenko’s indicators and goals
Indicator

Board of Directors

Type

TargetChudenko(non-consolidated)
Scope1 & 2
CO2(Emissions fromemissionsbusiness locations
and company
vehicles)Targetyear

Content

2030

Reduce by 46% or abovefrom fiscal 2013 level

2050

Carbon neutral(2) Results（単位：t-CO2）

Metric Base year
(FY2013)

FY2020

FY2021CO2 emissions(Scope 1+2)

11,753

9,301

8,621

Scope 1

6,149

5,006

4,952

Scope 2

5,604

4,295

3,669

Indicator

Important opportunities
AspectItem

Impact on the company

Energy source
products andservices

Increased demand
for renewable energy

Products andservices

Time
axis

Degree of impact

Response as a company

1.5˚C

4˚C

Increased order opportunities for construction
related to renewable energy, such as solar andwind power generation

Medium- to
Mediumlong-term

Low

Promotion of initiatives forrenewable energy, enhancementof construction systems andtechnical capabilities

Increased demandfor energy-conserving
and decarbonizationrelated equipment

Increased order opportunities for energyconserving and decarbonization-related
construction

Medium- to
Mediumlong-term

Low

Promotion of decarbonization
initiatives, enhancement ofconstruction systems andtechnical capabilities

Resource
efficiency

Electrification of
automobiles andtheir adoption

Reduce vehicle fuel costs by electrifying
vehicles for sales activities and construction
vehiclesMedium- tolong-term

Low—

Renewal of fleet toelectric vehicles

Product andservice resilience

Increased demandfor disasterprevention andmitigation equipment

Infrastructure development and maintenancefor disaster prevention and mitigation
Increased demand for repairs

Medium- tolong-term

Low

MediumEnhancement of theconstruction system* We refer to the International Energy Agency (IEA) SDS (Sustainable Development Scenario) and the Intergovernmental Panel on Climate Change (IPCC) to analyze risks and opportunities
in each scenario.
* Assumed scenario
1.5°C scenario: A scenario in which global average temperature increases are kept below 1.5°C above pre-industrial levels in a world where global greenhouse gas emissions are net
zero around 2050 through climate change measures taken by countries.
4°C scenario: Scenario in which the global average temperature rises by 4°C above pre-industrial levels in a world where decarbonization does not progress.

CHUDENKO Report 2022

36

S

ESG Initiatives

Human Capital
Approach to human capital
In order for a company to achieve sustainable growth, it isessential to accurately grasp the changing times and toconstantly explore and create new value. Chudenko has always
placed people as the source of our corporate value, and we aresystematically working on everything from recruitment totraining based on the recognition that people are our mostimportant assets.
Moving forward, we will create a workplace environment andtraining where human resources with diverse personalities andvalues can work together toward common goals, think
independently to create new value, and proactively take on thechallenge to make reforms.

Human resource strategy and humancapital investment

including safety and health initiatives and the enhancement ofvarious systems. We recognize that in order for Chudenko,
which is a labor-intensive company, to achieve sustainablegrowth, it is important to make solid investments in such humancapital and steadily realize the image of the human resources weseek by having them function in multiple ways.

To realize the image of human resources we seek, we
aim to systematically develop human resources byeffectively combining OJT and OFF-JT, from theeducation necessary to become good members ofsociety and business people, to the acquisition ofadvanced specialized skills.

Education

Personnel evaluationand compensation

Personnel planInternal environment
improvement policy• New graduates,
mid-career hires• Employment of people
with disabilities• Regular personnel
transfers

Compliance
Bonus system for
acquiring qualifications
Welfare system

Safety andhealth activities

Employeeawareness survey

Health management

Work style reforms

Promoting womenin the workplace

84

93.3%

60

54

90.0%

Total

150

138

92.0%

*Includes graduate schools, technical colleges,
junior colleges, and vocational schools● We hold about 200 training sessions each year based on the human resources development training plan that is formulated

each fiscal year, which includes education of younger employees, rank-specific training, and training for specialized skills.

State of qualifications (as of March 2022)
PhD (Engineering) 2
Professional engineers (Engineering Management) 3, (Electrical & Electronics Engineering) 42,(Environmental Engineering) 16, (Information Engineering) 1<Electrical>: 244 chief electrical engineers (Class 1 to 3), 1,151 electrical construction management engineers (1st and 2nd grade)<Air-conditioning piping>: 287 plumbing construction management engineers (1st and 2nd grade), 88 engineers from The Societyof Heating, Air-Conditioning and Sanitary Engineers of Japan<Communications>: 32 chief telecommunications engineers (transmission and switching/lines), 91 telecommunications
construction management engineers (1st and 2nd grade)<Instrumentation>: 162 instrumentation engineers (1st and 2nd grade)<Civil engineering>: 197 civil engineering construction management engineers (1st and 2nd grade)<Architecture>: 14 architects (1st and 2nd grade), 80 construction engineers

Diversity/childcare leave● We understand the importance of diversity and inclusion and strive to foster an organizational culture that allows us to grow in

Sustainable growth

Brother system

Management plan
Achievement of performance targets
Improvement of medium- to long-term corporate value

Training diary

90

High school

Skills/experience(persons withqualifications)
Image of humanresources we seek

“People who flexibly accept changes in society
and take on the challenge of making reforms”

Human resource
development policy

Construction management
position system

Actualeducation during the following period at our training facilities, and also implement thorough OJT through the introduction of thebrother system and the assignment of construction management leaders.
New employee basic training period• Clerical:(1st year) about 2 weeks, (2nd year) about 1 week
• Sales, indoor electrical, air-conditioning piping, information communication equipment:(1st year) about 4 months, (2nd year) 2–3 weeks, (3rd year) 2–3 days
• Distribution line, power transmission and distribution:(1st year) about 6 months, (2nd year) about 1 week, (3rd year) 1–2 weeks● We have established an engineering center and are working to develop human resources who will promote the creation andutilization of intellectual property and intangible assets through technology development and specialized education throughindustry-academia collaboration.
● Educational expenses per person: ¥44,000/year

In addition to securing safety and health and ensuring
compliance, we strive to reform work styles andpromote diversity, and work to create a workplaceenvironment where each and every employee can workwith pride and joy.

Young employee
development program

Fulfillment rate

Planned
University*● Positioning the three years after joining the company (two years for clerical workers) as a training period, we provide basic

Internal environment improvement policy

Human resources strategy & human capital investment

Disclosed information● FY2023 New graduate hiring plan fulfillment rate

● Hiring cost per person: ¥114,000/year

Human capital investment framework ⇒ Path to growth• Education of younger
employees• Rank-specific training• Training for specializedskills, etc.

Disclosed item
HiringHuman resource development policy

Our human resource strategy consists of drafting andimplementing a human resource development training plan andpersonnel plan based on our human resource development
policy, work style reforms based on our internal environment
improvement policy, and committee activities such as promoting
women’s empowerment. It covers a wide range of items,

Human resource
development training plan

Investment in human capital and disclosure of information

Safetyharmony with each other. At the same time, we accept and use diverse ways of thinking and values as organizational strengths
to create a highly engaged and vibrant work environment.
1) Percentage of management roles occupied by women*: 3.5% *Managerial roles assistant managers and supervisors
2) Percentage of female hires:
7.8%3) Percentage of employees with disabilities:
2.7%4) Percentage of employees taking childcare leave:
16.7% for men, 100% for women5) Wage gap between men and women
Wage gap between men and women (ratio of average annual wage for women to average annual wage for men)
All workers

77.7%

Regular full-time workers

80.9%Part-time/fixed-term workers

60.6%

Target period: FY2021 (from April 1, 2021 to March 31, 2022)
Wages:
Excluding commuting expenses
Part-time/fixed-term workers:
Expert employees, senior employees, contract employees(excluding full-time open-ended contract employees)● By creating the Practical Safety Training Building and experiencing simulated dangers that can occur in various workplaces, we

are working to increase employees’ sensitivity to hazards and improve their safety awareness.
● Established a safety and ten-day health awareness period (twice a year), and headquarters officers conduct inspections ofbusiness locations.
● Implement accident-free business location award (per 200,000 hours, up to 1,000,000 hours).
● Set “safety awareness” as a personnel evaluation item.

37

CHUDENKO Report 2022

CHUDENKO Report 2022

38

S

ESG Initiatives

Education for new employees

Support for personal development

Promotion of women’s empowerment

Chudenko Corporation’s Action Plan

While the duration is determined in accordance with the numberof new hires in each division, a period of one to six months after
entering the company is designated as the training period.
During this period, all new hires stay at the Training Center.
They live in a dormitory with others who have joined theCompany the same time, where we foster the “threefundamental skills” that are required for life as a member ofsociety and as an employee of the Company.

The Group operates a distance learning system as a framework
to support all employees who actively decide to try something
new. The courses available under this system are divided into thefive categories of Business Practice, Management, Work-Life
Balance/Self-Management, General Education, andQualifications, with each containing approximately 200 courses.

With regard to women’s empowerment, in 2015 we launched the“Committee for the Promotion of Women’s Empowerment,”
formulating a plan of action as set out in the Act on the
Promotion of Female Participation and Career Advancement in
the Workplace, and taking into consideration from across-divisional perspective the planning and implementation of avariety of measures. In 2016, the “Working Group for the
Promotion of Women’s Empowerment” was established byvoluntary female employees.
In 2019, the Company received from the city of Hiroshima a
General Prize as a Business Promoting Participation by BothMen and Women. This prize is awarded by the city to businesses
that provide a model for other organizations in the way they work
actively to enable women to demonstrate their ability, expand
their range of work, and balance work with household andcommunity activities.
We will continue to promote initiatives for full participation
by women.

Period ofthe plan

Three fundamental skills
1. Awareness of basic
norms of lifestyleand social etiquette
2. Self-awareness as
an employee andcamaraderie
3. Basic knowledge,
technical skills required
to perform duties

Distribution line education for new employees

Intranet (support for personal development)

Nurturing younger employees

Participation in National Skills Competition

With regard to younger employees (in their first to third year after
joining), we aim to cultivate them at an early stage as the humanresources who will be responsible for the future of the Company.
To this end, we set the training periods as two years for theadministrative employees, and three years for sales/technicalemployees, respectively. During these training periods,
employees alternate repeatedly between group OFF-JT at theTraining Center and OJT at a business location, to ensure thatthey acquire knowledge and technical skills.

The National Skills Competition is an event in which participants
compete to become recognized as the most technically skillfulcompetitors in Japan, and also serves as a qualifying
competition for the international competitions that take place
every two years. Chudenko participates in the National Skills
Competition every year.
At the 60th National Skills Competition held in Chiba
Prefecture in fiscal 2022, two participants from Chudenko
represented Hiroshima Prefecture and two from Yamaguchi
Prefecture.

Education system

Support Supplementation

Supplementation
Supplementation
Support

OFF-JT

Distance learning to support
personal development
Voluntary training

Rank-specific education

Hideaki Oba

Education and nurturing ofyounger employees

General Manager,
Administration Division

Health and safety education
Specialist skills education
Education aimed atacquiring qualifications
General external training
Education for human rights
awareness

39

CHUDENKO Report 2022

● Steady and consistent hiring of female employees● Active participation by male employees in childcare

Goal 1: Female managers to account for 4.5% of
total managerial positions* by FY2024* Managerial position: The person assigned to arole equivalent to or higher than supervisor

Goals anddetails of
initiatives

Goal 2: Female employees to account for 5.0% or
higher of annual hirings(of which technical staff to be 2.0% or higher)
Goal 3: Male employees taking paternity leave toaccount for 2.0% or higher by FY2024, taking
an average of at least one week off

Creating an environment where the company andemployees can transform and grow together

OJT

Support● Steady and consistent promotion of female managers

Comment from a General Manager

Progression as a groupacross all workplaces

Support for
personal development

Issues at
Chudenko

April 1, 2021–March 31, 2025

Competition in progress

General Affairs
Department
Administration
Division

Human Resourcesand Labor Department
Human Resources
Development Department
Training Center

The Company’s most important assets are human resources, and we aim to create a company in which
each and every one of them is able to play a leading role and feel pride and joy in their work. To achievethis, we must confront the various issues from the perspective that both company and employeeschange and grow together, and respond flexibly to changes in the business environment while making
solid investments in human resources.
In the construction industry, hiring and retaining younger people and women is a pressing issue, andalthough industry-wide initiatives have been undertaken, the situation continues to be difficult. Under
these circumstances, we have regularly hired an average of about 140 people annually over the past 15
years in order to secure the next generation of engineers, and we are also actively hiring mid-career
employees as needed.
With respect to work style reform, which is a common industry issue, we are working to improve
operational efficiency, productivity, and the working environment by promoting DX, and I would like tolink this to helping to realize work life balance in order to increase employee engagement.
In terms of training, we will share the level and ideals we aim for with employees and will promote
the early development of young employees and the systematic development of middle and top leaders,
while respecting the individuality of each person.
Diversity is not just about securing human resources, but is necessary for a company to have thecompetitiveness to respond to changing times. Going forward, we will make even greater efforts to create
an environment in which all employees can express their individuality and fully demonstrate their abilities.

CHUDENKO Report 2022

40

S

ESG Initiatives

Health and Safety Activities
FY2022 health and safety activity policy
Based on our philosophy of “safety takes priority overeverything,” the Company is working as one to eradicate
accidents and disasters and striving to encourage, preserve andincrease mental and physical well-being.
In addition, we will work on the following priority goals undersuch ongoing situations that major accidents continue to occur,
serious traffic accidents have not been eliminated, and
COVID-19 remains prevalent.

Enhancement of vehicle safety facilities

Priority goals● Major electric shock/Arc accidents: Zero
● Major accidents involving falls: Zero
● Serious/fatal traffic accidents: Zero
● Prevention of disease, early discovery andtreatment of health problems● Preventive measures against infectious diseases

Priority actions

2. Understanding and complying
with laws and regulations,standards, and rules

Comply with and deepen one’s understanding of laws and regulations, standards and rules. In
addition, steadily implement measures to prevent recurrence of accidents that took place in the past.

Safety support car

3. Mitigating risks and eliminating
unsafe behavior

As well as considering and implementing risk mitigation measures derived from risk assessments
adapted to the site, be sure to instill practices for risk and hazard prediction. Make efforts toprevent work-related accidents by practicing “speaking out” and having the courage to point out
and eliminate unsafe behavior.

Dozing prevention device

4. Maintaining the workplaceenvironment and using the rightmachinery and tools

In addition to the “five practices” for maintaining workplaces and vehicles (organized, arranged,
cleaned, hygienic, disciplined), implement pre-use inspections of machinery, and be sure to use theright machinery and tools.

5. Thorough practice of safe driving

Be sure to practice “commentary driving” and “defensive driving,” which are extremely effective inenhancing safety.

6. Encouraging mental and physicalwell-being

Use health and stress checks to get an understanding of the state of mental and physicalwell-being and to maintain and promote the health, and make efforts to prevent illness anddiscover and treat health problems as early as possible. Aim to create a bright and energetic
workplace by encouraging lively communication.

7. Implementing measures toprevent infection of COVID-19

In order to prevent COVID-19 infections, steadily implement the latest infection prevention
measures issued by the COVID-19 Headquarters.

CHUDENKO Report 2022

only to employees of the Company but also to people fromGroup companies, partner companies, and technical highschools, and other organizations. Even during the COVID-19
pandemic in fiscal 2022, around 1,385 people underwent
simulated experiences, and by having the facility used by such awide range of participants we contribute to the spread of safety
awareness and knowledge.
We also offer hands-on training and tours of our safety
training facilities and other facilities.

Total vehicles

Board of Directors &Management
Policy Council

Declaration of HealthManagement
Collaboration &Cooperation
Relevant
department
Coordinationand information
sharing

Headquarters
Health and Safety officer
Department in charge ofhealth and safety promotion
Occupational health staff

Business locations
Health and safety promotion
managerOccupational health staff

Union

Enhances motivationof employees• Support that leads to
the revitalization of
the organization

Employees

2,034

Safety equipment

Auxiliary collision prevention system

Representative Director
and President(chief executive officer)

Health insurance
association

Status of vehicle safety equipment(as of March 31, 2022)

With an awareness of safety as the highest priority and one’s own responsibility to practice safety
management and safe behaviors, take every opportunity to provide guidance, education, andsupport to Group companies and partner companies.

The Company utilizes the Practical Safety Training Building within
its Training Center located in Asaminami Ward, Hiroshima City,
for the purpose of improving safety awareness by providing
participants with a simulated experience of the various dangers
that can occur on site, and increasing their sensitivity to hazards.
These are categorized into five themes of “electric shocks /arcs,” “falling,” “overturning,” “pinching & other,” and “traffic.” Forexample, those who are involved can experience for themselves
shorts reproduced in low-voltage measuring equipment andbetween low- and high-voltage lines, the shock imparted byfalling objects, and the experience of a ladder sliding bothvertically and horizontally. Each of these utilizes facilities
designed for the purpose, and participants undergo simulated
experiences while their safety is ensured.
These facilities provide simulated experiences every year not

41

To achieve zero traffic accidents, we are currently promoting the
introduction of safety support cars and auxiliary collision
prevention system equipment, which are highly effective inpreventing accidents.
In the event of an accident, in addition to making efforts toestablish a complete picture of the accident using the footage
from the dash cams installed in every vehicle, we utilize
information derived from actual footage in group meetings toprevent further traffic accidents.

1. Awareness of safety as highest
priority, and of own responsibility

Improvement of safety awareness

Health management promotion system

652
1,359
23

Total

2,034

Dash cams

2,034

Kenko Keiei® initiatives
Chudenko has been promoting various initiatives to maintain andimprove the health of our employees. Based on the belief thatsustainable corporate growth can be achieved by improving the
motivation of employees and revitalizing the organization, we
drafted and established the “Declaration of Health Management”
and “Health Management Promotion System.”

Declaration of Health Management
As a general equipment engineering company, we believe thatin order to contribute to the development of society andachieve sustainable growth by creating living and businessenvironments with high added value, it is of utmost
importance that our employees remain healthy, both

We will make known our Health Management Policy, whichindicates our policy for efforts on Kenko keiei®(healthmanagement), throughout the company, encourage each
employee to address their mental and physical well-being, andwill continue to invest in the health of our employees.
With regard to mental well-being, the Company implements
stress checks for all employees every year, in accordance withthe stress check system set out in the Industrial Safety and
Health Act. The results are utilized for formulating internalmeasures to improve the workplace environment and for otherpurposes, and we implement follow-ups as appropriate forpeople under significant stress, such as by arranging meetings
with a physician.

Kenko keiei® Goals and Results (FY2019-2021)
Item

Target

2019

2020

2021

Regular healthcheck consultation
rate

100%

100%

100%

100%

Re-examination
rate for thosewith findings

100%

97.6%

99.2%

99.3%

Ratio of stresschecks performed

100%

96.6%

97.1%

98.4%

physically and mentally.
For this reason, as a company, we will firmly support each
employee to manage their own health and work to address
their mental and physical well-being, and we will work tocreate a workplace where all employees can work
energetically and actively, both physically and mentally.

Total health risk
120 or moreorganizations

3 organizations 3 organizations 2 organizations
0(out of a total of(out of a total of(out of a total oforganizations 269
organizations) 278 organizations) 293 organizations)

Total health risk
average for all
offices

90 or less

83

82

82

*Kenko Keiei® is a registered trademark of the NPO Kenkokeiei.
*Total health risk = National average: 100, construction industry average:
93 (FY2021)

Practical Safety Training Building

Simulation of a fall from height

CHUDENKO Report 2022

42

S

ESG Initiatives

Coexistence with Communities

Response to COVID-19
In response to COVID-19, the Company set up aCountermeasures Headquarters (Countermeasures Preparation
Headquarters) in March 2020. As well as devising infection
countermeasures tailored to the changing situation, theheadquarters is gathering information and sharing it with Group
companies in Japan and overseas.
We will make efforts on our business continuity while
complying with instructions from central and local governments,
paying close attention to the most recent information, securing
the health and safety of employees and their families, and taking
measures to prevent the spread of infection.

Providing employment opportunities● Distribution of non-woven masks toall employees● Setting up of hand sanitizer points andpanels to prevent droplets

Main
countermeasures● Requests for self-restraint in non-essential

business trips and meetings● Utilization of remote work andonline meetings● Daily sanitizing and ventilation ofshared facilities

1-day work experience
The Company operates 1-day work experiences (summer/winter)to help students choose an occupation, and encourages
research into the industry and companies.
Enabling students to visit workplaces and sites, and to
experience business operations for a day allows them to get areal feeling for employment in the construction industry, andprovides answers to such questions as “What kind of work do
people do every day?” and “What do they keep in mind whileworking?”(In fiscal 2021, we held a WEB 1day webinar due to the impact
of COVID-19.)

The aim is to impart the enjoyment of creating things and tosupport the individuals who will be responsible for the future bysharing their own experiences while providing technicalinstruction and practical demonstrations of electrical work.

On-site lectures at external organization

Implementing “Customer Appreciation Month”

Quality
1-day work experience

Increasing customer satisfaction
In order to increase customer satisfaction, we are working to
reduce nonconformities not only in finished facilities (functions,performance, etc.), but also in the overall construction process.
We are also seeking to improve construction and operational
quality by strengthening management systems related toconstruction quality and carrying out thorough staff education
and by enhancing communication with customers.
In addition, we conduct customer questionnaires and seek
their feedback regarding the status of our construction and sales
activities, opening the way to increases in customer satisfaction.

ISO 9001 registration status
Applicablestandards

ISO 9001: 2015

Date registered

March 31, 2000

Registeredbusiness operator

Chudenko Corporation

Scope of activities

Relevant businesslocationsOperating a management system
for nonconformities
As well as ensuring a response in cases where a conformity
related to construction quality has caused problems for thecustomer, the management system enables us to unify
information management, understand the status of processing
and similar cases, and prevent a recurrence.

Implementing internal inspections andon-site guidance
To ensure construction quality, we conduct internal inspectionsof facilities before delivering them to customers. We also strive toensure quality by conducting on-site guidance where appropriate
according to the progress of construction.

Examining andregistering body

Japan Quality Assurance Organization

CHUDENKO Report 2022

A chance to pilot a drone

The Running Team was established in June 1990 with the aim ofenergizing employees, improving the corporate image, andenhancing cooperation with local communities.
While training daily toward the team goal of being ranked in
the top eight in the New Year Ekiden, the team also holds a runningschool as part of its volunteer activities in the local community.

Our highly experienced Hiroshima Certified Meister* employees(4 people) and instructors who have participated in the National
Skills Competition visit technical high schools in the Chugoku
region to give on-site lectures.

An inspection in progress

43

Cleanup activity on the shore of
Lake Shinji

On-site lectures at external organization

Supervising Branches in Hiroshima, Okayama,
Yamaguchi, Shimane, and Tottori, Tokyo/Osaka
Headquarters, Electric Power Construction Plant,
Equipment Plant
JQA/QM4594

Cleaning streetlights

Chudenko Running TeamVR falling simulation

Design and construction of electrical, information
communication, air-conditioning, plumbing andsanitary equipment, and related facilities;
construction work for overhead power lines; design,
manufacture, and construction of electricalequipment (switchboards, control boards, etc.)

Registration
numberSummer work visits to Chudenko
In cooperation with the “Summer Science and Technology
Challenge” initiative being led primarily by the Gender Equality
Bureau Cabinet Office, the Company holds “Summer Work Visits
to Chudenko” targeting female junior and senior high school
students and female college students with an interest in fields
related to science and technology.
As an initiative to support their future career paths, wearrange our work visit programs and provide opportunities for theparticipants to have discussions with female engineers.

“Customer Appreciation Month” began as “Days of Magokoro(Sincerity)” in 1992, based on the idea that companies can growonly when they are trusted by local communities and local
people. Since 2004, the event has been held in November every
year with the new name “Customer Appreciation Days,” and theactivity period has been changed to one month from fiscal 2021.
Every year, each business location conducts the volunteer
activities in the local community such as cleaning roads and parks.

*A system that seeks to raise society’ s appreciation of technicians, foster
respect for them, raise technical standards, develop and pass on skills, andpromote the development of successors by certifying particularly competenttechnicians in Hiroshima Prefecture. As of July 19, 2022, 159 individuals in 32
different occupations are certified.

Running school

CHUDENKO Report 2022

44

S

ESG Initiatives

G

ESG Initiatives

Investment and Use of Intellectual
Property and Intangible Assets
Purpose of investment and utilization of
intellectual property and intangible assets
Chudenko considers intellectual property and intangible assets to be
the source of its corporate value. We strive to improve corporate
value through a virtuous cycle of investment and utilization of
intellectual property and intangible assets based on our “Policy on
Investment and Utilization of Intellectual Property and Intangible
Assets” in order to achieve the sustainable creation of high added
value, consistency with management strategy and management
issues, an effective execution system and pursuit of governance, andsecuring funds for further investment by improving corporate value.

Policy on Investment and Utilization of Intellectual
Property and Intangible Assets
In order to sustainably create high added value and improve
corporate value, we have established the following policy on
investment and utilization of intellectual property andintangible assets.
● Recognize intellectual property and intangible assets as
the source of corporate value, and promote initiatives thatare conscious of the acquisition, creation, and utilization of
intellectual property and intangible assets in all aspects ofbusiness activities.
● Make use of cutting-edge technology to engage intechnology development that promotes operational
reforms and operational improvements.
● Develop human resources who promote the acquisition,
creation, and utilization of intellectual property andintangible assets.
● Comply with laws and regulations to protect the
intellectual property and intangible assets owned by thecompany, and to respect and not infringe on theintellectual property and intangible assets of others.

Creation of a virtuous cycle to improve corporate value
Since intellectual property and intangible assets include industrial
property rights as well as technology, customer base, and trust,
we believe that our sales and construction activities, strengtheningof systems for the stable supply of electricity, and efforts to

expand order opportunities are business activities that enhancethe "Chudenko brand" and improve our corporate value.
On this basis, Chudenko reinvests the profits earned in thedevelopment of new technologies such as single-phasesynchronized power inverters (SSI), joint research with
universities, entry into new businesses such as the PPA business,
human resource development, education, and promotion of DX
to improve productivity, creating a virtuous cycle for theenhancement of corporate value.

Governance and risk management
To promote the investment and utilization of intellectual property
and intangible assets, we have appointed a person to oversee
the utilization and management of intellectual property andintangible assets in the “Sustainability Promotion Team.”
Furthermore, we are engaging in thorough risk management tominimize the impact of intellectual property risks, such as infringement/
aggrievedness, and leakage of rights, on our management.

Reference: Source of improvement of our corporate value
Item

Disclosed information

R&D expenses

FY2021: ¥225 million
FY2020: ¥235 million

Number of registered patents

78 (FY2021)

Number of registered customers

4,500 (as of September 2022)

Members of the Chudenko
Association

714 companies(as of September 2022)

Effect of improving sales
by strengthening urban areas(Breakdown of urban
area net sales)

FY2017
9.7%

Number of ZEB orders received

13 (cumulative up to September 2022)

Internal-consumption solar
power facilities (PPA project)
Power generation plan

FY202210MW➡

➡

FY202123.0%

FY202450MW

Reinvestment in new intellectual property and intangible assets

Corporate GovernanceOur company motto and mental foundation is a heart oftruthfulness, a heart of honesty with no ill feelings, a pure heart, aselfless heart. As a general equipment engineering company, we
have established a corporate philosophy that makes it our
mission to contribute to the development of society by creating
value added to everyday life and the business environment forour customers. Our corporate philosophy lays out the specificdirection for the Company.
Based on this philosophy, we will improve the efficiency andtransparency of our management and also enhance thesupervisory functions of our Board of Directors, internal audit
divisions, and corporate auditors with the aim of becoming acompany that is trusted by all our stakeholders.
Furthermore, we agree with the basic thinking behind theJapan’s Corporate Governance Code and pursue the best
possible corporate governance, working continually to enhance it.

Board of Directors / Management Policy Council
The Board of Directors is comprised of 11 directors (four ofwhich are independent outside directors). The meetings are, in
principle, held once a month and are attended by corporate
auditors. It makes decisions on important matters of businessexecution and supervises the execution of ESG duties bydirectors. To date, we have been gradually decreasing thenumber of directors and increasing the number of outside

Corporate governance structure
General Meeting of Shareholders
Appointment/
dismissal

Appointment/
dismissal

Appointment/
dismissal

ReportingBoard of Corporate Auditors
5 auditors

Inputs: Our strengths• Expanded order opportunities and secure profits
in the Chugoku region and urban areas• Construction track record with high technology

1 Includes two independent auditorsand one outside auditors.

Corporate
Auditors Office• Acquisition and accumulation of technology
and know-how• Earned trust from local communities
Output: Handover of deliverables• Handover of high-quality construction
properties• Stable supply of electricity and prompt
restoration in the event of a disaster• Provision of customer’s decarbonization support

45

CHUDENKO Report 2022

Outcomes

Inputs• Governance• Risk management• Information disclosure
OutputBusiness
activities

Business activities: Sales and construction activities• Sales activities in the Chugoku region andurban areas• Electricity, air conditioning, water supply, newconstruction of information communicationequipment, construction of building upgrades• Construction and maintenance of power facilities• Actively propose ZEB and PPA projects

2 Includes four independent
outside directors

Reporting

Reporting

ReportingExecution of business
Representative Director and President
Reporting

Reporting

ReportingInstruction/ordersDiscussion
Instruction/ordersInternal Control
Committee
Cooperation
Cooperation/
reporting

ReportingExamination
Department
Auditing

Corporate Ethics Committee
Nomination Advisory Committee
Remuneration Advisory
Committee

Appointment/dismissal and supervision

Instruction/orders• A track record of supporting the stable supplyof electricity• Efforts to expand business foundations in
the Chugoku region and business in urban areas

AdviceReporting on executionof business

Cooperation

Accounting
AuditorBoard of Directors
11 directors

Auditing

Auditing

Outcome: Acquisition of profits, etc.

directors to ensure flexible operations of the Board of Directors
and improve its efficiency and dynamism.
In addition, to enhance the independence, objectivity, andaccountability of the functions of the Board of Directors, mattersof officer candidate nomination and director remuneration arereferred to the Nomination Advisory Committee and theRemuneration Advisory Committee, both of which more than halfof the members are independent officers. This ensures greater
objectivity and transparency in the decision-making process.
Furthermore, the term of office for directors is one year to clarify
their management responsibilities in that fiscal year.
Remuneration for corporate auditors is referred to theRemuneration Advisory Committee and determined with thecooperation of the Board of Corporate Auditors.
With regard to execution of business, such matters are left
up to the Representative Director and President to the extent
possible. However, important matters related to management,
including matters to be discussed at Board of Directors
meetings, are discussed at Management Policy Council
meetings, which are held at least once a month in principle andattended by the Chair, President, managing executive officers,
and corporate auditors.
At the same time, a managing executive officer/executive
officer system has been adopted. This delegation of executive
authority enhances the business execution function andaccelerates decision-making while also clarifying businessexecution responsibilities. Moreover, it improves the efficiency ofdecision-making and business execution by the Board of Directors.

Basic stanceInternal auditing

Management
Policy Council

Executive Vice President / General Managers
Supervising
Branches /Branches,
Tokyo/ Osaka
Headquarters,
Electric Power
Construction OfficeInstruction/
guidance

ReportingInstruction/ordersDepartments in head office
Reporting
ReportingInstruction/
guidance

Group companies

CHUDENKO Report 2022

46

G

ESG Initiatives

Board of Corporate Auditors
The Board of Corporate Auditors is comprised of five members(three of which are outside auditors) and establishes audit
policies and plans.
Corporate auditors audit the execution of duties by directors
based on the audit policies and plans established by the Boardof Corporate Auditors. In addition, the corporate auditors receive
regular reports from the accounting auditor on audit plans andresults and observe audits conducted by the accounting auditor.
By sharing information and opinions in a timely manner andenhancing coordination, they seek to improve the quality andefficiency of audits.
Furthermore, the corporate auditors receive reports from the
Examination Department, which is an internal audit division, on
examination and inspection plans as necessary. By sharing
information and opinions in a timely manner and enhancing
coordination, they seek to improve the quality and efficiency of audits.
Individuals who have knowledge related to finance, accounting,and legal affairs are also appointed as corporate auditors.

Outside officers
There are four outside directors and three outside corporate auditors.
The four outside directors are independent officers. By
having them share information and provide opinions from aneutral and objective standpoint not only at Board of Directors
meetings but also Executive Management Council meetings,
which is attended by directors, corporate auditors, generalmanagers, and branch managers, the Company is working torevitalize the Board of Directors and enhance its management
supervision function. In addition, meetings are held at least oncea year for outside directors to share opinions with representative
directors and corporate auditors, and the Company is working toenhance the ability of outside directors to gather information byhaving corporate auditors provide reports to them on audit results.
Outside corporate auditors conduct audits from a neutral
and objective standpoint. They gather information on the statusof audits by corporate auditors, the accounting auditor, and the
Examination Department as well as on the content of important
meetings through the Board of Corporate Auditors and shareopinions to conduct audits.

Support system for outside directors andoutside corporate auditors
Outside directors
The Board of Directors Secretariat (General Affairs Department[in charge of secretarial affairs]) takes the lead in providing
advance notice of the annual schedule of Board of Directors
meetings. It sends the materials for the meeting in advance, andprovides an overview of the agenda as appropriate. If an outside
director is absent from the meeting, a summary report is provided

47

CHUDENKO Report 2022

to them based on the minutes.
In addition, information is provided as necessary, including
emails containing information on press releases and otherdevelopments at the Company.
We are working to provide outside directors with thenecessary information as appropriate, including by having themattend Management Executive Council meetings and participate
in various events and sending them meeting materials.
Outside corporate auditors
The Corporate Auditors Office has been established specificallyto provide assistance to corporate auditors and supports general
operations related to corporate auditors, including outside
corporate auditors.

Internal audits
Nine dedicated staff members are allocated to the Examination
Department, which conducts internal audits.
The department establishes an examination and inspection
plan for the purpose of increasing management efficiency andimproving operations based on the primary aim of themedium-term management plan. It then investigates the status ofcorporate operations from the standpoint of compliance andappropriateness and provides a report on its findings andsuggestions to the president and Management Policy Council.
In addition, the department conducts an independent
assessment of matters requiring improvement within the internal
control system and provides a report to the Internal Control
Committee.
In addition, the Examination Department appropriately
provides information on the results of internal audits to thecorporate auditors, and regularly reports the plans and results ofinternal audits to the Board of Corporate Auditors.

3. Policy on determining the amount or method of
calculating individual remuneration and timing of
payment
a. Policy related to director remuneration

Officer remuneration
The amount, method of calculation, and policy for determining
officer remuneration are detailed below.

○ Basic remuneration

The amount of individual remuneration is determined basedon criteria that are established by position according to roleand responsibility and is paid in cash monthly.

1. Basic thinking on officer remuneration• Provide an appropriate amount as basic remuneration forthe performance of duties.
• Build a remuneration structure that leads to ongoing
improvement to corporate value.
• Ensure that the compensation structure is easy forshareholders and other stakeholders to understand.

○ Performance-linked remuneration

2. Basic policy on officer remuneration
a. Basic policy on director remuneration
Director remuneration consists of basic remuneration,
which is fixed, and performance-linked/stock price-linked
remuneration, which are variable.
From the standpoint of their role and independence,outside directors are only paid basic remuneration.
• Provide basic remuneration for the performance of duties.
• Provide performance-linked remuneration to further
incentivize improvement of short-term performance.
• Provide stock price-linked remuneration to incentivize
improvement of medium- to long-term performance andaim for improvement of the stock price.

○ Stock price-related remuneration

This remuneration system varies according to consolidated
operating profit.
The amount of individual remuneration is determined basedon the criteria that at each level of consolidated operating
profit, standard remuneration amounts are establishedaccording to position, and these are then adjusted
according to the level of the individual’s contribution
through the performance of their duties. The amount is paidin cash at the end of the individual’s term of office in Juneof every year.
Restricted stock remuneration is paid to directors.
The number of shares to be paid to each individual isdetermined based on the amount equivalent to the shares
granted by position according to role and responsibility andthe stock price on the business day prior to the date of theresolution by the Board of Directors related to allocation ofshares. Every year, the Board of Directors passes a
resolution on the allocation of shares within one month of
appointment of directors, and the shares are paid within
one month of the date of the resolution.

b. Basic policy on corporate auditor remuneration
Corporate auditor remuneration consists only of basic
compensation, which is fixed, in light of their role.
• Provide basic remuneration for the performance of duties.

b. Policy related to corporate auditor remuneration.
The amount of individual remuneration is determined basedon criteria that are established by position according to roleand responsibility and is paid in cash monthly.

Accounting audits
Deloitte Touche Tohmatsu LLC has been appointed as theaccounting auditor of the Company. Two certified public
accountants execute accounting audits for the Company. They
are assisted by five other certified public accountants and 12
others. The Board of Corporate Auditors takes appropriate steps
to ensure proper audits. These include helping the accounting
auditor recognize its responsibilities through the selection
procedures and sharing information as necessary.
The accounting auditor and the president engage in regular
discussion (at least once a year) and meet as necessary whenrequested by the accounting auditor.

Total amount of director and corporate auditor remuneration in FY2021

Performance-linked remuneration table
Consolidated
operating profit level

Total amount of remuneration by category(millions of yen)

Officerclassification

Directors(Outside
directors)

Corporate
auditors(Outside corporate
auditors)

Total amount of
remuneration(millions of yen)BasicremunerationStockprice-linked
Performanceremuneration
linkedcompensation Restricted stock
remuneration

Numberof officers
eligible forremuneration

345

200

108

36

14

(21)

(21)

(−)

(−)

(5)

68

68

−

−

5

(16)

(16)

(−)

(−)

(3)

Remuneration
amount¥12 billion or above

Up to ¥230 million¥8 billion–Less than ¥12 billion

Up to ¥190 million¥6 billion–Less than ¥8 billion

Up to ¥155 million¥4 billion–Less than ¥6 billion

Up to ¥125 million¥2 billion–Less than ¥4 billion

Up to ¥80 million¥1 billion–Less than ¥2 billion

Up to ¥40 million

Less than ¥1 billion

0

Note: Performance-linked remuneration is paid to
directors, excluding outside directors.

CHUDENKO Report 2022

48

G

ESG Initiatives

4. Policy on determining the percentages of individual
remuneration
The ratio of basic remuneration to variable remuneration(performance-linked and stock price-linked renumeration) for
directors (excluding outside directors) is around 5:1–5 so thatthe remuneration functions effectively as an incentive tocontinually improve corporate value.
Outside directors and outside corporate auditors are only
paid basic remuneration.
5. Method of determining individual remuneration
To enhance the transparency and objectivity of the process fordetermining basic remuneration and performance-linked
remuneration for directors, remunerations deliberated on by
the Remuneration Advisory Committee, which is comprised ofmore than a majority of independent officers, and thendetermined by the Representative Director and Chair and theRepresentative Director and President, who are tasked withdoing so by the Board of Directors. Stock price-linked
remuneration is determined by the Board of Directors basedon the deliberations of the Remuneration Advisory Committee.
Basic remuneration for corporate auditors is determinedwith the cooperation of the Board of Corporate Auditors basedon the deliberations of the Remuneration Advisory Committee.

Corporate Ethics Committee
With regard to corporate ethics, the Group has established aCompliance Policy that fleshes out the code of conduct of the
Corporate Philosophy and serves as the model for employee
behavior. In addition, basic matters related to efforts to promote
corporate ethics have been set forth in the Corporate Ethics
Rules, and a Corporate Ethics Committee has been establishedto ensure the fairness of business activities and allow the Groupto maintain and improve the trust it has received fromshareholders, customers, local communities, and others.
Moreover, we established a Corporate Ethics Helpline to fieldquestions and concerns regarding legal violations or corporate
ethics-related problems occurring in the course of carrying out
operations.
The Corporate Ethics Committee is comprised of the Chair,
the President, the Vice-President, and three outside experts. In
principle, it meets twice a year and is attended by corporate
auditors. It deliberates on matters related to promoting corporate
ethics awareness and reports on the content and results to theBoard of Directors.

internal control throughout the Group have been set forth in theInternal Control Rules, and an Internal Control Committee has
been established.
The Internal Control Committee is comprised of the
President, the General Manager of the Planning Division, theGeneral Manager of the Administration Division, and the General
Manager of the Examination Department. In principle, it meets
three times a year and is attended by corporate auditors. It
deliberates on matters related to the enhancement andpromotion of internal control and reports on the results to theManagement Policy Council. It also refers the important mattersto the Board of Directors.

Disclosure of information to shareholders/investors
At least once a year
Most recent events
Regular IR conferences
for individual investors● December 14, 2022 Company explanatory meeting for individual investors

The president explained the business performance, medium-term management plan,shareholder returns, and other matters through a live webcast. A recording of the video will be
distributed on the web at a later date.
Held regularly, twice a year
Most recent events

Status of preparation of structure for ensuring
appropriateness of Group company operations
The Corporate Planning Department, which is the section thatoversees Group companies, provides appropriate instruction andsupport related to compliance, the promotion of appropriate
business activities, and the establishment of a compliancestructure at Group companies. Meanwhile, the Corporate Ethics
Helpline has been established by the Company, which accurately
addresses consultations and reports and is also available toemployees of Group companies.
The Examination Department audits Group companies andprovides instruction and guidance, while corporate auditors of
the Company conduct investigations of Group companies asnecessary and request reports on audits from the corporate
auditors of Group companies.
As for the preparation of a structure for promoting risk
management within the Group, the related departments of theCompany coordinate to provide appropriate instruction and support.
In addition, we have established Group Management
Guidelines, and when group companies make decisions onimportant business matters, they seek the cooperation of theCompany as necessary. In the event that something happens or
is expected to happen that will have a serious impact on groupmanagement, they are asked to provide a report to the Company.

Regular IR conferences
for analysts andinstitutional investors

Publishing of IR materials
on website● May 31, 2022 FY2021 Financial results briefing● November 25, 2022 Financial results briefing for 2Q FY2022

The president explained the business performance, medium-term management plan,shareholder returns, and other matters through a live webcast. A recording of the video will be
distributed on the web at a later date.
We publish shareholder and stock information (General Meeting of Shareholders, Articles ofIncorporation, dividends, shareholders memos, etc.), Integrated Report (Chudenko Report),
consolidated financial results, securities reports / quarterly reports, financial results briefing
materials / company information session materials, business reports (IR communications),
and other IR materials (such as notices of revision of performance or dividend forecasts) on
our website.
IR information https://www.chudenko.co.jp/info/

Internal Control Committee
With regard to internal control, the Board of Directors decided ona basic policy for building an internal control system and has
prepared a structure so that the Chudenko Group can cometogether and promote appropriate business activities. Based on
this basic policy, the basic matters for enhancing and promoting

49

CHUDENKO Report 2022

CHUDENKO Report 2022

50

G

ESG Initiatives

Management Team
Director

Statutory Auditor
2012.62013.62015.62016.42016.62018.62022.6

Managing Director; Deputy General Manager, Power
Generation Division; General Manager, Property Management
Division, The Chugoku Electric Power Company, Incorporated
Managing Director; Deputy General Manager, Power
Generation Division; Head, Kaminoseki Nuclear Power Plant
Siting Project
Representative Director and Vice President; Deputy General
Manager, Power Generation Division; Head, Kaminoseki
Nuclear Power Plant Siting Project
Representative Director and Vice President; General Manager,
Power Generation Division; Manager, Kaminoseki Nuclear
Power Plant Siting Project
Representative Director and Vice President & Executive Officer;
General Manager, Power Generation Division
Representative Director and President, Chudenko
Representative Director and Chair of the Board of Directors,
Chudenko (current position)

Akira Sakotani

2011.6

Takafumi
ShigetoRepresentative Director
and ChairRepresentative Director
and President

1975.42008.72011.72013.62015.62016.62019.62020.62021.62022.6

Kiyofumi Ueno
Representative Directorand Executive Vice
President

Joined Chudenko
General Manager, Construction Department,
Tokyo Headquarters
General Manager, Sales Department, Tokyo Headquarters
General Manager, Sales Department, Sales Division
Executive Officer and General Manager, Sales Division
Managing Executive Officer and General Manager,
Tokyo Headquarters
Director, Managing Executive Officer, and General Manager,
Engineering Division; Responsible for Tokyo Headquarters
Director, Senior Managing Executive Officer, and General
Manager, Engineering Division; Responsible forTokyo Headquarters
Representative Director, Senior Managing Executive Officer,
and General Manager, Engineering Division; Responsible forTokyo Headquarters
Representative Director, Executive Vice President,
General operations
In charge of Sales Division, Examination Department, Safety,
Sanitation, Quality, and Environmental Department andPurchasing Department (current position)

Executive Officer and Manager, Okayama Branch,
Chugoku Electric Power Company, Incorporated
Senior Executive Officer; General Manager, Property
Management Division
2014.6 Executive Officer and Manager, Tokyo Branch2016.6 Managing Executive Officer; General Manager,
Compliance Promotion Division; General Manager,
Property Management Division
2017.6 Director, Managing Executive Officer; General Manager,
Compliance Promotion Division; General Manager,
Property Management Division
2017.10 Director, Managing Executive Officer; General Manager,
Compliance Promotion Division; General Manager,
Examination Department; General Manager,
Property Management Division
2019.6 Statutory auditor, Chudenko
2019.6 Director; Managing Executive Officer; General Manager,
Regional Co-creation Division, The Chugoku Electric Power
Company, Incorporated
2020.6 Representative Director and Vice President & Executive Officer;
in charge of personnel development; General Manager,
Procurement Division; Manager, Nuclear Power Plant
Reinforcement Project2022.6 Representative Director and President, Chudenko(current position)
1987.92014.72016.62017.62019.62022.6

JitsuoTaniguchi

2017.62018.62020.6

Joined Chudenko
General Manager, Business Creation Department
General Manager, Business Creation Department I,
Planning Division
Executive Officer and General Manager, Business Creation
Department I, Planning Division
Managing Executive Officer and General Manager,
Okayama Supervising Branch
Director, Managing Executive Officer, and General Manager,
Planning Division (current position)

1987.42014.62016.62019.62021.62022.6

Hideaki Oba
Director andManaging Executive Officer

51

CHUDENKO Report 2022

2009.42019.42020.42021.62022.4

Naoto Yorino
Director(Outside director)

1981.42011.62013.62014.62016.62019.6

Standing Auditor

1981.42012.7
Executive Officer and in charge of Corporate Planning Group,
Head Office Administration Division, Tenmaya Co., Ltd.
2013.5 Director and in charge of Corporate Planning Group,
Administration Division
2014.4 Director and General Manager, Corporate Planning Division
2016.1 Director, General Manager, Sales Division, and General
Manager, Okayama Main Store2017.2 Director, General Manager, Department Store Business
Division, and General Manager, Okayama Main Store2017.5 Managing Director, General Manager, Department StoreBusiness Division, and General Manager, Okayama Main Store2017.12 Representative Director and President, General Manager,
Department Store Business Division
2019.2 Representative Director and President, General Manager,
Department Store Business Division, and General Manager,
Corporate Division
2021.6 Director, Chudenko (current position)
2022.4 Director, Tenmaya Co., Ltd. (current position)2016.62012.32019.62020.62017.72019.62021.6

Statutory Auditor

2018.62019.62019.6

Managing Director, Hiroshima Bank, Ltd.
Senior managing director
Representative Director and Chair, Hirogin Utsumiya Securities
Co., Ltd. (currently Hirogin Securities Co., Ltd.)
Representative Director and Chair and President, Hirogin
Securities Co., Ltd.
Representative Director and Chair
Auditor, Hirogin Securities Co., Ltd.
Auditor (current position)

Kazuhiro
TakeuchiAuditor (Outside)
1988.4

Seiji Kawakami

Haruko Murata

Director andManaging Executive Officer

Director(Outside director)

Director, General Manager, Business Logistics Division,
Mazda Motor Corporation
Director and General Manager, Production Engineering Division
Executive Officer and General Manager, Production
Engineering Division
2003.6 Executive Officer and General Manager, Quality Division
2007.4 Managing Executive Officer and in charge of Quality Assuranceand Environment
2008.4 Managing Executive Officer and General Manager,
Domestic Business Division
2008.11 Managing Executive Officer, in charge of Domestic Business,
and General Manager, Domestic Business Division
2011.4 Managing Executive Officer and in charge of Domestic
Business and Fleet Sales
2012.6 Managing Executive Officer and in charge of Domestic
Business, Fleet Sales, and Customer Service
2013.6 Director, Senior Managing Executive Officer, oversight ofOperations in China, Domestic Sales, Fleet Sales No. 1,
Chairperson of Mazda Motor (China) Co., Ltd.
2015.6 Director, Senior Managing Executive Officer, oversight ofOperations in China Domestic Sales, Fleet Sales No. 1, incharge of Global Auditing, Chairperson of Mazda Motor (China)
Co., Ltd.
2016.4 Director, Senior Managing Executive Officer, oversight ofOperations in China, Domestic Sales, Fleet Sales, and in
charge of Global Auditing2017.4 Director, Senior Managing Executive Officer, oversight ofOperations in China, Domestic Sales, Fleet Sales
2019.6 Special Advisor
2020.6 Director, Chudenko (current position)

Joined Chudenko
Deputy Head, Accounting Department; Manager in charge ofFinance Section
Executive Officer; General Manager, Accounting Department,
Planning Division
Executive Officer; Deputy General Manager, Planning Division;
General Manager, Finance Department, Planning Division
Statutory Auditor (current position)

HiroshiMatsunaga
2010.62013.62015.6

1989.4 Joined Toto Kiki Co., Ltd. (now TOTO Co., Ltd.)
1992.11 Joined Kagawa Gakuen
2011.7 Joined AYUMI Audit Corporation
2012.8 Registered as Certified Public Accountant (current position)2012.11 Registered as Certified Public Tax Accountant(current position)2012.12 Established Murata Haruko Accounting Firm (current position)2017.7 Employee, Choshu Audit Corporation
2021.6 External Director, DaikyoNishikawa Corporation(current position)
2021.6 Director, Chudenko (current position)

Joined Chudenko
General Manager, Tsuyama Business Office
General Manager, Distribution Department, Okayama
Supervising Branch
Deputy General Manager, Distribution Department,
Electricity Division
Executive Officer, Deputy General Manager, Electricity Division,and General Manager, Distribution Department, Electricity
DivisionManaging Executive Officer, Deputy General Manager,
Electricity Division, and General Manager,
Distribution Department, Electricity Division
Director, Managing Executive Officer, General Manager,
Electricity Division and General Manager, Distribution
Department, Electricity Division
Director, Managing Executive Officer, General Manager,
Electricity Division (current position)

Joined ChudenkoManager, Secretarial Office; General Manager, Human
Resources Department
Executive Officer; Manager, Secretarial Office; General
Manager, Human Resources Department
Director and Executive Officer; Manager, Secretarial Office;General Manager, General Affairs Department, in charge of
Human Resources
Director, Managing Executive Officer; General Manager,
Administration Division
Standing auditor (current position)

Hidefumi Ogata

2017.6

1987.42014.72016.7

Joined Chudenko
General Manager, Corporate Planning Office
General Manager, Corporate Planning Department,
Planning Division
Executive Officer and General Manager of Kurashiki BranchManaging Executive Officer and General Manager,
Administration Division
Director, Managing Executive Officer, General Manager,
Administration Division (current position)

2022.4

Joined Fuji Electric Manufacturing Co., Ltd.
Research Assistant, School of Science and Engineering
Assistant, Waseda University
Research Associate, School of Engineering, Hiroshima
University
Associate Professor, School of Engineering
Visiting Researcher, McGill University, Canada
Professor, Graduate School of Engineering, Hiroshima
University
Vice-Dean, Graduate School of Engineering
Vice-Dean, Graduate School of Engineering, and Vice-Dean,
School of Engineering
Professor, Graduate School of Advanced Science andEngineering
Director, Chudenko (current position)
President, National Institute of Technology (KOSEN), Kure
College (current position)
Specially Appointed Professor and Honorary Professor,
Graduate School of Advanced Science and Engineering,
Hiroshima University (current position)

Director(Outside director)

2022.6

Director andManaging Executive Officer

1990.6
1991.42005.4

Shigeki Ekuni

2022.6

Takakazu
Higashioka

1987.4

Joined Chudenko
General Manager, Miyoshi Sales Office
General Manager, Air-Conditioning Piping Engineering
Department, Engineering Division
Executive Officer and General Manager, Air-Conditioning Piping
Engineering Department, Engineering Division
Director, Managing Executive Officer, and General Manager,
Sales Division
Director, Senior Managing Executive Officer, and General
Manager, Engineering Division, in charge of Tokyo
Headquarters (current position)

Director andSenior Managing
Executive Officer
1983.42014.72016.6

1983.4
1985.42013.6

1997.42019.6

Registered with the Hiroshima Bar Association (current
position), joined Magokoro Law Office
Joined Himawari Law Office (current position)
Auditor (current position)

2001.6
2002.3
2002.6

Nobuhide
InamotoDirector(Outside director)

Kumi Iioka
Auditor (Outside)

2011.62013.62015.62018.62020.62022.62022.6(Secretary) General Manager, Compliance Promotion Division,
The Chugoku Electric Power Company, Incorporated
Executive Officer, (Secretary) General Manager, Compliance
Promotion Division (Secretary)
Executive Officer, (Compliance) General Manager, Compliance
Promotion Division
Managing Executive Officer; General Manager, Human
Resources Revitalization Division
Director; Managing Executive Officer; General Manager,
Human Resources Revitalization Division
Representative Director, Executive Vice President, in charge of
Human Resources Development; Manager, Procurement
Division; Manager, Nuclear Power Reinforcement Project(current position)
Auditor, Chudenko (current position)

Toshio Takaba
Auditor (Outside)

CHUDENKO Report 2022

52

G

ESG Initiatives

Messages From Outside Directors
Based on our philosophy, we will improve the efficiency and transparency of our management and also enhance the supervisory

Q The effectiveness of the Board of Directors

functions of our Board of Directors, internal audit divisions, and corporate auditors with the aim of becoming a company that is

How do you rate Chudenko’s corporate governance?
Also, please tell us from what perspective you speak at Board of Directors meetings.

trusted by all our stakeholders.
We spoke with Haruko Murata, Shigeki Ekuni, and Naoto Yorino, who were newly appointed as outside directors in fiscal 2021.

Q The effectiveness of the Board of Directors
How do you rate Chudenko’s corporate governance?
Also, please tell us from what perspective you speak at Board of Directors meetings.

Haruko Murata
Director (outside director)
Ms. Murata has a high level of insightbased on her extensive experience as
certified public accountant and tax
accountant as well as her expertise in
the field of accounting and tax matters.
Appointed as a director of
Chudenko in June 2021, also serves
as a member of the Nomination
Advisory Committee andRemuneration Advisory Committee.

Simply put, Chudenko's Board of Directors is alive and well. It’s been about a year since I became an
outside director, and I feel that the Board of Directors has become an extremely active meeting body, withmany constructive opinions coming from outside directors who have diverse perspectives. Executives havealso responded sincerely to each of these diverse opinions, and over the past year have restructured andreorganized processes and established new mechanisms.
We will continue to supervise the company from an objective perspective to ensure that it is an
institution that can realize sustainable growth and enhance corporate value by verifying risk-taking andmaking rational decisions in response to the challenges it faces.
In order to improve corporate value and realize sustainability, we have been focusing on addressing
climate change as one of our key themes over the past year. I feel that the key issue for the future is how to
exhibit Chudenko’s presence in society, which is essential for the growth of the company in the future, andto uncover value that even we are not yet aware of and return it to the market.

Shigeki Ekuni
Director (outside director)
Mr. Ekuni has a high level of insightbased on his extensive experience asa corporate manager at Tenmaya Co.,
Ltd. Appointed as a director of
Chudenko in June 2021, also serves
as a member of the Nomination
Advisory Committee and Remuneration
Advisory Committee.

Q Future challenges and aspirations
What do you think is the most important thing for Chudenko to increase its
corporate value?
In today’s rapidly changing competitive environment, I believe that diverse and creative thinking is thesource of sustainable growth. Although the empowerment of women is only one part of our diversity
activities, it is a challenge that we at Chudenko must overcome for minorities, who represent the largest
percentage of our workforce and are close to our hearts. Many women tend to shy away from key positions
in a corporate culture that has been created mainly by men due to anxiety and pressure. Understanding
this, it is essential to first create an environment that fosters the groundwork for women to take the first step
forward. While it is important to establish systems and numerical targets, I believe that management's keyrole is to respect all employees, not just women, and at the same time provide them with opportunities tomaximize their potential.

What do you think is the most important thing for Chudenko to increase its
corporate value?

Q The effectiveness of the Board of Directors
How do you rate Chudenko’s corporate governance?
Also, please tell us from what perspective you speak at Board of Directors meetings.

Director (outside director)
Mr. Yorino has a high level of insightbased on his many years ofexperience as a graduate school
professor and his expertise in the fieldof power systems engineering.
Appointed as a director of Chudenko
in June 2021, also serves as amember of the Nomination Advisory
Committee and Remuneration
Advisory Committee.

CHUDENKO Report 2022

Q Future challenges and aspirations

While there are both traditional and new business domains, new businesses such as carbon neutrality andrenewable energy are expected to grow rapidly. I believe that by being quick to address these issues, wewill not only change the mindset of our employees, but also increase the significance of Chudenko’s
existence outside of the company. Chudenko’s strength lies in its solidity and sincerity, but we should be
more proactive in taking on challenges that will lead to the dreams and significance of Chudenko. In
addition, in order to overcome the uncertain times, we should focus on how to develop talent and where toinvest our management resources.

Naoto Yorino

53

As Chudenko is listed on the prime section of the Tokyo Stock Exchange, I am naturally impressed andreassured that the Board of Directors operates properly in accordance with its Articles of Incorporation andregulations. I feel that governance is effective, with a wide range of discussions and comments from various
perspectives, including those from outside officer. I have many opportunities to come into contact withcustomers, so I make my comments one at a time with an emphasis on the customer. I am grateful for the
many opportunities provided for our outside officers to learn about Chudenko’s operations, such asadvance explanations of board meeting materials and site tours of workplaces and offices.
At board meetings, I pay attention to how the company ensures that the rules are firmly in place in theevent of an emergency or when ensuring that employees are fully aware of the rules. I also try to ask myself
whether the rules themselves are appropriate for the current era and whether they are truly necessary. In
addition, when we decide on policies and objectives, I focus on whether all employees are working on thesepolicies and objectives as if they were their own.

From my perspective as an academic, I believe that the management of Chudenko is sound. Outside
officers can speak freely at the Board of Directors meetings, and their opinions are properly reflected in the
management. Although there were no major issues that required discussion by the Nomination Advisory
Committee or the Remuneration Advisory Committee in fiscal 2021, I believe that their functions ascommittees have been secured because there is an atmosphere that allows open and frank discussion.
As for my position, I am involved in school management as the principal of a national institute oftechnology technical college, and I am also involved in research and education of electrical engineering at auniversity, interacting with people in electric power-related industries. On the other hand, I have noexperience in corporate management, so I consider it my role to pay attention to various viewpoints fromoutside the company and to speak from a different perspective from other outside officers. I have been
cautious in the past, but now that I am in my second year, so I would like to proactively speak out on
matters that I believe will benefit Chudenko, even if my views may differ slightly from those of the other officers

Q Future challenges and aspirations
What do you think is the most important thing for Chudenko to increase its
corporate value?
The themes I am particularly conscious of are carbon neutrality, social contribution as a company to SDGs,
and strategies on how to enhance the attractiveness and value of the company. Chudenko’s core business,
equipment work, is in a competitive environment, so it is important for us to have unique technologies basedon our core business that only Chudenko can offer, in order to maintain our competitive advantage in the
future. Since the company has solid management in its core business, I have high expectations for thecompany to take further steps toward technological development and future business development, in
addition to growth investments such as M&As.

CHUDENKO Report 2022

54

G

ESG Initiatives

Compliance
Compliance policy
One of our highest management priorities is to continuously
engage in fair and appropriate operational management inaccordance with compliance. We have established aCompliance Policy that goes into more detail on the fourth
corporate guideline of our Corporate Philosophy, which is to“stick to social rules and be mindful of common sense in one’s
actions,” in order to serve as a code of conduct for our officers
and employees.
Based on our Compliance Policy, we are promoting
corporate activities that prioritize compliance within themedium-term management plan.

purpose of deepening individual understanding of the importanceof compliance and share a thorough awareness of compliancethroughout the Group companies.
We are also working to instill awareness that the Corporate
Ethics Helpline is a tool to protect the Company and our
employees.

Compliance education throughout
Group companies
The Compliance Division and in collaboration with the corporate
ethics leaders of each workplace conduct compliance education
for all officers and employees (including contract and temporary
employees), including those of Group companies with the

A class at a Group company

Risk Management
Business risks
Below are the main types of risks recognized as having thepotential to affect the financial condition, business performance,and cash flows of consolidated Group companies.
These risks were identified based on the degree of impact
and frequency of occurrence during the course of the Group’s
regular brainstorming, evaluation, and review of countermeasures.
There are other risks in addition to these, such as credit risk
related to business partners, and the risk of a drop in the market
value of securities holdings.
1. Risk of quality defects
In the event of a serious quality problem arising from humanerror in the design or construction stage of building equipment
work or the planning or manufacturing stage of our products, it
could result in a heavy cost burden associated with repairs or aclaim for damages due to construction or delivery delays, andthe suspension of business in conjunction with this could
significantly damage the Group’s credibility or reputation,
impacting performance.

55

CHUDENKO Report 2022

2. Risk of legal or compliance violations
In the event that a business operation or process is carried outthat runs contrary to the Construction Business Act, theIndustrial Safety and Health Act, or other related laws or that
violates compliance, it could result in a criminal penalty,suspension of business, loss of social credibility, hefty fine orclaim for damages, which in turn could significantly damage theGroup’s credibility or reputation, impacting performance.
3. Risk of decline in orders received
In the event of a significant decline in orders received because offactors such as a decrease in capital investment by the Chugoku
Electric Power Group, which is a major business partner of the
Chudenko Group, and by another private company or
government agency, the Group may be unable to secure thenecessary orders, impacting performance.
4. Risk of work or traffic accidents
The Group has many construction sites and has implemented
measures to prioritize safety, but in the event of a work or traffic
accident despite those measures, it could result in compensation
for human loss or victims, judicial or administrative penalty, orloss of social credibility, which in turn could significantly damage
the Group’s credibility or reputation, impacting performance.

5. Information security risk
The Group possesses business partner information and otherconfidential information, and in recent years, there have been
many cases of companies falling victim to unauthorized accessand cyberattacks.
In the event that such information were to be leaked or lost
due to human error, technical error or unforeseen circumstances,
it could result in a hefty claim for damages, suspension ofbusiness, or loss of social credibility, which in turn could
significantly damage the Group’s credibility or reputation,
impacting performance.
6. Risks related to M&As and business investments
The Group engages in M&As and invests in businesses for the
purpose of expanding our business and enhancing ourcompetitiveness centered on equipment work, which is our
main business.
However, in the event that we were unable to recover ourinvestment or additional expenses were to be incurred due to not
being able to develop the acquired or invested businessaccording to plan despite the preliminary investigation andreview, there could be an impact on the Group’s performance.

Business continuity plan (BCP)
Being involved in the supply of electricity, we are charged with avital mission by our customers and society in general. Therefore,
it is extremely important that we make preparations for disasters.
As such, we have established a business continuity plan bothfrom the short-term perspective of preventing suspension of ourbusiness in the event of a disaster and the long-term perspectiveof preventing bankruptcy following a disaster. We regularly
conduct training in anticipation of a major earthquake, such asverification of the emergency contact system and safety
confirmation, so that our officers and employees understand theirrespective roles.

7. Risk of natural and other disasters
The Group has many workplaces in Japan and other countries.
Large-scale natural disasters such as earthquakes,
tsunamis, and typhoons, and the spread of novel viruses andother infections could not only cause direct damage toemployees and facilities but could also result in indirect damages
such as interruptions and congestion in the distribution andtransportation network and even sluggishness or confusion insociety and the economy.
This, in turn, could result in an interruption or delay inbusiness activities, impacting the Group’s performance.
8. Risks related to increased construction costs
The Group strives to reduce costs and secure profits throughrepeated cost reviews before receiving orders and during
construction, but if the cost of construction increases due to asignificant rise in material costs or subcontracting costs thatcannot be reflected in the contract amount, profitability could
deteriorate, impacting the Group’s performance.

Training at Head Office (Special Emergency Response Headquarters)

9. Risks related to securing and training human resources
In the Group’s equipment work business, which is its main
business, the labor force is aging due to a decrease in new
employment and high turnover rates. Therefore, securing people
to take over is a pressing issue. In the event that the Group isunable to secure human resources with the required national
qualifications and skills when they are needed, insufficientconstruction capabilities could result in a failure to secure sales,
impacting the Group’s performance.

CHUDENKO Report 2022

56

Corporate Information

11-Year Financial Summary (Consolidated)
Unit: Millions of yen

FY2011FY2012FY2013

FY2014FY2015FY2016FY2017FY2018FY2019FY2020

FY2021

110,332
95,814
14,517
14,668
–150
2,060
50
1,859
36
3,621
–1,726–3,121

118,038
100,597
17,44014,197
3,243
2,796
94
5,946
704
2,827
3,822
1,665

136,396
119,376
17,019
9,788
7,231
10,71887
17,861
107
123
17,844
13,502

145,547
126,062
19,485
10,054
9,430
6,748
48
16,13030
502
15,658
10,492

147,752
126,326
21,425
10,448
10,9773,885
58
14,8041,350
318
15,836
10,889147,935
126,556
21,37911,703
9,675
2,285
90
11,871
1,659
285
13,246
9,273

148,300
127,540
20,75912,224
8,535
3,338
129
11,74497
208
11,632
7,809

153,322
133,986
19,335
12,848
6,486
2,504
69
8,921
1,837
911
9,848
6,160

168,888
147,620
21,26812,934
8,333
2,956
101
11,188
1,240
3,292
9,136
4,795

184,482
159,078
25,404
15,921
9,482
2,556
139
11,8991,004
85
12,818
8,119

190,690
165,114
26,239 *3
15,813
10,425 *3
1,947 *3
413
11,95942881
11,1196,682

216,241
175,932
2,419
49
2,063
80.8%

226,968
188,152
1,961
42
2,154
82.4%

248,314202,804
4,571
88
2,303
81.1%

261,858
216,047
3,776
97
2,601
81.8%

260,073
215,058
3,802
170
2,678
81.9%

263,618
217,013
3,264
178
2,790
81.5%

269,875
222,373
4,589
332
2,862
81.8%

267,181
218,036
3,811
240
2,960
80.2%

274,976 *2
212,043
2,279
156
2,776
75.7%*2

276,519
218,747
2,151
235
2,839
77.6%

279,725
216,329
2,537
225
2,823
76.2%

–2,6032,217–930
24,8867,371
7,686–2,37337,581

8,685
12,411–2,59556,095

5,142–12,761–2,75945,724

10,4609,339–7,43658,314

10,719–1,231–9,20758,5806,700–6,499–5,05553,74010,126–25,559–5,71232,566

11,835–15,725–6,43822,242

9,116
6,344–7,18230,477

7,968– 4,326– 8,516
25,6792,974.30–53.1320—

3,181.27
28.35
20
70.5%

3,426.03
229.8130
13.0%

3,638.40
178.2962
34.8%

3,654.78
185.9772
38.7%

3,844.92
160.2072
44.9%

3,909.09
139.61
94
67.3%

3,855.67
110.22
104
94.4%

3,739.30
86.13
104
120.7%

3,870.58
146.13104
71.2%

3,868.69
120.98
104
86.0%

14.8%
2.7%
5.0%
1.4%
0.9%
0.8%
32.56
0.29

12.5%
5.3%
13.1%
9.9%
7.0%
5.7%
7.75
0.52

13.4%
6.5%
11.1%
7.2%
5.0%
4.1%
13.14
0.64

14.5%
7.4%
10.0%
7.4%
5.1%
4.2%
12.09
0.62

14.5%
6.5%
8.0%
6.3%
4.3%
3.5%
14.73
0.61

14.0%
5.8%
7.9%
5.3%
3.6%
2.9%
20.61
0.74

12.6%
4.2%
5.8%
4.0%
2.8%
2.3%
20.48
0.59

12.6%
4.9%
6.6%
2.8%
2.3%
1.8%
25.55
0.59

13.8%
5.1%
6.5%
4.4%
3.8%
2.9%
16.16
0.61

13.8%*3
5.5%*3
6.3%
3.5%
3.1%
2.4%
17.09
0.53

Profit and loss
Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating profit
Non-operating profit
Non-operating expenses
Ordinary profit
Extraordinary profit
Extraordinary loss
Profit before income taxes
Net income attributable to owners of parent
Financial position
Total assets
Net assets
Capital expenditures
R&D expenses
Depreciation and amortization
Equity ratio(%)

Cash flows
Cash flows from operating activities
Cash flows from investing activities
Cash flows from financing activities
Cash and cash equivalents
Per share information
Net assets per share(yen)

Earnings per share(yen)

Dividend per share(yen)

Dividend payout ratio(%)

Principal indicators
Gross profit margin(%)

Operating margin(%)

Ordinary margin(%)

Net profit margin(%)

Return on equity (ROE)(%)

Return on assets (ROA)(%)

Price earnings ratio (PER)(times)Price book-value ratio (PBR) (times)

13.2%
–0.1%
1.7%
–2.8%
–1.8%
–1.4%
—
0.29

OthersNumber of shares issued
Number of treasury shares
Year-end share price(yen)

65,138,117
6,381,998
850

65,138,117
6,382,419
923

65,138,117
6,136,172
1,784

65,138,117
6,091,412
2,342

65,138,117
6,780,936
2,249

58,138,117
2,024,710
2,359

58,138,117
1,994,845
2,877

58,138,117
2,481,265
2,257

58,138,117
2,060,413
2,201

58,138,117
2,437,064
2,361

58,138,117
2,992,249
2,067

4,105

4,167

4,190

4,210

4,474

4,468

4,531

Non-financial information
Number of employees
*1
*2
*3

57

4,265 人

4,149 人4,089 人4,063

In fiscal 2014, as we changed the method of recording construction costs, figures for fiscal 2013 profit, loss, and assets have been restated.
In fiscal 2020, as we finalized the provisional accounting treatment of business combination, the figures for fiscal 2019 reflect this provisional treatment.
In fiscal 2021, due to the change in accounting treatment for gains on sales of goods, figures are shown after the retroactive application of the change inaccounting treatment.

CHUDENKO Report 2022

CHUDENKO Report 2022

58

Corporate Information

Company Profile

Chudenko Group

Shareholder information (As of March 31, 2022)

Consolidated Group companies

Total number of shares authorized to be issued 260,000,000
Total number of shares issued 58,138,117(Excluding 2,992,249 treasury shares)
Number of shareholders
9,261

Name

CHUDENKO CORPORATION

Established

September 29, 1944

Capital¥3,481,905,850

Sanshin ElectricMaterials Co., Ltd.

Sale of electric equipment andconstruction materials

Address of
Head Office6-12 Koamicho, Naka-ku, Hiroshima
730-0855, Japan
Tel: +81-82-291-7411 (main line)

CHUKO KAIHATUCORPORATION

Insurance agency and leasing

Number of
employees

Consolidated: 4,531
Non-consolidated: 3,359(As of March 31, 2022)

Eapec Hiroshima Co., Ltd.

Design and integration ofelectrical work, air conditioning
piping work, etc.

Supervising Branches in Hiroshima,
Okayama, Yamaguchi, Shimane, andTottori Tokyo/Osaka Headquarters,
Electric Power Construction Office

Chudenko Eletech Hiroshima /Shimane Co., Ltd.*1

Design and implementation ofelectrical work, etc.

Chudenko Eletech Okayama /Tottori Co., Ltd.

Design and implementation ofelectrical work, etc.

Chudenko Eletech
Yamaguchi Co., Ltd.*2

Design and implementation ofelectrical work, etc.

Sugiyamakankousetubi
Co., Ltd.

Design and implementation of
air conditioning piping work, etc.

Hayamizudenki Co., Ltd.

Design and implementation ofelectrical work, etc.

Main businesslocations

History
1944

59

Stock Information

Twelve electric construction companies merge toestablish Chugoku Electrical Work Co., Ltd. in
Komachi, Hiroshima City.

1950

Tokyo Office (now Tokyo Headquarters) is opened.

1970

The Company is listed on the Second Section of
the Tokyo Stock Exchange.

1972

The Company is designated for the First Sectionof the Tokyo Stock Exchange.

1980

The Company motto “Magokoro” is established.

1990

The company name is changed to
CHUDENKO CORPORATION.

1996

The Head Office is relocated to Koamicho, Naka-ku,
Hiroshima City (the current location).

2001

The Corporate Philosophy is established.

2010

CHUDENKO (Malaysia) Sdn. Bhd. is establishedin Malaysia.

2016

Sugiyamakankousetsubi Co., Ltd. and HayamizudenkiCo., Ltd. become part of Group.

2017

RYB Engineering Pte. Ltd. becomes part of Group.

2020

Showa Corporation becomes part of Group.

2022

Listed on the Tokyo Stock Exchange Prime Market

CHUDENKO Report 2022

Name

Description of main business

ChudenkoTechno Co., Ltd. Distribution line work

Showa Corporation

Design, implementation, andsupervision of thermal
insulation work
Manufacture and sale ofinsulated pipe supporting
hardware

CHUDENKO (Malaysia)
Sdn.Bhd.

Design and implementation ofelectrical work, etc.

CHUDENKO ASIA Pte.Ltd.

Management of the RYB GroupRYB Engineering Pte.Ltd.

Design and implementation ofelectrical work, etc.

*1 In July 2021, Hiroshima Eletech Co., Ltd. absorbed Shimane Eletech
Co., Ltd., and the name was changed.
*2 In April 2021, the name was changed from Yamaguchi Eletech Co., Ltd.

Non-consolidated Group companies
Name

Description of main businessBerryne Co., Ltd.

Agricultural business

Chudenko World FarmCo., Ltd.

Agricultural businessIndividuals/others
15.69%

Major shareholders
Number of Shareholding
shares held
ratio (%)

Name
The Chugoku Electric Power Company, Incorporated

21,892,259

39.69

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

4,219,400

7.65

Momiji Bank, Ltd.

1,673,900

3.03

The Chugoku Bank, Limited

1,398,619

2.53

Custody Bank of Japan, Ltd. (Trust Account)

1,386,300

2.51

Chudenko Employee Shareholding Association

1,134,051

2.05

Meiji Yasuda Life Insurance Company

1,129,465

2.04

The Hiroshima Bank, Ltd.

1,036,180

1.87

The Yamaguchi Bank, Ltd.

1,000,279

1.81

The San-in Godo Bank, Ltd.

656,481

1.19

Treasury shares
5.15%

Foreigncorporations,
etc.
8.77%

Other
corporations
42.93%

Shareownership

Financial
institutions, etc.
27.46%

Share price and trading volume
Share price (closing) (yen)Trading volume
3,500,000

3,500

3,000,000

3,000

2,500,000

2,500

2,000,000

2,000

1,500,000

1,500

1,000,000

1,000

500,000

500

0

April

August2019

December

April

August2020

December

April

August2021

December

April

August0

December

2022

Inquires

Chudenko Corporation

6-12 Koamicho, Naka-ku, Hiroshima 730-0855 Japan
Investor Relations, Corporate Planning Department, Planning Division
TEL: 082-233-9034 FAX: 082-234-8075

CHUDENKO Report 2022

60