Annual Review 2016
SRG TAKAMIYA CO., LTD.

Profile

The SRG TAKAMIYA Group supportssocial infrastructure through the
production, sales and rental of temporary
equipment and materials.
SRG TAKAMIYA CO., LTD. started with salesof wooden scaffolding for construction sites.
With the arrival of the Japan World Exposition
held in Osaka, we quickly recognized thepotential of the rental market for temporary
equipment and materials, and thus shifted
our focus from equipment sales towards
rentals. Breaking into landslide prevention
and soil improvement work, as well as mobile
elevating scaffolding for use on ultrahigh-risebuildings, has driven our market development
and business expansion, and we have continued to grow as a company specializing in
rental of temporary equipment and materials.

Contents
The SRG TAKAMIYA Group’s Business................................3
The SRG TAKAMIYA Group’s Characteristics.......................5
The SRG TAKAMIYA Group’s History of Growth...................7
Top Message.......................................................................9
Summary by Business........................................................13
Corporate Governance.......................................................17
Directors, Corporate Auditors and Executive Officers..........19
Consolidated Six-year Summary.........................................20
Corporate Information.........................................................21

1

In 2010, we aquired and converted to a
subsidiary Hory Corporation, a company thatdevelops, manufactures and sells temporary
equipment and materials. This added manufacturing capabilities, including high productdevelopment capacity and brand strength,
providing a multifaceted support system
for worksites.
We are also operating a construction
business that provides setting-up anddismantling services for scaffolding, and an
agriculture business, as well as carrying out
expansion overseas. All of these activities aim
to build a solid foundation for future growth.

SRG Takamiya Annual Review 2016

FY Mar. 2016

Net sales¥34,350 million
Up 0.3%Operating income¥2,983 million
Down 3.7%

Profit attributable to owners of parent¥2,153 million
Up 4.0%2

The SRG TAKAMIYA Group’s BusinessSupporting Construction Sites with Lightweight
Temporary Equipment and Materials
Much of the equipment and materials used atconstruction sites is rented.
Of this, the SRG TAKAMIYA Group specializes in providing lightweight temporary equipment and materials that includes scaffolding
erected for use by workers during construction.
These equipment and materials include
several thousand different items, each with theirown purpose. So work can proceed safely andeffectively on worksites, the Group endeavors
continuously to make further developments,
while carefully managing the quality of equipment so it can be repeatedly provided for rental.

Principal Lightweight Temporary Equipment

Work Scaffolding

Scaffolding primarily set up aroundthe exterior walls of construction

Rental BusinessWith the rental of lightweight temporary equipment and materials at its
core, this business provides transport, logistics, construction and CAD
drawings.
Through active investment in high-value-added, highly versatile new
products, centered upon ourⅠq System of next-generation scaffolding,
we are switching over from conventional scaffolding. In this way, we aim
to improve operational efficiency and profitability.

59.4%

FY Mar. 2016
Sales Ratio

Construction Work of the Rental Business3

Building Construction

Bridge Construction

Ultrahigh-rise Building
Renovation Work

Tunnels & UndergroundConstruction

Work scaffolding for work onapartment complexes, schools,
hospitals and other facilities.

Falsework for construction ofbridges in mountainous regions
and viaducts

Mobile elevating scaffolding
for use in the renovation ofultrahigh-rise buildings andtowersRails and piping for use underground in subways, pipelines
and utility tunnels

SRG Takamiya Annual Review 2016

and Materials Used on Construction Sites

Falsework

Suspended Scaffolding

Used to support heavy loads in buildings and civilengineering projects such as bridges

Scaffolding suspended for use in inspections,repair and other work of road bridges

Sales BusinessCentered on the Company’s subsidiary, Hory Corporation, we are manufacturing and selling materials including clamps and other lightweight temporary
equipment and materials such as theⅠq System, as well as seismic damping
and other building materials and solar panel installation frames.
In response to growing demand related to the 2020 Tokyo Olympic
Games, we aim to increase the production capacity and cost competitiveness of temporary equipment and materials, while also working towards
development, production and sales in agriculture and other new businesses.

FY Mar. 2016
Sales Ratio

40.6%

Major Products of the Sales Business
ClampsⅠq System, Next Generation
Scaffolding

Seismic Damper for
Residential Application

Solar Panel Installation
Framing

Bolted fastening-type metal fittings
offer enhanced strength and safety
through press-processing. Hory
Corporation was the first company
to mass-produce clamps in Japan,
and boasts a high market share

Scaffolding providing a lift heightof 190 cm means a more spacious work area, equipped withadvance guardrails to ensure
safe, efficient scaffolding work

Hory’s original seismic damper
can be used for both new andrenovated buildings, lessening
damage due to repeated shaking

Installation frames for residential
roofs, and frames and fittings forindustrial facilities such as mega
photovoltaic power plants

4

The SRG TAKAMIYA Group’s Characteristics

Lightweight Temporary Equipment and Materials
Specialist Creating New Industry Norms
By utilizing and combining following five functions, the SRG TAKAMIYA Group provides a rangeof temporary construction solutions.

Development and Manufacturing
We have acquired a range of metal processing technologies over the years. By leveraging these technologies, weare developing and manufacturing unique products suchas next-generationⅠq System scaffolding, seismic dampers and solar panel installation frames.

Rentals
We have a wide range of rental equipment and materials
for use on various worksites, from general scaffolding
through to falsework for use with bridge construction andtunnel construction.

Sales
In addition to sales of temporary equipment and materials
and building materials for residences centered on Horybrand, we sell used temporary equipment and materials.

Construction
Through a nationwide network of companies that set up
scaffolding, we are contracted for safe and high-quality
assembly and dismantling of scaffolding.

CAD Drawings
We create CAD drawings and make strength calculations
for scaffolding, perform tracing that converts paper frame
drawings to CAD data and create drawings with 3D technologies.

5

SRG Takamiya Annual Review 2016

Supporting Safety on Construction Sites,
Improving the Industry
The SRG TAKAMIYA Group specializes in temporary
equipment and materials, and provides high-value-added,
high-quality products and services to a wide range of industries and business areas. We are also addressing diverse
customer issues and contributing towards safe and efficient
workplaces through technical innovation. We are always
looking towards future business developments, and will
always be a business group that introduce innovations andcontributes to the development of the industry.
The SRG TAKAMIYA Group’s Strengths

Wide-Ranging
Business Sectors

Comprehensive
Proposal-Making
Capability

We share and utilize ouraccumulated expertise, andprovide comprehensive
proposals tailored to theneeds of our customers.

We provide equipment toa range of industries andbusiness fields and makea groupwide effort tosupport workplaces
throughout Japan.

Foresight toCreateNew Value

We are constantly striving
to increase corporate value
by providing innovative
products and high-quality
services, as well as
developing new businesses.

Increasing Construction
Site Safety and Efficiency

6

The SRG TAKAMIYA Group’s History of Growth

Steadily Expanding Business Fields by
Being Attentive to the Changing Times

1969
Established

Rental Business

1974
Started rental of
construction
scaffolding

1989
Started in bridge
construction field

2003
Started in landslide
prevention work

2005

2007

Listed on
JASDAQ

Listed on theSecond Sectionof the Tokyo
Stock Exchange

2005
Started in urban
civil engineering field

SRG TAKAMIYA Group’s Major Products

YT Lock System

Lift Climber

The YT Lock System is scaffolding for use on slopes ofhillsides, which are more prone to accidents than flat
areas, and is designed to be simple to set up safely.
This product removes the need for tightening tens of
thousands of clamps to connect individual pipes andclamps in the conventional scaffolding setup, helping tosave time and worker-hours. This also enables safe
assembly on slopes, where both hands are required.

The Lift Climber, mobile elevating scaffolding, can handle
up to 210 m heights. The work platform moves up on
two separate pillars, allowing more light for the building,while at the same time increasing security by preventing
crime when setting up scaffolding. Additionally, automaticleveling and other design features ensure better worker
safety, and these are easy for anyone to operate on-site.
The Lift Climber is also easy to assemble, dismantle andrelocate, and the reduced setup period lowers costs.

Scaffolding setup on slope

Renovation work on large-scale condominiums

7

SRG Takamiya Annual Review 2016

Acquired Hory
Corporation andHory Korea Co., Ltd.
Expanded into
manufacturing and sales

Sales Business2010

Started production andsales of Iq System,
next-generation
scaffolding

2013

Established
HORY VIETNAM
Co., Ltd.
(Manufacturing base)2014

Acquired
DIMENSION-ALL INC.
(Marketing base)

2015

2014
Assigned to
the First Sectionof the Tokyo
Stock Exchange

2008
Started in ultrahighrise building
construction andrenovation field

2009

2010

Started in underground
pipeline construction
field

Established construction
department

2014
Started rentals of
Ⅰq System, next-generation
scaffolding

Ⅰq System, Next-Generation Scaffolding
Temporary equipment and materials are very durable and tend to not be updated for long periods of time. However, theaverage height of Japanese people has increased over the years, meaning that conventional scaffolding has become too
confined for Japanese workers. Stricter safety regulations have also made usage of conventional products more inefficient.
Accordingly, we set out to develop next-generation scaffolding suited to modern construction worksites. We are now
working to popularize ourⅠq System through both rental and sales so that it becomes the de facto standard in thescaffolding industry.

Three innovations① Outstanding safety

Increasing the lift height by 20 cm, to 190 cm, lets
workers work more comfortably without bending.
Reducing underfoot gaps also improves safety.

② High utilization rate

190cm

170cm

Compared to the conventional gate type, a strut
type without a fixed width has increased versatility.
This has led to a dramatic improvement in rental
utilization rates.

③ Reduced operating costs

The system can be stored compactly, with a 50%
reduction in storage space over conventional
equipment. Another major benefit is the 30%
reduction in the number of transport vehicles
required.

8Top Message

Kazumasa Takamiya
President andRepresentative Director

Review of the Fiscal Year
Ended March 31, 2016
The fiscal year ended March 31 2016 was thesecond year of the medium-term management plan;
performance in this period included net sales of¥34,350 million (up 0.3% year on year), operating
income of ¥2,983 million (down 3.7%), ordinary
income of ¥2,731 million (down 17.9%), and net
income attributable to owners of parent of ¥2,153
million (up 4.0%). Sales were up year on year but fell
short of planned figures.
In the rental business, demand for private
construction in the Tokyo metropolitan area continued
to be favorable, and both theⅠq System and Lift
Climber for use in renovation of ultrahigh-rise buildings

9

recorded high utilization rates. Bridge construction
and other civil engineering rentals had beenstagnant, but gradually started to show a moderate
improvement. However, in the sales business, as aresult of factors such as lower electricity buy-backprices and the suspension of feed-in tariffs fromelectricity companies, there was a larger-thanexpected drop in demand for solar panel installation
framing. Furthermore, future uncertainty with regard
to medium-term construction demand has resulted
in a major slowdown in purchases of scaffolding
equipment. In the sales business as a whole, we saw
a large year-on-year drop in earnings and profits.

SRG Takamiya Annual Review 2016

Revision of Final Medium-termManagement Plan Goals
SRG TAKAMIYA is acting on the three-year mediumterm management plan that began in the fiscal year
ended March 31, 2015, but given that the environment
in the sales business has changed drastically fromoriginal assumptions, we have revised the numericaltargets for the final year, ending March 31, 2017.
When the plan was announced in May 2014,
stimulus measures under Abenomics had led tosignificantly heightened expectations for an increasein demand for construction, with a corresponding risein demand for equipment purchases. Winning the bid
to hold the 2020 Olympics and Paralympics in Tokyo
has encouraged us to anticipate growing demand overthe medium term, so we set our sales plan at higher
levels. However, mainly due to a shortage of workers
in the construction industry, construction volumes did
not expand as much as expected. Although purchasedemand for equipment declined due to a backlashfrom strong customer purchases in the preceding

fiscal year, rental demand continued to be strong.
With volumes of construction work remaining at highlevels, we expect our business environment to trend
favorably, but we have determined that scaffolding
sales will diverge significantly from our initial plans.
In equipment for use in solar power installations,the market contracted at a faster rate than expected.
Together with heightened competition from othercompanies, we expect sales to drop further.
Based upon these factors, we revised our
performance targets for the fiscal year ending March
31, 2017 to net sales of ¥38,800 million (up 13.0%
year on year), operating income of ¥3,380 million (up13.3%), ordinary income of ¥3,100 million (up 13.5%),
and net income attributable to owners of parent of¥1,950 million (down 9.4%), because of the absenceof a gain on sales of securities booked in the previous
period.

Consolidated Financial Highlights
Net sales
Operating income ①
Ordinary income
Profit attributable to owner of parent
Depreciation ②
EBITDA (①+②)
Earnings per share (yen)Dividends per share (yen)(millions of yen)
2015/3(Actual)

2016/3(Actual)2017/3(Forecast)

34,261
3,098
3,325
2,070
3,649
6,747
46.17
12.5

34,350
2,983
2,731
2,153
4,137
7,120
48.12
10.0

38,800
3,380
3,100
1,950
4,370
7,750
44.60
10.0

Notes:
1. Recorded figures are rounded down to the nearest million yen (except per-share information).
2. We conducted two-for-one stock splits on April 1, 2013 and January 1, 2015. Per-share information incorporates the impact of these stock splits. The dividend
for the fiscal year ended March 31, 2015 included a commemorative dividend of ¥2.5 to commemorate the designation of our stock to the First Section of theTokyo Stock Exchange.

Taking Strategic Move toward
Future Growth, and Solid Results
Although we have revised our performance targets,the basic strategies of the medium-term management
plan are unchanged. Although growth has slowed incomparison to the initial plan, we are confident that
we will be able to construct a foundation for achieving
growth over the medium to long term.

Starting with a full-fledged launch of ourⅠq Systemof next-generation scaffolding in the fiscal year ended
March 31, 2015, this scaffolding has been rented foruse at over 1,500 worksites in the following two years.
The system has garnered high praise from customers
for its safety and efficiency, and we expect cumulative

10

Top Message

rentals to reach 3,500 worksites in the fiscal year
ending March 31, 2017.
The Construction Department, which provides
setup services for scaffolding, has pushed forward theintroduction of theⅠq System. The department has
been moving forward with aggressive sales activities.
These efforts include introducing theⅠq System at
all worksites, ensuring that everyone working there
can experience its advantages. The network ofcompanies that set up scaffolding in cooperation with
our Construction Department has been expanding,and as of March 31, 2016, this network comprises
44 member companies nationwide. Japan’s aging
society and falling birthrate have resulted in a shortageof workers, meaning that being able to secure
personnel is a major factor in accepting orders. We
aim to dynamically expand this network and provide
value-added services in construction, with outstanding
personnel and high levels of safety.
Agriculture is a new area of business for SRG
TAKAMIYA. We are using cooperation with growers
to develop greenhouses capable of more efficient
production, and will commence full-scale sales
activities in the future. Manufacturing and constructionof agricultural greenhouses and racks can utilize
the expertise that we have long accumulated in our
scaffolding business, as well as our skills in metal

processing, strength calculations and construction.
Furthermore, deregulation in the industry resulting inpart from the TPP has led to the field of agriculture
seeing an increase in highly motivated companies.
However, this is another field suffering from asevere shortage of human resources. Therefore, we
determined that this was one area where the SRG
TAKAMIYA Group could make a contribution. We
anticipate that our foray into the agriculture businesswill aid the Company’s growth.
In our overseas business, DIMENSION-ALL
INC. in the Philippines became a subsidiary, and weare using this as a springboard into Southeast Asianmarkets. Requirements for products in Southeast
Asia differ from those in Japan, and we are working
to develop products to meet local market demands.
Also, we are planning business activities using
Japanese leased assets in the Philippine market. In
addition, Hory Korea Co., Ltd., which has previously
manufactured products for the Japanese market, is
now working to expand its sales in the South Koreanmarket. Safer scaffolding is in demand in South Korea,
given the high number of accidents in this industry,
and this business has the potential for further growth.
Through these activities, we have set a target foroverseas sales to comprise 10% or more of total sales
in the fiscal year ending March 31, 2017.

Stronger Management for
Sustainable Growth
A major risk factor in the medium to long term willbe the demand for construction following the 2020
Olympic and Paralympic Games in Tokyo. Somesay that demand will not drop substantially, but wemust anticipate a slowdown from the special demand
created by the Olympics. We weathered the collapseof the bubble as well as the 2008 global financial crisis,and still found opportunities for growth. However,
it is no simple task to respond to the various issues
plaguing Japan—labor shortages, concentration of the
population in the Tokyo metropolitan area and regional
disparities. Current earnings in our business are a resultof our former investments. We need to invest more rightnow if we are to respond to Japan’s myriad problems,and continue to grow in the future. A focus of thisinvestment is theⅠq System and our expansion efforts

11

into overseas markets, particularly in Southeast Asia.
We could take advantage of the current strong
demand in Japan’s construction market, andpursuing increased sales may reward us with shortterm growth. However, this could damage the futuresafety of our scaffolding. Providing high-value-added
products with high safety levels and efficiency is in
itself essential for medium- to long-term growth.
Accordingly, we have been rapidly switching over tothe leasedⅠq System and aggressively investing infactories in Japan and overseas. These processes
will be completed in the year ending March 31,
2017. We will then enter a period of recovering thoseinvestments, in anticipation of lower construction
demand.
Development of human resources is another issueSRG Takamiya Annual Review 2016

Net Sales and Operating Income over 11 Years (millions of yen)
Net sales

Operating income

40,000

40000

4,000
32,44330,00028,1132,158

1,797
14,017

1,353

14,526

3,098

34,3502,983

30000
We provide
equip
a range of industbusiness fields an
20000effoa groupwide
support workplac
throughout Japan

3,000

23,201

2,111

20,0003,051

34,261

2,000

17,49015,129 15,338

1,605

14,53010,000

10000

1,000

1,037
722

678

0

0

0
2006.32007.32008.32009.32010.32011.3

we face in achieving sustainable growth. First, fully
understanding Company policies is very important,so we make a strong effort to ensure that our policies
are shared among management and the transfer ofauthority proceeds smoothly. In the future, we expectthat by having the Company’s policies fully understood
14017

14526

15129

Tireless Innovation to
Increase Corporate Value
1353

2158

2111

2012.32013.32014.32015.32016.3by everyone including executive trainees, they will beable to carry out their duties autonomously, and wehope to develop personnel who can create high value.
At the same time, we will further develop workplaceenvironments and systems, and work to appropriately
motivate our employees.

15338

14530

17490

23201

28113

32443

34261

34350

1797

678

722

1037

1605

3051

3098

2983

Through active business development, including
mergers and acquisitions, the SRG TAKAMIYA Grouphas grown into a nationwide business group owning
an extensive variety of scaffolding. This is a result of us
remaining ahead of our competitors in providing newvalue. One example of this is in scaffolding, which had
not changed in 50 years. Our efforts have focusedon creating next-generation scaffolding incorporating

added-value features of safety and efficiency. At
present, scaffolding and related businesses in Japanare central to our operations, but we do not want tobe limited to this. Our objective is to take a flexible
approach to growth and to ensure that we remain acompany that provides ongoing innovation to society.
Our return of profits to shareholders is based
upon providing stable dividends and increasing
dividends in line with profit increases. I ask our
stakeholders to take a medium- to long-term view
toward growth over the next five to ten years.
I thank you for your continued support.

July 2016.

Kazumasa Takamiya
President and Representative Director

12Summary by Business

Rental BusinessResults for the Fiscal Year Ended March 31, 2016
In the rental business, sales were ¥20,513 million (up9.8% year on year) and operating income was ¥2,697
million (up 35.9%).
We are seeing healthy private-sector demand
for redevelopment and renovation in the Tokyo
metropolitan area in particular, and even in March, amonth where our equipment usually returns, rental
shipments remain high. For our strategic product,
the next-generationⅠq System, we have in placevarious measures in addition to normal rentals. These
measures include using our well-developed nationwide

network of companies that set up scaffolding toprovide proposals combining both rental and setup.
Our efforts have resulted in our rental scaffolding being
used at over 1,500 sites nationwide, illustrating highlevels of usage rates not possible using conventional
scaffolding.
Additionally, our mobile elevating scaffolding, Lift
Climber, has been hired for the renovation of ultrahighrise condominiums in the Tokyo metropolitan area athigh rates, another factor contributing to our improved
results.

Future Business Strategy
OurⅠq System has proven very popular on worksites,and even with ongoing increases in owned leaseassets, we expect demand to increase, reaching
cumulative rentals at 3,500 worksites during the year
ending March 31, 2017. We are actively switching ourlease assets from conventional scaffolding to nextgeneration scaffolding, and by improving the ratioof high-versatility products such as clamps, we are

Sales and Operating Incomeof the Rental Business (millions of yen)
Net sales

working to increase operational efficiency.
To increase profitability over the medium tolong term, we will focus our efforts on responding
to the redevelopment of bridges, tunnels and otherinfrastructure, as well as to demand stemmingfrom the Olympics, while improving the efficiency ofequipment management and logistics systems.

Cumulative Rentals of
Ⅰq System (worksites)

Operating income

25,000

3,000

2,000

2,697
20,51320,00018,686

1,500

1,500
1,984

2,000

15,0001,000
10,000
1,000
500

5,000
0

0
2015.32016.3530

02015.32016.3*Sales and operating income include internal sales and transfers.

13

25000

Cumulative rentals of

SRG Takamiya Annual Review 2016

Sales BusinessResults for the Fiscal Year Ended March 31, 2016
In the sales business, sales were ¥18,859 million(down 7.2% year on year) and operating income
was ¥1,728 million (down 34.9% year on year). A
slowdown in ourⅠq System sales plan and a drastic
drop in sales of solar panel installation framing werethe main reasons for this decline in both sales andprofits.
While there has been strong demand forconstruction primarily within the Tokyo metropolitanarea, due to uncertainty about the future, companies
have tended to put off purchases of scaffolding,instead meeting requirements through rentals. Thissituation has led to sluggish growth in sales of both
new and used equipment.
Furthermore, in the environment-related business,
lower electricity buy-back prices and the suspensionof feed-in tariffs from electricity companies led to adrop in domestic demand for solar-power generation
systems, meaning that sales of solar panel installation
framing dropped significantly from the previous year.

Future Business Strategy
Having rented theⅠq System and experienced forthemselves its safety and ease of setup on worksites,
this system is increasingly trusted by customers,
and more are considering purchases. By further
establishing a track record of improving rental
performance through our Construction Department
and other means, we will illustrate the superiority ofthis system, thus creating sales opportunities.

Also we will expand our agriculture business as
a new business field, to take over from solar panel
installation framing. We are planning to deepen
relationships with various growers, develop original
greenhouses and expand their installation. We are also
aggressively developing our hydroponic cultivation
racks and other products that use scaffolding, as we
aim for the agriculture business to become a longterm growth engine.

Sales and Operating Incomeof the Sales Business (millions of yen)
Net sales

Sales ofⅠq System (worksites)
Operating income

25,000

3,000

1,500
1,344

2,654
20,32620,00018,85915,000

2,000

1,000

1,000

500

1,728

10,000

528

5,000
0

0
2015.302015.32016.32016.3*Sales and operating income include internal sales and transfers.

25000

20000

20,326

18,859

2,654

1,728

14

Summary by Business

Overseas Operations
Until now, the SRG TAKAMIYA Group has utilized
sales and production locations such as Hory Korea
Co., Ltd., and HORY VIETNAM Co., Ltd., to increase
productivity and to expand sales of products within
ASEAN nations, as well as to ensure the stable supplyof products to both Japan and ASEAN countries.
In the domestic market, we anticipate a fall-off indemand for construction after the 2020 Tokyo
Olympic and Paralympic Games, so maintaining
growth will require that we accelerate our overseas
strategies. Our main focus is expanding our businessin Southeast Asia, and as a part of this effort wepurchased DIMENSION-ALL INC., which develops
sales and rentals of temporary equipment andmaterials in the Philippines.
In the future, we will strategically invest Groupassets in the Philippines, and enhance our position inSoutheast Asia. Equipment that has been written off

Vietnamfor depreciation in Japan can still meet the needs of
the Philippine market. First, falsework for use in new
bridge construction will be sent to the Philippines.
Through expanding rentals and sales, we will increase
market share within the Philippines.
We are already developing new products thatcan secure a competitive edge in the Southeast Asianmarket. We will position our subsidiary in Vietnam
as a central production base for Southeast Asia,and it will supply South Korea and the Philippines.
Meanwhile, Hory Korea, which has until now acted
as a production base for Japan, will switch tostrengthening sales and rentals within South Korea
itself, thereby increasing the company’s presence.
Also, from the year ending March 31, 2017,
overseas business will be a new disclosure segment.
Our objective is to have the overseas sales ratio reach
10%, and raise this to 50% in the medium to long term.

Manufacturing

HORY VIETNAM Co., Ltd.

Korea

Marketing

Manufacturing

Hory Korea Co., Ltd.
A wholly owned subsidiary of Hory
Corporation. The company produces
clamps and other products, supplying
these to Japan and Southeast Asian
countries.
ThailandMarketing

SRG Global Holdings Co., Ltd.
Vietnam

Marketing

Designing

Cadnian Vietnam Co., Ltd.

A wholly owned subsidiary of Hory
Corporation. The company produces
temporary equipment and materials
such as theⅠq System, strengthening
sales in the South Korean market.
Philippines

Manufacturing
Marketing
Designing
Consolidated
Non-consolidated

15

Marketing

DIMENSION-ALL INC.
Expanding sales and rentals of
temporary equipment and materials in
the Philippine market, the company haslarge construction companies ascustomers, and is building a strong
position in the market.

SRG Takamiya Annual Review 2016

ColumnHory’s Product Development
Capacity and Brand Power—
Key to Growth
Hory Corporation was the first Japanese company to succeed in using press-processing to massproduce clamps which are metal fittings for construction scaffolding. Throughout its business activities
spanning 60 years, the company has leveraged its advanced metal processing technologies anddevelopment capabilities to build a trusted brand.
Hory has weathered different economic climates, including the high economic growth periodcharacterized by a construction boom, and the economic slump after the collapse of the bubble
economy, and the company has continuously developed innovative products that tied together
customer needs and the company’s own strengths. Through this effort, Hory has become widely
known throughout the industry as an established brand for temporary equipment and materials. Horyholds a high market share, especially for clamps, within Japan, and since becoming a member of the
SRG TAKAMIYA Group in 2010, those clamps have become mainstay products throughout the Group.
At present, by coupling Hory’s product development capabilities with SRG TAKAMIYA’s aggressive
expansion of the rental business, we have established a framework for the rapid introduction of new
products into the market.
Hory also has production locations in South Korea and Vietnam, both of which are pivotal to the
SRG TAKAMIYA Group’s overseas strategy.

Main Hory Products
Year released

Product

1955

Clamps: bolted fastening-type metal fittings used for construction scaffolding; Hory was the first to use press-processing in theirmass-production.

1964

Bases and joints: pipe joints and fixed bases certified by the Scaffolding and Construction Equipment Association of Japan

1975

Hory Beam: horizontal frame falsework designed with integrated clamps, with easy assembly and dismantling

1992

SGX Series: system falsework that uses a simple setup method to significantly improve workability

1999

V-MAX: suspended scaffolding to improve work safety and external appearance

2010

Hory Up Zero: fixed advance guardrails designed to eliminate fall accidents and provide high work efficiency

2012

WUTEC-SF: seismic damper for residential structures, reducing the degree of building shaking by up to 80%

2013

Ⅰq System: next-generation scaffolding providing safety and efficiency, with a 190 cm lift height

ClampsWUTEC-SF

16

Corporate Governance (As of June 29, 2016)

Basic Policy on Corporate Governance
The Group believes that ensuring full compliance, guaranteeing operational transparency and efficiency, and maximizing its
corporate value for shareholders and other stakeholders are all central to corporate governance.

Overview of Corporate Governance System
Organization

Company with a Board of Corporate Auditors

Chairman of the Board

Kazumasa Takamiya

Number of Board

Nine, including one outside director

Number of Corporate Auditors

Three, including two outside corporate auditors

Board of Directors Meetings
in the FY Mar. 2016

Held: Regularly 12 times, extraordinary seven times, written resolutions four times
Director attendance rate: 96%, corporate auditor attendance rate: 89%

Board of Corporate Auditors Meetings
in the FY Mar. 2016

Held: Regularly 12 times, extraordinary two times
Corporate auditor attendance rate: 93%

Main Meetings Attended by Corporate Auditors

Board of Directors Meetings, Management Meetings

Appointment of Independent Directors

One outside director and two outside corporate auditors

Accounting auditor

Ernst & Young ShinNihon LLC

Corporate Governance System
Management &decision-making
Board ofDirectors

Appointments and dismissals

ReportCooperation

Board of Corporate
Auditors

Appointments and dismissals

Cooperation

Accounting
auditorAppointments and dismissals

Accounting audit

Affiliatedsubsidiaries

Cooperation

Business
Division

Cooperation

Audit

Oversight

Internal auditing

President andRepresentative
Director
Oversight

Internal Audit
OfficeReport

Audit

General meeting of shareholders

Instruction

Business execution
Selection, dismissal, supervision

Appointment of Outside Executives
We appoint outside directors and outside corporate auditors. Each outside executive carries out objective and neutral
auditing and monitoring of directors’ business execution from their respective positions, thus ensuring satisfactory corporate
governance.
Net Sales and Operating Income over 11 Years (millions of yen)
Although there are no specifically defined standards or policies regarding independence when appointing outside directors
and external corporate auditors, during appointment, we first evaluate that they have a perspective sufficiently separated fromour management personnel based upon their career and relationship with our company, and that they have the independence
to carry out their duties as external executives.
Mutual cooperation involves periodically receiving reports from the corporate auditors and the manager of the Internal
Audit Office, and making comments as needed, with the aim of strengthening this cooperation.

Reason for Appointing Outside Director
Kouji Shimokawa (Independent Director)
President and Representative Director of
Shimokawa Accounting Office Ltd.
President & CEO of
Global Human Communications Co., Ltd.

17

We have appointed Mr. Shimokawa as an outside director in the expectation that theCompany can use his knowledge and experience cultivated in management accounting
as a qualified tax accountant.

SRG Takamiya Annual Review 2016

Reason for Appointing Outside Corporate Auditor
We have appointed Mr. Kajikawa as an outside corporate auditor in the expectation that hewill utilize his qualifications as a certified public accountant and tax accountant and a deep
knowledge and understanding of corporate accounting to perform his duties appropriately as anexternal corporate auditor from an objective and neutral standpoint, based on his professional
insight into finance and accounting.

Tsuyoshi Kajikawa(Independent Corporate Auditor)
Representative of Kajikawa Certified
Public Accountants

We have appointed Mr. Sakatani as an outside corporate auditor in the expectation that hewill utilize his qualifications as a certified public accountant and tax accountant and his deep
knowledge and understanding of corporate accounting, to perform his duties appropriately as anexternal corporate auditor from an objective and neutral standpoint, based on his professional
insight into finance and accounting.

Yoshihiro Sakatani(Independent Corporate Auditor)
Japan Management Consulting Co., Ltd.
President and Representative Director

Executive Remuneration
For the fiscal year ended March 31, 2016, executive remuneration for our directors and corporate auditors was as follows:
Classification

Total remuneration(thousands of yen)

Directors(excluding outside directors)

Total remuneration by type (thousands of yen)
Annual bonuses

Retirement
benefits

Number of
executives
covered61,169

—

—

8

9,600

—

—

—

1

7,560

—

—

—

3

Basic
remuneration

Stock options

212,630

151,461

Corporate auditors (excluding
outside corporate auditors)

9,600

External directors

7,560

Auditor Remuneration
For the fiscal year ended March 31, 2016, remuneration paid to certified public accountants and others was as follows:
Previous fiscal year

Current fiscal year

Classification

Compensation paid foraudit certification work
(thousands of yen)Compensation paid for
non-audit certification work
(thousands of yen)Compensation paid foraudit certification work
(thousands of yen)Compensation paid for
non-audit certification work
(thousands of yen)

The Company

28,800500

30,000—Consolidated subsidiaries
Total

—

—

—

—

28,800500

30,000—*Our consolidated subsidiaries of Hory Korea Co., Ltd., HORY VIETNAM Co., Ltd., and DIMENSION-ALL INC., paid a total of ¥3,711 thousand as remuneration
based upon audit certification work to Ernst & Young member firms, which are members of the same network as our certified public accountants.

Communications with Shareholders and Investors
We endeavor to provide shareholders and investors with timely information in a transparent, fair and consistent manner. As
well as striving to disclose information in accordance with appropriate disclosure regulations, we work proactively to disclose
information that is effective in fostering a better understanding of the Company.
We aim to expand our numbers of shareholders and investors, and through direct communications are attempting
to increase their understanding of our business activities, strategies and performance. Specifically, we are conducting
presentations and meetings on financial results for analysts and institutional investors, as well as presentations for individual
investors. We also publish the SRG Report, a newsletter for individual shareholders. Our main investor relations activities for the
fiscal year ended March 31, 2016 were as follows:
For Individual Investors•Presentations for individual investors:
six/year (total participants: 800)
We hold regular presentations at the
Security Analysts Association of Japan
as well as at branches of securities
companies, with our officials as speakers.
Our IR site indicates the timing of thisdisclosure.

For Analysts and Institutional Investors•Financial results presentations: two/year(year-end, end of the second quarter)•One-on-one meetings: approximately
100 times
At our semi-annual results presentations,the president and other executives
summarize our performance and provide
earnings forecasts. Materials and videos
are available on our investor relations site.

IR Site•https://www.srg.jp/ja/ir/index.html
To ensure the timeliness and fairness of
disclosure, we disclose materials on ourIR site in a timely manner. This information
includes analyst reports and historical
data. We also provide in-depth content
to assist in a further understanding of ourbusiness and strategy.

18

Directors, Corporate Auditors and Executive Officers (As of June 29, 2016)

Directors

Corporate Auditors

Kazumasa Takamiya

Akiyoshi Takamiya

Yutaka Morita

Kazumasa Yamaguchi

President andRepresentative Director
Executive Manager,
Overseas Business Division

Representative Director andExecutive Vice President
Executive Manager,
Sales & Marketing Division
In charge of Environmental
Business Marketing

Director and Executive
Vice President
Executive Manager,
Procurement, Development andManufacturing Division
In charge of Marketing

Corporate Auditor

Hideki Yasuda

Tsutomu Abe

Takashi Matsui

Tsuyoshi Kajikawa

Director and Senior Managing
Executive Officer
General Manager,
Corporate Planning Department
In charge of General Affairs andFinance

Director and Executive Officer
Division General Manager,
Sales & Marketing Division
and General Manager,
Rental Department

Director and Executive Officer
Division General Manager,
Scaffolding Management Division
and General Manager,
Scaffolding Control Department

Outside Corporate Auditor

Sadamitsu Shimizu

Yuki Mukaiyama

Kouji Shimokawa

Yoshihiro Sakatani

Director and Executive Officer
Division General Manager,
Procurement & R&D Division

Director and Executive Officer
Division General Manager,
Business Development Division

Outside Director

Outside Corporate Auditor

OutsideIndependent

OutsideOutsideIndependent

Independent

Note: Kouji Shimokawa is an Outside Director. Tsuyoshi Kajikawa and Yoshihiro Sakatani are Outside Corporate Auditors. The Company designated these three
as Independent Director and Independent Corporate Auditors pursuant to the regulations of the Tokyo Stock Exchange and registered them as such at
the stock exchange.

Executive Officers
Kazunori Kawakami

Takahiro Shozaki

Atsuhiko Sako

Tomoya Tatsumi

Senior Executive Officer
Deputy Division General Manager,
Sales & Marketing Division andGeneral Manager, Scaffolding
Construction Department

Executive Officer
General Manager,
Sales & Marketing Planning
Department Sales &Marketing Division

Executive Officer
Deputy Division General Manager,
Sales & Marketing Division

Executive Officer
General Manager Finance &Accounting Department
and Manager of Finance Section

Shinri Ueda

Koichi Nishihashi

Michio Ashida

Executive Officer
General Manager, Scaffolding
Quality Control Department
Scaffolding Management Division

Executive Officer
General Manager,
General Affairs Department

Executive Officer
General Manager
Marketing Department

19

Consolidated Six-year Summary

SRG Takamiya Annual Review 2016

(millions of yen)
2011.32012.32013.32014.32015.32016.3

Net sales

17,490)23,201)

28,113)32,443)34,261)34,350

Cost of sales

11,509)15,998)19,917)

22,610)23,404)23,059Selling, general and administrative expenses

5,258)

6,165)

6,590)

6,781)

7,758)

8,307

Operating income

722)

1,037)

1,605)

3,051)

3,098)

2,983

Ordinary income

621)

1,080)

1,553)

3,006)

3,325)

2,731

Profit attributable to owner of parent

302)

755)

807)

1,768)

2,070)

2,153

Investments in assets for rent

1,663)

3,687)

2,850)

2,381)

5,577)

7,227

Depreciation

2,745)

3,088)

3,280)

3,369)

3,649)

4,137

3,468)

4,126)

4,886)

6,421)

6,747)

7,120

Total assets

29,594)32,472)33,987)

37,245)

43,520)50,091Equity5,648)

6,271)

6,947)

9,514)

11,453)

11,766

Interest-bearing debt

17,290)17,784)

17,405)

16,605)

20,274)24,709Number of employees

609)

679)

710)

693)

903)

979

Cash flows from operating activities

2,483)

669)

1,575)

2,839)(1,620)(1,081)

Cash flows from investing activities

(692)

(539)

(812)

(1,239)(1,563)(1,736)

Cash flows from financing activities

(477)

(39)

(779)

(715)

2,927)

2,844

Cash and cash equivalents at end of period

3,039)

3,100)

3,076)

3,979)

4,233)

4,242

Free cash flows

1,790)

129)763)

1,600)(3,183)(2,817)

Earnings

6.97)

17.47)

18.83)

40.17)

46.17)

48.12

Net assets

130.38)146.27)162.04)213.24)253.95)269.09Dividends

5.0)

5.0)

5.0)

6.5)

12.5)

10.0

ROE*4

5.4)

12.7)

12.2)

21.5)

19.8)

18.5

ROA*5

2.3)

3.5)

4.7)

8.4)

8.2)

5.8

Operating profit margin

4.1)

4.5)

5.7)

9.4)

9.0)

8.7

Equity ratio

19.1)

19.3)

20.4)

25.5)

26.3)

23.5

D/E ratio

306.1)

283.6)

250.5)

174.5)

177.0)

210.0

For the year

3

EBITDA*At year-end

Cash Flow

Per share data (yen)Ratios (%)

Notes: 1. Figures are rounded down to the nearest million yen (except per share information).
2. We conducted two-for-one stock splits on April 1, 2013 and January 1, 2015. Per-share information incorporates the impact of these stock splits. The
dividend for the fiscal year ended March 31, 2015 included a commemorative dividend of ¥2.5 to commemorate the designation of our stock on the First
Section of the Tokyo Stock Exchange.
3. EBITDA = operating income + depreciation
4. Return on equity = profit attributable to owners of parent / average equity
5. Return on assets = ordinary income / average total assets

20Corporate Information

Corporate Outline
Name
Date ofestablishment
Headquarters

SRG TAKAMIYA CO., LTD.
June 21, 1969

CapitalRepresentative

Grand Front Osaka Tower-B Bldg. 27F, 3-1,
Ofuka-cho, Kita-ku, Osaka 530-0011, Japan

Number of
employees

714,770,000 yen
President and Representative Director
Kazumasa Takamiya
Non-consolidated 339
Consolidated
979

Stock Information
Stock data

Breakdown of Shares by Type of Shareholders
144,000,000
45,304,000
4,421

Total number of issuable shares
Total number of issued shares
Number of shareholders

Financial instruments firms

Treasury stock

1.14%

3.48%

517,649 shares

Principal Shareholders

Foreign institutions and others

Shareholders

Number ofshares held
(shares)

Percentageof shares
held (%)

Takamiya Ltd.
Tojitsu Takamiya
Sky Rainbow Employee Stock
Ownership Community
Akiyoshi Takamiya
Kazumasa Takamiya
Japan Trustee Services Bank
(Trust account)Toyoji Takamiya
Chikako Takamiya
The Bank of Tokyo-Mitsubishi UFJ, Ltd.
Kanamoto Co., Ltd.

6,725,520
5,879,504

15.38
13.45

Other Japanesecompanies

2,276,240

5.21

20.20%

2,198,784
2,109,672

5.03
4.82

1,773,000

4.05

1,678,288
1,579,824
907,200
888,400

1,578,070 shares

4.73%
2,141,202 shares

9,152,280 shares

Financial institutions

Individuals and others

13.72%

3.84
3.61
2.07
2.03

56.72%

6,216,900 shares

25,697,899 shares*Rounded to the second decimal place.

*Notes: 1. The Company holds 1,578,070 shares of treasury stock.
2. Treasury stock is excluded from the list of major shareholders andis not used in calculating percentages of shares held.

Stock Prices and Trading Volume
Stock price (yen)1,200

Trading volume (thousands of yen)

8,000

Stock splits

900

6,000

600

4,000

300

2,000

0

4

5

6

7

8

9

10 11 12

1

2013

2

3

4

5

6

7

8

9

10 11 12

1

2

3

4

2014

5

6

7

8

9

10 11 12

2015

1

2

3

0

2016

*We conducted two-for-one stock splits on April 1, 2013 and January 1, 2015. Stock prices are retroactively revised to incorporate the impact of these stock splits.

Shareholders Information
Fiscal year
Securities code
Ordinary general meeting of shareholders
Record date
Share trading unit
Transfer Agent and Registrar for Common
Stock
Contact for Transfer Agent and Registrar

Method of public notice21

From April 1 to March 31 of the following year
2445 (the First Section of the Tokyo Stock Exchange)
June
Ordinary general meeting of shareholders: March 31 /Year-end dividend: March 31 / 2nd quarter-end dividend: September 30
100 shares
Mitsubishi UFJ Trust and Banking Corporation
Osaka Securities Agent Department, Mitsubishi UFJ Trust and Banking Corporation
3-6-3, Fushimi-cho, Chuo-ku, Osaka-shi, Osaka 541-8502, Japan
Tel: 0120-094-777 (toll-free)
By electronic notification on SRG TAKAMIYA’s website: http://www.srg.jp/
However, if electronic notification is not possible due to an accident or other unavoidable
circumstances, notice will be published in the Nihon Keizai Shimbun newspaper.

SRG Takamiya Annual Review 2016

Group Network
Cadian Co., Ltd.

Rental BusinessGrand Front Osaka Tower-B Bldg. 27F, 3-1,
Oofuka-cho, Kita-ku, Osaka 530-0011, Japan
TEL: +81-6-6375-8048
FAX: +81-6-6375-8128

IWATA Co., Ltd.
523-2 Shironodan, Chogetsu, Momoyama-cho, Kinokawa City,
Wakayama Prefecture 649-0611, Japan
TEL: +81-736-66-3450
FAX: +81-736-66-3451

NEXTECH Co., Ltd.
Grand Front Osaka Tower-B Bldg. 27F, 3-1,
Ofuka-cho, Kita-ku, Osaka 530-0011, Japan
TEL: +81-6-6375-9200
FAX: +81-6-6375-9227

SHINKEN NAGAKITA Co., Ltd.
2-7-43 Jindoji-minami, Chuo-ku, Niigata City,
Niigata Prefecture 950-0986, Japan
TEL: +81-25-248-5730
FAX: +81-25-248-5741

TATSUMI Co., Ltd.

Sales Business2000-7 Shimohaji, Ibaraki-machi, Higashiibaraki-gun,Ibaraki Prefecture 311-3155, Japan
TEL: +81-29-297-2406
FAX: +81-29-297-2407

Hory Corporation
Onward Park Bldg. 12F, 3-10-5, Nihonbashi, Chuo-ku,
Tokyo 103-0027, Japan
TEL: +81-3-3276-3920
FAX: +81-3-3276-3921

HIRAMATSU Co., Ltd.
4342-9 Sumiyoshi, Yoshida-cho, Haibara-gun,Shizuoka Prefecture 421-0421, Japan
TEL: +81-548-22-7588
FAX: +81-548-22-7122

Hory Korea Co., Ltd.
277-5 Myeongdong-ri, Hallim-myeon, Gimhae-si,
Gyeongsangnam-do, Korea
TEL: +82-55-342-5651
FAX: +82-55-342-5654

AOMORI ATOM Co., Ltd.
35-135 Yakiyamakawame, Odanozawa, Higashidori Village,
Shimokita-gun, Aomori Prefecture 039-4223, Japan
TEL: +81-175-45-7750
FAX: +81-175-45-7751

HORY VIETNAM Co., Ltd.
Long Duc Industrial Park, Long Duc Ward, Long Thanh District,Dong Nai Province, Vietnam
TEL: +84-61-368-1211
FAX: +84-61-368-1199

SN Builtech Co., Ltd.
Onward Park Bldg. 11F, 3-10-5, Nihonbashi, Chuo-ku,
Tokyo 103-0027, Japan
TEL: +81-3-3276-3930
FAX: +81-3-3276-3931

DIMENSION-ALL INC.
Unit 906, One Corporate Centre, Meralco Avenue Corner Julia
Vargas Avenue, San Antonio, Pasig City, 1605 Metro Manila,
Philippines
TEL: +63-2-997-4001

TOTAL TOSHISEIBI Co., Ltd.
2601, Yorozu-cho, Nakagawa-ku, Nagoya City 454-0872, Japan
TEL: +81-52-352-0347
FAX: +81-52-353-5841

Group Tie-ups
Manufacture and sales of
temporary equipment
and materials

Manufacturers,
trading companies

Hory Korea
HORY VIETNAM

Manufacture and sales of
temporary equipment
and materials
Products

HORY

Purchase of lease assets

Purchase of products for sale

Purchase of lease assets

Purchase of products for sale

Purchase of lease assets

Purchase of products for sale

Purchase of lease assets

Sales and rental of temporary equipment
and materials

Manufacturers, trading companies

SRG TAKAMIYA

Preparation of drawings

Cadian

Sales

Regional marketing

Specialist construction
AOMORI ATOM, SN Builtech,
TOTAL TOSHISEIBI, NEXTECH

Equipment transportation

HIRAMATSU

Domestic customers

Overseas customers
RentalSales, rental and construction of
temporary equipment and materials
IWATA, SHINKEN NAGAKITA,TATSUMI

Sales, rental and construction of temporary
equipment and materials

DIMENSION-ALL

Purchase oflease assets

Domestic and overseas construction companies,
contractors, agents (scaffolding rental companies)
Preparation of drawings

Transport operations

22

SRG TAKAMIYA CO., LTD.
Grand Front Osaka Tower-B Bldg. 27F, 3-1,
Ofuka-cho, Kita-ku, Osaka 530-0011, Japan

Printed in Japan