INTEGRATED REPORTI NTRO DU CTI ON

Creating value for aviationand metropolis with trust

Our Mission

We, the Airport Facility Group, will contribute to the advancementof aviation and the creation of attractive communities throughprioritizing and delivering valuable facilities and services.

We adequately respond to customers' needs
and the requirements of society within
and outside airports, try to expand our business base,develop our business actively,
and promote the growth of the company,
while also aiming to contribute to realizing an affluent society.

01

I N T E G R A TED REP ORT 2 0 2 3

AFC VISION

Toward creating unique value within and outside airports
Our Value
1. We endeavor to uphold the trust and confidence that the public and customer placed on us.
2. We will always remain fully committed to safety and security.
3. As airport and real estate professionals, we will always challenge ourselves to meet publicand customer expectations.
4. We will always remain fully committed to preserve the global environment and actively
contribute towards long term sustainability of our society.
5. We respect diversity and provide a rewarding workplace.
6. We actively promote and maintain highest standard of ethics and integrity.

INTEGRATED REPORT 2023

02

CONTENTS

To our stakeholders

I ntegrated Report 2023

Society

05

Corporate development

07

AFC Group shown in data

09

Message from the President

We offer our heartfelt apologies to our shareholders and parties involved for

13

Message from Outside Director

causing grave concern and inconvenience over the occurrence of the governance

15

Value creation processproblem regarding the appointment of company officials in the past, and the fact

17

Materialitythat some of the proposals on the appointment of officials were voted down at the19

Medium- to Long- Term Management Plan

23

Special Issue 1 ● Airport Business Headquarters

25

Special Issue 2 ● Business Creation Headquarters

Our company operates facilities in Haneda Airport and other major airports

29

Special Issue 3 ● Technology Headquarters

throughout Japan, including cargo terminals, training facilities for crew, and31

Special Issue 4 ● Promotion of non-asset business

33

Special Issue 5 ● Promotion of sustainability

stakeholders of our group, and the new officers will strive to fulfill such task.

hangars, and supports the functions of airports through the provision of area

Human resource and organization development strategy

40

Promotion of work-life balance and D&I

41

Promotion of health management

42

Disaster countermeasures

43

Community building and contribution in neighboring regions

Governance

54th general shareholders' meeting.
Our urgent task is to regain confidence from our shareholders and all the39

44

Corporate Governance System / Role of the boards of directors
and corporate auditors

45

Directors and Statutory Auditors

47

Appointment and compensation of outside directors and auditors
Evaluation of the board of director’s effectiveness49

Cross-shareholdings under the national policy /Efforts to fulfill the criteria to keep listing

50

Compliance51

Risk management

heating and cooling facilities, water supply and drainage services, andinfrastructure for shared communication services. In addition, we have been

Environment

53

Financial information

expanding the field of our business, such as by leasing properties outside airports,

35

57

Stock information / Corporate profile

Promotion of environmental businesses

including hotels, residents, an international student dormitory, and buildings inurban central areas, as well as developing businesses in Singapore and Canada.
Under these circumstances, our company will continue creating value by
resolving various challenges, including environmental problems, safety andassurance of employees and the regional community, and the improvement ofcorporate governance, by taking advantage of our strengths in real estate and other

About this Report
This Report is compiled to ensure the understanding of our Group in a well-balanced fashion from various aspects among all the stakeholders, including
financial information such as management performance and strategy, as well as non-financial information in terms of environment, society, and governance.
Please also refer to the website of our company, which offers various other information.

Overview

businesses, based on the Basic Policy for Sustainability.
We ask for ongoing understanding and support from our stakeholders.

Shigeo Tamura
President and CEO

IR siteINTEGRATED REPO RT

September 2023

Financial

Non-financial
Sustainability
Site

Corporate
governance report

Reference materials
for results briefing

Annualsecurities report

Details

03

I N T E G R A TED REP ORT 2 0 2 3

Period covered by this Report

Areas covered by this Report

From April 1, 2022, to March 31, 2023.

Airport Facilities Co. Group(Some of the activities and efforts after April 1, 2023, are also included.)(including affiliated companies in Japan and abroad)

INTEGRATED REPORT 2023

04

CORPORATE DEVELOPMENT

Expansion of business field from Haneda Airport, ourstarting point

t

2020

Airports, facilities outside airports, non-asset businesses

se
s
A
Non

In-flight meal factory in ARC Building

1970

1993

2002

Establishment of Airport Facilities Co., Ltd.

Completion of the construction of Utility Center Building,West Hangar, and domestic cargo terminal in
Haneda Airport

Acquiring Technical Center 1 in Haneda Airport

2021

Hangar at Nata Heliport

Completion of theconstruction of
Kanazawa-Hakkei International Community Plaza
Kanazawa-Hakkei
International Community
Plaza (international
student dormitory) in
Yokohama City

2008
B747 Hangar

Completion of the South wing of Engine
Maintenance Building in Haneda Airport

2009

Utility Center Building

Completion of Component Maintenance Buildingin Haneda Airport

rt
o
p
r
i
-A

Non

Domestic cargo terminal

1978

2011
Completion of the construction of TOKYU
STAY Kamata hotel in Ota Ward
Acquisition of Rinku International Logistics
Center in Izumisano City, Osaka Prefecture
Completion of Kobe Hangar in Kobe Airport

2020

West Hangar

AFN acquires a helicopter maintenancefacility in Langley Regional Airport, Canada

2013

1994

Establishment of AIRPORT FACILITIESASIA PTE.LTD. (AFA)

1989

Completion of the construction of aircraft
sewage treatment facility (SD plant) in KansaiInternational Airport

2014

1995
1993

Transition to the Prime Market of
the Tokyo Stock Exchange

Singapore Office of AFC
Group opens

2017

G

Acquiring two Kyodo Buildings in Nihonbashi
Muromachi

Completion of the construction of Sogo Building No. 5
in Haneda Airport

Establishment of the Tokyo Airport Heating &Cooling Co., Ltd.

Helicopter maintenance facility (Canada)

Establishment of AFN PROPERTIES LTD.
AFA acquires an engine maintenance plant in
Seletar Airport, Singapore

1997
Stock listed on the First Section of the Tokyo Stock Exchange

T

EN
M
N
RO

Airbus Asia Training Centre (Singapore)

ENVI

Stock listed on the Second Section of the Tokyo Stock Exchange

Starts offering stock over the counter throughJapan Securities Dealers Association

Foreign/environment business

2020
Start of solar power generation at the rooftops ofthe domestic cargo terminal of Haneda Airport

2018
Completion of TRC
Distribution B Building
Rooftop Solar Power
Plant in Ota Ward2013

Flight simulator (Singapore)

05

2022
Hotel (TOKYU STAY Kamata)

L
LOBA

2010

Opening of Chitose Office (current Chitose Business Office)Completion of the construction of Sogo Building No. 2
in Haneda Airport

1981

Establishment of AFC AssetManagement Co., Ltd.

2005
Completion of the construction of aircraft sewage
treatment facility (SD plant) in Chubu Centrair
International Airport

Sogo Building No. 1

2022

Completion of the extension and refurbishment of ARC Building in Haneda Airport into an in-flight meal factory
Completion of the construction of Hangar at Nata Heliport in Fukuoka Airport (Nata Area)
The first-phase opening of HANEDA INNOVATION CITY (Development of Zone 1 of the Former Haneda Airport
Ground) in Ota Ward

Completion of the construction of Honsanrizuka
Solar Power Generation Facility in Narita CityTRC Distribution B Building Rooftop Solar Power Plant

1970

1993

1993

1998

2013

2013

Establishment of Airport Facilities Co., Ltd.,
becoming independent from Kokusai Kogyo Co., Ltd.

Debuts on the stock market

Facilities development accompanied with theHaneda Airport offshore land reclamation projectStart of businesses outside airports

Finance business starts abroad

Environmental initiatives(solar power generation)

Start of the leasing of buildings, area heating andcooling service, water supply and drainage service in
Haneda Airport 1-Chome area, and the leasing ofbuildings in Itami Airport

1993: Starts offering stock over the counter throughJapan Securities Dealers Association
1995: S tock listed on the Second Section of the Tokyo Stock Exchange
1997: S tock listed on the First Section of the Tokyo Stock Exchange
2022: T ransition to the Prime Market of the Tokyo Stock Exchange

At the timing of the start of the second phase of theHaneda Airport offshore land reclamation project (inSeptember 1993), area heating and cooling service(Tokyo Airport Heating & Cooling Co., Ltd.), local area
communication network business, and water supply
and drainage service starts.

Starting from the acquisition (sales) of Roppongi
Building in Minato Ward, projects in urban central
areas are expanded
Thereafter, the business is further developed toinclude hotels, residents for those who work at
airports, and international student dormitory.

AIRPORT FACILITIES ASIA PTE. LTD. is established in
Singapore in 2013.
In 2014, finance business starts.
In 2014, AFN PROPERTIES LTD. is established in
Canada and started finance business.

In 2013, the first solar power generation facility of ourcompany was constructed in Honsanrizuka, Narita.
Thereafter, solar power generation facilities are installed in
Kagoshima Airport in 2014, in Mizunami City, Gifu Prefecture
in 2016, in TRC (TRC Distribution B Building Rooftop) in 2018,
and in Haneda Airport domestic cargo terminal in 2020.

I N T E G R A TED REP ORT 2 0 2 3

INTEGRATED REPORT 2023

06

AT A GLANCE AFC Group shown in data

Net sales

Operating income

Net income (loss)

Net sales/operating income by Business segment ((Million yen)

(Million yen)

(Million yen)

30,000

5,000

3,000

Real estate business

Area heating & cooling business

Water Supply & Drainage Business and Other Businesses(Million yen)

(Million yen)

(Million yen)

25,0004,000

24,15520,00023,77725,516

4,000

3,831

2,000

3,280

3,000

*22,784

2,503

2,000

10,000

FY2020

FY2021

FY2022821

1,000*2,460

0

1,000
0

1,564

20,00018,94015,000（933）

FY2020Net assets

FY2021

FY2022

FY202010,000

FY2021

FY2022

2,922

2,862

2,172

0

2,957

3,000

3,412

FY2021

2,500

1,097

1,000
452

225

FY2020

FY2021

FY2022(Million yen)（%）

60,000100.0

Net Sales by Business segment

Net Sales by Region

80.0

Water Supply & Drainage Businessand Other Businesses

Other Regional Airports

57,36857,50054,96455,00055,306

60.0

52.1

54.5

51.4

40.0
52,50020.0

50,000

FY2020

FY2021

FY20220

FY2020EBITDA + recovery

Dividend per share(Million yen)

(Yen)

8,000

7,619

7,535

7,464

6,000

FY2022

FY2020

FY2021

FY2022

1.3％

77.3％

FY2021

FY2022

Outside Airport, Overseas,
and Other Businesses

14.8％

FY2022

KansaiInternational Airport

Domesticcargo area
Runway B

FY2020

FY2021

Haneda Airport

76.4％

Runway D

Runway C

14

14

10

0

（188）
FY2020（33）

Osaka
International Airport

Real estatebusiness

Area Heating & Cooling Business, Water Supply & Drainage Business
operation area
14

106

0

1.9％

20

2,000
0

FY202130

4,000

FY2022

13.4％

500

5.6％

9.3％

Area heating &cooling business

1,834

2,373

1,974

1,500

1,000

FY2022

3,000
2,000

0
FY2020Equity ratio

3,379

Operating income)

2,000

5,000

0

19,73018,845Net sales

Former aircraft maintenancearea (1-Chome area)

FY2022

Domestic
New aircraft
passengers area maintenance area

Runway A
International
passengers/cargo area

Area where both area heating & cooling business and watersupply & drainage business are operated
Area where only water supply & drainage business is operated

Performance for the fiscal year ended in March 2023

1

In order to equalize the conditions, the assumption of the exemptions of rent in FY2020 (that had been actually reported as an extraordinary loss) that have notbeen reported as an extraordinary loss but were deducted from sales, as was the case in FY2021, is shaded in the chart (*). Comparing the figures of the latest
three fiscal years under such conditions, we have achieved practical increases in net sales and operating income for three consecutive years.

Chubu Centrair International Airport

In addition to the termination of the exemption of rent and heating charge claims for air carriers that was implemented for the past two consecutive fiscal years,
water supply and drainage service usage recovered due to the increase in the number of airport users, resulting in an increase of net sales.

Kobe Airport

3

Operating income decreased due to the increase in raw material expenses resulting from soaring energy prices in the area heating and cooling business and a
new burden of depreciation expenses related to asset retirement obligations (about 1 billion yen) from the Haneda Airport 1-Chome Project. Depreciation expenses
related to the asset retirement obligations are impacted by expenses from the perspective of future investment.

Kitakyushu Airport

4

As for net income, an extraordinary income due to the amended declaration of corporate tax assets and an extraordinary income from the sale of the hotels in
Kyoto in FY2020 were reported. On the other hand, impairment loss was reported as an extraordinary loss with the expected demolishing and redevelopment of
Osaka Sogo Building, resulting in the profit attributable to owners of parent of 1.5 billion yen.

113

I N T E G R A TED REP ORT 2 0 2 3

for FY2022 only

( 33 )

Number of those newly employed(number of women newly employed)

7

for FY2022 only, including
mid-career recruitment(5)

Canada:Langley Regional Airport

New Chitose Airport

Osaka International Airport

2

Number of employees (number offemale employees)07

Map of the facilities of our company

Hiroshima HeliportSendai Airport

Fukuoka Airport

Naha Airport

Haneda Airport, nearby
the airport, and the Tokyo
Metropolitan area
Kagoshima Airport

Overtime work

Kansai International Airportmonthly average in FY2022, non- consolidated

19

Singapore:
Seletar Airport

hours

Paid leaveaverage days taken in FY2022, non- consolidated

14

days
INTEGRATED REPORT 2023

08

TOP MESSAGE

Towards realizing transparent
management, strong governance,
and the maximization of
corporate value
Shigeo Tamura
President and CEO

Introduction

every industry, not only the aviation and real estate industries.

acquired the company's first property for sale in Hiroshima City insincerely so that our company is chosen by customers. The flow

However, recently, the normalization of economic and social

March 2023, and then the second property in Shinjuku in June.

of change in the social environment is faster than we expect, andBecause a potential problem was identified in the process ofactivities has progressed largely including the recovery in aviation

Regarding the acquired real estate, we will raise the asset value

our company cannot escape it. More than anything, it is important

discussion regarding the appointment of candidates for the directors

and tourism demands, and we are hearing more positive news forfor sale, gain profit, and aim to compose a privately-placed REIT.

to think, plan, and implement on the premise that times haveof our company, we have established the Independent Inspection

the company. On the other hand, there are still uncertainties in

As for the aircraft fund for which we signed an investmentchanged. We would like to achieve sustainable growth for our

Committee Regarding Governance on the Nomination of Directors

the international community caused by factors such as thecontract in July 2022, we obtained the first aircraft as a measurecompany, without postponing the issues but resolving them with(hereinafter referred to as the Inspection Committee) to implement

circumstances of Ukraine, so we need to pay attention to theto establish a "business portfolio that is resilient to risks" aware

a strong will to carry through.

inspection. We accept with sincerity the results of inspection byeffect on the businesses of the company, both tangible and intangible.

of capital efficiency, mentioned in the Medium- to Long-Term

In FY2023, the second year of our Medium- to Long-Termthe Inspection Committee to formulate and implement concrete

The Medium- to Long-Term Management Plan for FY2022-

Management Plan. This aims to diversify the company's revenue

Management Plan, we would like to continue steady efforts one bymeasures to prevent recurrence based on the problems pointed

FY2028 announced in May 2022 started under a harsh environment,

sources by investing in a fund to hold multiple aircraft, which are

one towards the development in the future, without nipping the budsout and suggestions on improvement measures. We will devote

such as the significant decrease in aviation demand caused byattracting attention as a global investment asset that generates

of growth, to achieve the Medium- to Long-Term Management Plan.

all our energy to restoring trust from our stakeholders.

the COVID-19 pandemic, and the recognition of an asset retirement

stable profit for a long term.

obligation for existent facilities associated with the start of the

For the achievement of the Mediumto Long-Term Management Plan09

We will continue managing the PDCA cycle based on the early

Organizational reform

Haneda 1 Cho-me Project. However, by utilizing the knowledge

recognition of changes in the business environment andwe have been developing until now, we are engaged in threemanagement issues, and work to establish stable growth and a

Toward the achievement of the Medium- to Long-Term Management

priority measures, namely (i) the Haneda 1Cho-me Project, (ii)

profit foundation, towards the achievement of the Medium- to

Plan, organizational reform was implemented as of June 29, 2023,

expansion of the non-asset business, and (iii) improvement of theLong-Term Management Plan.

for the purpose of restructuring the system to suit the promotion of

Progress management of the Mediumto Long-Term Management Plan

profitability of existing businesses, under the AFC Vision, titledOn the other hand, a trusting relationship with our customers

business and reinforcing marketing promotion.

"Toward creating unique value within and outside airports."

is important for our business. We need to place top priority on

The reform included the restructuring of the existing five

Recently, we have been acquiring real estate for sale insafety and security, to construct, maintain, repair, and improve

Headquarters into three Headquarters, namely the Airport Business

Three years have passed since everyday life changed significantly

collaboration with AFC Asset Management Co., Ltd., establishedfacilities, and ensure that our customers can use the facilities

Headquarters, Business Creation Headquarters, and Technology

due to the spread of COVID-19. The global pandemic affectedlast year in the area of non-asset business. Specifically, we

comfortably. It is essential that all employees approach their work

Headquarters, in order to clarify responsibilities for profit andI N T E G R A TED REP ORT 2 0 2 3

INTEGRATED REPORT 2023

10

TOP MESSAGE

ensure the thorough management of income and expenditure.
1) Airport Business Headquarters

independence criteria prescribed by the Tokyo Stock Exchange.
In addition to the existing one female outiside (independent)

The Headquarters consist of Airport Business Department,

director, one female outside (independent) auditor took office in

Airport Infrastructure Business Department, and Planning andJune 2023, and the ratio of female directors among the board

Research Department, and are in charge of businesses within

members is now about 17% (2 out of 12 directors). Directors andHaneda Airport and other domestic airports in general,

statutory auditors of our company have various backgrounds andintegrating the functions for services within the airport.

different knowledge.

2) Business Creation Headquarters

We expect that active discussions made from more multilateral

The Headquarters consist of Real Estate Business Department

perspectives than ever will lead to the establishment of transparent

and Foreign Business Department, with Innovation Promotion

and strong governance.

Division added as an organization under the direct control ofthe Headquarters. The Headquarters are in charge of businesses
outside airports and foreign businesses.
3) Technology Headquarters
The Headquarters consist of the Facilities Planning Department,

As of December 2022, our company failed to fulfill the criteria for

Osaka Office, and Chitose Office, and are in charge of businesslisting on the Prime Market of the Tokyo Stock Exchange.

related to facilities in general, including new construction,

Therefore, setting the improvement of IR and shareholder return

among preparation for future investment to achieve sustainable

Although the achievement of the reduction goal for CO2 emissions

renovation, repair, and maintenance.

as the basic policy, we announced a plan to fulfill the criteria by

growth, maintenance of financial soundness and return of profits

is a big challenge, we strive to reduce CO2 emissions by 46% in

the end of December 2025.

to shareholders, under the basic policies of return to shareholders,

FY2030 by considering various methods and technologies.

Transparent management, and theestablishment of strong governance

Board of directors

In regard to the first item, the improvement of IR, our company

namely the "stable and continuous return of profits" and "dividend

In terms of social efforts, we conducted a disaster drill for prompt

established the Public Relations and Investor Relations Division toincrease linked to business performance improvement." In therestoration at the time of disaster, and also held an in-house lecture

promote constructive dialogue with shareholders and investors,

Medium- to Long-Term Management Plan, we decided to aim foron D&I promotion. In regard to regional contribution, we donatedand we are actively working on IR activities.

a consolidated payout ratio of 40% or higher, increased from thestockpiles against disasters and provided support to restaurants

previous goal of 30% or higher.

providing free or inexpensive meals to children.

While we are holding a results briefing twice every year, we arealso striving to keep close communication with analysts. We also

Also, the shareholder benefit was changed from the discountAs for D&I (women empowerment), we are working to raise

The Corporate Governance Code specifies the roles andconduct IR meetings and interviews, and are also considering

coupon for affiliated hotels to a meal voucher for Blue Corner UC,

awareness within the company through measures such as regularresponsibilities of the board of directors as: (1) indication of theresuming the facilities observation tour for shareholders in FY2023

a restaurant operated by our group company. In the restaurant,

transmission of information. It is highly important to bring out thegeneral direction, such as the corporate strategy, (2) developmentthat was canceled due to the COVID-19 pandemic.

you can watch airplanes within Haneda Airport while enjoying

motivation and potential of female employees, and we consider

meals. This place makes you feel more familiar with Haneda

that it is necessary to develop an appropriate environment.

of an environment to support adequate risk-taking by executives,

Our company website provides information including theand (3) highly practical supervision of management and directors

disclosure of new projects as necessary, reference materials forfrom an independent and objective perspective. The board ofresults briefing, and the AFC Report that is sent to our shareholders

operating a suitable management system and internal control

directors of our company makes decisions on matters prescribed

twice every year. Further, our company also prepares the Integrated

system, in order to ensure sound, transparent, and fair management

by laws and regulations, matters specified in the rules on theReport to ensure the understanding of our Group in a well-balanced

board of directors, and other matters of importance, and assumes

fashion from various aspects among all the stakeholders,

the role of supervising the management of the company inincluding financial information such as management performance

In order to further promote sustainability management, our company

general. In their execution of operations, directors are assigned

and strategy, as well as non-financial information in terms of theestablished the Sustainability Promotion Council, to minimize risks

specific duties, and it is ensured that each director carries themenvironment, society, and governance.

and create business opportunities through setting and managing

out. At the same time, organization regulations and division of

We are also actively disclosing IR materials in English for our

Airport, the base of our business.

Sustainability promotion

In terms of governance, we are committed to developing andand to achieve sustainable growth. We are also identifying problems
and taking necessary measures in the Risk Management Committee

the progress regarding important issues (matters of materiality)

and the Compliance Committee.

Conclusion

duties regulations are formulated to ensure that such duties areoverseas investors. We launched the English website of ourand key performance indicators (KPIs), as well as to consider

We recognize that our largest responsibility is to continue winning

conducted adequately and efficiently.

company, which also includes financial results, reference materials

measures such as response to the Task Force on Climate-related

trust and keep achieving sustainable growth as a company listed

for results briefing, and the AFC Report, in English.

Financial Disclosures (TCFD).

on the Prime Market of the Tokyo Stock Exchange.

In addition, independent outside directors are selected basedon criteria such as being capable of contributing to AFC’s
sustainable growth and an increase in the enterprise value in themedium to long term by providing advice and recommendations
to management from a position of independence, as well as the11

Measures to fulfill the criteria forlisting on the Prime Market

I N T E G R A TED REP ORT 2 0 2 3

We will continue working to provide information to ourshareholders through the improvement of IR.
In regard to the second item, improvement of shareholder return,
we pay stable dividends while maintaining the right balance

As for current efforts in terms of the environment, we are aiming

We will continue responding sincerely to requests from ourto reduce CO2 emissions by 46% in FY2030 compared to FY2013.

shareholders, investors, and various other stakeholders, striving to

Measures such as the introduction of LED lights in facilities andincrease corporate value, and enabling AFC Group to evolve further.

upgrading to high-efficiency equipment are being carried forth.

(As of September 1, 2023)

INTEGRATED REPORT 2023

12

MESSAGE FROM OUTSIDE DIRECTOR

In order to further increase
corporate value, we will utilize
outside perspectives.

Sustainability promotion

what is most important for that is human resources, in other words,
employees. As such, we aim to fulfill wellbeing (a state where you

Sustainability efforts towards the realization of the SDGs are now

are happy and physically, mentally, and socially satisfied), the thirdan essential condition for corporate activities, and are directly linked

item of the SDGs. I expect our company to prepare an open andto corporate value, including the evaluation of and decision to invest

easy-to-work environment where all employees can make best of

in the company. Our company sets a goal in terms of each of thetheir characteristics and fully exert their potential. If the employees

ESGs (environment, society, governance), but it is necessary to

can move towards the goal with a smile, and with strong motivation,plan out the way towards their achievement, setting out specificallyit will definitely have a good effect on the company.

what should be done by when and managing the progress.
I will repeatedly share within the board of directors and in thecompany the issues of the aggravation of climate change and theIndependent Outside Director

Currently, a vast amount of information is flooding society. Under

throughout the world, and I hope that all the aspects of thesuch circumstances, merely disclosing company information provides

management and the business operations of the AFC Group will

no assurance that it will reach people. Some of the business activities

be addressed based on the perspectives of the reduction of CO2

of our company have a strong affinity to the SDGs, which are focusedemission and SDGs. Our company must contribute securely to theon as global guidelines. IR activities to securely convey necessary

promotion of “eco-airports,” which is a national initiative, and it isinformation are essential. The company’s strategy is called into

desirable to exert strong leadership and bring the specific concept

question on what information to convey and when and how to do so.
Also, in order to ensure sustainable corporate activities, we mustthe Haneda Airport 1-Chome Project and other new projects.

deepen dialogue (communication) with all our stakeholders

I am closely watching whether the decision-making in the(shareholders, investors, regional society, and employees) andcompany incorporates the perspective of ESG, whether thelisten to their opinions, and incorporate such opinions into theprocess of the evaluation of the investment target is appropriate,

operation of our business to increase our corporate value. Especiallyor whether the ideas and opinions of the young generation arewhen changes are made that may have both internal and external

adequately evaluated and opportunities for the creation of new

effects on the company, directors must be reminded of the need tobusiness are generated.

thoroughly discuss and understand the changes, and to carefullyRole to be played by an outside director

For the enhancement of governanceI assumed the post of outside director of our company in 2015.

The enhancement of governance is becoming a more and more

Then, there is also the perspective of diversity, equity, andI realize that the expected role of outside directors is increasing

important theme for a company. It is an urgent issue, particularly

inclusion (DE&I). Our company gathers various human resources ofin importance every year. I have been working for a long time asfor our company. We deeply regret and apologize sincerely todifferent career backgrounds, from a wide variety of communities.

a freelance announcer. Further, I was also in charge of runningsociety and many stakeholders for the confusion and trouble caused

While this involves difficulties, it is at the same time a strong

an organization and was engaged in various areas, includingfrom the series of events that started two years ago, in a manner

advantage that no other companies have, as long as such different

transportation, as a committee member of the government. I believethat is also attributable to the background of the establishment ofcharacteristics, values, and working styles are respected, and anthat my responsibility is to utilize such experience and view the AFC

our company. The company is currently uniting the efforts of allenvironment is established allowing us to fully exert such features.

Our company must realize again the pride, significance, andGroup based on the multilateral perspectives of society and people.

directors and employees under the new management structure forLearning how to make decisions and how to do your job in theimportance of our role as the power behind the scenes that

explain the process in detail to our stakeholders and wider society.
All the directors are recognizing such need anew.

For the achievement of the Mediumto Long-Term Management Plan

The board of directors of our company includes three independent

the restoration of confidence, while considering and implementing

context of day-to-day work is also effective. Courtesy, manners,

supports airports, which serve as bridges connecting the world

outside directors and two independent outside auditors. In addition,measures for the enhancement of governance and building soundand morality are factors required for working adults that do not

and carrying dreams for various people and goods, and at thefrom June 2023, Ms. Sawako Ueno joined as a statutory auditor,

corporate culture with a self-cleaning mechanism.

change over time, and I think the employee training provided insame time move forward to boldly take on new businesschallenges in response to global trends and society’s needs.

and including myself, there is now one female outside director

There is an increasing number of measures that must be taken

our company is very good. Along with the perspective of genderand one female outside auditor. I believe the composition is

to fulfill our mission as a Prime-listed company, but we believe it isequality, I would like to see more opportunities for female employees

well-balanced also from the perspective of a skills matrix.

necessary to prioritize such measures and pursue further efficiency,

to play an active role as a major competitive workforce and to have

corporate value while keeping an adequate distance from theas a company with limited human resources, in order to implement

more opportunities to take on new challenges.

president and other executives, and move forward with them towards

what is necessary for realizing the ideal image of the company.

13

acceleration of movement towards a decarbonated societyof sustainability to the fore also in the renovation of facilities under

Kayo Aoyama

Importance of IR and dialogue with various people

I N T E G R A TED REP ORT 2 0 2 3

Of course, the pursuit of profit is necessary for a company, andAs an independent outside director, I will contribute to increasing

realizing the Medium- to Long-Term Management Plan.

INTEGRATED REPORT 2023

14

VALUE CREATION PROCESS
Basic Policy for Sustainability

are currently leasing hotels and residents for those who work at airports, an international student dormitory, office buildings in urban central areas,

Our company engages in business under the corporate philosophy of "contributing to developing the future of aviation and attractive towns."
Currently, our company is developing facilities in Haneda Airport and other major airports throughout Japan, including cargo terminals, training

as well as developing businesses in Singapore and Canada, to expand our field of business.
Our company will utilize different kinds of capital (financial capital, human capital) and networks (clients, society), and it aims to contribute to thefacilities for crew, hangars, maintenance plants, in-flight meal factories, and multipurpose buildings, as well as supporting the functions of airportssocioeconomy by providing facilities that continuously respond to various needs in businesses in areas such as real estate business, which is thethrough the provision of area heating and cooling facilities, water supply and drainage services, and shared communication services. In addition, we

strong point of our company, as well as to tackle issues including environmental problems to continuously create value.

Management resources

Business activities

Financial indicators(input)Financial foundation(financial capital)
Human resources(human capital)

Medium- to Long-Term
Management Plan
Real estatebusiness

Net sales

Area heating &cooling business

Operating income
Net income

Network(clients, society)Accumulated know-how(knowledge, technology capital)

Water supply &drainage business,shared communication
business, and building
maintenancebusiness

Environmental
businesses (solar power
generation, etc.) andnew businesses

Resources(natural capital)

ROA

Implementation of

the businessstrategy

Five advantages

Requirements from society(materiality)

Invigoration of the socioeconomy throughthe development of aviation

Stable earnings
structure centered onleasing business
Facility
development basedon airports
in Japan and abroad
Infrastructurebusiness

Reduction ofenvironmental burden
Community development
and social contribution
Formulation of a workplace
where employees can maintaintheir motivation for work

Ability to collectinformation from thenational governmentand clientsBusiness uniqueto our company
such as SD plants

I N T E G R A TED REP ORT 2 0 2 3Continuation of sustainable growthand development ofa profit foundation for the next stage
Provision of infrastructure supporting
airport functions
Formulation of towns
and airports resilient against disasters
Provision of comfortable and safe airport
function facilities and offices

ESG efforts

Reduction of environmental burden throughthe development of buildings and facilities

Measures taken against global warming
and climate change

Promotion of Diversity and Inclusion (D&I)

Waste reduction, pollution prevention

Technologicalcapability in terms ofreal estateand infrastructurewith many years ofexperience(outcome)

Payout ratio

Harmony with and invigoration of the community,
building a community resilient against disasters

Provision of opportunities
for capacity building
Provision of workplace environment
easy to work in
Invigoration of regional society

Realizing a workplace and work-life balance
where everyone can work healthily

Trust from the society and clients

Realizing a society where everyone
can work free of discrimination

Stable and sustainable return to shareholders/trust from shareholders and investors

Ensuring sound, transparent, and fair management

Governance supporting

business

Corporate Philosophy,

AFC VISION

Continuous improvement of corporate

15

EBITDA + recovery

Values creation and provision
to stakeholders and society

value through the cycle of value creation

INTEGRATED REPORT 2023

16

MATERIALITY

Materiality of Airport Facilities Co., Ltd.
Process of identifying materiality
Our company studied trends in domestic and international social issues, prioritized those issues, identified matters of materiality through repeated discussions

STEP

among the management, and set KPI (key performance indicators) for the period covered by the Medium- to Long-Term Management Plan.

1

We regularly implement progress management, discuss the causes and measures for lack of progress with initiatives, and work for the achievement of
KPI in terms of both risks and business opportunities. Initiatives that are achieved during the period are announced on the company's website.

Materiality (priority issues)

Items to be addressed

KPI during the Medium- to Long100% replacement of the lights in major facilities with
LEDs (scheduled to be completed in FY2023)■ Replacement with high-efficiency equipment anddevices (scheduled to be completed in FY2027)■ Realization of ZEB in new facilities and theintroduction of the latest energy-saving equipment
■



▲

Reduction of energy
consumption/CO2 emissions

in FY2030 compared to FY2013 basedon government policy

2Studying the trends in domestic andinternational social issues

Prioritizing the issues
Evaluation according to the social requirements
and the basic policy of our company

Term Management Plan period
Further development of renewable energy, including
solar power generation■ Considering environmental business utilizing nextgeneration technologies■ Achieving a 100% ratio of eco-friendly cars and installingrecharging facilities for electric vehicles in major facilities

STEP

3

Evaluation of appropriateness
Discussion at the management level

Progress

Relation with
the SDGs■Five projects for upgrading to LED lights were completed by the end of FY2022
Installation of a solar power generation facility on the rooftop of the engine maintenancefactory in Seletar Airport, Singapore

■
■



▲

Utilization of renewable energy,
waste reduction■ Target to reduce CO2 emissions by 46%

STEP

Studying and identifying issues

Promotion of reuse andrecycling■■ Purifying sewage■Promotion of installing water-saving facilities
Maintaining mandatory water quality standards

Maintaining mandatory water quality standards

■



▲

ENVIRONMENT■ Reduction of water use■ Waste reduction■ Promotion of reuse and recycling

Sorting waste at each office of our group
Reducing the use of paper through the further
promotion of IT digitalization■■

Holding training on harassment and sessions byexternal lecturers■■ Human resource development

Reducing the use of paper through the utilization of IT digitalization- Digitalization of salary statements (started from September 2022)- Digitalization of invoices (started from April 2023)■

Career development training, training sessions fordifferent purposes (compliance, etc.), promotion ofqualification acquisition

■


▲

Sustainable capacity building
and growth

Set basic policies and goals based on the Act for Measures to Support the Development of
the Next-Generation Children and The Act on Promotion of Women’s Participation andAdvancement in the Workplace- P romote working styles that make it easy to keep a balance between work and childcare,and to support autonomous career development (by the end of FY2024)-C reate a workplace environment where a balance between work and childcare can beeasily kept (by the end of FY2024)- Increase the number of female managers to at least 8% by the end of FY2025 and 10% by the end of FY2028■

Reduction of overtime work, promotion of taking
leave, promoting reinstatement■ Promoting the appointment of female managers■ Achieving the mandatory employment rate of disabled
persons■▲Realizing a society where
everyone can work free of
discrimination■ Promotion of work-life balance and D&I

▲Realizing a workplace where
everyone can work healthily▲

Building facilities resilient
against disasters
Crisis management andthorough implementation ofcountermeasures against
emergency

▲

SOCIETY■ Promotion of health management■ Preparing in advance against disasters■ Prompt restoration of airport functions

and businesses when a disaster occurs

Aiming to achieve zero industrial accidents and fatal
accidents■

Workplace inspections by industrial physicians
Implement mental health interviews to all employees

■

■

■

Strengthening the earthquake resistance of buildings
and securing stockpiles against disasters■Implementing practices based on our business
continuity plan (BCP) and reviewing its contents■Implementing safe driving lectures by external lecturers
Implementation of interviews with physicians specializing in mental health once every month■

Renewal of stockpiles against disasters■

Scheduling and implementing various disaster drills,
and holding first-aid lectures■Conducting comprehensive disaster drills (online form due to COVID-19) and revising various
rules on disaster countermeasures to allow prompt confirmation of employees' safety and thedamage situation, and restoration at the time of disaster

■



▲

Harmony with and invigorationof the community

Implementing Compliance training by lawyers■■ Community building and contribution inneighboring regions

Provision of renewed stockpiles to Ota Ward and food bank activity groups
Donation of lunch boxes made in an in-flight meal factory to restaurants providing free or
inexpensive meals to children■Participating in and supporting regional events■■Updating the corporate governance report (confirmation of cross-shareholdings under thenational policy, implementation of the evaluation of the board of director’s effectiveness)■ Based on the Inspection Committee's report on problems and recommendations for
improvement, formulating the improvement plan to aim for greater management transparency
and soundness■■ Thorough corporate governanceEvaluation of the board of director’s effectiveness■R ecord of attendance at board meetings■B oard comprising of various directors■ Ensuring compliance, implementing

■

■



▲

Ensuring sound, transparent,
and fair management

GOVERNANCE

appropriate risk management■ Securing communication withstakeholders

17

I N T E G R A TED REP ORT 2 0 2 3

Holding the meetings of Risk Management Committee
and Compliance Committee
Uploading information on results briefing, facilities
observation tour for shareholders, and IR materials on
the corporate website■Thoroughly identifying risks and reducing risks bytaking measures according to each risk

■Holding the meetings of Risk Management Committee and Compliance Committee twice each■Holding the results briefing twice a year
Implementing meetings with investors■ Preparing the Integrated Report and disclosing it on the website■■

INTEGRATED REPORT 2023

18

MEDIUM- TO LONG-TERM MANAGEMENT PLAN
Progress of the Medium- to Long-Term Management Plan

Medium- to Long- Term Management Plan

Toward creating unique value within
and outside airports

The Medium- to Long-Term Management Plan for FY2022-FY2028 announced in May 2022 started under a harsh environment, such as the significant decrease inaviation demand caused by the COVID-19 pandemic, and the recognition of an asset retirement obligation for existing facilities associated with the start of the Haneda
1 Cho-me Project.
Under such circumstances, we moved forward with various measures to develop a high-efficiency business portfolio that is resilient to risks, which is one of theimportant themes of the Management Plan.
We will work to establish a profit foundation towards achieving sustainable growth, while standardizing and sophisticating management based on the PDCA cycle byregularly holding the Management Strategy Council where various business challenges, including managing the progress of the Management Plan, are discussed.

ROADMAP

1

Medium- to Long-Term
Management Plan
for FY2022-FY2028

1
2
3

Haneda Airport 1-Chome project
A facility redevelopment project in the Haneda Airport
1-Chome area

Expansion of non-asset businesses
Diversification of profit sources and improvement of
capital efficiency

Improvement of the profitability of existing businesses
Improvement of the occupancy rate and implementation of
restructuring projects

Further strengthening of
the business foundation
Continuation of sustainable growthand development ofa profit foundation for the next stage
Return on Assets

Endeavor towardrealizing
the AFC Vision
for FY2029

End of FY2021

Toward creating unique value
within and outside airports- More precise anticipation ofcustomers’ needs- Bold expansion into new business areas- Realization of a sustainable society
through ESG activities

ROA
Targets

3.4 %ROA
Actual results

AFC VISION

FY20285.0 %*Scheduled completion of Phase 1 of the Haneda Airport 1-Chome project*ROA (return on assets) = business profit (operating profit + non-operating profit) ÷ total assets

Noteworthy current external environment factors
Item
Aviation/
airports

Recognition of the environment
Recovery from the COVID-19 crisis and further strengthening ofHaneda Airport’s functions
Replacement demand due to the strengthening of the functions of
airport facilities and infrastructure

AFC Group's response

Specific measures- Strengthening and expansion of the airport-related real estate business- Identification of customers’ diversifying needs, and proposals- Active capital investment in the airport-related infrastructure business- Haneda Airport 1-Chome project- Airport-related real estate business- Airport-related infrastructure business- Activities related to a non-airport new business model- Selective investments conscious of bipolarization of the real estate market- Thorough risk management- Non-asset business- Non-airport business

Promotion of the “eco-airport” initiative
Changes in office demand due to work style reform andtechnological innovation

Real estateindustry

Growing needs for renovation and replacement due to an increase inaged real estate stock
A lack of transparency over the future course of inflation, real estate
prices, and interest rates

Haneda Airport 1-Chome project (Phase 1: From FY2022 to FY2028)

In the Haneda Airport 1-Chome area, where relatively old buildings are scattered, this project efficiently consolidates and rebuilds existing facilities. It is a project
where the experiences of our company can be fully utilized, and it is expected to contribute to stable long-term earnings from the leasing business. In new facilities,
the introduction of various measures towards the reduction of environmental burden are being considered, contributing to realizing a sustainable society. Discussions
with stakeholders are now being held, and the details of facilities and the scale of the projects will be decided hereafter.

2

Non-asset businesses and foreign businesses

As an engine to move forward towards the diversification of profit sources, profit increase, and improvement of capital efficiency, we are accelerating efforts on
the acquisition of real estate for sales outside airports and on overseas investment.
■ Acquisition of real estate for sales outside airports
Utilizing the discerning ability of AFC Asset Management Co., Ltd. established in May 2022, we acquired the first property for sale in Hiroshima City, Hiroshima
Prefecture in March 2023, and the second property in Shinjuku Ward, Tokyo in May 2023. Regarding the properties acquired, we are working to maximize
profit through increasing the property value, as well as to continue promoting the accumulation of excellent properties by determining trends in the real estatemarket, and we aim to enter the revolving business and privately-placed REIT business.
■ Foreign business
In July 2022, our company invested in "MACH I," the first aircraft fund for domestic investors in Japan since the occurrence of the COVID-19 pandemic, as amajor investor. In this fund, an Airbus A320CEO was purchased as the first aircraft in February 2023. Also, the engine leasing business invested in March2022 is also contributing to profit from FY2022. We will continue our challenges into new business domains, including real estate business outside airports
and foreign businesses, with a speedy decision-making.
■ Construction management
We are engaging in the construction management business as a part of the non-asset business utilizing the knowledge of our company. The reconstruction of
hangars in Sapporo Okadama Airport, which was the first project, started in February 2023 and received evaluation from our client as providing value unique to ourcompany, with abundant knowledge on the peculiarity of airport facilities. We will continue refining our original know-how and support the business of our clients.

3

Improvement of the profitability of existing businesses

In addition to continuing efforts for maximizing profits through measures such as the improvement of the occupancy rate in properties for rent, we are also putting
forward initiatives on the premise of recent rising prices and soaring energy prices. In addition, we are also recognizing that decisive reactions taken against properties
with problems in terms of profitability and future potential are also an important business challenge. As for the hotels in Kyoto acquired in 2018, we decided to sellthem for the purpose of improving asset efficiency and financial standing.
Also, since the properties for rent possessed in Osaka International Airport are aging, they were decided to be demolished by the end of March 2026. We willconsider a business plan regarding the redevelopment in the future.
■ Start of the operation of the fresh products center
Functions to handle perishable cargo that had been scattered throughout the domestic cargo area of Haneda Airport are consolidated and reorganized into
the fresh products center, and operation started tentatively. This contributed to resolving the existing problem of inefficiency caused by the confusion of thetraffic lines of trucks and forklifts, and both efficiency and safety increased. We are currently working on capital investment for refrigerating storehouses toincrease added value, towards the full-scale operation scheduled in FY2024.

4

Human resource and organization development strategy

Further enhancement of corporate governance
Need for activities to realize a sustainable society

Society andeconomyClimate change, and the increasing frequency and severity of natural
disasters
Progress in research and development and practical application of
next-generation aviation mobility

Overseas

19

Increasing populations, economic development and expanding
aviation demand in AsiaI N T E G R A TED REP ORT 2 0 2 3- Enhancement of governance- Strengthening of BCP efforts- Investments related to the environment and energy- Surveys looking toward future aviation- S trengthening of the businessfoundation- A irport-related infrastructure business- S tudy on creation of new businesses
toward future prosperity- Creation of new businesses to capture Asia’s growth- F oreign business

Aiming to enhance education and training and to improve skills based on career plan support, we are newly introducing training programs, such as training targeting
employees in their first and second years to develop basic knowledge on real estate, and training for different job grades to learn factors required for workplaceleaders, with an awareness of future management perspectives, targeting employees promoted to Chief.
Also, aiming to establish an organization where diverse human resources can work actively, our company is engaged in measures to promote work-life balance
and D&I (flex time system, system for working from home, training sessions by external lecturers, etc.), and aspiring to develop an organization and human resourcesthat are professionals in airports and real estate, which is the guiding principle of our company.

INTEGRATED REPORT 2023

20

MEDIUM- TO LONG-TERM MANAGEMENT PLAN

Haneda Airport 1-Chome project (Phase 1: From FY2022 to FY2028)

Osaka Sogo Building Redevelopment Project

The national government (Ministry of Land, Infrastructure, Transport and Tourism) is trying to reinforce the disaster prevention function of
the area in the period of about 10 years from now, by elevating the ground of the area in preparation against damages such as high tide water.
Our company currently owns eight facilities, including hangars, maintenance plants, and in-flight meal factories within the area. Theseare essential functions for the operation of Haneda Airport and aircraft, and it is impossible to cease the provision of the services that thesefacilities are in charge of. Therefore, our company consolidates and reorganizes the functions that are dispersed among these eightfacilities in response to the regrading work implemented by the national government, to develop facilities that are able to provide functionsof even higher quality. We consider this as a rare business opportunity and will promote this project of the largest scale since the Haneda
Airport offshore land reclamation project by setting three aims, namely the improvement of profitability, consideration for the environment,
and the assurance of safety and security, while paying close attention to responding to our clients’ needs.

Project
Overview

Osaka International Airport had been redeveloped with the Japan World Exposition, Osaka, 1970, in mind.
The construction of the passenger terminal building was completed in January 1969, and Osaka Sogo
Building was completed a little before, in December 1968.
More than 55 years has passed since the completion of Osaka Sogo Building, and because the building
was aging, it was decided to be demolished by the end of March 2026. We will consider a business plan
regarding the redevelopment in the future.
We also consider this as an important business opportunity and would like to plan a facility that is highly
profitable and convenient to use also in the future, and to realize a facility that also fulfills the needs ofsociety and users in terms of environment, disaster prevention, and ease of work, by accurately graspingclients' needs.

Overall view of Haneda Airport
Domestic cargoterminal area

Terminal 1 and
2 areasNew aircraft
maintenance area

IT promotion

Seibijo Station

Haneda1-Chome area
(aircraft
maintenancearea)

Terminal 3 area

Redevelopment area
Existing facilities owned by AFC

Schedule

Upon the consolidation and reorganization of the company’s facilities, it is necessary to proceed with the construction work in the following
order: regrading, new construction, and the removal of old facilities. Also, with construction works for a wide variety of businesses
overlapped during the period of ten years, the administration of process flow is highly important. Exerting the business know-how that ourcompany has been developing in and out of airports, we will ensure adequate process flow management.

PHASE 1

FY2022-FY2028(Medium- to Long-Term Management Plan)

PHASE 2

FY2029-FY2031

Pursuit of work efficiency
with IT

Currently under the Haneda Airport 1-Chome Project, our company is in charge of the plans for new facilities
and the coordination of the comprehensive process flow. This project is of the largest scale for our company
since the Haneda Airport offshore land reclamation project, so there are many issues to overcome. The existing
facilities will be relocated to a new site while maintaining all the current functions. However, roads connectedto the facilities will all change, so it will be necessary to also relocate or newly construct utilities, such as waterand sewerage, power supply, and telecommunication lines. We are realizing how difficult it is to coordinate
matters among the stakeholders. Also, it is almost impossible to carry out the actual construction works asscheduled, because different works by different operators occur in succession, affecting one another. In
order to cope with these issues adequately, cross-sectional cooperation of relevant operators beyond theborders of companies is necessary, and our company is working every day to coordinate such cooperation.
We will steadily move the project forward to ensure the safe and secure operation of Haneda Airport.

Planning and Research Department, Airport Business Headquarters (employee in his 20s)

21

I N T E G R A TED REP ORT 2 0 2 3Real estate management
utilizing digital tools

Strengthening of
information security
Employee’s VoiceOur company is working on the active utilization of digital tools in order to improve the efficiency of realestate management. Checkups and meter readings had been implemented manually before, but using
an AI-operated digital tool, it became possible to shorten working hours and increase accuracy.
Information, such as trouble reports, can also be shared on a real-time basis, allowing prompt reactions.
We will further work on the enhancement of security functions, improvement of convenience, and theimprovement of work efficiency in facilities managed by our company through digitalization. Monitoring
cameras are already installed in major facilities to start the reinforcement of disaster and crime prevention
measures. The unified management of the footages of the cameras contribute to the labor-saving offacility management.
We are considering the gradual expansion of facilities to install monitoring cameras in the future.
At the same time, we will utilize the biometric access control mechanism and digital signage as newmeasures to increase the efficiency of real estate management and improve customer service.
Currently, our company is mainly increasing the efficiency of routine work and reducing the use of paper
through the utilization of IT digitalization. We have digitalized some of the invoices issued to our clients,
contracts, and in-house documents, and improved the work process.
We will continue promoting efforts to digitize documents and procedures exchanged between ourcompany, customers, and clients, as well as reduce the time and effort required for the preparation,
management, and exchange of documents through the introduction of an information sharing portal torealize smooth communication, in order to increase the efficiency of work processes. We are also aiming
to realize smooth information sharing among relevant parties with the unification of and improved accessto information through digitalization.
Considering the situation where cyber attacks are becoming more severe and sophisticated, the AFC Groupis recognizing information security risks as an important challenge.
Therefore, in order to maintain and enhance preparations regarding information security, our company
established the Information Security Committee to regularly check and improve the security situation of
the group.
Our company implements adequate management also by establishing the Information Security
Management Regulations, the Personal Information Protection Regulations, etc., and trying to improve
the literacy of employees through monthly e-learning and simulation. Also, in order to protect our
information assets from the risks of unauthorized access and information leakage, we have establishedand are implementing security measures for IT infrastructure, including terminals for business, such as
computers and networks.

INTEGRATED REPORT 2023

22

Special Issue 1 Airport Business Headquarters

Key Person Message
The three departments of the Airport Business Headquarters are engaging in the following businesses.
The Airport Business Department has long been engaged in businesses such as the new projects
for facilities in Haneda Airport and other airports throughout Japan, aircraft maintenance necessary
for the operation of flights, and renting facilities for training and air cargo.
The Airport Infrastructure Business Department is working for the stable provision of important
infrastructure facilities in airports, including the water supply and drainage service in Haneda andChitose Airports, and the local area communication network service in Haneda Airport.
The Planning and Research Department is in charge of planning and research regarding Haneda
Airport, mainly the Haneda Airport 1-Chome Project, the focused issue in the Medium- to Long-Term
Management Plan, and research, study, and information gathering on measures to cope with the
Keisuke Komatsu
aviation policies of the government.
Executive Vice President
The mission of the headquarters according to the Medium- to Long-Term Management Plan is to
Executive General Manager of
improve profitability through the improvement of the occupancy rate in properties for rent, setting
Airport Business Headquarters
adequate rent, and the reorganizing of facilities with inferior profitability or growth potential, withcapital efficiency in mind.
We will adequately respond to the needs and wants of our customers and provide facilities that respond to the demands of the times, as well as topursue cost reduction and improve profitability, appropriately respond to aviation demand, and aim to create new businesses.
Also, by utilizing the know-how and network developed through businesses handling many facilities, including construction, operation and maintenance,with the specific characteristics of airports, we aim to increase the commission of business.
We have been engaged in business as a company contributing to the development of aviation in airports, which are public facilities, using thetechnological ability and information gathering ability, which are the strengths of our company, and with the creditworthiness among our clients andbusiness partners that had been developed over a long time. We will try to further reinforce the profitability of existing facilities, and work for the secureachievement of the Medium- to Long-Term Management Plan, aiming for the stable supply of airport function facilities and the further progress ofHaneda Airport 1-Chome Project.

Start of the tentative operation of the fresh products centerin the domestic cargo terminal area of Haneda Airport
In the domestic cargo terminal area of Haneda Airport, maintained and operated by our company, a part of the terminal is temporarily operated as a fresh products
center specializing in handling fresh products and flowers.
While the cargo terminal area has been rented to cargo forwarders handling fresh products for some time, the tenants were dispersed among different parts
within the area, and there had been safety problems, such as the inefficiency of the acceptance and delivery of cargo, and confusion about the traffic lines oftrucks and forklifts.
By consolidating such cargo forwarders to the fresh products center, it is now possible to accept
Approx. 3,000m2 (7,200m2 is
Scaleand deliver cargo between air carriers and fresh products business operators in a single action nearscheduled for full-scale operation)
the center, which improves efficiency. In addition, the confusion about the traffic lines of forklifts andStart of temporary
trucks has been resolved, and the reduction of traffic and the improvement of safety within the area
2022
operation
can be expected.
Forwarders handling fresh products
It is scheduled to go into full-scale operation in FY2024. Ancillary facilities, including refrigerators andTenantand flowers
freezers, will be prepared to promote the operation of convenient and valuable facilities for customers.

23

I N T E G R A TED REP ORT 2 0 2 3

Efforts for the improvement of the profitability of existing businesses
We are constantly putting efforts into maximizing profits through measures such as the improvement of the occupancy rate in properties for rent.
The main business for the Airport Business Headquarters is real estate business, which accounts for about 80% of the net sales of our company. Exemptions ofrent for air carries provided in FY2020 and FY2021 had been terminated, and the rent recovered to the ordinary level in FY2022. Utilizing the technological ability
and information gathering ability related to real estate and infrastructure, which we have been developing from the foundation of the company, we will increase
the occupancy rate of existing facilities and aim to improve profitability.

Airport-related infrastructure businessWe provide important infrastructure services, such as area heating and cooling
service, water supply and drainage service, and local area communication
network service in Haneda Airport.
Area heating and cooling business we are being engaged in Haneda Airport
1-Chome from the foundation of our company was transferred to Tokyo Airport
Heating & Cooling Co., Ltd., our group company, in 1993. The company
continues to stably provide heating and cooling services to passenger
terminal buildings, maintenance plants, and government buildings.
We have been engaged in the water supply and drainage business in
Haneda Airport since shortly after the foundation of the company. The
know-how and achievements accumulated through the long-term service
are trusted by many of our clients, and make the users of Haneda Airport
feel safe and secure.
Local area communication networks business started in 1993 when thesecond phase of the Haneda Airport offshore land reclamation project started.
This business lays optical cables between the buildings in Haneda Airport,
excluding some of the areas, provides a basic telecommunications networkthat can be jointly used by airport-related organizations such as air carriers,
passenger terminal building companies, and public offices, and allows the
reduction of cost through joint use and offers a smooth means of mutualcommunication among relevant parties. The network is built to ensure stablecommunication also at the time of disaster.

Haneda Airport water supply and drainage facilities

Haneda Airport shared communication service facilities

New efforts
Response to the practical use of a flying vehicle
Flying vehicles have the potential to largely change the concept of thetransportation of people and things, and they may bring new value andenergy to people's everyday lives and the regional community.
Our company, Japan Airport Consultants, Inc., CTI Engineering Co., Ltd.,and AirX Inc. conducted a test flight in Okinawa on June 7, 2023, towards
the social implementation of the technology of flying vehicles.
Utilizing the knowledge obtained in this test flight, we will implement ademonstration experiment throughout Japan and consider the possibility ofcommercial flights in the future, aiming to improve and resolve the social
issues Japan is facing and creating new value through the social
implementation of flying vehicles.
Our company will continue our efforts for the consideration of operation
regarding the management and operation of landing platform and ancillaryfacilities and equipment towards the practical use of flying vehicles.

INTEGRATED REPORT 2023

24

Special Issue 2 Business Creation Headquarters

Key Person Message

Keisuke Kuma
Managing Executive Officer
Executive General Manager ofBusiness Creation Headquarters

Innovation Promotion Office
The Business Creation Headquarters consist of the Real Estate Business Department, Foreign Business
Department, and Innovation Promotion Division. The Real Estate Business Department is in charge ofreal estate business outside airports (offices, hotels, residences, etc.) and renewable energy business.
The Foreign Business Department is engaged in businesses such as the holding and provision offacilities in Singapore and Canada, leasing of aircraft and engines, and renewable energy businesses
abroad, together with the Singapore Office. The Innovation Promotion Division utilizes the technologies
and know-how developed by the AFC Group to seek new business opportunities, and is working tocreate and obtain new businesses.
Also, for the realization of a new business model mentioned in the Medium- to Long-Term
Management Plan, AFC Asset Management Co., Ltd., our group company, was established in May
2022. Through cooperation with the AFC Asset Management, our company will engage in the rotarybusiness model, by acquiring medium-scale office buildings, improving the asset value of suchbuildings through renovation and selling them, and acquiring other property with the funds obtained
through such sales.
By promoting such efforts even more actively, we will contribute to the early achievement of theMedium- to Long-Term Management Plan and the increase of the corporate value of the AFC Group.

1 Innovation Promotion Office
For the sustainable growth of the AFC Group, we established the Innovation Promotion Office within the company on April 1, 2022.
The Innovation Promotion Office seeks new business opportunities in and out of airports and is engaged in activities for realizing new businesses. In addition to
the function as a platform for promising business ideas, the office will cooperate with project proposers and relevant divisions to realize the commercialization of
the projects.

2 Case examples of commercialized projects
One of the projects for which the idea came from within the company and was implemented beyond the borders of departments is the support for the operation ofrestaurants (Blue Corner) in the airport, in which the restaurant business is operated by a subsidiary of our company comprised of young employees. Tailored to
the renovation of the store, weekly events, such as offering craft beer and pancakes, are planned based on the flexible ideas of young employees to provide newservices to customers. Also, by sharing information about the store via SNS (Instagram) at the same time, the number of customers visiting the store increased
significantly, resulting in the acquisition of new customers. While constantly implementing the existing stable business, the young employees are bringing a breathof fresh air into the businesses of our company from a fresh perspective.

Real Estate Business Department
Efforts related to real estate business outside airports
The Real Estate Business Department is in charge of real estate business outside airports (offices, hotels, residences, etc.) and renewable energy business.
Regarding the real estate business outside airports, we possess office buildings, such as Kyodo Buildings in Muromachi 1-Chome and 4-Chome, hotels, such as
TOKYU STAY Kamata and Hotel JAL City Haneda Tokyo West Wing, and residences, such as apartments located along the Haneda Airport Line mainly targeting
Airport workers. As for other types of properties, we operate Kanazawa-Hakkei International Community Plaza, an international students' dormitory of Kanto Gakuin
University in Yokohama City, expanding our business field.
We are also making efforts in the renewable energy business utilizing idle land and the rooftops of facilities, including solar power plants in Honsanrizuka andGifu Mizunami, and the TRC Distribution B Building Rooftop Solar Power Plant in Ota Ward, Tokyo, contributing to the SDGs.
On the other hand, while our company has been implementing the management and operation of facilities on our own, we will cooperate with AFC AssetManagement Co., Ltd., a newly established group company hereafter to realize even more active investment and the improvement of profitability.
We will aim to improve the asset value of the properties through investment in new properties and also by taking various measures to improve the value of
properties already held. We are also considering composing funds (privately-placed REIT, privately-placed fund, etc.) by gathering such excellent properties, andaccelerating preparation towards the realization of the rotary business model.

Special pancakes created by an idea of young employees

The Innovation Promotion Office is working in tandem with the system ofsoliciting ideas within the company and the realization of such ideas. Recently,
we have opened a new official SNS account of Blue Corner and held a renewal
event for Blue Corner UC. Upon actually realizing the ideas, we are feelingdifficulty in the coordination within the company and bridging the generation gap,
rather than the quality of the idea itself. For the future, we will make efforts tocreate a system and reinforce an environment where various ideas are proposed
regardless of scale. The Innovation Promotion Office is an organization thatcannot exist without the cooperation of employees. We will continue striving tobuild a creative environment within the company towards soliciting andcommercializing various ideas.

Innovation Promotion Office (employee in her 20s)
Muromachi 1-Chome Building

25

I N T E G R A TED REP ORT 2 0 2 3

Muromachi 4-Chome Building

Sky Residence Otorii

Sky Residence Kawasaki-Daishi

Sky Residence Omori-Higashi

Transmission of information via Instagram

Employee’s VoiceINTEGRATED REPORT 2023

26

Special Issue 2 Business Creation Headquarters

Foreign Business Department
In this spring, we installed a solar power generation facility in the small engine maintenance factory we possess in Singapore
Seletar Airport. Electricity generated in the facility is sold to Standard Aero, the user of the building, providing some of thepower necessary for the operation of the plant. Currently in Singapore, the introduction of renewable energy is actively
being promoted by the government. We consider this situation as a new business opportunity, and proposed a solar power
generation project, which resulted in the conclusion of the contract. It was the first renewable energy business implemented
abroad for our company, and we were able to engage in wide range of businesses through this project, including institutional
design, such as the selection of local business partners and developing relationships with them, and coordination with
relevant parties, including negotiation on the terms of contract. We will continue aiming to further diversify the company's
revenue sources based on airports, and to develop a business portfolio that is resilient to risks.

Our foreign business
In November 2013, AIRPORT FACILITIES ASIA Pte. Ltd., a 100%-owned subsidiary of our company, was established in Singapore. Thereafter, in November 2014,
the second 100%-owned foreign-based subsidiary, AFN PROPERTIES Ltd., was established in Canada. The major facilities we provide include a training facility forthe crew for AIRBUS ASIA TRAINING CENTRE, a group company of Airbus, and small engine maintenance factory and helicopter maintenance facility for Standard
Aero. From Japan, the operation of foreign subsidiaries is controlled, and foreign businesses are implemented by also utilizing locally incorporated subsidiaries.
We also engage in various overseas project from Japan, under cooperation with partner companies. Most recently, we have been involved in the aircraft leasing
business. Towards the future, we will put our efforts into a wide range of businesses in addition to the possession of existing facilities, including the leasing
business of aircrafts and engines and renewable energy business, to expand our foreign business.

Foreign Business Department/Innovation Promotion Office (employee in her 20s)

Employee’s Voice

Recent projects
Singapore
Office1 Participation in an aircraft leasing fund
In July 2022, our company participated in "MACH I," an aircraft fund established and operated by Mercuria Investment Co., Ltd., as an anchor investor. Thisis an aircraft fund with Airborne Capital Limited serving as the asset manager, aiming to raise 50 billion yen in total mainly for narrow-body aircrafts. We willaccumulate know-how on business related to aircraft investment through participation in this project, and at the same time, promote foreign businesses
with a view to expanding investment in this area in the future.

AFA has an office in the building adjacent to Tanjong Pagar Station in Singapore. In addition to company representatives from Japan, we invited
Mr. Ivan Ho who has abundant experience in the aviation industry in Singapore, as the local advisor, and are putting efforts in marketing
activities, customer management, and the cultivation of new markets. Also, with this office considering not only Singapore but the entire
ASEAN region as one, we will strive to obtain business opportunities in wide areas.

Singapore is an aviation hub of the ASEAN region, and we expect large demand foraviation-related facilities, forecasting the growth of aviation demand within the region
in the mid- to long-term. Our company established locally incorporated subsidiary in
Singapore in 2013. We are engaging in businesses mainly in Singapore Seletar Airportand opened the Singapore Office in April 2020. We will continue obtaining opportunities
through the Singapore Office to address the potential business chances, and to utilize
the advantage of the place as the center of aviation demand.

2 Start of the operation of solar power facility for Standard Aero
This is a project to install a solar power generation facility in the engine maintenancefactory for Standard Aero possessed in Singapore Seletar Airport, and to sell electric
power to the company. The facility started operation in May 2023. This is the firstrenewable energy business implemented abroad for AFC Group. We will actively engage
in resolving environmental issues, and contribute to realizing carbon-neutral society.

Foreign Business Department/Singapore Office

2011

2016

2017

July 2022

The leasing out of Kobe
Airport Hangar to Airbus
Group starts.

The renting out of Airbus Asia
Training Center starts. Also, thefinancing of a flight simulator
introduced in the facility starts.

The leasing out of ahelicopter maintenancefacility in Langley Regional
Airport, Canada starts.

Investment contract
for an aircraft fund isconcluded.

2011

27

Employee’s VoiceI N T E G R A TED REP ORT 2 0 2 3

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2014

2014

2020

March 2022

May 2023

The financing of helicopter
Hangar in Seletar Airport starts.
(contract terminates in 2019)

The leasing out of anengine maintenancefactory for Standard
Aero starts.

Foreign business base officeof AFC Group opens in
Singapore.

Financing related to thepurchase of an aircraft
engine for TEAM starts.

Solar power generation facility forin-house consumption is installed on
the rooftop of the engine maintenancefactory for Standard Aero.

INTEGRATED REPORT 2023

28

Special Issue 3 Technology Headquarters

Key Person Message

Satoru Watanabe
Senior Executive Officer
Executive General Manager ofTechnology Headquarters

Introduction of LED lights in owned facilities
The Technology Headquarters is in charge of a wide range of businesses. The Facilities Planning Department
covers the planning of new facilities, businesses related to the construction work and budget managementfrom designing to construction stages, operation and maintenance management for the adequate
maintenance of facilities owned by our company and facilities consigned from our customers, businesses
related to the day-to-day repairs and renewals, as well as the planning and promotion of new projects
utilizing the technical knowledge that had been developed by the company.
The Osaka Office is in charge of contracting procedures with clients and management services in Osaka
Sogo Building and Rinku International Logistics Center, as well as the operation and maintenancemanagement of facilities owned by our company and facilities consigned from our customers in Chubu
Region and western Japan.
During the period covered by the Medium- to Long-Term Management Plan, the Headquarters will
accurately grasp customer's needs and changing social issues, to maintain and improve the quality offacilities possessed by the company through the planning of highly efficient construction plans that areenvironmentally friendly and planned and efficient repair and renewal of existing facilities, to ensure
comfortable use by the customers. Further, the Headquarters will contribute to the improvement of
profitability throughout the company by pursuing cost reduction to the fullest extent.
In the area of fee business activities, we aim to increase the commission of construction management(CM) business for the construction of aviation-related facilities, including hangars, planned by ourcustomers, utilizing the know-how and skills on facility construction, operation, and maintenance, as well
as networks, which we have been developing through engagement in various facilities with particularfunctions within airports.
In addition, by fully utilizing our original knowledge and network accumulated through thedevelopment of various facilities so far, ranging from energy supply facilities to facilities consumingenergy, we will contribute to the realization of a sustainable global environment through the further
enhancement of solar power generation facilities and the utilization of other forms of renewable energy,
and active engagement in the utilization of new energy, such as hydrogen.

Since FY2020, we have been making secure progress in the introduction of
LED lights in the facilities we own throughout Japan for energy saving and the
reduction of CO2 emissions. Construction work had been mostly completed asof the end of FY2022, with the exception of facilities in Haneda Airport
1-Chome area that are scheduled to be reconstructed in the future, and somefacilities where discussion with tenants will be necessary upon the
introduction of LED lights.
Regarding the reconstruction of facilities in 1-Chome area, we aim torealize a "net zero energy building" (ZEB). For other facilities whereconstruction is yet to be implemented, we are scheduled to start construction
as soon as consensus is reached with the customer.

Domestic Cargo Terminal W-1 Building

CM business within airports
For the reconstruction plan of the Hangar of All Nippon Helicopter Co., Ltd. in Sapporo Okadama Airport, we signed a construction management (CM) contract withthe company and offered CM service throughout the process from the planning, basic and execution design, to the completion of construction.
CM service is one of the construction production methods for the construction manager on behalf of the contractee to take initiatives of the project towards theachievement of project goals and requirements, in order to cope with an immense amount of coordination and management work generated upon construction,and to secure transparency and accountability.
The contract was proposed by All Nippon Helicopter, evaluating the knowhow and network of our company that we have developed through the construction ofaviation-related facilities in airports throughout Japan. We have supported the reconstruction of a Hangar for two years until the completion of the construction in
February 2023.
We will continue utilizing our know-how and technologies to make optimum proposals and services that match the client's needs and go with the times, and forincreasing the commission of CM business.

CM method

Conventional method

Designer

Design work consignment
contract

Contractee
Construction
service contract

Designer

Design work consignment
contract

Contractee

CM manager

Construction
service contract

Management

Builder

BuilderManagement* There are cases where the designer and the builder are the same.

Efforts for the utilization of new energy

Extension work of Kobe Hangar

29

I N T E G R A TED REP ORT 2 0 2 3

Rinku International Logistics Center

Towards the goal of realizing carbon neutrality and a decarbonated society by 2050, it is required toaccelerate efforts in airports to reduce CO2 emission from facilities and vehicles will be promoted, as
well as the utilization of renewable energy considering the characteristics of airports.
We focused on the fact that many forklifts operate in the domestic cargo area of Haneda Airport
managed by our company, and we are considering introducing fuel-cell forklifts (FCFL) usinghydrogen as a fuel.
Also, as a part of the investigation project by the New Energy and Industrial Technology Development
Organization (NEDO), we are conducting a survey on the feasibility of the utilization of hydrogen in
Haneda Airport and neighboring regions, following the adoption of the Study of CO2-free Hydrogen inTokyo International Airport and the Surrounding Area, participated in by six public and privateorganizations, including our company.

Invitation to the fuel-cell forklift test-ride event held in June 2022

INTEGRATED REPORT 2023

30

Special Issue 4 Promotion of non-asset business

Key Person Message

Progress/properties

AFC Asset Management Co., Ltd.
Hiroshima Motomachi NS Building

Shinjuku Yawaragi Building

In March 2023, we have acquired Hiroshima Motomachi NS Building(Motomachi, Naka-ku, Hiroshima City) as the first property of
non-asset business. This property is located in Kamiyacho/Hacchobori
Area, the center of Hiroshima City. It is one of largest business,
commercial, and sightseeing areas in Chugoku Region, surroundedby the prefectural government buildings, financial institutes, branchesof major banks, the Peace Memorial Park, Hiroshima Castle, etc. It
is located on the corner along Aioi-Dori, which is the main street ofHiroshima, with the three sides of the building facing streets. The
building has high visibility and is in busy area, and also in goodcondition, so it has strong competitiveness.

In June 2023, we acquired Shinjuku Yawaragi Building(Shinjuku-ku, Tokyo) as the second property. This
property is an office building in a favorable location, athree-minute walk from Shinjuku-Sanchome Station. It
faces Yasukuni-Dori, has good visibility, rarity, andstrong competitiveness.

Month and year of
the completion of
construction

February 1981

March 1989

Ground-floor area

616.56m2

304.02m2

Use district

Commercial area

Commercial area

Building coverage
ratio/floor-area ratio

80%/900%

80%/700%

Total floor area

5,076.91m2

1,978.08m2

Structure

Steel reinforced concrete structure, flat-roofed/eight stories
above the ground and one underground story

Steel reinforced concrete structure,flat-roofed/ten stories above the ground

Use

Office, garage, store

Office, etc.

Name

Hiroki Osawa
AFC Asset Management Co., Ltd.
President and CEO

AFC Asset Management Co., Ltd. started business on June 1, 2022, as a member of the AFC Group,
gathering staff members with abundant experience in real-estate transactions, in order to powerfully andpromptly promote the non-asset businesses mentioned in the Medium- to Long-Term Management Planof Airport Facilities Co., Ltd.
There are numerous small- and medium-sized office buildings located in the Tokyo Metropolitan Area
and other local cities outside airports, and the total gross floor area of those buildings is of a scalecomparable to large-sized buildings. Therefore, it is expected to utilize them effectively as existingbuilding stocks. However, there are also many properties with problems in terms of aging, vacancies,and refurbishment.
In the first phase of the plan, our company will promote business by increasing the value of suchproperties. In the second phase, we will develop a fund as a guarantee for the accumulation of good
properties. By acknowledging such real-estate values that are buried in the market, increasing them, andmaking them sustainable, we would like to contribute to the promotion of AFC Group's business andsociety in the future.
● Company Name

AFC Asset Management Co., Ltd.

● Description of Business

Real estate consulting business
Real estate fund business● EstablishedMay 26, 2022

● Shareholders

Airport Facilities Co., Ltd. (100.0%)

Non-asset businessIn the Medium- to Long-Term Management Plan, the development and expansion of non-asset businesses is set forth as an important measure to take a step towards
new business domains, while utilizing the knowledge and know-how of our company.
It goes without saying that our company will continue providing know-how and services on facility planning and operation within airports, we are also setting
the goal of expanding our scale of business through obtaining sale gains and composing funds backed up by excellent real-estate properties, etc., through thehandling of real estate for sales outside airports, as the core of the non-asset business pursued by our company, as shown in the diagram below.
The basic business model of our group so far had been to secure income gain through leasing business based on the long-term possession of real estate.
However, from now on, we will also be engaged in strategic investment according to the characteristics of each asset, aiming to obtain capital gain as a primaryvalue, such as obtaining capital gain by improving their value and selling them to investors.
In the future, we will accumulate and circulate good properties through in-house development and the acquisition of highly profitable loans to respond to theconsignments of capitals from others, and we aim to promote our company's non-asset business by seizing every relevant opportunity for profit.

31

Accumulation of excellent
properties through developmentof new properties and acquisitionof properties with higher value

Development of funds,
and investment

Development of humanresources and organization

Management by newly
established AM/PM
subsidiaries

I N T E G R A TED REP ORT 2 0 2 3

Income gain/securing
capital gains

Expansion of the size offund assets

I was seconded to the AFC Asset Management Co., Ltd. from October 2022. For the main business of increasing thevalue of real estate properties, I am engaged in work that I did not experience when I worked at Airport Facilities Co., Ltd.,such as acquiring properties with poor occupancy rate or profitability and require renewal, and regenerating them ashigh value-added and highly functional properties.
I am interested not only in simply obtaining profits, but also in the friendliness to the environment in terms that it is
not scrap-and-build, and I can contribute to the urban development surrounding the property. I feel motivated by thiswork that gives me new understanding and knowledge every day, such as acquiring specialized and beneficial knowledge
from members with abundant experience in real estate transactions.
I will continue to be committed to my work to mix the advantages of Airport Facilities Co., Ltd. and AFC AssetManagement Co., Ltd., and contribute to the development of the entire AFC Group.

Real Estate Investment Management Department, AFC Asset Management Co., Ltd. (employee in his 20s)

Employee’s VoiceINTEGRATED REPORT 2023

32

Special Issue 5 Promotion of sustainability

Sustainability Strategy of Airport Facilities

The AFC Group has been engaged in business under its corporate philosophy, and utilizes different kinds of capital (financial capital, human capital) and networks(clients, society) and aims to contribute to the socioeconomy by providing facilities that continue responding to various needs in businesses in areas such as realestate business, as well as to tackle environmental problems and other issues so as to continue creating value.
Regarding environment (E), society (S) and governance (G) initiatives that will also lead to the achievement of SDGs, we will improve our corporate value in themedium- to long-term and make efforts towards the realization of a sustainable society.
Also, we have established the Sustainability Promotion Council on January 1, 2022, chaired by the president and consisting of full-time directors, in order tofurther promote sustainable management.
The Sustainability Promotion Council not only discusses the themes and direction to be aimed at in the medium- to long-term, but also considers measures tominimize risks and create business opportunities through setting and managing the progress regarding important issues (matters of materiality) and key performanceindicators (KPI). The Council also considers measures such as
responses to the Task Force on Climate-related Financial
Disclosures (TCFD).
The existing four committees, namely Environment
Committee, Disaster Countermeasures Committee, Safety
Promotion Committee, and Improvement Promotion Committee
are positioned as the subordinate organization of the
Sustainability Promotion Council, and these organizations will
cooperate to promote sustainable management.

Board of Directors

Sustainability Promotion Council

Environment
Committee

Disaster Countermeasures
Committee

Safety Promotion
Committee

Improvement
Promotion Committee

Environment
Reduction of CO2 emissions

Study of a CO2-free Hydrogen Utilization Model Haneda Airport and the Surrounding Area by NEDO

Our group has been engaged in the reduction of CO2 emissions in terms ofboth saving and creating energy. We are replacing freezers used in thearea heating and cooling business and introducing LEDs for lighting used in
facilities to reduce CO2 emissions. We are also creating energy by promoting
solar power generation. Solar panels are installed on the rooftop of the
facilities of our and other companies and on idle suburban land.
Although the achievement of the reduction goal for CO2 emissions is a
big challenge, we strive to reduce CO2 emissions by 46% in FY2030 byconsidering various methods and technologies in addition to solar power
generation and other forms of renewable energy.

■ Changes in the CO2 emissions and goals of our group28%（t - CO₂）

60,00050,00051,563

Reduction

46%

Reduction
37,12640,00024%

Reduction

The AFC Group participates in the Study of CO2-free Hydrogen in Tokyo International Airport and the Surrounding Area, which is a commissioned projectby the New Energy and Industrial Technology Development Organization (NEDO), jointly with five other public and private organizations.
This survey analyzes the amount of energy currently used in Haneda Airport and the surrounding area, summarizes the future vision in the case of
introducing hydrogen energy, streamlines the supply method and the introduction policy of facilities necessary for its realization, and conducts
verification towards the achievement of the reduction of CO2 emissions.
The report on the survey is scheduled to be compiled by the end of September 2023.

39,01527,80030,00020,000Outline of the survey

10,000
0

2013

2021

2022

2030

(FY)

Adopted theme

Study of CO2-free Hydrogen Utilization Model in Tokyo International Airport and the Surrounding Area

Major contentsof the survey

Study of the potential for supplying hydrogen using a model in which hydrogen generated overseas is imported via Kawasaki's coastal area andtransported to its demand location, the area in around Haneda Airport■ Study of the demand potential for hydrogen utilization for power, heat, and GSE vehicles on the Haneda Airport grounds and in the surrounding area
■ Study of economic benefits and greenhouse gas emissions reductions■ Study of prior usage cases and technology trends in Japan and abroad

Survey period

From October 2022 to the end of September 2023 (scheduled)Participants

Airport Facilities Co., Ltd.
Japan Airport Terminal Co., Ltd.

■

Solar power generation
We are working on the reduction of CO2 emissions through power generation using renewable (solar) energy (for FIT and in-house consumption) by installing
solar panels on the rooftop of facilities owned by our company and in idle lands. TRC Distribution B Building Rooftop Solar Power Plant, which started
power generation in 2018, is one of the largest solar power generation facilities within the 23 wards of Tokyo (at that time). It generates 6.3 million kWh/year
in total by the five operating facilities, which is equivalent to the annual consumption of 1,400 average households. (Calculated by assuming the annual
electricity consumption per household as 4,397kWh [reference: Ministry of the Environment])
At the domestic cargo terminal of Haneda Airport, power generated with the solar panels installed on the rooftop of the building is self-consumed byfacilities within the area to reduce theuse of power generated with fossil■ Change of the amount of renewable (solar) energy power generation
fuels. Also, in some of the facilities(thousand kWh)managed and operated by our
8,000
company, we implement hybrid power
7,000
6,395 6,138
generation using renewable energy,
6,000
5,402
5,307
5,021
such as solar and wind. Generated
5,000
power is charged to install
4,000
3,147
freestanding lights used at night and
2,677
3,000
in emergencies.
2,000
1,440
1,000
0

368
2013

ENEOS Corporation
Kawasaki City

Ota Ward
Deloitte Tohmatsu Consulting LLC

Area surrounding the airport
Kawasaki coastal area
Storage tanks

Tank truck

Pipeline

Factories

Commercial
facilities

Publicfacilities

Mobility

Terminal 1

Airport facilities

Haneda Airport
H2

Hydrogen
Terminal 3

Terminal 2

1,120

Hydrogen station

2014

2015

2016

2017

2018

2019

2020

2021

2022

GSE vehicles*

Mobility/rail(FY)*GSE vehicles: Ground support equipment vehicles

33

I N T E G R A TED REP ORT 2 0 2 3

INTEGRATED REPORT 2023

34

ENVIRONMENT

Promotion of environmental businesses
Conservation of water resources

Promotion of waste reduction and reuse/recycling■ Changes in water use in Haneda Airport■ Waste discharge amount and the state of recycling

FY2018FY2019FY2020

FY2021

FY2022

3

Water use (thousand m )

2,014

1,946

1,138

1,233

1,547

Discharge amount (t)Recycled water use (m )

6,788

6,849

4,869

5,049

5,637

Reuse (t)3Promotion of water saving
in owned facilities

We are promoting the introduction of water-saving faucets and toilets in office buildings, maintenance facilities, andthe building of cargo facilities we own to reduce the waste of running water and to improve water saving function.

Utilization of recycled water

We are implementing the efficient use of water resources by using recycled water for flushing toilets in the Utility
Center Building in Haneda Airport.

Sewage treatment

In addition to the facilities given above, we comply with the relevant laws regarding water contamination, etc. in
facilities owned, managed, and operated by our group, and appropriately treat sewage as necessary before
discharging to public waters.

■ SD plant (aircraft sewage treatment facility)
Unlike the general domestic wastewater and human waste, sewage discharged from aircraft contains various chemicals particularly used for toilets in aircraft toprevent infection. Therefore, there is a high bar for its treatment. We have considered the treatment of aircraft sewage as an important issue since the company's
foundation, and acquired a patent on the sewage treatment method through research and development. We started the operation of the sanitary disposal plant (SDplant) in 1980 in Haneda Airport, and the same kind of facility is now being operated in eight airports throughout Japan. This SD plan is provided as an
infrastructure that can be jointly used by different air carriers and ground-handling companies. Sewage brought in will be treated by utilizing microorganisms tocomply with the effluent standards of municipalities. The facilities contribute to the conservation of water quality in rivers and oceans by preventing watercontamination from sewage generated from the aircraft operation.

Aircraft

Vehicle transportationof sewage

Discharge

Haneda SD Plant■ Large-sized aircraft washing facility
In Haneda Airport, we are providing large-sized aircraft washing facilities that can be used jointly by different air carriers. A large-sized aircraft washing facility is a
facility to wash stains off aircraft for preventing corrosion, improving fuel efficiency, and for aesthetic purposes, and comprises an aircraft parking space forwashing and a facility that treats the wastewater used for washing. Water discharged after washing includes chemicals, oil, sludge, and heavy metals. Therefore,
we treat the water until it reaches the standard that can be discharged to the sewerage system to prevent the contamination of water resources. Also, it isexpected that washing the aircraft will lead to improved fuel efficiency. We are also indirectly contributing to the environmental upgrading of air transportation,
which is a part of our daily life, through this aircraft washing facility.

Pressured water
Discharge
Drainage
Large-sized aircraft washing facility

I N T E G R A TED REP ORT 2 0 2 3FY2021

FY2022

2,281

1,615

1,518

1,419

915

376

156

202

304

172

Disposal amount (t)

1,904

1,458

1,315

1,115

743

Recycling rate (％)

16.5

9.7

13.3

21.4

18.8

■ Major efforts

Separate collectionof wasteIn properties operated and managed by our company, separated collection of waste is promoted under cooperation
with the client companies, etc.

Recycling ofrecyclable wastes

In properties operated and managed by our company, separated collection of waste is implemented and recyclable
waste is recycled under cooperation with the client companies, etc.

Promotion of the reductionof the use of paper

In order to reduce the amount of paper resources used by our company, we are promoting the digitalization ofmaterials used in the company, and using recycled paper.

Reduction of plastic waste

Considering the ocean pollution and negative impact on marine life caused by disposable plastic waste, we
abolished the use of plastic straws in restaurants of our group companies, replaced plastic cups used in thecompany with paper cups and promote the use of one's own cup to reduce the amount of plastic waste.

Responding to recommendations by the TCFD

■ GovernanceOur company recognizes dealing with climate change as an important issue for management, and established a governance system centering around supervisionby the board of directors and the Sustainability Promotion Council.
●M atters related to climate change are discussed by the Sustainability Promotion Council, chaired by the president, who is the coordinator of matters related to climate change.
● Sustainability Promotion Council will discuss the progress made in management of key performance indicators (KPI) during the period of the Medium- to
Long-Term Management Plan and the policy and strategy for minimizing climate change risks and seizing opportunities.
● The board of directors receives a report on risks and opportunities regarding climate change once a year from the Sustainability Promotion Council, and it
supervises efforts regarding issues.

■ Strategy
Recognizing that countermeasures against climate change are key issues for business management, we are discussing the strategy as follows, by analyzing theimpact of risks and opportunities on the company's strategy through climate change scenarios, with the aim of achieving continuous growth while making efforts
to mitigate and adapt to climate changes through our business activities.
● Risks and opportunities for short, medium, and long-term included in the Medium- to Long-Term Management Plan (FY2022-FY2028) will be discussed.
● The degree of the impact of risks and opportunities of climate change on the balance sheet and finances of the company is analyzed and evaluated.
● Regarding the risks and opportunities of climate change, mitigation and adaption to climate change will be analyzed and evaluated based on the 2Aircraft washing facility

Pump/discharge water treatment and filtering

35

FY2020In addition to efforts to fight climate change, our group recognizes the importance of the disclosure of climate-related financial information, and expressed ourendorsement of the TCFD (Task Force on Climate-related Financial Disclosures) in June 2022. We are discussing and taking measures regarding the disclosed
items recommended by the TCFD (governance, strategy, risk management, indicator/target), and disclosed information on the corporate website. We will continue
to disclose such information.

Purification

Flow of aircraftwashing anddrainage treatment

FY2019■ Supporting TCFD recommendations
SD plant

Flow of aircraft
sewage treatment

Aircraft washing

FY2018degrees-scenario recommended by the TCFD.

INTEGRATED REPORT 2023

36

ENVIRONMENT

Risks

Full-scale measures tocombat the escalating
impact of climate change

Opportunities■ Efforts based on the medium- to long-term environmental business, ESG, and materiality
Items to be addressed

KPI during the Medium- to Long-Term Management Plan period① Transition risks■

Increase in construction cost with the rise of the prices of■

construction materials and increase in the production cost
Increase of competitiveness by owning environmental-■ of heat sources due to the energy price surge

friendly properties

Increase of taxation burden on CO2 emissions■

Increase in construction cost with the introduction of ZEB■

and additional capital investment accompanied by thetightening of national standards
Increase of the vacancy rates and the decrease of contracts■for buildings that are delaying taking environmental measures

Futurereal estatebusiness② Physical risks

Increase in repair expenses due to increased occurrenceof large-scale typhoons and concentrated heavy rains■

Cost reduction by introducing high-efficiency equipment
Increase in asset values by preparing environmental-■

friendly properties
Reduction of CO2 emission and the increase of the■ Supply chain (CO2) emission of AFC Group

competitiveness of properties with the further development

Increase in capital investment for increasing the capacity■

Target to reduce CO2 emissions by 46%
in FY2030 compared to FY2013
based on government policy

■

■

■

of air conditioning facilities due to extreme heat

100% replacement of the lights in major facilities with LEDs (scheduled to be completed in FY2023)
Replacement with high-efficiency equipment and devices (scheduled to be completed in FY2027)■ Realization of ZEB in new facilities and the introduction of the latest energy-saving equipment■ Further development of renewable energy, including solar light power generation■ Considering environmental business utilizing next-generation technologies (introduction of EVs
and FCVs for forklifts, etc.)■ Achieving a 100% ratio of eco-friendly cars and installing recharging facilities for electricvehicles in major facilities■

of solar power generation for self-consumption

Increase of
corporate value

Increase in flood damage due to sea surface elevation

Actions taken from now on to minimize the risks

Actions taken from now on to maximize
the opportunities

Major impacts on the finance of our company based on the 2 degrees-scenario are analyzed as follows.
①R epair expenses accompanied with typhoons and heavy rains are analyzed by referring to the damage amount caused by typhoons in the past. It is evaluatedthat financial impact is small according to the estimate on the premise of the ratio of the occurrence of phenomenon under the 2 degrees-scenario.
②R egarding sea level rise, it is evaluated that the risk will be lowered in the future with the elevation of the ground of Haneda Airport 1-Chome area, planned by
the Civil Aviation Bureau of the Ministry of Land, Infrastructure, Transport and Tourism.
③ A s for the area heating and cooling business, sales amount and CO2 emission with temperature rise were estimated. It is evaluated that impact on both income
and CO2 emission is small, because while the sales of cooling increase, the sales of heating decrease with temperature rise.

FY2020

FY2021

FY2022

Scope1（t-CO₂）

16,141

13,301

13,926

Scope2（t-CO₂）

8,194

10,742

11,280

Scope3（t-CO₂）

48,41844,98944,691

Total（t-CO₂）

72,75369,032

69,897

Scope 3 (upstream)

Purchased products
Newly built building
Office equipment (desks, personal
computers)■■ Risk management

64％

11,280 t-CO₂

44,691 t-CO₂

Light oil■

Scope 3 (downstream)
Gas■

Category ⑪

Scope 2 (in-house)
Electricity■

Use of products soldAir conditioning■Category ⑬

Scope 3 (in-house)
Category ②

Category ⑤

Capital goods

Waste from business activities

Operation of leased assets
Electricity, gas, and air conditioning
used by tenants■ * Collected separately

Air conditioners■B oilers■Freezers (THC)■P umps■

Waste from offices■Category ⑥
Business trip

Category ③■ Indicators and targets

I N T E G R A TED REP ORT 2 0 2 3

16％

Scope3Category ①■37

Scope2

FY2022

Scope 1 (in-house)
Gasoline

Our company aims to reduce CO2 emissions by 46% in FY2030 compared to FY2013 based on the governmental policy, in order to achieve carbon neutrality by 2050.
● T he progress regarding risks and opportunities of climate change is managed, such as reviewing key performance indicators (KPI) in the Medium- to LongTerm Management Plan against actual achievements.
● Supply chain emission is monitored and relevant risks and opportunities are identified.

13,926 t-CO₂■ Supply chain of the AFC Group■

Matters related to climate change including risk management are discussed and managed by the Sustainability Promotion Council, chaired by the president, whois the coordinator of matters related to climate change, under the supervision of the board of directors.
● S ustainability Promotion Council discusses the impact of climate change and measures taken against it, and promotes measures such as formulating
policies and strategies for minimizing identified risks and reflecting them in plans, budget, and goals.
● S ustainability Promotion Department serves as a secretariat for the Sustainability Promotion Council on matters related to climate change, and implements
liaison and coordination among departments and promotes company-wide measures taken against climate change.
● The board of directors receives a report from the Sustainability Promotion Council, and supervises risks regarding climate change.

20％* Emission Scope3 is the count of emission throughout the entire supply chain, from the procurement of raw
materials to sales/consumption. Supply chain (CO2) emission of AFC Group is calculated for facilities that arecovered by the Act on Rationalizing Energy Use. (Amount of purchase related to electricity, gas, and petroleum)* Shareholding ratio of 60.32% is accounted for Tokyo Airport Heating & Cooling Co., Ltd.

In addition to above, although there are also some uncertain factors such as taxation burden on CO2 emission in the future, it is evaluated that there is no significant
impact of climate change on the company's finance in general. On the other hand, there are various business opportunities related to airport decarbonization. The
Medium- to Long-Term Management Plan places efforts on environmental business as one of the issues to be considered for the creation of new businesses
toward future prosperity.

Scope1

Items related to energy
Extraction and transportation of fuel(crude oil, etc.)■* Items not included in Scopes 1 and 2

Category ⑫

Aircraft, train, etc.

■Disposal of products soldCategory ⑦■Commuting

■

Train

■

Building clearance
Withdrawal of equipment instruments■ Waste from tenants

INTEGRATED REPORT 2023

38

SOCIAL

Human resource and organization development strategy/
regional contribution
Human resource and organization development strategy

3 Organization development strategy

1 Human resource development
We established a new Corporate Philosophy/Guiding Principles in October 2022, and are promoting business activities under the corporate philosophy of "contributing
to developing the future of aviation and attractive towns through providing valuable facilities and services."
We are aiming to acquire the knowledge and experience necessary for professionals in airports and real estate, which is our Guiding Principles, and at the sametime develop human resources that can respect diversity.

■ OJT (On the Job Training)
We implement efforts linking the annual plan for each division and MBO (management by objectives) system.
Four issues/goals on individuals’ own work are set at the beginning of the fiscal year, and after interviews with supervisors, adjustment will be made in terms oflinks with the plans in each division, the adequacy of details set, and the way to implement the plan. Employees will work on their everyday work through on-thejob training, and they will confirm the progress through interviews with supervisors after half of the fiscal year has passed in September and on other occasions.
Thereafter, an annual summary and review will be made at the end of the fiscal year in March, and after measuring the achievement level, a new goal will be set
to improve oneself. That is the basic process of human resources development.

■ Career development system
We are implementing efforts to provide an opportunity for employees to convey their opinions and intentions regarding their career development from the past andpresent to the future (duties, assigned posts, etc.) to the company, and communicate with each other once a year.
The system aims to provide an opportunity for employees to not merely state their wishes about personnel transfer, but also to regularly summarize their own job
experience, and to draw their future vision and consider what will be necessary to realize it.

■ Mentor system
Young employees with a career in the company of up to about three to five years are designated as mentors for new employees to give them advice about theireveryday work and the workplace, and to provide mental support.
This system intends to promote the smooth transition of new employee's from student to working adult in terms of awareness, as well as to improve the mentor
employees’ communication ability and ability to listen to others and verbalize their ideas.

■ Support system for qualification acquisition
Our company has a system to subsidize employees’ expenses
regarding the acquisition of qualifications that are useful for their work,in order to support their willingness to improve their work-related
knowledge and their skills. Also, for some of the qualifications,
we are offering monetary gifts for the acquisition to reward theemployee's efforts.
We are also adding qualifications covered by the subsidy systemfrom 2023, considering the recent diversification and changes in thedetails of work.

Passed the examination for real estate transaction
agents in FY2022

It is really helpful because the system
subsidizes the expenses for schools foracquiring qualification that I selected andalso for texts and other study materials.
Since the qualifications for clerical workand IT are now newly covered by the subsidy
system, I feel it motivates us to try toacquire new qualifications by considering
our own careers.

Management Planning Department, Airport Business
Department (employees in their 20s)

Employee’s Voice

2 Efforts for female empowerment
We formulated the Action Plan by General Employers on the Breakthrough of the Empowerment of Women in April 2022, and the following goals are set to be achievedby the end of FY2025.
● Increase the ratio of women in manager positions to 8%.
● P romote autonomous career development by employees and human resources development.
In addition, we will review the Action Plan by General Employees on Measures to Support the Development of Next-Generation Human Resources, and the following
goals are set to be achieved by the end of FY2026.
● P romote working styles that make it easy to keep a balance between work and childcare, and to support autonomous career development.
●C reate a workplace environment where a balance between work and childcare can be easily kept.
Towards the achievement of these goals, we will work on improving in-house systems and setting up opportunities for educational training.

39

I N T E G R A TED REP ORT 2 0 2 3■ Overview of headquarters

Toward the achievement of the Medium- to Long-Term Management Plan,
organizational reform was implemented in June 2023, for the purpose ofrestructuring the system.
The existing five Headquarters were restructured and three Headquarters,
namely the Airport Business Headquarters, Business Creation Headquarters,
and Technology Headquarters were newly established, in order to clarify
responsibilities for profit and ensure the thorough management of income
and expenditure.

Airport Business
Headquarters

The headquarters are in charge of the management of income
and expenditure for businesses within airports in general, in
Haneda Airport and other domestic airports.

Business
Creation
Headquarters

The Headquarters is in charge of the management of income andexpenditure for businesses outside airports and foreignbusinesses in general.

Technology
Headquarters

The Headquarters is in charge of the management of income andexpenditure for businesses related to facilities in general,
including new construction, renovation, repair, and maintenance.

Promotion of work-life balance and D&I■ Flex time system and system for working from home
A flex time system, where employees can decide when to arrive at and leave from work flexibly within a certain time range, is being introduced from April 2021 sothat employees can keep a balance between their work and private life. We are trying to design a system through dialogue with users, for instance by changing thecore time based on the results of questionnaires and interviews to employees after test trials.
We have also introduced a system for working from home in April 2021 to reduce the time for commuting and improve work efficiency. Since April 2022, we havebeen adding changes accordingly, such as allowing employees to go out for business purposes, including visiting clients, so that the system will be more useful toemployees.

■ Childcare leave system for male employees
A system for taking childcare leave at the time of birth (childcare leave for fathers after birth) was introduced in October 2022 to encourage male employees totake childcare leave, and also to support the balance between work and family life by partly allowing working during the period of leave. Since the introduction of
the system, three out of four eligible male employees have used the system.

■ Application system for annual leave in advanceOur company asks employees to submit their schedule of annual leave
for the following fiscal year in March through the in-house system, andby obtaining the approval from their supervisor beforehand, promotes
the establishment of a proactive work schedule and efficient leave.
We are also trying to provide an environment in which it is easy for
employees to take long-term leave, by setting days recommended for taking
paid leave at the year-end and new-year holidays, Obon festival period,and holidays with an interval of only one or two work days in between.

■ Empowerment of senior human resources

I think this is a good system because it naturally lets
you to look to the future and think about your workand private schedule when applying for your annual
leave in advance.
The schedule can be flexibly adjusted and changed
even after application, and since the company culture
is generous regarding the taking of leave, it is easy tokeep a balance between your work and private life.
General Affairs Department, Management Planning
Department (employees in their 20s)

Employee’s VoiceWith the recent improvement in health expectancy, an increasing number of employees are willing to work not only after retirement but
also after reaching the age of 65. In the AFC Group, cases where employees work actively in their areas of specialty even after reaching
the age of 65 are increasing, with measures considering the personnel distribution after retirement, job experience, and qualifications
possessed, and based on the comprehensive evaluation of the employee's willingness to work, health condition, and working conditions.
Also, there are employees who joined our company after retiring from other companies and are actively working on different stages
such as the repairing and patrol of facilities.

■ Reduction of overtime work
In order to secure health and work-life balance for employees, we are constantly working on the reduction of overtime work.
Each business segment’s manager monitors working hours within the department and reduces overtime work by assigning responsibilities and adjusting
workloads according to each employee.

FY2019FY2020

FY2021

FY2022Average days of paid leave taken (average for the fiscal year) (days)

12

12

12

14

Average hours of overtime work (non-consolidated, monthly) (hours)

22

18

19

19

INTEGRATED REPORT 2023

40

SOCIAL

Disaster countermeasures■ Employment of disabled persons
We are implementing human resources measures so that everyone can work actively in areas in which they have an advantage, based on the characteristics andexperiences of each person. At the same time, focusing on the form of the employment of disabled people that is suitable for our company, we are considering
employment from a multidimensional perspective, such as working styles and improvement of the office environment.

■ Measures taken against harassment
The AFC Group formulated the Power Harassment Prevention Rules, which clarifies the necessity of setting up a contact point for consultation and complaints.
Further, we are calling for the creation of a comfortable working environment through measures such as holding regular training sessions as efforts to prevent
harassment, which aim to understand the diversification of recognitions in society, study actual cases, and raise awareness among employees.

■ Promotion of D&I
Regarding the idea of incorporating the concept of diversity in the Medium- to Long-Term Management Plan and the new Corporate Philosophy and Guiding Principles,
we are explaining why diversity is highlighted this strongly, and why the company must take actions now, through messages in the form of dialogue between thepresident and employees, and we are trying to raise awareness within the company.
■ Case examples“Thank-you” card

In order to actively promote in-housecommunication, we introduced the “thank-you”
card as a tool for employees and officials to
exchange appreciation and positive points, andpraise each other.

D&I newsletter

This newsletter includes a selection of relevant
articles on topics such as DEI, men's childcare
leave, and leadership.

In-house training
workshop

Inviting a person from ANA Wing Fellows Vie Oji (AWO)
as a lecturer, a lecture on "Preparing an easy-towork office based on universal design" was held.

I was in charge of planning the in-house lectureon "Preparing an easy-to-work office based onuniversal design" together with the people of AWO.
It was a good opportunity to think about D&I,
also considering the view of people withdisabilities, and it made me more conscious of
the issue through the feedback of various
opinions and comments from within the company.
General Affairs Department (employee in his 30s)

Employee’s Voice

We are announcing the annual schedule of measures related to health maintenance and improvement every April and promote the implementation of planned
measures so that employees can work with vitality both physically and mentally.
We also hold a meeting on the promotion of safety and sanitation every two months to transmit information on the prevention of heat stroke and infectious diseases,
and raise awareness about industrial accidents.

■ Care by industrial physician after routine medical checkups and comprehensive medical examinations
We provide care by industrial physicians through interviews and e-mails for employees who had certain findings in the results of routine medical checkups andcomprehensive medical examinations.
By providing notification of re-inspection and other procedures promptly after the results are received, we try to improve the lifestyle habit of employees or
prevent their physical deconditioning, and to realize an environment where people can work healthily.

We encourage employees to notice stress and we
implement regular interviews by specialist physicians formental health care. We are ensuring proactive prevention
and privacy protection by implementing the interviews forall employees.

Because you can be interviewed
regularly whether you ask for it
or not, I feel that it is like amental health checkup.
The consultant is very easy totalk to, so you can have aconsultation with ease.
General Affairs Department (employee in his 30s)

41

I N T E G R A TED REP ORT 2 0 2 3■ Conducting comprehensive disaster drills within Haneda Airport
Our company is serving as a secretariat for disaster prevention cooperation association in the aircraft maintenancearea, new aircraft maintenance area, and the domestic cargo terminal area in Haneda Airport, and is conducting
comprehensive disaster drills in cooperation with Kamata Fire Station every year. The drills offer evacuation
training, firefighting training using fire extinguishers, first-aid training using an AED device, and experience inearthquake simulation vehicles, and try to maintain and improve the awareness of disaster prevention and crisis
management not only among the employees of our company but also those who work at tenants and within thearea and the regional residents. * The drill was not held in FY2020 and FY2022 due to the impact of COVID-19.

Comprehensive disaster drills■ Fire defense organization for self-protection
We established a fire defense organization for self-protection within the company to improve awareness of disasterprevention and make preparations to minimize human and physical damage at the time of emergency.
We are also participating in the disaster drill examination meeting of fire defense organization for self-protection
hosted by Kamata Fire Station, to confirm the achievements of training in our relationship with the local community.

■ Supporting the rescue system of the airport

Disaster drill examination meeting of fire
defense organization for self-protection

As the business operator with an important role of supporting the operation of airports, we are assigning our employees as the cooperation member for a firefighting
and rescue team, in order to cooperate with the national disaster relief actions at the time of emergency, such as the occurrence of aircraft accidents. These
employees participate in firefighting and rescue drills assuming aircraft accidents and tsunami evacuation drills held by the Ministry of Land, Infrastructure, Transport
and Tourism in Haneda Airport to prepare against emergency.

■ Securing stockpiles against disasters

Promotion of health management■ Implementation of regular interview byphysicians specializing in mental health

Our company is engaged in the business of owning and operating facilities to support airports, which are part of social infrastructure, and is in charge of providing
an environment where the users of all airports and aircraft can feel safe and assured.
Also, we will strive to develop and operate facilities that make the customers using our facilities or airports and aircraft, as well as all other people in theregional community, feel safe and secure. At the time of a disaster, we aim for the early restoration of the businesses of our group and the functions of airports
while ensuring the safety of tenants, employees, and the region, and prevention of secondary disasters.

Our company has enough stockpiles for three days in preparation for disasters, assuming that employees will temporarily stay within the facilities we own at thetime of large-scale disaster. Also, considering the possibility that elevators will stop and that rescue will take time in a disaster, we are also installing a cabinet in
preparation for disaster inside elevators, which contains drinking water and a portable toilet. Further, some of the residences for those who work at airports areequipped with manhole toilets that can be used at the time of disaster and stretcher benches with a seating surface that can also be used as a stretcher.

■ Building for evacuation from tsunami
We designate many of the facilities we own in Haneda Airport as a building for use in evacuation from tsunami, show signs for them, and accept the evacuation ofpeople staying nearby when advisories and warnings on tsunami are issued.

■ Holding basic life-saving certification training
Our group is holding basic life-saving certification training for employees and promotes certification on life-saving
skills, with an aim to encourage them to acquire skills to provide first-aid treatment whenever a person suffers an
injury or contracts a disease, and to prepare against emergency. Basic life-saving certification training enable
employees to acquire first-aid skills, such as CPR, use of AED devices, and treatment of injuries, which are skills
useful at the time of emergency.

■ Installing AED devices
We are installing AED devices at the entrances, security offices, etc. of the facilities we own, and post signs showing
the existence of the AED devices so that they are available at the time of emergency.

Employee’s Voice

Basic life-saving certification training

INTEGRATED REPORT 2023

42

SOCIAL

GOVERNANCE

Corporate governanceCommunity building and contribution in neighboring regions

Corporate Governance System■ Donating stockpiles against disasters

Our ideas

Our group is constantly stockpiling necessary foods and water from the perspective of securing the safety of employees and officials, and allowing the early
restoration of facilities and ensuring business continuity at the time of emergency, and renewing the stockpiles at regular intervals. We donated the stockpiles
against disasters to be renewed to the municipalities where the offices of our company are located and incorporated NPOs. The stockpiles were provided to those
who are in need of food support and contributed to livelihood support and the reduction of food loss.
This effort contributes to the achievement of 1. No Poverty, 2. Zero Hunger, and 12. Responsible Consumption and Production among the 17 goals of the SDGs.
We will continue with activities to contribute to the region and society, aiming to realize a sustainable society.

Because a potential problem was identified in the process of the appointment of candidates for the directors of our company in June 2021, we have established
an independent inspection committee to implement inspection in April 2023. Hereafter, our company will achieve the resolution of governance problems and therealization of improvement measures pointed out and proposed by the independent inspection committee.

Donation

June 2022

Ota Ward Welfare Department and the Social Welfare Council of Ota Ward

February 2023

Social Welfare Department of Ikeda City, Osaka Prefecture

April 2023

Incorporated NPO Food Bank Network Mottainaiwa Chitose(As of June 29, 2023)

General Meeting of Shareholders
Nominating Committee
Compensation Committee

Board of Directors

Board of Corporate Auditors

President

Audit Office

Management Council
Enlarged Management Council

Accounting Auditor

Compliance Committee
Risk Management Committee

Information Security Committee

Sustainability Promotion Council

Environmental Committee
Disaster Countermeasures Committee
Safety Promotion Committee
Improvement Promotion Committee

Management Strategy Council
Construction Examination Committee
Departments and Consolidated Subsidiaries

Ota Ward Welfare Department

Social Welfare Department of Ikeda City, Osaka Prefecture

Incorporated NPO Food Bank Network Mottainaiwa Chitose

Role of the boards of directors and corporate auditors
 onating lunch boxes made by an in-flight meal factory to restaurants
D
providing free or inexpensive meals to children
In March 2023, as a part of activities to contribute to society, we donated lunch boxes made by an in-flight meal factory (TFK) to Ota Ramen Kodomo Shokudo andTomoshibi at Dandan, a general incorporated association, in cooperation with TFK Corporation, a tenant in the facility of our company providing in-flight meals.
This donation was realized through empathy for the activities of restaurants providing free or inexpensive meals to children, where people in a wide range ofage groups from children to adults gather as a place for communication. It contributes to the vitalization of the entire region and society, while raising interest
among people towards the area of aviation and airports, which is our company's main field, by providing in-flight meals.
This effort contributes to the achievement of 1. No Poverty,
2. Zero Hunger, 11. Sustainable Cities and Communities, and
17. Partnerships for the Goals among the 17 goals of the SDGs.

Board ofDirectors

Board ofCorporate
Auditors

Nominating
Committee

Compensation
Committee

Directors

8

Corporate
auditors

4

Corporate
auditors

Members

Members

4

6

6

Ratio ofoutside directors
and auditors

42％

Ratio ofoutside auditors

50％

Ratio ofoutside directors

83％

Ratio ofoutside directors

83％(As of July 27, 2023)

The board of directors makes judgments and decisions concerning matters prescribed by laws andpublic regulations or by the internal regulations that govern the board and other important matters,
thereby exercising the supervisory function over management affairs in general. The board is convened
on a monthly basis in principle. In fiscal year 2022, it was convened 11 times. The board of directors
is comprised of eight directors (including three outside directors) and four statutory auditors (including
two outside auditors). It is chaired by Shigeo Tamura, AFC’s president and executive officer. The Board
includes one female director (the female proportion on the board is 12.5%).
The board of corporate auditors is convened on a monthly basis in principle in order to determine
audit policy and prepare an auditors’ report, among other activities. In fiscal year 2022, the board
was convened 12 times. It is chaired by Masaaki Komiya, who is a full-time statutory auditor.

When nominating candidates for directors and statutory auditors, AFC convenes the non-mandatory
Nominating Committee as an advisory body to the board of directors in order to strengthen the
independence, objectivity and accountability of the board, which is responsible for reviewing andselecting candidates. The Committee is convened at least once every year. The Committee iscomprised of three independent outside directors, two independent outside members of the board ofcorporate auditors and one representative director/president and executive officer.
When determining compensation for directors, AFC convenes the non-mandatory Compensation
Committee as an advisory body to the board of directors in order to ensure the objectivity, transparency,
and validity of the compensation. The Committee is convened at least once every year. The
Committee is comprised of three independent outside directors, two independent outside membersof the board of corporate auditors and one representative director/president and executive officer.

Donation to Ota Ramen Kodomo Shokudo

43

I N T E G R A TED REP ORT 2 0 2 3

INTEGRATED REPORT 2023

44

GOVERNANCE Directors and Statutory Auditors

Directors

Member of theNominating Committee
Member ofCompensation Committee

Toshikatsu Ogura

Director

Director

April 1985

Shigeo Tamura

Hideo Miyake

Representative Director, President and Executive Officer

Representative Director, Executive Vice President and Executive Officer

June 2016

Executive Officer attached to General Affairs
Department (In charge of Special Missions)

April 2018

June 2017

Director, Senior Executive Officer and Chief ofFacilities Management Center of AFC

June 2020

Managing Director of AFC

June 2022

Director, Managing Executive Officer of AFC

June 2023

Representative Director, President and Executive
Officer of AFC (current post)

Newly appointed

Kayo Aoyama
Freelance announcer (up to the present)

July 2013

Senior Executive Vice President and Senior
Executive Manager of Marketing Headquarters,
NIPPON TELEGRAPH AND TELEPHONE WEST
CORPORATION

July 2015

President and Representative Director, NTT
BUSINESS ASSOCIE Corporation

June 2020

Outside Director of Haseko Corporation(current post)

June 2022

Outside Director of JAPAN POST Co., Ltd.
(current post)
Outside Director of AFC (current post)

February 2001 Member of Council for Transport Policy, Ministryof Land, Infrastructure, Transport and Tourism

Executive Vice President of ALL NIPPON AIRWAYS
CO., LTD.

OutsideApril 2020

Member of the Board, Executive Vice President of
ALL NIPPON AIRWAYS CO., LTD.

Member of theNominating Committee

April 2022

Senior Executive Officer of ANA HOLDINGS INC.

April 2023

Counselor of ANA HOLDINGS INC.

June 2023

Representative Director, Executive Vice President
and Executive Officer of AFC (current post)

Independent

July 2014

President of the National Agency of Vehicle
Inspection (part-time)

June 2015

Outside Director of AFC (current post)

June 2016

Member of National Public Service Ethics Board(current post)

Member ofCompensation Committee

OutsideIndependent

Member of theNominating Committee
Member ofCompensation Committee

Statutory Auditors

Newly appointed

Newly appointed

Tadao Nishio

Keisuke Kuma

Representative Director, Executive Vice President and Executive Officer

Director and Managing Executive Officer

Masaaki Komiya

Takahiro Hama

April 2017Managing Executive Officer and Senior Vice
President of Corporate Strategy and Planning,
Japan Airlines Co., Ltd.

April 2017

Deputy General Manager of Corporate Financedepartment, Division 3, Development Bank of Japan Inc.

Full-time Statutory Auditor

Full-time Statutory Auditor

June 2020

Director and Managing Executive Officer ofDevelopment Bank of Japan Inc.

June 2014

Outside Director of AFC

Executive Officer and General Manager ofFinancial Affairs Department, AFC

June 2012

June 2017

June 2016

Manager of Accounting Department, AFC

April 2021

Managing Executive Officer and Senior Vice
President of Managing Division Passenger Sales,
Japan Airlines Co., Ltd.
President and CEO of JAL SALES Co., Ltd.

Senior Executive Officer, Manager of Financial
Affairs Department, Planning and Finance
Headquarters, Foreign Business Department,
Business Planning Headquarters and PartManager of Management Planning Department,
Planning and Finance Headquarters

June 2015

Executive Director of the Research Institute of Capital
Formation, Development Bank of Japan Inc.

June 2022

June 2016

Vice Director-General, The Tokyo Organizing
Committee of the Olympic and Paralympic Games(TOCOG)

Executive Officer and Manager of Accounting
Department, Planning and Finance Headquarters,
AFC

June 2023

Full-time Statutory Auditor of AFC (current post)

April 2022

Representative Director and Chairman of JALPAK
Co., Ltd.

June 2023

Representative Director, Executive Vice President
and Executive Officer of AFC (current post)

Newly appointed

June 2022

June 2023

June 2022

Full-time Statutory Auditor of AFC (current post)

Takehiko Sugiyama

Sawako Ueno

Hirotomo Suzuki

Director

Statutory Auditor

Statutory Auditor

July 2018

December 2004 President of Hitotsubashi University

September 2019 Director of Deloitte Touche Tohmatsu LLC

April 1992

April 2011

January 2021 Investigator of Securities and Exchange SurveillanceCommission, Financial Services Agency

February 1994 Registered as Certified Public Accountant

Deputy General Manager of Marketing Department
I and Section Chief of Marketing Division I and
Cargo Terminal Business Department, Cargo
Terminal Business Division, AFC

October 2019 Deputy General Manager of Marketing Division I,
Marketing Department, Marketing Promotion
Headquarters and Airport Business Planning
Division, Airport Business Planning Department,
Business Planning Headquarters, AFC
June 2022

Manager of Management Planning Department,
Planning and Finance Headquarters, ACF

June 2023

Director and Executive Officer of AFC (current post)

OutsideIndependent

Vice Chairman of Japan Transport Policy
Research InstituteChief of Transport Policy Research Center

June 2015

Outside Director of AFC (current post)

June 2017

Outside Director of Tokyo Metro Co., Ltd.
(current post)

Member of theNominating Committee
Member ofCompensation Committee

Sustainability,
ESG

Global,innovation,
IT/DX

Planning, sales,
marketing

Airport-related
infrastructure

●

●

●
●

Keisuke Kuma●

Osamu Sasaoka
Takehiko Sugiyama

●

●

●

Kayo Aoyama

●

●

●

●

●

●

June 2023

Outside Auditor of AFC (current post)

Independent

April 2002

OutsideIndependent

Member of theNominating Committee

Joins Kyowa Audit Corporation
Joins Suzuki Certified Public Tax Accountant
Office (up to the present)

March 2003 Registered as Certified Public Tax Accountant
April 2023

Outside Auditor of AFC

July 2023

Outside Auditor of AFC (current post)

Member ofCompensation Committee

Appointment of directors●●

OutsideThe Head of Ueno Sawako Certified Public
Accounting Office (current post)

Member ofCompensation Committee

Shown below is a skill matrix that indicates the professional skills held by each of AFC’s directors.

Finance,accounting

Newly appointed

April 2023

Member of theNominating Committee

Shigeo Tamura

Toshikatsu Ogura

Outside Director, Solaseed Air Inc.
Outside Director, AIRDO Co., Ltd.

Director and Executive Officer

Legal affairs,
Management andcompliance,
organization
administration risk management

Tadao Nishio

June 2021

Osamu Sasaoka

Skill Matrix of Directors

Hideo Miyake

Director and Managing Executive Officer of AFC(current post)

Newly appointed

Acting Chief of Audit Office, AFC

Technology,
safety,supervising●

Because a potential problem was identified in the process of the appointment of candidates

independent inspection committee. We have reviewed the system that adheres to the oldfor the directors of our company in June 2021, we established an independent inspection

type of stakeholders and selected the right people so that the board of directors willcommittee in April 2023 to implement inspection. We have already received a report on

contribute to securing and increasing the common interests of all shareholders, instead of

the results of inspection by the Inspection Committee, which points out the governancecertain limited stakeholders. We believe that the selection is in line with the proposals

problems of our company and makes recommendations on improvement measures. Our

made by the independent inspection committee.

company accepts with sincerity the results of inspection by the independent inspectionMore specifically, the basic ideas and skill matrix for the selection of the candidates forcommittee, and we strive to achieve the resolution of governance problems and thethe directors that are necessary to achieve the Medium- to Long-Term Management Plan ofrealization of the improvement measures pointed out.

our company are newly set and reviewed through repeated discussions and deliberations●

Regarding the director nomination policy that the independent inspection committee●

recommended our company to formulate, we will work on the formulation through repeatednomination committee was improved. We are also receiving a letter of commitment fromdiscussion while implementing training on the governance of director nomination over thethe candidates pledging that they fulfill the duty of loyalty to our company instead ofnext year. However, as for the appointment of the candidates for directors this time, wecertain stakeholders, such as the organizations they come from.

●recognized that it is crucially important to select candidates with sufficient qualities●

by the board and the nomination committee, and the deliberation process within the

Our company aims to win trust from our shareholders and all other stakeholders, and tonecessary to increase the corporate value of our company through transparent procedures

achieve sustainable growth as a company listed on the Prime Market of the Tokyo Stock Exchange,

and appropriate deliberations based on the suggestions and recommendations of theby continuously promoting the establishment of a strong and adequate governance system.

Note: The main skills possessed by each person that are highly relevant to the Company's business are listed.

45

I N T E G R A TED REP ORT 2 0 2 3

INTEGRATED REPORT 2023

46

GOVERNANCE

Appointment of outside directors and auditors

Executive compensation in FY2022 is as follows:(Unit: Million yen)Compensation Amounts by Classification
Outside directors and auditors are selected based on criteria such as being capable of contributing to AFC’s sustainable growth and an increase in its enterprisevalue in the medium to long term by providing advice and recommendations to management from a position of independence, as well as the independence criteriaprescribed by the Tokyo Stock Exchange.

OutsideDirector

Takehiko Sugiyama

Mr. Sugiyama has taught as a university professor and been in charge of university management as the president of a national university.
In addition, he has an abundance of knowledge and experience in the field of transportation and traffic. AFC has appointed him as anindependent outside director as it expects him to contribute to its sustainable growth and an increase in its enterprise value in themedium to long term by helping to ensure appropriate execution of business operations from his position of independence as an outsider.

Kayo Aoyama

Ms. Aoyama is a freelance announcer and has an abundance of knowledge and experience gained from sitting on various government
committees, including those in the field of transportation and traffic. AFC has appointed her as an outside director as it expects her tocontribute to its sustainable growth and an increase in its enterprise value in the medium to long term by helping to ensure appropriate
execution of business operations from her position of independence as an outsider.

OutsideauditorToshikatsu Ogura

Mr. Ogura has an abundance of experience and superior knowledge as a senior manager in the telecommunications industry. AFC has
appointed him as an outside director as it expects him to contribute to its sustainable growth and an increase in its enterprise value in themedium to long term by helping to ensure appropriate execution of business operations from his position of independence as an outsider.

Sawako Ueno

AFC has appointed Ms. Ueno as an outside auditor as it expects her to provide high-level technical advice to the board of corporate
auditors and the board of directors, considering her ability to conduct audits from an objective standpoint based on her specialized insight
as a certified public accountant.

Hirotomo Suzuki

AFC has appointed Mr. Suzuki as an outside auditor as it expects him to provide high-level technical advice to the board of corporate
auditors and the board of directors, considering his ability to conduct audits from an objective standpoint based on his specialized insight
as a certified public tax accountant and a certified public accountant.

Executive compensation
1 Compensation system(１) T he compensation amount for AFC’s directors is determined within the range decided upon a resolution at a general shareholders’ meeting. Compensation forthe directors (full-time directors), excluding outside directors, is comprised of fixed-amount basic compensation and variable compensation linked to businessperformance (bonuses and restricted stock grants). Generally speaking, the fixed-amount compensation accounts for around 70% of the total amount ofcompensation, and the performance-linked compensation makes up around 30%. Compensation for outside directors is comprised entirely of fixed-amountbasic compensation the amount of which is determined within the range decided upon a resolution at a general shareholders’ meeting.
(2) Basic compensation for full-time directors is calculated according to the prescribed rules that take into consideration the title of the executive director and thespecifics of their respective director responsibilities, among other factors. Performance-linked compensation is calculated in light of the corporate earnings
compared with the earnings forecasts. Of performance-linked compensation, the non-monetary restricted stock grant is intended to provide an incentive for the
directors to strive for the sustainable growth of AFC’s enterprise value and also to promote the further sharing of value with shareholders.

Fixed-amount compensation: Approx. 70%

Performance-linked compensation:
Approx. 30%

Bonus: Approx. 51%

The board of directors conducts deliberations on a compensation proposal based on the policy on compensation and refers the proposal to the Compensation
Committee, which advises the board. Following the Compensation Committee’s deliberations and findings on the compensation proposal, the proposal is deliberated
once again at a board meeting. Upon a resolution at the board meeting, the annual compensation amount is determined and paid.
The Compensation Committee is comprised of independent outside directors, independent outside auditors, and the representative director, president, andexecutive officer, in order to ensure the objectivity, transparency and validity of compensation and is chaired by an independent outside director. It is convened atleast once every year.

I N T E G R A TED REP ORT 2 0 2 3Compensation
Amounts

Directors

230

156

(Outside Directors)

(13)

(13)

Statutory Auditors

46

46(Outside Auditors)

(9)

(9)

Total

276

203

Basic
Compensation

Performance-linked Compensation, etc.
Monetary
Compensation

Non-monetary
Compensation

37

35

Number of
Directors
and Statutory
Auditors

13
(3)

ー

ー

6
(3)

37

35

19

(Note) 1. The above-mentioned directors include four directors from among the six directors who retired from directorship at the end of the 53rd general shareholders’ meeting held on June 29, 2022, excluding the twooutside directors who received no compensation, and two statutory auditors.
2. The salaries of the employees who are also directors are not included in the total amount of directors' compensation.

Evaluation of the board of director’s effectivenessThe board of directors conducts self-evaluation and analysis in terms of the effectiveness of the board of directors in order to strengthen its own functions, thereby
contributing to an increase in AFC’s enterprise value. In fiscal year 2022, all directors and statutory auditors were asked to respond to a questionnaire survey inJanuary-February 2023. Based on the survey results, analysis and evaluation was conducted at a meeting of the board in February 2023. The following is an
outline of the results thereof.
The survey results indicate generally favorable evaluation with respect to matters such as the review of the composition of the board, including the number ofboard members and the ratio of internal directors to outside directors, which resulted in improved evaluation for such matters.
On the other hand, opinions were expressed and problems were recognized and share with respect to the discussions on governance and sustainability in theboard, and the method of implementing the evaluation of effectiveness.
In light of the survey results, AFC will promptly respond to the above-mentioned problems after conducting a sufficient study and make ongoing efforts toenhance the functions of the board.

Implementation
evaluation process

PeriodFrom January to February, 2023

Targets

All directors and statutory auditors, 13 in total

Questionnaire survey of all directors
and statutory auditors

Operation of the board of directors
Information exchange among internal and outside directors■ Discussion and statements made at the board of directors■ The entire board of directors■ Dialogues with shareholders (investors)■■

Questions

Analysis and evaluation
at the board of directors

T he improvement and speeding up of deliberation is pursued by distributing materials
and giving explanations to outside directors in advance before the meeting of the boardof directors and providing an opportunity for questions and answers.
■ Questions and discussions in the meeting of the board of directors are gradually
becoming active.
etc.
■

Evaluation
pointsRestricted stock grant:
Approx. 49%

2 Procedures for determining the compensation amount

47

Category of
Position

Improvement based on
the evaluation results

It is desirable that internal directors take initiatives to actively express opinions.
It is doubtful that the training of directors/statutory auditors and the development plan ofnext-generation executive candidates do not seem to be implemented systematically,leaving it up to the qualities of individuals.
■ Further deepened discussion on sustainability and ESG will be necessary in the future.
etc.
■
■

Opinions

INTEGRATED REPORT 2023

48

GOVERNANCE

Cross-shareholdings under the national policy
Policy of cross-shareholdings under the national policy
As for listed shares cross-held under the national policy other than for the purpose of investment,
our policy is to hold shares only when it is judged as rational from a quantitative and qualitative
perspective, by individually considering the necessity regarding business activities, such as businesscooperation, maintenance of transactions, and enhancement of transactions. The state of crossshareholdings under the national policy is reported once a year at the meeting of the board of directors,
and the board of directors considers selling stocks that are deemed to have lost their significance inlight of the cross-holding policy. At the meeting of the board of directors held in January 2023, thestate of cross-shareholdings under the national policy was verified quantitatively and qualitatively,
and the rationality of holding was confirmed.

Compliance
Changes in the state of cross-shareholdings
under the national policy(Number of brands)

30

25

Sold 28%
in FY2020
18

20
10
0

FY2020

FY2022

Efforts to fulfill the criteria to keep listing
As of December 2022, our company had failed to fulfill the criteria for listing on the Prime Market of the Tokyo Stock Exchange in terms of the average net value of
trade per day. In order to fulfill the above criteria, our company is currently working on the following measures.

1 IR improvement
Our company established the Public Relations Investor and Relations Division as a department in charge of IR, to promote constructive dialogue with shareholders
and investors, and is actively working on IR activities.
While we are holding a results briefing for analysts twice every year, we are also striving to secure convenience, such as changing the venue to a more accessible
location. We also conduct IR meetings and interviews, and we are also considering resuming the facilities observation tour for shareholders in FY2023.
Our company website provides information, such as reference materials for results briefings and the AFC Report, which is sent to our shareholders twice every
year. Further, we also prepare the Integrated Report to ensure that our stakeholders understand the Group’s pursuit of both economic value and social value andour aim for achieving sustainable growth. In addition, information on our company, such as new projects, are actively disclosed as necessary.
We are also actively disclosing IR materials in English for our overseas investors. We launched the English website of our company, which also includes financial
results, reference materials for results briefings, and the AFC Report, in English. Notices of ordinary general meeting of shareholders are also partly available in English,
from the notice for the meeting held in June 2022.
We will continue working to provide information to our shareholders through the improvement of IR.

2 Improvement of shareholder return
The basic policy of shareholder return in our company is focusing on the balance between factors such as the maintenance of stable management foundation,internal reserve in preparation for new business and investment opportunities, and medium- to long-term performance forecast, and the payout ratio. In the Mediumto Long-Term Management Plan formulated in May 2022, we decided to aim for a consolidated payout ratio of 40% or higher, increased from the previous goal of
30% or higher.
Also, as mentioned in the press release dated in February 22, 2023, the shareholder benefit was changed from the discount coupon for affiliated hotels to ameal voucher for Blue Corner UC, a restaurant operated by our group company. In Blue Corner, you can watch airplanes within Haneda Airport (new aircraft
maintenance area) while enjoying meals. This place makes you feel more familiar with Haneda Airport, the base of our business.
We will continuously aim for the improvement of shareholder return by considering the economic situation, business performance and financial condition.

49

I N T E G R A TED REP ORT 2 0 2 3

1

Basic policy on compliance

While various rules are being strengthened throughout the world, companies are required to have an even stronger awareness of compliance. Our group organizes
the Compliance Committee comprised of all representative directors and full-time statutory auditors in order to maintain and enhance compliance awareness.
The Compliance Committee conducts deliberations on important matters essential to ensuring compliance with laws and public regulations, the articles ofincorporation, and internal regulations by executives and employees in their performance of job duties and strives to keep business operations appropriate andimprove them, prevent non-compliance, and otherwise avoid and reduce legal risks on a group-wide basis. The Compliance Committee is convened twice every
year and is chaired by the president.
The activity policy of the committee in FY2022 is to ensure compliance in each division, complying with the corporate governance code, and the appropriate
management and storage of aviation and security information. The committee identifies risks and reviews the state of compliance in each division, and it confirms
the impact of law amendments on each business, in order to implement the PDCA cycle for compliance management.

2Compliance Committee

The Compliance Committee is comprised of the president serving
as the chair and all other representative directors and full-timestatutory auditors, and conducts deliberations on matters essential toensuring compliance with laws and public regulations, the articles ofincorporation, and internal regulations by executives and employees
in their performance of job duties and strives to keep business
operations appropriate and improve them, prevent non-compliance,and otherwise avoid legal risks on a group-wide basis.
Regarding the internal control on financial reporting, thepresident and the Audit Office governed by the board of corporate
auditors implement audit and evaluation to ensure the proper
operation of business in order to cope with the internal control
report based on the Financial Instruments and Exchange Act.
In FY2022, the following items were reported and discussed:(1) Risk countermeasures taken by each division(2) Responding to the revised Corporate Governance Code
(3) Whistleblowing(4) Employment of disabled persons(5) State of overtime work
(6) Aviation security information(7) Internal audit.

3

orate governance
Corp
Internal control
Important
items

Legal
violation

Fraudulent
accounting

Labor issues

CG CodeInternal audit

Company
regulations

Important
items

Information
leakage

Fraud,
embezzlement

Importantitems

Anti-social forces

Aviation security

Laws andregulations*
Importantitems* The Risk Management Committee will ascertain the state of compliance with laws andimplement follow-up to manage our company’s risk of loss.

Internal control system

Under the basic policy on the internal control system, in order to ensure compliance with the Companies Act and the Regulations for Enforcement of theCompanies Act on a group-wide basis, AFC strives to develop the internal control system, for example by developing various regulations and establishingcommittees related to compliance and risk management.
With respect to compliance problems, including legal violations, AFC has created whistleblowing contact points through which employees can consult with orreport to the company so that the problems can be promptly addressed.
AFC Group deals with anti-social forces firmly based on its corporate philosophy and basic policy on the internal control system. When it has received undue
demands from anti-social forces, AFC Group, under the Compliance Committee’s leadership, engages in close cooperation with lawyers and police. AFC Grouproutinely ensures that executives and employees are aware of its corporate philosophy and basic policy on the internal control system and eliminates any
relationship with anti-social forces on a group-wide basis through day-to-day business activities and audit activities. The board of directors constantly checks
whether the internal control system is functioning appropriately and reforms the system as necessary in order to continuously make improvements.

INTEGRATED REPORT 2023

50

GOVERNANCE

4Development of Guiding Principles

In October 2022, our company formulated the Guiding Principles to show the basic policy and attitude toward action that each of our officers and employees
should value, based on the Corporate Philosophy. With the Guiding Principles, all employees are reviewing their own behavior and work processes, and raisingawareness about compliance.

5

Compliance training

In January 2023, matters on compliance were featured in training for young employees
given by lawyers.
The training session was content-rich and included guidance on how it is important to
notify a whistleblowing contact point without hesitation upon witnessing any complianceviolations, based on the idea of observing corporate ethics and social norms, and taking
measures at an early stage.

2

Risk Management Committee

The Risk Management Committee is comprised of the president serving as the chair, directors, heads of business divisions, and representatives of subsidiaries,
in order to identify risks and ensure appropriate operation and improvement of the risk management system.
Our company is engaged in infrastructure business, including heating and cooling, water supply and drainage, and shared communication in Haneda Airport,
and stable operation is essential for the business of the AFC Group. Also, because airports serve a highly important role at the time of an emergency, such as a disaster,
we recognize that stable supply and smooth restoration in ordinary times and under emergencies are crucial for the Group.
In FY2022, the following items were reported and discussed:(1) Measures taken against the resurgence of the COVID-19(2) Responses taken against cases of trouble caused to our facilities(3) Criteria for keeping listing on the Prime Market(4) Measures taken to comply with the Act on the Promotion of Women's Active Engagement in Professional Life, Act on Childcare Leave, Caregiver Leave, etc.,
and other laws and regulations(5) State of disaster countermeasures(6) State of information management.
Business Continuity Plan (BCP)

6

In order to respond flexibly and adequately whenever a major natural disaster such as an earthquake occurs, our group formulates a business continuity plan
(BCP) aiming for the early restoration of the businesses of our group and the functions of the airport, and implements training and maintains the system.
The BCP of our group is also aligned with the Airport Advanced Business Continuity Planning (A2-BCP) formulated by the East Japan Civil Aviation Bureauof the Ministry of Land, Infrastructure, Transport and Tourism, and incorporates plans to maintain the functions of the entire airport and to aim for the early
restoration thereof as the relevant organization.
When a disaster occurs, we first take initial response, such as ensuring the security of tenants and employees and preventing secondary disasters, andthen organize a BCP team to implement activities.
Through regular training on BCP, our group is raising the disaster prevention awareness among group employees, streamlining issues that are found out
through training, and preparing a manual based on such findings.

Information security

In order to adequately maintain information security, a management system has been established based on the Information Security Management Regulations andother regulations, and secure operation is implemented. Especially regarding measures against information leakage, multiple system guards are secured in
preparation against both an invasion/attack from outside the company and a leakage of information from the company. Information security training is implemented
regularly in a quiz format from January 2023, in order to reinforce the awareness of individual employees through education on the importance of information
management and information security measures within the in-house system.
Further, the Information Security Committee has been organized for the purpose of ascertaining the state of information security measures, formulating andreviewing guidelines for information security measures, and sharing and verifying information on information security measures. The Committee implements
verification activities twice a year.

7

3
Whistleblowing System

AFC has established a whistleblowing system in order to handle consultations and reports from executives and employees regarding illegal acts. Reports are received
through internal contact points, including the General Affairs Department under the General Affairs Headquarters and the statutory auditors as well as through anexternal contact point in the form of an outside law firm. When reports have been received, investigations are conducted as necessary, and correctional measures
are taken if illegal acts have been found.
While there was one warning in FY2021, there was no warning in FY2022.

Risk management

1

Risk items

Major relevant risks
 isk of relying on a limited
R
number of clients■ Risks regarding the measurestaken by the national
government■ Risks of foreign business■Business risks

Risks of natural
disasters andimpacts of thenaturalenvironment

I N T E G R A TED REP ORT 2 0 2 3

Financial risks

Fluctuation risksof other businessenvironments

Efforts
Against the impact of the reduction of aviation demand on business performance, we are trying to steadily grasp
various needs and to reduce the impact of risks by utilizing the knowledge we have developed over many years.
● 
We are trying to disperse risks by paying close attention to risks according to changes in airport plans andoperational policies of the national government, airport companies, etc., which administrate the establishment of
airports, and by developing new businesses.
● 
We gather information on business risks abroad through our business contractors and try to reduce such risks.
●In preparation against the risks of the occurrence of natural disasters and fire, our group conducts seismic
diagnosis for all facilities and is taking measures regarding reinforcement work. We are also insuring our properties
against fire, etc. Also, assuming the occurrence of disasters, we are trying to improve the communication andinformation gathering mechanisms and systems to restore functions promptly.
● 
The area heating and cooling business and water supply and drainage business tend to have an impact on ourmanagement and financial conditions with seasonal factors such as temperature rise.
● isaster risks
DRisks regarding the impact ofnatural environment■ ■ isks of the impairment loss ofR
non-current assets■ Risks regarding the realizabilityof deferred tax assets■

Risk management policy

Since the AFC Group builds, operates, and manages facilities and functions necessary for airports, it is responsible for supporting the safe operation of airports andthe flight services of airlines. Therefore, in order to prevent the AFC Group’s business risks from causing disruptions to the operation of airports and flight services,
the group stives to develop and improve its integrated risk management system. The AFC Group has established the Risk Management Committee, which iscomprised of directors, heads of business divisions, and representatives of subsidiaries, in order to identify risks and ensure appropriate operation andimprovement of the risk management system. Risk Management Committee is convened twice every year and is chaired by the president.

51

Business risks and measures taken against each risk■F luctuation risks of otherbusiness environments, etc.

When there is a notable deterioration of the profitability of invested non-current assets and the decline of market
values, impairment loss may be recorded, which may affect the management results and financial state.
● 
If it is decided that some or all of deferred tax assets cannot be realized, the amount of deferred tax assets is
reduced, which may affect the management results and financial state.
●● ur group also faces other risks due to the fluctuation of business environments arising from various causes,O
including COVID-19, which may affect the management results and financial conditions.

INTEGRATED REPORT 2023

52

FINANCIAL & NON-FINANCIAL DATA

Key consolidated financial information for the period of eleven years(Note) Amounts are shown by rounding down the amount below one million yen.

FY2012FY2013

FY2014FY2015FY2016FY2017FY2018FY2019FY2020

FY2021

FY2022

21,067

20,971

21,111

20,697

21,662

22,791

24,21324,855

24,15523,77725,516

Real estate business

14,354

14,857

15,56815,311

16,131

16,95018,116

18,727

18,94018,845

19,730Area heating & cooling business

4,244

3,720

3,192

3,166

3,200

3,208

3,242

3,274

3,379

2,957

3,412

Water Supply & Drainage Service and Other Business

2,468

2,393

2,350

2,219

2,330

2,632

2,854

2,853

1,834

1,974

2,373

3,362

3,498

3,165

2,944

3,825

4,103

4,129

4,186

3,831

3,280

2,503

2,345

2,577

2,345

2,021

2,560

2,919

3,105

3,086

2,922

2,862

2,172

Area heating & cooling business

839

634

605

830

1,143

1,034

787

849

1,097

452

225

Water Supply & Drainage Service and Other Business

177

286

214

92

122

148

237

250

(188)

(33)

106

Ordinary income [million yen]

3,490

3,090

3,164

3,173

3,492

3,726

3,338

3,802

3,617

2,962

2,121

Profit (loss) attributable to owners of parent [million yen]

1,781

1,092

1,505

1,935

2,151

2,219

2,104

2,227

(933)

821

1,564

Net assets [million yen]

47,02647,99850,71551,64453,41554,48255,74056,33354,96455,30657,368

Total assets [million yen]

73,316

77,621

84,27085,21487,58087,961

101,384

104,483

100,429

102,468

100,403

Interest-bearing liabilities [million yen]

15,92016,746

22,112

24,00323,994

23,15933,70336,04534,71230,75627,301Business investment in plant and equipment [million yen]

3,166

7,541

1,980

2,973

3,048

4,504

13,611

7,153

2,569

1,899

1,545

Depreciation expense [million yen]

3,222

3,093

3,434

3,551

3,503

3,547

4,033

4,011

4,263

4,135

4,822

Net assets per share (BPS) [yen]882.80900.07951.16965.69995.53

1,050.69

1,072.90

1,080.48

1,049.44

1,055.28

1,095.16

Profit (loss) per share (EPS) [yen]

34.48

21.15

29.14

37.46

41.63

43.36

42.28

44.72

(18.71)

16.45

31.28

12

12

12

12

13

14

14

14

14

14

14

Cash flows from operating activities [million yen]

5,521

3,897

3,478

809

3,024

7,147

5,176

6,900

4,758

8,467

2,017

Cash flows from investing activities [million yen]

(3,832)(4,418)(4,771)(2,453)(3,048)(5,383)(13,490)(8,217)(2,704)

(449)

1,198

Cash flows from financing activities [million yen]

(3,515)

14

4,500

1,731

(137)

(2,909)

9,524

1,958

(1,907)(5,117)(4,460)Rate of ordinary income to the amount of total assets (ROA) [%]

4.8

4.1

3.9

3.7

4.0

4.3

3.5

3.6

3.5

2.9

2.0

Return on equity (ROE) [%]

3.9

2.3

3.1

3.9

4.2

4.2

3.9

4.1

(1.7)

1.5

2.9

Debt to equity [Times]

0.349

0.360

0.450

0.481

0.466

0.443

0.519

0.669

0.663

0.584

0.498

EBITDA + recovery [million yen]

5,341

5,443

5,367

5,176

6,161

6,737

7,501

7,835

7,619

7,464

7,535

Equity ratio [%]

62.2

59.9

58.3

58.5

58.7

59.4

52.6

51.5

52.1

51.4

54.5

Price-to-earnings ratio (PER) [Times]

18.10

36.03

23.13

13.59

13.52

14.60

13.07

8.98

-

32.94

17.55

Payout ratio [%]

34.8

56.7

41.2

32.0

31.2

32.3

33.1

31.2

-

85.1

44.7

Trends in business performance
Net sales [million yen][Amount for each segment]

Operating income (loss) [million yen][Amount for each segment]
Real estate business

Trends in financial conditions

Information per share

Dividend per share [yen]Information on cash flow

Management indicators(Note) Price-to-earnings ratio and payout ratio are not shown for FY2020 due to current loss attributable to owners of parent, etc.

53

I N T E G R A TED REP ORT 2 0 2 3

INTEGRATED REPORT 2023

54

FINANCIAL & NON-FINANCIAL DATA

Financial conditions

Non-financial information highlights

Explanation on financial conditions

FY2019Total assets as of the end of FY2022 are 100,403 million yen, decreasing byassets decreased due to the recording of depreciation expenses related to asset

Total assets

2 Liabilities

11,051

Current
assets

24,583Current
assets

28,881

Non-current
liabilities

110

116

113

Number of employees in the group

116

115

122

119

Average hours of overtime work (non-consolidated, monthly)

21 hours

17 hours

15 hours

19 hours

Average years of continuous employment (non-consolidated)

13 yearsand 6 month

14 yearsand 6 month

14 years
and a month

14 yearsand 6 month

20.2%

24.5%

28.4%

30.1%

0%

0%

4.3%

4.1%

100%

100%

100%

100%

12 days

12 days

12 days

14 days

3 (1)

6 (4)

8 (4)

7 (5)

CO2 emission (consolidated; t-CO2)

42,15237,94437,35839,015

Amount of renewable (solar) energy power generation (thousand kWh)

5,021

5,402

6,395

6,138

Water use (thousand m3)

1,946

1,138

1,233

1,547

Waste discharge amount (ton)

1,615

1,518

1,419

915

9.7

13.3

21.4

18.8

Ratio of female employees (non-consolidated)

9,865

Ratio of those in the manager positions among female employees(non-consolidated)

33,168Consultation rate of medical checkups(including comprehensive medical examinations)Average days of paid leave taken (average for the fiscal year)

Non-current
assetsNon-current
assets

77,884

Net assets

71,521

Net assets

55,306

Total net assets as of the end of FY2022 are 57,368 million yen, due to increases

57,368in retained earnings and in foreign currency translation adjustments associatedwith the depreciation of the yen, increasing by 2,062 million yen from the end of
the previous fiscal year. Among the above, total shareholders' equity is 51,839

109

Current
liabilities

Non-current
liabilities

36,1104,127 million yen from the end of the previous fiscal year.

3 Net assets

100,403

Current
liabilities

Total liabilities as of the end of FY2022 are 43,034 million yen, decreasing byMajor reasons include the repayment of long-term borrowing.

Total assets

102,468

retirement obligations, the sale of the hotels in Kyoto and office buildings, andthe recording of depreciation expenses for Osaka Sogo Building.

FY2022

Number of employees in the company(Unit: million yen)

2,064 million yen from the end of the previous fiscal year.
Despite the acquisition of Hiroshima Motomachi NS Building, investment in an

FY2021

Personnel affairs

1 Total assets

airport fund, and an increase in business loans due to new loans, non-current

FY2020End of FY2021

End of FY2022

million yen, increasing by 914 million yen from the end of the previous fiscal
year. The equity ratio is 54.5% (increase by 3.1 points).

Number of those newly employed (non-consolidated)(number of women newly employed) *Including mid-career recruitments

Environment

Ratio of recycling to the amount of discharged waste (%)

Explanation on cash flow
Cash and cash equivalents (hereinafter referred to as "funds") as of the end of FY2022 are 8,598 million yen, decreasing by 1,014 million yen from theend of the previous fiscal year. The cash flow situation in FY2022 and factors thereof are as follows.

1 Cash flows from operating activities(Unit: million yen)

Net cash provided by operating activities resulted in income of 2,017 million yen(compared to income of 8,467 million yen in the same period of the preceding
Cash flows
from investing
activities

year). This is mainly attributable to an increase in inventory assets due to theacquisition of real estate for sales, increase in operating loans due to new loans,

1,198

and an increase in payments, such as corporate tax, despite income before
income taxes and non-cash depreciation.

2 Cash flows from operating activities
Net cash provided by investing activities resulted in income of 1,198 million yen(compared to expenditure of 449 million yen in the same period of the precedingyear). This is mainly attributable to income from the sales of non-current assets

Effect ofexchange ratechange on cash
and cashequivalents

9,612

2,017

△4,460Cash flows
fromoperatingactivities

Cash flowsfromfinancing
activities

3 Cash flows from financing activities
Net cash used in financing activities resulted in an expense of 4,460 million yen(compared to expenditure of 5,117 million yen in the preceding year). This is mainly
attributable to the repayment of long-term borrowing and payment of dividends.

55

I N T E G R A TED REP ORT 2 0 2 3Real estatetransaction agents

30

Labor and social security
attorneys

4

Class 1 / class 2
health officers

Fire prevention
managers

51

First-class registeredarchitects

5

Certified Building
Administrators

4

18

Boiler expert(first/second class)28

Certified Construction
Managers of Japan

8,598

purchase of investment securities related to investment in an aircraft fund andCash andcash equivalents
at the beginningof FY2022

As of March 31, 2023

16

230

related to hotels for rent and office buildings, despite expenses due to theexpenses due to the purchase of non-current assets.

Qualifications (including those who passed the examination)

Cash andcash equivalents
at end of FY2022

High pressure gas production
safety technical managers(Class 1 to 3 Refrigeration
Safety Manager Certificates)

Qualified Persons forEnergy Management

3

Second/third-class chief
electricity engineers

20

First-class chief engineers
for piping work

3

First-class building work
process supervisors

2

7

Certified environmental
measurer (concentration,
noise, oscillation)

1

Pollution control manager

9

INTEGRATED REPORT 2023

56

CORPORATE DATA

Composition of shareholders(As of March 31, 2023)

The Company (Treasury stock)

Securities code

8864

Stock Listings

Prime Market of the Tokyo Stock
Exchange (from April 4, 2022)

Total number ofshares authorized

124,800,000

0.76％

Financial
institutions

21.71％

Foreign investors

14.46％

Other Japanese corporations

43.12％

10,521

21.02

ANA HOLDINGS INC.

10,521

21.02

Development Bank of Japan Inc.

6,920

13.82

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

2,654

5.30

NORTHERN TRUST CO. (AVFC) RE IEDP AIF CLIENTS NON TREATY ACCOUNT

1,600

3.19

BNYM AS AGT/CLTS NON TREATY JASDEC

1,231

2.46

BNYM AS AGT/CLTS TREATY JASDEC

889

1.77

Resona Bank, Limited.

800

1.59

Custody Bank of Japan, Ltd. (Trust account)

720

1.43

Toshiko Banno

654

1.30

(Note) 1. Our company holds 2,941,000 treasury shares but is excluded from the above major shareholders.
2. Ratio of shareholding is calculated by excluding the treasury shares.

Corporate profile

Group Companies

Nominating Committee
Compensation Committee

Supplying air conditioning to various facilities
at Haneda Airport

57

Environmental Committee
Disaster Countermeasures Committee
Safety Promotion Committee
Improvement Promotion Committee

Real estate consulting business /Real estate fund businessBusiness Creation
Headquarters

Construction, acquisition and leasing business ofaviation-related facilities in Seletar Airport

AFS PROPERTIES PTE. LTD.

Singapore

28.4 million USD

Financing flight simulators in Seletar Airport

AFN PROPERTIES LTD.

Vancouver/Canada

5.5 million CAD

Construction, acquisition and leasing business ofaviation-related facilities in Langley Regional Airport

General Affairs Department
General Affairs Division

23.7 million SGD/ 18.9 million USD

Personnel Division

Singapore

Accounting Division

AIRPORT FACILITIES ASIA PTE. LTD.

Airport Business Headquarters

Accounting and Financial
Affairs Department

Operating and managing plumbing/facilities,
real estate management at New Chitose Airport

Heiwa, Chitose-shi,
Hokkaido

Foreign Business Department

10 million yen

S Cube Co., Ltd.

Innovation Promotion Office

Restaurant and concession stand businessat Haneda Airport

Facilities Planning Department

20 million yen

Facilities Division

Blue Corner Co., Ltd.

Facilities Maintenance Division

Operating and managing plumbing/facilities,
real estate management at Haneda Airport

Administration Division

30 million yen

Osaka Office

Aqua Techno Service Co., Ltd.

Operations Division

Merchandising business at Haneda Airport

Rinku International Logistics Center

30 million yen

I N T E G R A TED REP ORT 2 0 2 3

Sustainability Promotion Council
Construction Examination Committee

Chitose Office

AFC TRADING Co., LTD.

Information Security Committee

Management Strategy Council

Technology Headquarters

Haneda Airport,
Ota-ku, Tokyo

Risk Management Committee

Description of Business

Financial Affairs Division

50 million yen

Compliance Committee

Management Strategy Division

AFC Asset Management Co., Ltd.

Audit Office

Accounting Auditor

Management Planning
Department

2,900 million yen

President

Sustainability Promotion DivisionTokyo Airport Heating & Cooling Co., Ltd.

CapitalBoard of Corporate Auditors

Management Council
Enlarged Management Council(As of June 29, 2023)

Location

Board of Directors

Information Technology
Promotion Division

6,826,100,000 yen

General Meeting of Shareholders(As of June 29, 2023)

Public Relations Investor
Relations Division

CapitalOrganization

Airport Marketing Division

President and CEO Shigeo Tamura

Head Office
No. 5 Sogo Building, 1-6-5 Haneda Airport, Ota-ku,
Tokyo 144-0041
Tel.: +81-3-3747-0251 (Main)

Airport Business Department

Representative

Location

Cargo Planning Division

February 1970

119 (consolidated)
113 (non-consolidated) (as of March 31, 2023)

Tenant Services Division

Established

Employees

Airport Infrastructure
Business Department

AIRPORT FACILITIES CO., LTD. (AFC)

Water Supply and Drainage
Management DivisionCorporate Name

Company NameJapan Airlines Co., Ltd.

Shared Telecommunications Division

100

Securities companies

Planning and Research Department

Share unit number

14.40％

Planning and Research Division

10,474

Ratio of Shareholding(%)

Real Estate Business Department

Number ofshareholders

Number of Shares Owned(thousands)

Shareholder

Individuals

5.55％(As of March 31, 2023)

Real Estate Business Division

52,979,350

Major shareholders (top 10)

Planning Division

Total number ofshares issued(As of March 31, 2023)

Singapore Office

Stock information

INTEGRATED REPORT 2023

58

No. 5 Sogo Building, 1-6-5 Haneda Airport, Ota-ku, Tokyo 144-0041
Tel.: +81-3-3747-0251 (Main)

https://www.afc.jp/english/