INTEGRATED REPORT
2022

Creating unique value within andoutside airports to develop the futureof aviation and attractive towns
We adequately respond to customers’ needs and the requirements of society
within and outside airports, and promote the growth of the company while also
aiming to contribute to realizing an affluent society with the expansion of ourbusiness base and active business development.

Domestic cargo terminal(Haneda Airport)

01

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

Solar light power generation (TRC)

Support people’s lives throughthe construction of facilities
and social infrastructures
Our company is responsible for supporting thefunction of airports through infrastructurebusiness, and strives to develop and operatefacilities that provide safety and assurance.
Flight simulator (Singapore)

Build a sustainable
society and open up
the future
We set goals in terms of environment,
society, and governance and work toachieve them for realizing asustainable society.
International student dormitory (Kanazawa-Hakkei International Community Plaza)West Hangar (Haneda Airport)

Technical Center 1 (Haneda Airport)

Maintenance andinspection

INTEGRATED REPORT 2022

02

The business area of our group is widening.
In order to diversify our business toward future
growth and to construct a sustainable society,
we had set forth AFC VISION in May 2022 andOUR MISSION (new Corporate Philosophy) andOUR VALUE (new Guiding Principles) on
October 1, 2022.

OUR MISSION (CORPORATE PHILOSOPHY)

We, the Airport Facility Group, will contribute to the advancement ofaviation and the creation of attractive communities throughprioritizing and delivering valuable facilities and services.
AFC VISION
The ideal image of the company aimed at through the implementation of the Medium- to Long-Term Management Plan (To be)

Toward creating unique value within and outside airports
OUR VALUE (GUIDING PRINCIPLES)
Something that shows the basic policy and attitude toward action that each of our officers and employees should value,
based on OUR MISSION (Corporate Philosophy) and AFC VISION
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 tomeet public and customer expectations.

OUR
MISSIONAFC VISION

4 We will always remain fully committed to preserve the global environment andactively 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.

03

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

OUR VALUE
System diagram

TABLE OF CONTENTS

About
this Report

Value creation by
Airport Facilities Co., Ltd.

Efforts towards
realizing sustainability

05

Corporate development

07

AT A GLANCE

27 Efforts towards realizing
sustainability

09

Message from the President

13

Message from External Director

15

Value creation process

31 Environment
39 Society
47 Corporate governanceBusiness strategy

Corporate profile

17

Medium- to Long- Term
Management Plan

55 The progress of financial andnon-financial affairs

23

Special Issue 1(Haneda Airport 1-Chome Project)

59 Stock information/
corporate information

25

Special Issue 2(Promotion of non-asset business)

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 interms of environment, society, and governance. Please also refer to the website of our company, which offers various other information.

Overview

Integrated reportNonfinancial

IR siteFinancial
Sustainability
site

Corporate
governancereportReference materials
for results briefing

Annualsecurities
reportDetails

Period covered by this Report

This Report covers the period from April 1, 2021, to March 31, 2022.
(Some of the activities and efforts after April 1, 2022, are also included.)

Areas covered by this Report

Airport Facilities Co. Group (including affiliated companies in Japan and abroad)

INTEGRATED REPORT 202204

CORPORATE DEVELOPMENT

Progress with the development of aviation andsociety towards the next stage
Since the foundation in 1970, our company has been developing facilities in Haneda Airport and other major airports throughout
Japan, including domestic cargo terminals, training facilities for the crew, hangar, maintenance plants, in-flight meal factories, andmultipurpose buildings, as well as supporting the functions of airports through the provision of infrastructures within airports,
including area heating and cooling facilities, water supply and drainage service, and shared communication service.
In addition, we are currently leasing hotels near airports and residents for those who work at airports, international student
dormitory, office buildings in urban central areas, as well as developing business in Singapore andCanada, to expand our field of business.
We aim for further growth by making bold challenges in our business while flexibly
understanding the changes of the times.

1970

1980

1990
② Haneda Airport offshore land
reclamation project① Foundation of Airport Facilities Co., Ltd.

Domestic cargo terminal (Haneda Airport)

B747 Hangar (Haneda Airport)
Energy Center of Tokyo Airport
Heating & Cooling Co., Ltd.
Utility Center Building(Haneda Airport)

Sogo Building No. 1 (Haneda Airport)

1 19701993

2 1993

Foundation 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 the leasing of buildings, area
heating and cooling service, water supply
and drainage service in Haneda Airport
1-Chome area, and the leasing of buildings
in Itami Airport.

05

I N T E G R A TED REP ORT 2 0 2 2- 1993: Starts offering stock over the counter
through Japan Securities Dealers Association- 1995: Stock listed on the Second Section of
the Tokyo Stock Exchange- 1997: Stock listed on the First Section of theTokyo Stock Exchange- 2022: Transition to the Prime Division of theTokyo Stock Exchange

At the timing of the start of the second phase of the Haneda Airport offshore
land reclamation project (in September 1993), the Utility Center Building
and the west hangar in the new aircraft maintenance area and thedomestic cargo terminal facility in the cargo area were completed. In
addition, area heating and cooling service (Tokyo Airport Heating & CoolingCo., Ltd.), local area communication network business, and water supply
and drainage service started in the offshore reclaimed area.

2030

Haneda Airport
1-Chome Project

2020

Start of non-asset
business in 2022

2010
2000

④ Overseas business⑤ Solar light power generation
business③ Facilities businessoutside airports

Airbus Asia Training Centre (Singapore)

Solar light power generation(rooftops of the domestic cargo terminal of Haneda Airport)

Hotel (TOKYU STAY Kamata)Inspection of water supply and drainage facilities

International student dormitory (Kanazawa-Hakkei International Community Plaza)

3 19984 20135 2013

Starting facilities
business outside airports

Finance businessstarts abroad

Environmental initiatives(solar power generation)

Starting from the acquisition of Roppongi Buildingin Minato Ward, projects in urban central areas are
expanded to include Koku Kaikan and Kyodo
Building. Thereafter, the business is further
developed to include hotels, residents for those
who work at airports, and international student
dormitory.

AIRPORT FACILITIES ASIA PTE. LTD. wasfounded in Singapore in 2013. In 2014,
finance business started. In 2014, AFN
PROPERTIES LTD. was founded in Canada
and started finance business.

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

INTEGRATED REPORT 2022

06

AT A GLANCEAFC Group shown in data

Net sales

Operating income(Million yen)

(Million yen)

25,00024,15524,0005,000

23,777*22,784

23,0003,000

22,0002,000

21,0001,000

20,000

FY2020

3,831

4,000

0

FY2021

3,280*2,460

FY2020

FY2021

Ordinary income

Profit (loss) attributable to owners of parent(Million yen)

(Million yen)

3,617

4,000
3,000

821

1,000

2,962

500

*2,247

2,000

0

1,000

△500

0

FY2020△1,000

FY2021△933
FY2020

FY2021

Performance for the fiscal year ending in March 2022
(1) For comparative purposes, exemption of rent that has not been reported as an extraordinary loss but was deducted from sales in FY2020 is shown in theshaded area in the chart.(*) Comparing FY2021 and FY2020 under such conditions, the results show practical increases in net sales and operating income.
(2) Net sales decreased only slightly (mainly due to the exemption of rents from air carriers affected by the COVID-19 pandemic), despite full-year operation of
new facilities completed in the previous fiscal year, marginal increase in the sales of the area heating and cooling business, and an increase in water supply
and use of wastewater.
(3) Operating income was impacted by rental relief and the increase in raw material expenses for the area heating and cooling business due to the oil price hikeand depreciating yen.
(4) We decided to consider selling leased hotel property in Kyoto, where inbound demand has lagged, mainly for the purpose of further improving asset efficiency,
and we recorded an impairment loss as an extraordinary loss. On the other hand, net income (loss) attributable to owners of parent returned to profitability,
mainly due to a reduction in the range of rent and other exemption and the contribution of new projects.

ReviewNet Sales by Business Segment

Net Sales by Region

Water Supply &Drainage Service
and OtherBusiness

15.9％

Outside Airport / Overseas

8.3％

Real estatebusiness

FY2021

79.3％

Area heating &cooling business

12.4％

5.1％

FY2021

Itami Airport

1.4％

Kansai International Airport

Map of the
facilitiesof ourcompany

Itami

Sendai

Kobe

Canada: Langley Regional Airport

Tokyo International Airport,
Tokyo Metropolitan area
KansaiFukuoka

Hiroshima Heliport

KagoshimaNaha

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

1.9％

New Chitose

Chubu

Kitakyushu

07

Other regional
airports

Singapore: Seletar Airport

HanedaAirport75.7％

Equity ratio

Net assets(%)(Million yen)
56,000100.0

55,00080.055,30655,50060.0

54,9648,000

FY2020

FY202120.0
FY20200.0

FY2021

EBITDA + recovery(Million yen)

51.4

40.0

54,50054,00052.1

Dividend per share

7,619

(Yen)

7,464

16.00

14.00

14.00

FY2020

FY2021

12.00
4,000

8.00
4.00

0

FY20200.00

FY2021CO2 emission

Amount of renewable (solar) energy power generation(t-CO₂)60,00050,000(1,000 kWh)
8,000

51,56337,12640,00030,0004,000

20,000FY2013

Number of employees(number of female
employees) (for FY2021)

Overtime work

3,147

2,000

10,000
0

6,395

6,000

0

FY2021116
15(monthly average in FY2021)

368
FY2013

FY2017

FY20218
12Number of those newly employed

(33)

hours

(number of women newly employed)(for FY2021, including mid-career
recruitment)

Paid leave(average days taken in FY2021)

(4)

days

INTEGRATED REPORT 2022

08

MESSAGE FROM THE PRESIDENT

We aim to create unique value within andoutside airports by flexibly responding toenvironmental changes.

Toshiaki Norita

President and Executive Officer

09

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

Introduction

balance sheet, we will restructure the business foundation of ourgroup towards the age of coexistence with COVID-19, and do make

Since its foundation in 1970, Airport Facilities Co. Group has been

our utmost efforts to address various issues to achieve sustainable

providing aviation-related facilities and other various facilities andgrowth.

services for more than 50 years in Haneda Airport and other major
airports in Japan as well as abroad, responding to the needs of ourcustomers and society. Recently, we have been expanding our

Future aimed at in the Medium- to
Long-Term Management Plan “AFC VISION”

business outside airports by utilizing the know-how we acquiredin airports, widening the field of our business.

Toward creating unique value

In this message, I would like to explain the situation surrounding
the group under the COVID-19 pandemic, the Medium- to

We have been discussing the medium- to long-term issues of ourLong-Term Management Plan including FY2021, “AFC VISION,”

group and the direction of progress we should aim at, for about awhich is the future image we aim to realize, and our New

year from June 2021. In the course of such discussion, we strongly

Corporate Philosophy.

recognized that it is difficult to achieve sustainable growth by

Business environment and performance
forecast under the COVID-19 pandemic

merely continuing and extending the same business as before.
Our group is not immune to geopolitical risks, such as COVID-19
and the crisis in Ukraine, natural disasters, and other various event
risks. We will also be impacted by these risks. In addition, we will

Further profit improvement

only be able to achieve a limited increase in profit with a businessmainly focusing on services within airports.

The financial results for FY2021 continued to be affected by the

There are many companies that are reacting flexibly to changes

COVID-19 pandemic, with both net sales and operating income

even under severe business conditions, and continuously

decreasing from the previous fiscal year. This is mainly due to theincreasing profit. We reached a conclusion that we need to review

exemption of rent and heating charges offered for our tenants,

the state, structure, and domain of our business in order to secure

including air carriers who are struggling in tough conditions amid

stable revenue and achieve growth.

the pandemic. Except for this factor, the results show practical

Under such recognition of the business environment, we

increases in net sales and operating income.

formulated this AFC VISION. It is recognized as the profile of theUnder such economic conditions, our company has also been

future company we aim to become. The purpose of our existence

engaged in projects outside airports to expand our businessis to utilize the knowledge we have acquired over more than 50

domain, including the provision of facilities to Alpine Koshigaya,

years to adequately respond to the needs of customers andand offering loans for the procurement of aircraft engines abroad.

requests from society, inside and outside airports alike, andAlso, plans to repair the facilities owned in order to upgrade thebecome a company to continuously create value. Above all, we will

quality of facilities and maintain and improve the level of services

try to become a unique company by developing and enhancing theare progressing smoothly.

business that only we can perform by winning the trust of ourOn the other hand, inbound demand remains at a low level. We

customers.

have decided to sell the hotel in Kyoto and recorded an impairment
loss. While it was very regrettable, we judged that it would bebetter to cut our losses at this point rather than to face greater riskin the future. Also with the profit made from selling shares, thecurrent profit attributable to owners of parent for FY2021 was 800
million yen, returning to profitability from the deficit of 900 million

Three priority measures in the Mediumto Long-Term Management Plan
Selection and concentration, making maximum
use of management resources

yen in FY2020.
FY2022 is the starting year of the Medium- to Long-Term

The newly formulated Medium- to Long-Term Management Plan

Management Plan. In terms of income, because the recovery of(FY2022 - FY2028) sets forth the selection and concentration andaviation demand from the COVID-19 pandemic can be expected,

making the maximum use of management resources as the basic

exemption of rent and heating charges offered in the previous

concept, and aims to improve the quality and strength of the

fiscal year is not assumed. Therefore, the net sales increased. On

company through the improvement of earning power and thethe other hand, there is a concern about rising fuel prices and raw

enhancement of management foundation in each business, as wellmaterial expenses due to the crisis in Ukraine. In addition, there

as to take on the bold challenge of exploring a new business area.

will be a new burden of depreciation expenses with the start of the

It is also considered as the plan to securely recover from theHaneda Airport 1-Chome Project as we explain in detail later,

severe condition under the COVID-19 pandemic and construct a

resulting in increased expenses. While trying to further improve ourrevenue base for the next stage.

INTEGRATED REPORT 2022

10

MES S AGE F ROM T HE PRE S I D E N T

The period of this plan is the seven years until FY2028,

the end of FY2028, seven years from now.

considering the nature of the real estate business, which requires

On the other hand, business profit will increase by 1.7 times. Thea certain period from the stage of investment plan to obtaining

ratio of business profit, which is currently 7:3 for within airports

revenue, and the period of revenue contribution by the Haneda

and outside airports (including abroad) is planned to be shifted to

Airport 1-Chome Project, which is a large-scale investment project

5:5 owing to the profit contribution from overseas business andthat will be explained in further detail later.

non-asset business.

Now I would like to explain how the three priority measures,

Upon changing the business structure as such and to put thewhich are the pillars of the new Medium- to Long-Term

Medium- to Long-Term Management Plan into practice, it isManagement Plan, are positioned.

necessary to further reinforce the management foundation. The

The first is the project to reorganize the area in Haneda Airport

core of such foundation is, needless to say, human resources. I

1-Chome, which is the place where our business started from.

believe that the growth of a company can never be achieved

Our Group will implement a significant investment of this size forwithout the growth of human resources. Our company will support

the first time in 30 years. We will create functions that Haneda

employees so that they can learn from each other and cooperate,

Airport will require in the future and areas serving as a newand become able to improve capability as individuals and as an

business base to connect the sky and the town, and secure aorganization. We will aim to become a competitive business groupstable revenue base for the long term. Also, the utmost attention

with high-level expertise.

will be paid to the environment to recreate a group of facilities
resistant to natural disasters.
The second measure is the expansion of non-asset business.
This will be a new business domain that takes place mainly outside

Efforts towards realizing sustainability
Aiming to realize a sustainable society

airports. The business of our company has possessed many facilities
based on the leasing model of traditional long-term ownership (for 30

Our company made a transition to the Prime Division of the Tokyo

to 50 years). In the new plan, we aim to make earnings based on the

Stock Exchange. As we are a prime company, the promotion ofrotary business model focusing on asset efficiency, by improving thesustainability is also an important theme. Now more than ever, sternvalue of profitable buildings acquired outside airports and sellingeyes from society will be set on whether we are engaged inthem, and through management fees for operations through a newly

corporate activities appropriate for a prime company. We will alsoestablished asset management company by further progressing suchpromote environmental activities and efforts to reduce CO2 emissions

style of business and formulating a fund. Further, by utilizing thethat are unique to our group, activities as a member of society andknowledge we have been developing for a long time, we will build athe region, and the establishment of a healthy and lively workplace

new profit model to make earnings through the management andbased on good communication and respecting diversity.

services of facilities. The expansion of non-asset business is

What stakeholders require for a company is changing greatly.

considered as an engine for growth in the new plan.

Reactions to social issues, sustainability of business, and resilience

The third measure is the improvement of the profitability ofagainst risks are now strongly demanded. We must further

existing business.

reinforce our efforts towards achieving sustainability.

We will adequately respond to the needs and wants of ourWhile the expansion of business and the growth of profit are

customers, implement refurbishment in line with the times, andnaturally important business challenges, the key point of theefficient and planned repairs, and increase the occupancy rate by

Medium- to Long-Term Management Plan is to simultaneously

maintaining and improving the quality of the facilities. We will also

realize both profit growth and the promotion of sustainability,

pursue cost review to try to improve the earning power.

which will also lead to the achievement of the AFC VISION.

On the other, we will make adequate business decisions on
low-operating facilities and properties that have problems withprofitability to reorganize our asset structure. The hotel in Kyoto wassold as a part of such review. The money received from the sales

GovernanceSound and transparent governancewill be allocated to investment in growth, etc., to achieve growth
as the entire group.

In terms of governance, it is necessary to ensure sound,We will optimize our business portfolio centering on these threetransparent and fair management in compliance with the Corporate

priority measures.

Governance Code.

It is expected that our asset value increases by 1.1 times and theratio of assets within airports will increase from 56% to 59% by

11

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

In order to promptly and appropriately respond to the rapidlychanging business environment, our company is trying to improvethe transparency and efficiency of management, as well as tofurther improve the decision-making and supervision by the boardof directors, to establish a suitable management system. With aneye to ensuring the diversity and expertise of the board of directors
and further actively deepening substantive discussion, the numberof directors has been reduced from 13 to 9, 3 of whom areexternal directors complying with the independence standards of
the Tokyo Stock Exchange and our company. We have also

adequately in the rolling plan, and strive to realize the plan.

OUR MISSION (new Corporate Philosophy)
We will contribute to the advancement ofaviation and the creation of attractive
communities through prioritizing and deliveringvaluable facilities and services.

abolished the system of corporate advisors.

Attainment target of the Mediumto Long-Term Management Plan
Towards a new paradigm

Our group has been developing business mainly in Haneda
Airport for half a century, winning support from various people.
However, the business environment surrounding us is changing
greatly. In order to become a company responding promptly to theenvironment and achieving constant growth, we are foreseeing thenext half-century and further on, and have been discussing the

By consistently building up the efforts set forth in the plan every

significance of the company’s existence and its ideal state among

year, by FY2028, the final year of the plan, we expect to achieve

employees and officials when formulating the Medium- to

net sales of 32 billion yen, operating income of 5 billion yen (1.5Long-Term Management Plan.

times larger than in FY2021), profit attributable to owners of parent

OUR MISSION (new Corporate Philosophy)/OUR VALUE (newof 3.3 billion yen (4 times larger than in FY2021), and ROA (return

Guiding Principles) presented are the compilation of our thoughts

on assets) of 5.0% (1.5 times larger than in FY2021).

regarding the enhancement of the value of the company, throughAs for the basic policy of shareholder return, we will offer stableefforts such as placing importance on winning the trust andand continuous return of profits to our shareholders and implement

credibility of our customers and society, and supporting thedividend increase linked to business performance improvement.

advancement of aviation and contributing to the development of

The consolidated payout ratio target was set at 30% or higher in

airports and the town through the provision of safe, secure andthe previous Medium-Term Management Plan, but it will be raised

valuable facilities and services based on our accumulated

to 40% or higher during this plan, further focusing on return ofexperience. All the employees and officials will put OUR VALUE

profits to our shareholders.

(Guiding Principles) into practice towards the realization of OUR

It is said that this is the age of VUCA (volatility, uncertainty,

MISSION (Corporate Philosophy).

complexity, and ambiguity), and we are constantly posed to face

I will spearhead the efforts and promote management so that ourvarious kinds of risks. We will implement the PDCA cycle togroup can evolve further.

confirm the progress made, reflect any changes in environment(As of October 1, 2022)

INTEGRATED REPORT 2022

12

MES S AGE F ROM E XT E RNAL D I R E C T O R

We will improve the functionality of the board of
directors to increase the corporate value ofthe Airport Facilities Co. Group

Takehiko Sugiyama
External Director

I assumed the post of external director of Airport Facilities Co.,and give my opinions as an external director.

Ltd. in 2015. Before that, I was a member of a university for about

We external directors receive sufficient information in advance on

40 years. For a period of time, I was engaged in university

matters necessary for the deliberation before the meeting ofmanagement as the president of a national university. I major in

directors, so in the actual meeting, questions are made andtransportation economics.

opinions are exchanged actively among internal and external

I believe that it is my duty to view Airport Facilities Co., Ltd. fromdirectors every time, and I evaluate it as a highly functional

many sides with the eyes of a person outside the company, based

meeting.

on the knowledge I have obtained in such career.

I serve as the chair of the nominating committee and the

The board of directors of Airport Facilities Co., Ltd. includes threecompensation committee from 2019, at the time of their

independent external directors (one third of the total directors), andestablishment. The composition of the committees, including fivetwo external auditors. I believe it is a well-balanced composition

external (independent) directors/auditors out of seven (71%), isfrom the perspective of a skills matrix.

also adequate. Although we were rather inexperienced at the time

Discussion at the board of
directors

13

when the committees were established, I feel that the discussion is
becoming more and more substantial every time.

In the discussion at the board of directors, I try to focus on risks

The meeting of directors in FY2021 spent much time on theand problems that may be often overlooked by internal directors

formulation of the Medium- to Long-Term Management Plan, andI N T E G R A TED REP ORT 2 0 2 2

deepened discussions on medium- to long-term goals and the way

environmental burdens and improving efficiency, such as theto achieve those goals after the pandemic.

further development of solar power generation business.

The plan formulated embodies the strong will that Airport

Also, different thoughts by different kinds of human resources

Facilities Co., Ltd. will take on the bold challenge of new businessand innovation based on various types of activities are essential for

toward the future. I understand that strategies for human

growth and development over the long term. Therefore, it will beresources/organization, improvement of governance, and themore and more important to further improve diversity within thefurther enhancement of management foundation by utilizing IT willorganization through the recruitment and promotion of aspiring

be the important challenges from now on.

human resources.

I hope that Airport Facilities Co., Ltd. utilizes the knowledge it

In terms of building an environment in which employees can

has developed in its history of 50 years to achieve sustainable

thrive, I feel a steady improvement in recent years. I would like togrowth and improve its corporate value, while also contributing

pay further attention to the progress of improvement in terms of

to realizing a sustainable society through resolving social issues,

human resources and organizational foundation.

and become a company creating unique value within and outside
airports.

While management risks cover a lot of ground, the utmost

There is a term “VUCA.”

top-priority issue is to prevent the aging of facilities and disasters,

This stands for volatility, uncertainty, complexity, and ambiguity. I

and it is necessary to be well prepared against such risks.

think it is a concept that must be kept in mind when making any

Regarding the BCP (business continuity plan), I consider thekind of decision in this age.

company should widen its structure on the premise of close

Keeping this “VUCA” in mind, specializing only in a single

cooperation with the region and external organizations, rather thanbusiness is a risk factor, and it is necessary to be engaged infocusing solely on doing things on its own, because businessmultiple business to ensure stability and sustainability. It is naturalcontinuity is based on mutual reliance among stakeholders.

that the company has been developing its business mainly in
Haneda Airport. However, considering the business portfolio, wemust expand our market by taking on challenges in areas outside
the business and technologies we already possess.

For the future of
the Airport Facilities Co. GroupI believe we need to combine offensive areas and defensive

I think it is also important for an external director to have aareas, keep the antenna fully spread out, and seize opportunities

perspective of actively backing up the growth of the company,

based on careful analysis even in areas less in common with therather than simply focusing on adequately avoiding risks.

current business.

I am willing to work together with the internal directors,
including the chairman and the president, so that the Airport

In the age of great uncertainty, where things are changing

Facilities Co. Group can achieve constant growth in line with therapidly, it is necessary to constantly create new value as adevelopment of society.

company, while also responding to requirements in society.
Because it is necessary for a real estate business to utilize
properties from a long-term perspective, it will be essential to both
keep a long-term view and respond flexibly and promptly tochanges in the situation.

Efforts towards realizing
sustainability
We are now in an age where efforts to realize a sustainable
society are a must.
Airport Facilities Co., Ltd. sets a goal in terms of each of the ESGs
(environment, society, governance), and it is important to achievethese goals without fail.
Regarding environmental efforts, the company is expected toconsider them as an opportunity, while paying attention to therisks, and to create business that contribute to reducing

INTEGRATED REPORT 2022

14

VALUE CREATION PROCESS

Airport Facilities Co. Group will utilize different kinds of capital (financial capital, human capital) and networks (clients, society) and aim to contribute to thesocioeconomy by providing facilities that continuously respond to various needs in business in areas such as real estate business, which is the strong point ofour company, as well as to tackle issues including environmental problems to continuously create value.

Management resources; input

Management resources
Financial foundation(financial capital)

Implementation of the business strategy

Business activities
Real estate business

Area heating & cooling business

Water supply & drainage service
and shared communication business

Environmental business(solar light power generation, etc.) /new business

Human resource(human capital)
Network(clients, society)Accumulated know-how(knowledge, technology capital)
Resources(natural capital)

Requirements from society(materiality)

Invigoration of the socioeconomy
through the development of aviation

Five advantages
Facility
development
infrastructurebusiness based on
airports in Japanand abroad

Technologicalcapability in terms ofreal estate andinfrastructure withmany years ofexperience

Reduction of environmental burden
Community development andsocial contribution

Business unique toour company such as
SD plants

Stable earnings
structure centeredon leasing business

Ability to collectinformation from thenational governmentand clients

Formulation of a workplace where
employees can maintain theirmotivation for work

GovernanceCorporate Philosophy
Continuous improvement of corporate value

15

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

Regarding ESG initiatives that will also lead to the achievement of SDGs we will improve our corporate value in the medium- to long-term
and make efforts towards the realization of a sustainable society.

Value creation/provision; outcome

Financial indicators
Medium- to Long-Term
Management Plan
Net sales
Operating income

Providing values tostakeholders and society(outcome)
Continuation of sustainable growth anddevelopment of a profit foundation for the
next stage

Net income
ROA
EBITDA + recovery
Payout ratio

Efforts and goals
related to realizing
sustainability

Provision of infrastructure supporting
airport functions
Formulation of towns and airports
resilient against disasters
Provision of comfortable and safe airport
function facilities and offices
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

Provision of an occasion forcapacity building

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

Provision of workplace environment easy
to work in

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

Invigoration of regional society

Realizing a society where everyone can work
free of discrimination

Trust from the society and clients

Ensuring sound, transparent,
and fair management

Stable and sustainable return toshareholders / trust from shareholders
and investors

supporting business/ VISION
through the cycle of value creation

INTEGRATED REPORT 2022

16

MED IUM- T O L ONG- T E RM M A N A G E M E N T P L A N

Medium- to Long- Term Management Plan

Toward creating unique value within and outside airports
Roadmap
Medium- to Long-Term
Management Plan
for FY2022-FY2028

1

Haneda Airport 1-Chome Project2

Expansion of non-asset business3

Improvement of the profitability of existing business

Facility redevelopment project in the Haneda Airport
1-Chome area

Endeavor towardrealizing
the AFC Vision

Diversification of profit sources and improvement of
capital efficiency

for FY2029- More precise anticipation ofcustomers’ needs- Bold expansion into new businessareas- Realization of a sustainable society
through ESG activities

Improvement of the occupancy rate andimplementation of restructuring projects

Further strengthening of
the business foundation
Continuation of sustainable growth anddevelopment of a profit foundation
for the next stage

ROA
Targets

Return on Assets
ROA

3.4 %

Actual results

End of FY2021

AFC VISION
Toward creating uniquevalue within and outside
airports

5.0 %FY2028 *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
Recognition of the environment

Item

Recovery from the COVID-19 crisis and further strengthening of Haneda Airport’s functions

Aviation/
airports

Replacement demand due to the strengthening of the functions of airport facilities and infrastructure
Promotion of the “eco-airport” initiative
Changes in office demand due to work style reform and technological innovation

Real estateindustry

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

AFC Group’s response

Specific measures- Strengthening and expansion of the airport-related
real estate business- Identification of customers’ diversifying needs, andproposals- Active capital investment in the airport-related
infrastructure business- Haneda Airport 1-Chome
Project- Airport-related real estatebusiness- Airport-related
infrastructure business- Activities related to a non-airport new businessmodel- Selective investments conscious of bipolarization of
the real estate market- Thorough risk management- Non-asset business- Non-airport business- Enhancement of governance- Strengthening of BCP efforts- Investments related to the environment and energy- Surveys looking toward future aviation- Strengthening of thebusiness foundation- Airport-related
infrastructure business- Study on creation of new
business toward future
prosperity- Creation of new business to capture Asia’s growth- Overseas business

Further enhancement of corporate governanceSocietyandeconomyNeed for activities to realize a sustainable society
Climate change, and the increasing frequency and severity of natural disasters
Progress in research and development and practical application of next-generation aviation mobility

Overseas

17

Increasing populations, economic development and expanding aviation demand in AsiaI N T E G R A TED REP ORT 2 0 2 2

How the Medium- to Long-Term Management Plan is positioned
AFC Group will satisfy the needs of customers and society and increase the value of airports by providing various facilities and functions at major airports
across Japan, with Haneda Airport as the main hub. At the same time, AFC Group will actively engage in non-airport business as well by taking
advantage of the knowledge that it has cultivated during its 50-year history.
AFC Group will aptly identify major changes of the times in a post-COVID-19 era, endeavor to further strengthen airport-related business and to expand
non-airport business based on customers’ trust, and strive to increase enterprise value through sustainable growth. It will also aim to create uniquevalue within and outside airports by contributing to the realization of a sustainable society through the resolution of social challenges.

Basic Policy
Basic Policy Continuous implementation of selection and concentrationand maximum use of business resources
Business that supports AFC’s growth
Airport-related business

Non-airport and overseas businessPriority Measures ③

Priority Measures ①

Priority Measures ②

Haneda Airport
1-Chome Project

Expansion of
non-asset business

Reorganization of existing
facilities in the place ofAFC’s founding

Promotion of a capitalefficiency-conscious“revolving business”

Improvement of the
profitability ofexisting business
Increasing profits throughimprovement of the occupancy
rate and implementation of
restructuring project

Optimization of the business portfolio centering on three measures

Further strengthening of the business foundation
Human resource and organization
development strategy

Strengthening of governanceUse of IT

Quantitative target
Continuation of sustainable growth and development of a profit foundation for the next stage
Numeral targets
for FY2028

Net
sales:

32.0

billionyenNetincome:3.3

billion
yen

ROA:

5.0

%

INTEGRATED REPORT 2022

18

MED IUM- T O L ONG- T E RM M A N A G E M E N T P L A N

Business strategy
In this plan, we categorize the business of our company into five groups under the Business Portfolio Strategy. The positioning ofeach business is redefined and the future business strategy is shown.
We will aim to increase profit and improve capital efficiency by securely promoting these business.

Airportrelated realestatebusiness

Airportrelated
infrastructurebusiness

Non-airport
business

Overseasbusiness

Restructuring
projects

19

I N T E G R A TED REP ORT 2 0 2 2･Steadily promote the Haneda Airport 1-Chome Project and strengthen the profit foundation･Aim to create new business by promptly identifying customer issues and responding totheir needs in a post-COVID-19 world- It is a foundation business of our company, and we aim to increase profit by continuously making investments and increasing
good leasing business assets.
- In this business, “Haneda Airport 1-Chome Project” and “increasing the revenue from the existing business” will be the priority
measures.
- We will capture new needs for facilities by enhancing the network in the industry through operating activities closely
supporting our clients.
- We will openly solicit ideas on new business among employees and discuss new business that respond to client’s needs.

･Maintain stable supply and reduce the environmental burden･Actively implement capital investment from the viewpoint of the BCP and theenvironment (eco-airport)- As the provider of the lifeline necessary for operating airports, we will contribute to realizing the sustainability of airports andsociety, focusing on stable supply and reducing environmental burdens.
- We aim to achieve the target of no serious incidents, in preparation for various risks, including natural disasters.

･Diversify profit sources by securing investment and fee revenues through thepromotion of non-asset business･Classify owned and developed assets into core and noncore assets and earn profits
based on an exit strategy- In addition to self-investment, we will aim to improve the capital efficiency of the entire company by speeding up investment
recovery through the promotion of non-asset business and securing potential buyers, to differentiate the company frombusiness within airports.
- Properties are categorized into “core property” and “non-core property” depending on their type, feature, and profitability. Exit
strategy according to the features of each property will be set forth and implemented.

･Incorporate Asia’s growth through business and capital investments based oncollaborations with business partners- Leverage our well-established network and cumulative knowhow in order to venture into capital investments based on financebusiness to improve profitability.

･Start reorganizing properties with inferior profitability or growth potential,with capital efficiency in mind
- We will improve profitability by reorganizing facilities, including the withdrawal from projects and the sales of properties, forproperties that are currently not making profit or are expected to deteriorate in terms of profitability in the future due toincrease in costs (repair expenses, etc.).
- The money received from the sales will be allocated to investment on growth, etc., to achieve growth as the entire group.

Business portfolio and financial strategies
While the real estate business was mainly focusing on the style of management to own real estate for a long term, there had
been problems in that the current business model will take time to recover the invested capital, decreasing the capital efficiency.
We will improve the efficiency by promoting non-asset business. At the same time, we will start reorganizing the properties thathave problems with profitability and growth.

Asset mix

End of FY2021- We will aim to increase assets by 1.1 times in seven years.
- The ratio of assets within airports is increasing from 56% to 59%. This
includes increase by investments related to Haneda Airport 1-Chome
Project.
Among assets within airports, about 40% are assets within Haneda Airport.
- The ratio of assets for this business increased significantly with thepromotion of non-asset business. Because this business is a rotary-modelbusiness where capital gain is obtained by selling properties after
increasing their values, assets are constantly being replaced.
- We will reorganize properties with problems until we have no properties
where reorganization is necessary.

Overseas businessRestructuring
projects

Airportrelated
real
estatebusiness

Non-airport
business

Non-airport
business

Airport-related
business

7 ： 3

Overseas business5 ： 5

Airport-related
infrastructurebusiness

Non-asset business
Non-airport business

Non-airport businessAirport-related
real estate businessAirport-related
real estate business

Haneda Airport
1-Chome Project

1.7

FY2028-fold increase

Haneda Airport
1-Chome Project

Airport-related
infrastructure business（％）
45

Aim for a consolidated payout ratio of 40% or higher
Consolidated payout ratio of
30% or higher

*

14

14

14

14
Aim to increase dividends
through a rise in the payout ratio

25
20
15
10

Restructuring projects

FY2021

Airportrelated
infrastructurebusiness-fold
1.1
increasemaintenance of financial soundness and return of profits to shareholders.
- While offering stable and continuous return of profits to our shareholders
and implementing dividend increase linked to business performance
improvement, we will raise the targeted payout ratio from “30% or higher”
to “40% or higher.”30

Overseas businessAirportrelated
real
estatebusiness- We pay stable dividends while maintaining the right balance among
preparation for future investment to achieve sustainable growth,35

Non-airport
business

59％

Payout ratio of 40% or higher

40

Airport-related
business

Overseas business
Non-asset business

Non-airport
business
Airport-related
infrastructure business

Targets for business profit growth and business mix
 e will aim to increase business profit by 1.7 times in seven years.
-W y securely promoting non-asset business and overseas business, we are-Bplanning to shift the ratio of business profit, which had been 7:3 for within
airports and outside airports to 5:5 in seven years and evolve our businessportfolio.
 ecause Haneda Airport 1-Chome Project, which is one of the priority-Bmeasures of real estate business within airports, is a long-term project
covering a period of ten years, the ratio of the increase of profit to the increaseof assets is not so large at the time of the final year of the plan (FY2028). We
expect the project to start fully contributing a little after this plan.
-W e will streamline properties with problems until we have no properties
where reorganization is necessary.

56％

End of FY2028

including non-asset business2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028（FY）*Annual dividend per share (yen)

INTEGRATED REPORT 2022

20

MED IUM- T O L ONG- T E RM M A N A G E M E N T P L A N

Strengthening of the business foundation
Human resource and organization development strategy
We will aim to become a company providing competitive and highly specialized value by improving
the capacities of individuals and as the organization as a whole.
Human resource development-W e will enhance the development of professional human resources necessary for promoting the business of
our companies through the improvement of education and training and the buildup of skills based on careerplan support, investment in human resources, etc.

Optimization of the businessstructure- S trengthen the sales promotion system by reforming the organizational structure and making use of humanresources in a way better suited to implement business operations.
- In order to securely promote non-asset business, a subsidiary (AFC Asset Management Co., Ltd.) exclusively
engaged in business such as the expansion of revolving business of real estate outside airports and thedevelopment of a real estate fund in the future was established. The subsidiary started operation in June 2022.

Work-life balance e aim to provide an environment where each of the employees can continue working without worries in a-Whealthy condition both physically and mentally, so that they can fully exert their characteristics and abilities.

Promotion of health-oriented
management

 e make public the annual schedule of measures related to health maintenance and improvement.
-W e regular interview all employees regarding mental health.
-W e provide care by an industrial physician after routine medical checkups and comprehensive medical-Wexaminations.

Enhancement of employee
engagement

 e promote diversity and inclusion (through the empowerment of women, employment of disabled persons,-Wand efforts to prevent harassment).

Efficiency improvement using IT
We will seek the utilization of IT not only for administrative work but also in other business areas, such as for
improving customer service and productivity.
Use of IT in real estate
management-W e aim to improve labor productivity and real estate management quality through the introduction of realestate management utilizing digital tools such as AI and RPA.

Improvement of customer
service and cost reduction-B y digitalizing invoices and orders, which we had been issuing and receiving on paper, we will aim to provide
them instantly to customers, reduce the use of paper, and reduce cost.

Further strengthening of
information security-W e will implement continuous training of and investment in people and things, while understanding the trendsof security measures and take necessary measures as needed.

Strengthening of corporate governanceWe ensure sound, transparent, and fair management that places importance on compliance.

21

Strengthening of the board of
directors’ functions-W e will further improve the efficiency and speed of the execution of operation based on the policy decided by
the board of directors, by uniformly reviewing the system of the board and executive directors.

Prompt and appropriate
information dissemination-W e transmit information promptly and adequately to meet disclosure requirements for Prime Divisioncompanies (information disclosure complying with TCFD recommendation, etc.)

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

Message from the representative

Develop a high-efficiency
business portfolio that isresilient to risks
Katsuhiro Yamaguchi, Executive Vice President

What was prioritized upon theformulation of the Medium- to LongTerm Management Plan

diversification and risk tolerance. On the other hand, regarding the
non-airport business, we will start rotary-model business targeting
medium- and small-sized buildings abundant in the market andimprove their value, promote the development of a real estate fundThe business environment surrounding our company is changing

using properties we had been engaged in as the underlying asset, andgreatly. In such environment, we have newly upheld “AFC VISION:

aim to upgrade our fee business. For this purpose, we established AFC

Toward creating unique value within and outside airports” as the vision

Asset Management Co., Ltd. in May 2022.

we aim to realize. We have been repeating discussions under thetheme of developing a high-efficiency business portfolio that is resilient
to risks, and formulated this plan.

In order to promote such efforts, we are aiming to change the ratioof business profits within airports and outside airports, which iscurrently 7:3 to 5:5 by FY2028, and to raise ROA (return on assets) by
1.5 times to 5.0%.

Key points of the business portfolio
strategy
In order for a company to achieve sustainable growth, it is essential

Enthusiasm for promoting the
Medium- to Long-Term
Management Plan

to allocate limited management resources adequately and efficiently.
In the Medium- to Long-Term Management Plan, we divide the

Because this plan extends over seven years, investment discipline

business of our company into five categories, namely “airport-related

and timely progress management is important. Therefore, we would

real estate business,” “airport-related infrastructure business,”like to put our utmost effort towards achieving our goals by adequately"non-airport business,” “overseas business,” and “restructuring

implementing the PDCA cycle and flexibly rolling out the plan.

projects,” in order to take on challenges in the new area while also
capitalizing on the advantages we have been developing.
Regarding the airport-related real estate business, we aim to further

We established the Innovation Promotion Office within the company
in April 2022. We are willing to stay ahead of the times, respond tovarious environmental changes, and take on challenges to capture

reinforce our business assets within Haneda Airport through efforts

opportunities for new business, including the introduction of next-

such as Haneda Airport 1-Chome Project, and also to improve revenue

generation technology and ESG investment.

INTEGRATED REPORT 2022

22

SPECIAL ISSUE:

1

Haneda Airport 1-Chome Project
Haneda Airport 1-Chome area: place of AFC’s founding
Haneda Airport has been serving the role of the base for air transportation of Japan since before World War II. It had been repeatedly expanded
according to a significant increase in aviation demand and the progress of internationalization in Japan after the war until the current form wascompleted.
Our company was founded in 1970 in Haneda Airport 1-Chome area as a company owning and providing offices and other facilities related toaviation and airport works and hangars. Since then, based in Haneda Airport 1-Chome, we have been developing and providing various types offacilities in the Haneda Airport offshore land reclamation area and in major airports throughout Japan.
Haneda Airport 1-Chome area is the place where our company was founded, and was the starting point for our development.

Reinforcement of disaster prevention functions in Haneda Airport 1-Chome area
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 flood damages such as high tide water.

Aim of Haneda Airport 1-Chome Project
Our company currently owns eight facilities, including hangars, maintenance plants, and in-flight meal factories within the area. These are essential functions forthe operation of Haneda Airport and aircraft, and it is impossible to cease the provision of the services that these facilities are in charge of. Therefore, our company
consolidates and reorganizes the functions that are dispersed among these eight facilities in response to the regrading work implemented by the national
government, to develop facilities that are able to provide functions of even higher quality. We consider this as a rare business opportunity and will promote thisproject of the largest scale since the Haneda Airport offshore land reclamation project by setting the following three aims and paying close attention to responding
to our clients’ needs.

Improvement of
profitability

23

Consideration
for the environment

Assurance ofsafety and security

We will adequately understand clients’ needs

In addition to measures taken for individual

As for the facilities after consolidation andand make a plan for facilities comfortable tobuildings, such as the realization of ZEB

reorganization upon the regrading, the risk ofuse for a long time. Further, efficiency will bethrough the improvement of energy use

high tide water will be reduced. In addition,

improved for the facilities as well as theefficiency, we are also thinking of providing

utilities and telecommunications infrastructures

business with the consolidation.

heat sources, such as hot and chilled water andwill be renewed, while the responses to various

steam for facilities including those other than ofproblems including power failure will be

our company, in order to realize a sustainableimproved, and the disaster prevention level insociety and the reduction of CO2 emission.

the area will increase dramatically.

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

Overallview ofHanedaAirportDomestic cargoterminal area

Seibijo Station

Existing
facilities owned
by AFC

Terminal 1 and 2
areas

New aircraft
maintenance area

Haneda Airport
1-Chome area
(aircraft
maintenancearea)

Terminal 3 area

Redevelopment area

Phasing
Upon the consolidation and reorganization of the company’s facilities, it is necessary to proceed with the construction work in the following order: regrading, newconstruction, and the removal of old facilities. Also, with construction works for a wide variety of business overlapped during the period of ten years, theadministration of process flow is highly important. Exerting the experience and know-how that our company 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

Future of Haneda Airport 1-Chome area
In line with the reorganization of Haneda Airport 1-Chome area, an arrangement to build a pedestrian bridge over Ebitori River is currently under way. Also, thegrand opening of HiCity (Haneda Innovation City), a large-scale complex being developed in the adjacent area with our company’s participation, is scheduled for2023, and the development of a city planning park by Ota Ward is also being planned nearby. When these projects are completed, Haneda area, Haneda Airport
1-Chome area, HiCity and the city planning park will be connected, invigorating the flow of people. It is expected that the town will be activated with various
visitors, including those related to the aviation/airport industry.
In such trend, we expect that the value of the area will further increase. Our company serves as the core of such movement and will make necessary arrangements
so as to provide high-quality facilities to the aviation/airport industry and to continuously work as the base for the profit earned from airport-related business.

Message from the representative
Haneda Airport 1-Chome area, which is the place of our company’s founding, has been providing functions and services
indispensable for the smooth operation of Haneda Airport for a long time. The regrading project by the national
government is to reinforce the disaster prevention function of the area as a part of initiatives to improve the resilience ofnational land, and our company is willing to provide full support.
In this occasion, we will develop facilities to respond to the needs of the society and users in terms of environment,
disaster prevention, and the ease of work, and will seamlessly provide high-quality services to our customers. Because
arrangements must be made with various stakeholders, a company-wide system is established for the project.
Preparation for the project is being made speedily, aiming for a completion in about ten years. We will promote theproject so that Haneda Airport 1-Chome area will be the base of our company “toward creating unique value within andoutside airports.”

Mitsuhiko Okada, Managing Executive Officer

INTEGRATED REPORT 2022

24

SPECIAL ISSUE:

2

Promotion of non-asset businessIn the Medium- to Long-Term Management Plan, the development and expansion of non-asset business 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.
The domain of the non-asset business that our group is targeting is shown in the diagram below. It includes
know-how on facility planning and operation, and the provision of services within and outside airports, projects for
obtaining sale gains through the revolving-model real estate business outside airports, and the development of a realestate fund in the future for obtaining management fees.

Accumulation of excellent
properties through development of
new properties and acquisition ofproperties with higher value
Development of humanresources and organization

Development offunds, andinvestment
Management by
newly established
AM/PM
subsidiaries

Earning fees andsecuring capital
gains

Expansion of thesize of fundassetsMajor theme (1) Development of real estate revolving-model business
The basic business model of our group 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, such as obtaining medium- and small-sized buildings
abundant in the investment market and obtaining capital gain by improving their value and selling them to investors.

Major theme (2) Development and management of a real estate fundWe will accumulate good properties through inhouse development and acquisition from the investment market, and aim to develop a real estate fund that alsoutilizes the capital of other organizations.
In addition to making its own investment in the real estate fund, the group will also aim to earn fee income through the management of the fund by a groupsubsidiary.

Establishment of an asset management subsidiary
Towards the stable promotion of the Medium- to Long-Term Management Plan, we haveestablished a subsidiary exclusively engaged in business such as the expansion of theCompany Name: AFC Asset Management Co., Ltd.

revolving business of real estate outside airports and the development of a real estate

Description of Business: Real estate consulting business/

fund in the future.
Staff members with abundant experience in real-estate transactions andvalue-improving business of the company will be engaged in the promotion of the
non-asset business mentioned in the Medium- to Long-Term Management Plan,

Shareholders: Airport Facilities Co., Ltd. (100.0%)

together with Airport Facilities Co., Ltd.

25

Real estate fund business
Established: May 26, 2022

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

Profit from“revolving
business”

Self-developed
funds AM/PM
business

Developmentof funds, andinvestment

Provideoutsourcing
PM/BM
services within
and outside
airportExpansion of
non-asset
business

CM businesswithinairports

Major theme (3) Expansion of CM business within airports andthe development of PM and BM
Utilizing the know-how on facility development and networks, which are the strong points of our company being engaged in the construction of various facilities
with particular functions within airports, we will aim to increase the commission of construction management (CM) business for facilities within airports, such as
hangars. As for the construction management business, we will proceed with the project from the standpoint of an orderer, by ensuring transparency andaccountability regarding the vast amount of liaison and management work.
We will also develop property management (PM) and building management (BM) services, and aim to provide them not only in Haneda Airport but also in regional
airports and outside airports.

Message from the representative
In order to powerfully and promptly promote the non-asset business mentioned in the Medium- to Long-Term
Management Plan of Airport Facilities Co., Ltd., our company (AFC Asset Management Co., Ltd.) gathered staff
members with abundant experience in real-estate transactions, and started business on June 1, 2022, as a member ofthe AFC Group.
Among the small- and medium-sized office buildings located in the Tokyo Metropolitan Area and other regions outside
airports, there are properties with problems in terms of vacancies and refurbishment. In the first phase of the plan, ourcompany will promote business by increasing the values of such properties, together with Airport Facilities Co., Ltd..
In the second phase, we will develop a fund as a guarantee for the accumulation of good properties.
By reactivating properties for profit that are buried in the market and making them sustainable, we would like tocontribute to the promotion of our group’s business and society in the future.

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

INTEGRATED REPORT 2022

26

Efforts towards
realizing sustainability
Concept of sustainable management
AFC will continue to create value by contributing to the economy and society and by resolving various challenges,
including environmental problems, by taking advantage of its strengths in real estate and other business.

Development of economy andsociety through the provision ofvaluable facilities and services

Contribution to theenvironment through ourbusiness activities

Safety and assurance of
employees and the regional
community

Enhancement of corporate governance

Message from the representative
As for the promotion of sustainability, our company formulated the Basic Policy for Sustainability in December 2021. We are
currently developing a system for sustainability promotion, setting up targeted items and key performance indicators (KPI) to
be achieved during the period of the Medium- to Long-Term Management Plan, and are working from the perspectives ofboth risk and business opportunity.
In terms of environmental efforts, we are aiming to reduce CO2 emissions by 46% in FY2030 compared to FY2013. Measures
such as the introduction of LED in facilities and renewal of high-efficiency equipment are being carried forth.
Regarding social contribution, we implemented training based on the development of BCP, and held an in-house lecture on
the promotion of diversity and inclusion inviting consultants from outside the company.
In terms of governance, we are taking necessary measures through committees on compliance and risk management for
ensuring sound, transparent, and fair management.

27

We will continuously respond sincerely to requests from our shareholders, investors, and various other stakeholders, identify

Fuminori Tsuboi,

important issues, and implement the PDCA cycle for solutions to improve our corporate value.

Managing Executive Officer

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

Basic Policy for Sustainability
Our company is being engaged in business under OUR MISSION (CORPORATE PHILOSOPHY) of “contributing to theadvancement of aviation and the creation of attractive communities.”
Currently, our company is developing facilities in Haneda Airport and other major airports throughout Japan, includingcargo terminals, training facilities for the crew, hangars, maintenance plants, in-flight meal factories, and multipurpose
buildings, as well as supporting the functions of airports through the provision of area heating and cooling facilities, watersupply and drainage services, and shared communication services. In addition, we are currently leasing hotels near
airports and residents for those who work at airports, an international student dormitory, office buildings in urban central
areas, as well as developing business 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 itaims to contribute to the socioeconomy by providing facilities that continuously respond to various needs in business inareas such as real estate business, which is the strong point of our company, as well as to tackle issues including
environmental problems to continuously create value.

Sustainability Promotion Council and its role
We established the Sustainability Promotion Council on January
1, 2022, chaired by the president and consisting of full-time
directors, in order to further promote sustainable management.

Board of Directors

The Sustainability Promotion Council will discuss the themes
and direction to be aimed at in the medium- to long-term, andconsider measures such as important issues (matters of

Sustainability Promotion Council

materiality), KPIs, preparation against environment risks, creationof business opportunities, and 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 arepositioned as the subordinate organization of the Sustainability

Environment Committee
Disaster Countermeasures Committee
Safety Promotion Committee
Improvement Promotion Committee

Promotion Council, and these organizations will cooperate topromote sustainable management.

Efforts on sustainability (ESG) during the period of
the Medium- to Long-Term Management Plan
Our company addresses social issues that will also lead to contribution to the achievement of SDGs (Sustainable
Development Goals) through our corporate activities, and promotes the resolving of such issues.
The SDGs were adopted by the United Nations in 2015 for the realization of sustainable society. They are made of 17
goals and 169 targets towards 2030 regarding global issues in terms of environment, discrimination, poverty, humanrights, etc. Examples are “Take urgent action to combat climate change and its impacts,” “Achieve gender equality andempower all women and girls,” and “Make cities inclusive, safe, resilient and sustainable.”
Our company will sincerely face requirements in society, identify materiality, and set KPI (key performance indicators) tobe achieved in the Medium- to Long-Term Management Plan.

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EFFO RT S T OWARDS RE AL IZ I N G S U S TA I N A B I L I T Y

Process of identifying materiality
Our company studied trends in domestic and international social issues, prioritized those issues, identified matters of materiality
through repeated discussions among the management, and set KPI (key performance indicators) for the period covered by the
Medium- to Long-Term Management Plan.
We regularly implement progress management, discuss the causes and measures for lack of progress with initiatives, and work forthe achievement of KPI in terms of both risks and business opportunities. Initiatives that are achieved during the period areannounced on the company’s website.

List of matters of materiality
Important issues

ENVIRONMENT- Reduction of energy consumption/
CO2 emissions

Items to be addressed

Target to reduce CO2 emissions by 46% in FY2030 compared to
FY2013 based on government policy- Utilization of renewable energy- Waste reduction- Promotion of reuse and recycling- Reduction of water use- Purifying sewage- Waste reduction- Promotion of reuse and recycling- Sustainable capacity building andgrowth- Realizing a society where everyone
can work free of discrimination

SOCIETY

Promotion of work-life balance and D&I- Realizing a workplace where
everyone can work healthily- Building facilities resilient against
disasters- Crisis management and thoroughimplementation of countermeasuresagainst emergency- Harmony with and invigoration of
the community

GOVERNANCE

Human resource development

Promotion of health management

Preparing in advance against disasters
Prompt restoration of airport functions and business when adisaster occurs
Community building and contribution in neighboring regions

Thorough corporate governance

Ensuring sound, transparent,
and fair management

Ensuring compliance, implementing appropriate risk management
Securing communication with stakeholders

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

STEP

1

Studying andidentifying issues
Studying the trends in domestic
and international social issues

STEP

2

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

STEP

3

Evaluation of
appropriateness
Discussion at the
management level

KPI during the Medium- to Long-Term Management Plan period

Relation with the
SDGs- 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 electric vehicles in major facilities- Promotion of installing water-saving facilities- Maintaining mandatory water quality standards- Sorting waste at each business establishment of our group- Reducing the use of paper through the further promotion of IT digitalization- Holding training on harassment and sessions by external lecturers- Career development training, training sessions for different purposes (compliance, etc.), promotion of qualification acquisition- Reduction of overtime work, promotion of taking leave, promoting reinstatement- Promoting the appointment of female managers- Achieving the mandatory employment rate of disabled persons- 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- Scheduling and implementing various disaster drills, and holding first-aid lectures- Participating in and supporting regional events- Evaluation of the effectiveness of the Board of Directors- Record of attendance at board meetings- Board comprising of various directors- Holding the meetings of Risk Management Committee and Compliance Committee- Thoroughly identifying risks and reducing risks by taking measures according to each risk
- Uploading information on results briefing, facilities observation tour for shareholders, and IR materials on the corporate website

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ENVIRONMENT

Our ideas
In modern society, where various environmental problems including global
warming are becoming severer, measures taken against environmental problems
are becoming a critical social issue. We consider that working to resolve
environmental problems through our business is an important management
issue.
We will raise the awareness of the entire group on environmental issues, andconsider what kind of impact the different processes of corporate activities haveon the environment, and what we can do to reduce environmental burden. Also,
we will not make do only with measures against risks, but will also seek new
business opportunities regarding these environmental issues.

Our group recognizes that our corporate activities and lifestyles are based on a
global environment with abundant nature, and in order to pass this richenvironment on to the next generation and to realize a sustainable society, we
have set the goal of “Achieving carbon neutrality by 2050 and aiming to reduce
CO2 emissions by 46% in FY2030 compared to FY2013 based on government
policy.”Also, in addition to the reduction of CO2 emissions, we also make efforts toconserve water resources, reduce waste, and promote recycling, in order tocontribute to the realization of a sustainable society.

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Reduction of CO2 emissions, increasing the efficiency of energy use

Changes in CO2 emissions and reduction target
Our group has been engaged in the reduction of CO2 emissions in terms of both saving and creating energy. We are replacing freezers used in
the area heating and cooling business and introducing LEDs for lighting used in facilities to reduce CO2 emissions. We are also creating energy
by promoting solar light 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.
The CO2 emissions of our group have been steadily decreasing since FY2013.
We will continuously work towards the achievement of our goal in FY2030 by reducing CO2 emissions and improving the efficiency of energyuse, through measures to optimize the environment within the building and improve the operational efficiency of equipment, such as theintroduction of LED lights and high-efficiency equipment, and the introduction of a BEMS (building energy management system) in the newfacilities in Haneda Airport 1-Chome Project.

■ Changes in the CO2 emissions

and goals of our group（Unit: t-CO₂）
60,00051,56328%

Reduction

46%

Reduction

50,00037,12640,00027,80030,00020,00010,000
0

2013

2021

2030

(FY)

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ENV IR ONME NT

Improvement of efficiency andreduction of energy use
Promotion of energy saving in owned
facilities
We are introducing LED lightings in office buildings, maintenancefacilities, and the buildings of cargo facilities we own. We are also
selecting equipment with higher energy efficiency for air
conditioning to reduce energy use.
Rinku International Logistics Center

Improvement of the efficiency of energy use in the area heating and cooling businessTokyo Airport Heating & Cooling Co., Ltd. of our group is engaged in area heating and cooling business that covers the most part of Haneda
Airport. The company is contributing to increasing the efficiency of energy use and the reduction of CO2 emissions by creating heat sources, suchas chilled water and steam at the base plant. These heat sources are not only used for area heating and cooling but also for special purposes inmaintenance plants and in-flight meal factories.
The measure is also generating benefits in terms of both the economy and environment, because it can significantly reduce heat source
generating devices and receiving and transforming facilities, and it contributes to the efficient use of limited land at airports and spaces within
the building or conserving the scenery.
Runway D

Area covered byarea-wide air
conditioning system
at Haneda Airport(area shownin red)Runway C
Domestic cargoterminal area
Runway B
Haneda Airport 1-Chome area
(aircraft maintenance area)

Terminal 1 and
2 areasNew aircraft
maintenancearea

Runway A
Terminal 3 area

Measures for diffusing eco-friendly cars and making themmore convenient
Recharging facilities for electric vehicles (EV) and plug-in hybrid
electric vehicles (PHEV) are provided in the parking space of
HANEDA INNOVATION CITY, which our company is operating. We arealso introducing eco-friendly cars for some of the company vehicles
used for the business of our group. We will further promote theintroduction of eco- friendly cars in the head office, businessestablishments (Osaka, ARC Building, Chitose, Tokyo Airport Heating& Cooling Co., Ltd., and Aqua Techno Service Co., Ltd.)33

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

The first issuance of green bonds for investment in domestic airports
Our group had procured some funds for installing solar power generation facilities in the domestic cargo terminal within Haneda Airport, aimed
to utilize renewable energy, by issuing private placement bonds utilizing the system of green bonds. This was the first case in a domestic airport.
A green bond is a bond issued to procure funds necessary for business that contributes to resolving environmental problems. The initiative was
evaluated as Green 1, which is the highest rank, by the Japan Credit Rating Agency.

Rating agency
Qualification evaluationof green bonds

Green projectIssuance

Issuing entity
Investment

Green bonds

Investor

For inhouse
consumption

Payment/
application

Dealing of private
placement

Buildings of cargofacilities

Solar power
generation facility

Securities companies

Donation of credits (excess reduction of CO2 emissions) toTokyo Metropolitan Government
Our group agreed to cooperate in the efforts of Tokyo Metropolitan Government's initiative “Zero Emission Tokyo,” which aims to realize asustainable city that does not emit CO2 , and donated 94,831t of excess reduction as credits based on the Cap-and-Trade Program (*) to theTokyo Metropolitan Government on March 31, 2020. Our company and the group company Tokyo Airport Heating & Cooling Co., Ltd., received aletter of gratitude from the Tokyo Metropolitan Government in January 2021 for being a large-scale business donating 10,000t or more. We also
reported the achievement of reductions exceeding the mandatory reduction of greenhouse gas emissions in the second period of the plan (from
FY2015 to FY2019) set by the Tokyo Metropolitan Government.
■ Reduction of CO2 emissions and our donation（ t-CO₂ ）125,000(Unit: t-CO₂)

Actual reduction

114,425

Excess reduction

Required reduction

27,958Required
reduction

Excess reduction

94,831

105,000
85,00065,00045,00025,000
5,000

Donation
Actualreduction*2*2First period of the plan (from FY2010 to FY2014)*1: An initiative to make it mandatory for large-scale facilities in Tokyo to reduce their CO2 emissions, and credit the reduction in emissions achieved over the required level for trade among
business.
*2: As for excessive reduction during the first period, the total of the required reduction and the excess reduction is larger than the actual reduction because the emission factor was
reviewed due to the occurrence of the Great East Japan Earthquake. (Refer to the “Guidelines on the Operation of Emission Trading in Mandatory Reduction Targets and Emission Trade
System”)

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ENV IR ONME NT

Utilization of renewable energy■ Change of the amount of renewable (solar) energy power generation(1,000 kWh)
7,000

6,395

6,000

5,307

5,000
4,000

2,677

3,000
2,000
1,000
0

368
2013

1,120

2014

5,021

5,402

3,147

1,440

2015

2016

2017

2018

2019

2020

2021

(FY)

Renewable energy
We are working on the reduction of CO2 emissions through power generation using renewable (solar) energy (for FIT and inhouse 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)

TRC Distribution B Building Rooftop Solar Power Plant

Solar power generation facility utilizing the idle land (Honsanrizuka)

At the domestic cargo terminal of Haneda Airport, power
generated with the solar panels installed on the rooftop of thebuilding is self-consumed by facilities within the area to reduce theuse of power generated with fossil fuels. Also, in some of the
facilities managed and operated by our company, we implement
hybrid power generation using renewable energy, such as solar andwind. Generated power is charged to install freestanding lights usedat night and in emergencies.
A solar power generation facility for inhouse use in Haneda Airport domestic cargo terminal (left)
A hybrid freestanding light (right)

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Responding to recommendations by the TCFD
In addition to efforts to fight climate change, our group recognizes the importance of the disclosure of climate-related financial information, andexpressed our endorsement 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.

For detailed information, see AFC’s website. https://www.afc.jp/csr/tcfd.html

GovernanceOur company recognizes dealing with climate change as an important issue for management, and established a governance system centering
around supervision by the Board of Directors and the Sustainability Promotion Council (chaired by Toshiaki Norita, President and Executive Officer).
The Sustainability Promotion Council will discuss the progress made in management of key performance indicators (KPIs) during the period of theMedium- to Long-Term Management Plan and the policy and strategy for minimizing climate change risks and seizing opportunities, and report to
the Board of Directors for their supervision once a year or more.

Strategy
We are discussing the strategy by analyzing the impact of risks and opportunities on the company's business through the 2°C-scenario
recommended by the TCFD, with the aim of achieving continuous growth while making efforts to mitigate and adapt to climate change through ourbusiness activities.
Risks/opportunities

Details

Transition risks- Increase in construction cost with the rise of the prices of construction materials and increase in the production cost of heat sources due tothe energy price surge- Increase of taxation burden on CO2 emissions- Increase in construction cost with the introduction of ZEB and additional capital investment accompanied by the tightening of national
standards- Increase of the vacancy rates and the decrease of contracts for buildings that are delaying taking environmental measures

Physical risks- Increase in capital investment for increasing the capacity of air conditioning facilities due to extreme heat
- Increase in repair expenses due to increased occurrence of large-scale typhoons and concentrated heavy rains- Increase in flood damage due to sea surface elevation

Opportunities- Increase of competitiveness by owning environmental-friendly properties- 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 competitiveness of properties with the further development of solar power generation for
self-consumption

Risk management
Sustainability Promotion Council will discuss 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.

Indicators and targets
Our company aims to reduce CO2 emissions by 46% in FY2030 compared to FY2013 based on the governmental policy, in order to achievecarbon neutrality by 2050.
Roadmap

Breakdown of CO2 emission by our group
Scope1

Reduction by

46％

Achievementof carbon
neutrality
FY2013

FY2021

FY2030FY2050Coverage of the target
Scope1

33.1％
Scope3

66.5％

Scope1
Scope2

0.4％

Scope2

Scope3

Scope3

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ENV IR ONME NT

Conservation of water resources■ Changes in water use in Haneda Airport

FY2018FY2019FY2020

FY2021

Number of properties

212

199

200

186

Water use (thousand m3)

2,014

1,946

1,138

1,233

Recycled water use (m3)

6,788

6,849

4,869

5,049

Promotion of water saving
in owned facilities

Utilization ofrecycled water

We are promoting the introduction ofwater-saving faucets and toilets in officebuildings, maintenance facilities, and thebuilding of cargo facilities we own to
reduce the waste of running water and to
improve water saving function.

We are implementing the efficient use ofwater resources by using recycled waterfor flushing toilets in the Utility Center
Building in Haneda Airport.

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

Vehicle transportationof sewage

SD plant

Discharge
Purification

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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, andappropriately treat sewage as necessary
before discharging to public waters.

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 aircraftwashing 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 for washing 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 is expected 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.
Flow of aircraft washing and drainage treatment
Aircraft washing facility

Aircraft washing
Pressured water

Discharge
Drainage
Pump / discharge water
treatment and filtering

Large-sized aircraft washing facility

Promotion of waste reduction and reuse / recycling■ Waste discharge amount and the state of recycling

Unit: ton

FY2018FY2019FY2020

FY2021

Waste discharge amount

2,281

1,615

1,518

1,419

Reuse

376

156

202

304

Disposal Amount

1,904

1,458

1,315

1,115

Recycling rate

16.5%

9.7%

13.3%

21.4%

■ Major efforts

Separate collection of waste

In properties operated and managed by our company, separated collection of waste is promoted undercooperation with the tenant companies, etc.

Recycling of recyclable wastes

In properties operated and managed by our company, separated collection of waste is implemented andrecyclable waste is recycled under cooperation with the tenant 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.

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SOCIETY

Our ideas
Our company is developing real estate business throughout Japan andabroad, in addition to the business of owning and operating facilities tosupport airports, which are part of social infrastructure. Real estate isclosely related to people's everyday life, and we consider it as an asset thathas a significant social impact. We will strive to develop and operatefacilities that make the customers using our facilities or airports andaircraft, as well as all other people in the regional community, feel safe andsecure.

Further, in order for our group to achieve sustainable growth and maintainbusiness activities, it is necessary to realize an environment where all theemployees and officials of our group can be engaged with their work in ahealthy, happy, and satisfied fashion both physically and mentally, and beable to fully exert their characteristics and abilities. Therefore, we willfurther push forward workstyle improvement and reinforce thedevelopment of human resources, while fostering a free-spirited corporate
culture respecting the characteristics of individuals and diversity, topromote human resources strategy towards achieving sustainable growth.

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

Promotion of work-life balance and D&I
Our group considers that one of the important management resources to realize business continuity and sustainable growth is

Policyemployees. Thus, we aim to provide an environment where each of the employees can continue working without worry in a healthy
condition both physically and mentally, so that they can fully exert their characteristics and abilities.

Promotion of work-life balance
Major efforts
We are creating an environment allowing flexible workstyles where employees can take leave easily, in order to improve the productivity of employees and tobalance their work and private life.

Flex time system
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
so that employees can promote their independence and keep the balance between their work and private life.
We are trying to design a system through dialogue with users, for instance by changing the core time based on the results of questionnaires and interviews to
employees after test trials.

System for working from home
We introduced the system for working from home in April 2021 to reduce the time for commuting and improve work efficiency.
Since April 2022, we have been adding changes accordingly, such as allowing employees to go out for business purposes including visiting clients, so that thesystem will be more useful to employees.

Mentor system
Young employees with a career in the company of up to about five years will each become a mentor to a new
employee to hear about their worries in everyday work and the workplace, and provide mental support.
This system intends to promote the smooth transition of new employee’s from student to working adult in termsof awareness, as well as to improve the mentor employees’ communication ability and ability to listen to others
and verbalize their ideas.

Application for annual leave in advance and setting days
recommended to take paid leave
Our company asks employees to submit their schedule of annual leave for the following fiscal year in March through the in-house system, and by obtaining theapproval 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 holidays with an interval of only one or two work days in between.

Preparation of consultation desk and handbook onchildcare leave
Recently, there have been frequent legal revisions on childbirth and childcare aiming to support the balance between work andfamily life, and abundant relevant information is being transmitted. However, the contents of such revisions and other information
is tending to become more complex.
In April 2022, we opened an in-house consultation desk on childcare leave, and established a system to explain and support
employees who are expecting childbirth or whose spouse is expecting. This counter has both male and female consultants toensure that employees feel comfortable making inquiries.
Also, we prepared a handbook on marriage, childbirth and childcare that provides a brief explanation on the system, initiatives, andprocedures in an easy-to-understand fashion to ensure information transmission and promote understanding within the company.

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S O C IE T Y

Promotion of D&I

Holding D&I events and promotion within the company
Based on the concept that a workplace where various types of human resources are always empowered will lead to the sustainable growth ofthe company, we are promoting diversity and inclusion (D&I) in our company.
As a part of such efforts, in February 2022, we held an event to further deepen our understanding and recognition of D&I and consider whatform of D&I is suitable for the AFC group. In the panel discussion by the external lecturer and four directors of our company, how to seek the
future of our company was discussed. The discussion was also shared within the company. D&I training for different job grades was
implemented in the same month for managers and general employees.

Promotion of the empowerment of women
Recently, the number of female employees joining the company as a new graduate or in mid-career is increasing as a result of active
recruitment. In the last five years, the ratio of female employees increased from 17% to 28%. At the same time, we have been reviewing thecurrent system and improving the working environment.
We formulated the Action Plan by General Employers on the Breakthrough of the Empowerment of Women in April 2022.
During the planned period (four years), we have been promoting the establishment of an environment and opportunity where women can exert
various capabilities and willingness to take on challenges, under the major themes of the increase of the female ratio among managers and thepromotion of autonomous career and human resources development by employees.
In addition, we will also review the Action Plan by General Employees on Measures to Support the Development of Next-Generation Human
Resources to work on realizing flexible workstyles also based on the perspective of supporting the balance between work and childcare.

Measures taken against harassment
Before the revision and the enforcement of Act on Comprehensively Advancing Labor Measures, and Stabilizing the Employment of Workers,
and Enriching Workers’ Vocational Lives (Power Harassment Prevention Act) in June 2020, which required companies to take measures toprevent power harassment, our group set forth the Power Harassment Prevention Rules, clarified the definition of harassment, and clearly statedthe establishment of consultation desks.
Further, aiming to understand the diversification of recognition in society, study actual cases, and raise awareness among employees, we holdregular training sessions. The content of training programs differs between managers and general employees, to encourage fostering aworkplace environment based on a mutual understanding that it is easy to work.

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Human resource development
We promote strategy and the improvement of workstyles uniformly towards the achievement of the Medium- to Long-

PolicyTerm Management Plan, and efforts linking the plan in each division and MBO (management by objectives) system will be
implemented. Further, in order to capitalize on the strong points of our company and create added value, we will keep
establishing a system for the capacity building of employees and promoting human resources development.

Major efforts

OJT (On the Job Training)
We adopt an MBO system. Four issues/goals on individuals’ own work are set at the beginning of the fiscal year, and after interviews withsupervisors, adjustment will be made in terms of links with the plans in each division, the adequacy of details set, and the way to implement theplan. Employees will work on their everyday work by taking on-the-job training, and they will make interim reports and confirm the progress
through interviews with supervisors after half of the fiscal year had 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. That is thebasic process of human resources development.

Training for different job grades and on different themes
Training for different job grades is held according to career length and career stage, in order for employees to understand their roles and build theircapacity, and to support their growth. Also, training sessions are held on different themes as needed for upgrading the knowledge of employees.
Examples of training for different job grades- Training for new employees- Training for leaders- Training for managers
etc.

Training on different themes- Training on cultural refinement foryoung employees- Training on the basics of realestate- Lectures for fire and disasterprevention administrators- Harassment prevention
Training- Mentor training
etc.

Also considering the details of the training
and measures to prevent infection, wehold training in both face-to-face andonline forms.

Support for qualification acquisition
Our company has a system to subsidize employees expenses regarding the acquisition of qualifications that are useful for their work, in orderto 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 the employee’s efforts.
We are also adding qualifications covered by the subsidy system, considering the recent diversification and changes in the details of work.
Number of employees who acquired qualification(including those who passed the examination)- Real estate transaction agent: 29- Labor and social security attorney: 4- Certified Building Administrator: 4- First-class registered architect: 5- Second/third-class chief electricity engineer: 18- Qualified person for energy management: 7- Certified construction manager of Japan: 3*As of March 31, 2022

Those who passed theexamination for realestate transaction agent
in FY2021

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42

S O C IE T Y

Promotion of health management
We announce the annual schedule of measures related to health maintenance and improvement every April andPolicypromote 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 theprevention of heat stroke and infectious diseases, and raise awareness about industrial accidents.

Major efforts

Implementation of regular interview by physicians specializing
in mental health
We encourage to employees to notice stress and we implement regular interviews by specialist physicians for mental health care. We are
ensuring proactive prevention and privacy protection by implementing the interviews for all employees.

Care by industrial physician after routine medical checkups andcomprehensive 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.

Disaster prevention
Our group is trying to develop and operate facilities that make the customers using our facilities or airports andPolicyaircraft, as well as all other people in the regional community, feel safe and secure.
At the time of disaster, we aim for the early restoration of the business of our group and the functions of airports while
ensuring the safety of tenants, employees, and the region, and prevent secondary disasters.

Preparation against disaster

Fire defense organization for self-protection
We established a fire defense organization for self-protection within the company toimprove awareness of disaster prevention and make preparations to minimize human andphysical damage at the time of emergency.
We also participate in the disaster drill examination meeting of Japan Self-Defense
Forces hosted by Kamata Fire Station, to confirm the achievements of training in our
relationship with the local community.

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

Holding basic life-saving certification training
Our group holds basic life-saving certification training for employees andpromotes certification on life-saving skills, with an aim to encourage them toacquire 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 treat injuries, which are skills useful at thetime of emergency.

Installing AED devices

Building for evacuationfrom tsunami

We are installing AED devices at the entrance,
security office, etc. of the facilities we own, post a sign

We designate many of the facilities we own in Haneda

showing the existence of the AED device there, andAirport as a building for use in evacuation from tsunami, showprovide an AED device when there is a person suffering

signs for them, and accept the evacuation of people staying

cardiopulmonary arrest within the facility or nearby.

nearby when advisories and warnings on tsunami are issued.

Securing stockpiles against 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 the time 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 containing drinking water and a portable toilet inside elevators in preparation for disaster. Further, some of theresidences for those who work at airports are equipped with manhole toilets that can be used at the time of disaster and stretcher benches with aseating surface that can also be used as a stretcher.

Supporting disaster prevention and safety at Haneda Airport

Conducting comprehensive disaster
drills within Haneda Airport
Our company is serving as a secretariat for disaster prevention cooperation association in the aircraft
maintenance area, 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 in earthquake simulation vehicles, and try to maintain and improve
the awareness of disaster prevention and crisis management not only among the employees of ourcompany but also those who work at tenants and within the area and the regional residents.
*The drill was not held in FY2020 and FY2021 due to the impact of COVID-19.

Supporting the rescue system of the airport
As the business operator with an important role of supporting the operation of airports, we have assigned 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 theoccurrence 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.

INTEGRATED REPORT 2022

44

S O C IE T Y

Provision of airport infrastructure
We 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 toTokyo Airport Heating & Cooling Co., Ltd., our group company, in 1993. The company continues to stably provide heating and cooling services topassenger 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 the second 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 network that 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 mutual communication among
relevant parties. The network is built to ensure stable communication also at the time of disaster.

Area heating and cooling system

Local area communication

Development of BCP

Business Continuity Plan (BCP)
In order to respond flexibly and adequately whenever a major natural disaster such as anearthquake occurs, our group formulates a business continuity plan (BCP) aiming for the
early restoration of the business of our group and the functions of the airport, andimplements 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 Bureau of the Ministry of Land,
Infrastructure, Transport and Tourism, and incorporates plans to maintain the functions of theentire 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 oftenants and employees and preventing secondary disasters, and then organize a BCP teamto implement activities.
Through regular training on BCP, our group is raising the disaster prevention awarenessamong group employees, streamlining issues that are found out through training, andpreparing a manual based on such findings.

45

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

Scene from the A2-BCP gathering training

Community building and contribution in neighboring regions
Our group promotes social contribution activities as the entire group in order to exercise our social responsibility as
a company. We place importance on connection with society and the region, encourage each employee from the

Policyentire organization to actively participate in the community, and will make a continuous contribution towards resolvingsocial issues and realizing sustainable and affluent future society.

Major efforts

Donating the monument to honor the former
three towns
The place where Haneda Innovation City, for which our company participates as a business, islocated was a town where many people lived before World War II (former three towns, namely
Haneda-Suzuki Cho, Haneda-Anamori Cho, Haneda-Edomi Cho). After the war, more than 3,000
people who lived in the former three towns were forced to leave within 48 hours, due to thecondemnation of the land.
In order to convey such important history, culture, and people’s lives in Haneda in the past to the
future, we created the monument to honor the former three towns together with other aviationrelated companies and groups, and donated the monument to Ota Ward in March 2022.
Monument to honor the former three towns

Reducing food loss and supporting food supplies
Our company is constantly stockpiling necessary foods and water from the perspective of securing the safety of employees and officials, andallowing the early restoration of facilities and ensuring business continuity at the time of emergency, and renewing the stockpiles at regularintervals.
We provided the stockpiles to be renewed to the Ota Ward Welfare Department and the Social Welfare Council of Ota Ward in June 2022 foreffective utilization, to contribute to the reduction of food loss and to provide the supplies to those who are in need of food support.

Comment
from the staff
in charge

Although we had been unable to effectively utilize stockpiles for disaster prevention that are nearing expiration, we recently
donated them to the Ota Ward Welfare Department and the Social Welfare Council of Ota Ward to contribute to the reduction offood loss and food support.
We also heard that many people are in need of food supplies from those who work at Ota Ward Welfare Department. We arewilling to continue with this activity.

Donating stockpiles for disaster prevention to the Ota Ward Welfare Department

INTEGRATED REPORT 2022

46

CORPORATE
GOVERNANCE

Our ideas
AFC’s basic policy on corporate governance is to strive to improve and enforce governancein order to secure and increase AFC Group’s enterprise value and shareholders’ collective
interests in light of the group’s corporate philosophy while being fully aware of theaccountability of management vested with a mandate from shareholders and AFC’s social
responsibilities as a company whose foundation lies in airport-related business.

Corporate Governance System(As of June 29, 2022)

General Meeting of Shareholders
Nominating Committee
Compensation Committee

Board of Directors

Board of
Statutory Auditors

President

Audit Office

Management Council
Enlarged Management Council

Compliance Committee

Management Strategy Council
Construction Examination Committee
Departments and Consolidated Subsidiaries

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

Information Security
Committee

Risk Management Committee
Sustainability Promotion Council

47

Accounting Auditor

Environment Committee
Disaster Countermeasures
Committee
Safety Promotion Committee
Improvement Promotion
Committee

Role of the Boards of Directors and Statutory Auditors(As of June 29, 2022)

The Board of Directors makes judgments and decisions concerning matters prescribed by laws and public

Board ofDirectors

9 Directors
4 Corporate
Auditors

Ratio ofexternal directors
and auditors

38.5％

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 2021, it was convened 14 times. The Board of Directors is comprised of nine
directors (including three external directors) and four statutory auditors (including two external auditors). It ischaired by Kenya Inada, AFC’s representative director and chairman. The Board includes one female director(the female proportion on the Board is 11.1%).

Board of
Statutory
Auditors

4 Statutory
Auditors

Ratio ofexternal auditors

50％

The Board of Statutory 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 2021, the Board was convened 13 times.
It is chaired by Kazuhiko Muraishi, who is a full-time corporate auditor.

When nominating candidates for directors and statutory auditors, AFC convenes the Nominating Committee as

Nominating
Committee

7 members

Ratio ofexternal directors

71.4％

an advisory body to the Board of Directors in order to strengthen the independence, objectivity andaccountability of the Board, which is responsible for reviewing and selecting candidates. The Committee isconvened at least once every year. It is comprised of three independent external directors, two independent
external members of the Board of Statutory Auditors, and two internal directors, and is chaired by Takehiko
Murayama, who is an independent external director.

Compensation
Committee

7 members

Ratio ofexternal directors

71.4％

When determining compensation for directors, AFC convenes the 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. It is comprised of three independent external directors,
two independent external members of the Board of Statutory Auditors, and two internal directors, and ischaired by Takehiko Murayama, who is an independent external director.

Members of the Board of Director, Board of Statutory Auditors, and each Committee
The Board of Directors, Board of Statutory Auditors, Nominating Committee, and Compensation Committee are comprisedof the following members.
Name

Title

Board ofDirectors

Board of
Statutory
Auditors(As of June 29, 2022)

Nominating
Committee

Compensation
Committee

Kenya Inada

Chairman and Executive Officer

◎

〇

〇

Toshiaki Norita

President and Executive Officer

〇

〇

〇

Katsuhiro Yamaguchi

Executive Vice President〇

Keisuke KomatsuManaging Executive Officer〇

Shigeo Tamura

Managing Executive Officer〇

Fuminori Tsuboi

Managing Executive Officer〇

Takehiko Sugiyama

External Director / Independent Director

〇

◎

◎

Kayo Aoyama

External Director / Independent Director

〇

〇

〇

Toshikatsu Ogura

External Director / Independent Director

〇

〇

〇

Kazuhiko Muraishi

Full-time Statutory Auditor◎

Masaaki Komiya

Full-time Statutory Auditor〇

Akihiko Shiba

Statutory Auditor / Independent Director

〇

〇

〇

Shigeto Kubo

Statutory Auditor / Independent Director

〇

〇

〇

* “◎” shows the chair.
INTEGRATED REPORT 2022

48

CORPORATE GOVERNANCE

Directors and Statutory Auditors (As of June 29, 2022)
2

3

4

5

6

7

8

9

10

11

12

Statutory Auditors

Directors

1

13

49

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

12

Chairman and Executive Officer

Kenya Inada
April 2019 Member of the Board, Executive Vice President of ALL NIPPON AIRWAYS
CO., LTD.
April 2020 Advisor to ANA HOLDINGS INC.
June 2020 Executive Vice President of AFC
June 2021 Chairman and Representative Director of AFC
June 2022 Representative Director, Chairman and Executive Officer of AFC (Current
post)

3

Executive Vice President

Katsuhiro Yamaguchi

4

Shigeo Tamura
April 2014 Deputy Manager of AFC, attached to General Affairs Department
June 2016 Executive Officer of AFC, attached to General Affairs Department (In chargeof Special Missions)
June 2017 Director, Senior Executive Officer and Chief of Facilities Management Centerof AFC
June 2020 Managing Director of AFC
June 2022 Director, Managing Executive Officer of AFC (Current post)7

Directors

External

Independent

Takehiko Sugiyama

Directors

External

IndependentToshikatsu Ogura

810

Masaaki Komiya
June 2012 Member of the Board of Directors, Managing Executive Officer, Development
Bank of Japan Inc.
June 2015 Executive Director of the Research Institute of Capital Formation,
Development Bank of Japan Inc.
June 2016 Vice Director-General, The Tokyo Organizing Committee of the Olympic andParalympic Games (TOCOG)
June 2021 Outside Director, Solaseed Air Inc.
June 2021 Outside Director, AIRDO Co., Ltd.
June 2022 Full-time Statutory Auditor of AFC (Current post)

13

Statutory Auditors

External

External

Independent

Kayo Aoyama

Full-time Statutory Auditors

Kazuhiko Muraishi
June 2008 Executive Officer and General Manager of Accounting Department of AFC
June 2010 Senior Executive Officer and General Manager of Accounting Department ofAFC
June 2011 Director, Senior Executive Officer, and General Manager of Accounting
Department of AFC
June 2016 Full-time Statutory Auditor of AFC (Current post)

12

Full-time Statutory Auditors

Directors

April 1985 Freelance Announcer (Up to the present)
February 2001 Member of Council for Transport Policy, Ministry of Land, Infrastructure,
Transport and Tourism
July 2014 President of the National Agency of Vehicle Inspection (Part-time)
June 2015 External Director of AFC (Current post)
June 2016 Member of National Public Service Ethics Board (Current post)

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 2018 Chairman, Japan Telecommunications Welfare Association
June 2020 Chairman, Information & Telecommunication Equipment Constructor’s
Association
June 2020 Outside Director, Haseko Corporation (Current post)
June 2022 External Director of AFC (Current post)

11

Managing Executive Officer

Fuminori Tsuboi
July 2018 Director-General of Administration Department, Japan Meteorological
AgencyJuly 2019 Director-General, Chubu District Transport Bureau, Ministry of Land,
Infrastructure and Transport
January 2021 Deputy Director-General, Japan meteorological Agency
April 2022 Adviser of AFC
June 2022 Director, Managing Executive Officer of AFC (Current post)

December 2004 President of Hitotsubashi University
April 2011 Vice Chairman of Japan Transport Policy Research Institute, Chief ofTransport Policy Research Center
June 2015 External Director of AFC (Current post)
June 2017 External Managing Director of Tokyo Metro Co., Ltd. (Current post)

9

Managing Executive Officer

Keisuke Komatsu
June 2006 Executive Officer and General Manager of Operations Department of AFC
June 2009 Senior Executive Officer and General Manager of Operations Department ofAFC
June 2011 Managing Director, Senior Executive Officer, and General Manager ofOperations Department of AFC
June 2017 Managing Director of AFC
June 2022 Director, Managing Executive Officer of AFC (Current post)

6

Managing Executive Officer

Toshiaki Norita
June 2013 External Director of AFC
April 2017 Director of Japan Airlines Co., Ltd.
April 2017 Executive Vice President of AFC
June 2021 President and CEO of AFC
June 2022 Representative Director, President and Executive Officer of AFC (Current
post)

August 2012 E xecutive Officer of NEW KANSAI INTERNATIONAL AIRPORT COMPANY, LTD.
July 2016 Director General of East Japan Civil Aviation Bureau, Ministry of Land,
Infrastructure, Transport and Tourism
June 2020 Director of AFC
June 2021 Executive Vice President of AFC
June 2022 Representative Director, Executive Vice President and Executive Officer ofAFC (Current post)5

President and Executive Officer

Statutory Auditors

External

Independent

Akihiko Shiba
October 2004 Registration in Daini Tokyo Bar Association
Joining T. Kunihiro & Co. Attorneys-at-Law
April 2010 Established Shiba Management Law Office (Current: Shiba & Tanaka Law
Offices)
June 2010 Outside Statutory Auditor of Prince Hotels, Inc.
June 2013 External Statutory Auditor of AFC (Current post)
June 2015 Audit & Supervisory Board Member of NH Foods Ltd. (Current post)

Independent

Shigeto Kubo
August 2013 Commissioner, Japan Tourism Agency
June 2019 Outside Director of Kyoritsu Maintenance Co., Ltd. (Current Post)
June 2020 Senior Managing Director, Airport Transport Service Co., Ltd.
April 2022 Representative Director, Chairman and Executive Officer, TOBU TOP TOURS
CO., LTD. (Current post)
June 2022 External Statutory Auditor of AFC (Current post)

INTEGRATED REPORT 2022

50

CORPORATE GOVERNANCE

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

Name

Title

Management
andorganization
administration

Legal affairs,riskmanagement,
financialaffairs, andaccounting

Governmental
and publicaffairs

Aviation,
airportoperation, andinfrastructureMarketingand public
relationsGlobalaffairs

Kenya Inada

Chairman and Executive Officer

〇

〇

〇

〇

〇

Toshiaki Norita

President and Executive Officer

〇

〇

〇

〇

〇

Katsuhiro Yamaguchi

Executive Vice President〇〇

Keisuke KomatsuManaging Executive Officer〇

Shigeo Tamura

Managing Executive Officer〇

Fuminori Tsuboi

Managing Executive Officer〇

Takehiko Sugiyama

External Director / Independent Director〇

Kayo Aoyama

External Director / Independent Director

Toshikatsu Ogura

External Director / Independent Director

〇

〇
〇
〇

〇

〇

〇

〇
〇

〇

〇

〇

〇
〇

Appointment of External Directors and Statutory Auditors
External directors and auditors are selected based on criteria such as being capable of contributing to AFC’s sustainable growth and an increase in its
enterprise value in the medium to long term by providing advice and recommendations to management from a position of independence, as well as theExternal Auditors

External Directors

independence criteria prescribed by the Tokyo Stock Exchange.

51

Takehiko Sugiyama

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

Kayo Aoyama

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 external
director as it expects her to contribute to its sustainable growth and an increase in its enterprise value in the medium tolong term by helping to ensure appropriate execution of business operations from her position of independence as an
outsider.

Toshikatsu Ogura

Ogura has an abundance of experience and superior knowledge as a senior manager in the telecommunications industry.
AFC has appointed him as an external director as it expects him to contribute 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 fromhis position of independence as an outsider.

Akihiko Shiba

AFC has appointed Shiba as an external director as it expects him to provide high-level legal advice to the Board of
Statutory Auditors and the Board of Directors. considering his ability to conduct audits from an objective standpoint basedon his specialized insight as lawyer.

Shigeto Kubo

Kubo has many years of experience and an abundance of knowledge in the transportation sector and also has theexperience of serving as an external director at a real estate service company. AFC has appointed him as an external
auditor as it expects him to take advantage of his experience and knowledge to contribute to the auditing of AFC.

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

Evaluation of the Board of Director’s Effectiveness
The Board of Directors conducts self-evaluation and analysis in order to strengthen its own functions, thereby contributing to an increase in AFC’senterprise value.
In fiscal year 2021, all directors and statutory auditors were asked to respond to a questionnaire survey in January-February 2022. Based on the survey
results, analysis and evaluation was conducted at a meeting of the Board in February 2022. The survey results indicate generally favorable evaluation withrespect to matters such as: increases in the number of matters referred to the Board and in the time for deliberations after the Board started to beconvened on a monthly basis in fiscal year 2021; institutional support for sufficient deliberations; and invigoration of discussions by the Board.
On the other hand, opinions were expressed and problems were recognized and shared with respect to the composition of the Board, including thenumber of Board members and the ratio of independent external members of the Board of Statutory Auditors to external directors. In light of the survey
results, AFC will promptly respond to the abovementioned problems after conducting a sufficient study and make continuous efforts to enhance thefunctions of the Board.

Compensation System
1. Compensation system(1) The compensation amount for AFC’s directors is determined within the range decided upon a resolution at a general shareholders’ meeting.
Compensation for the directors (full-time directors), excluding external directors, is comprised of fixed-amount basic compensation and variable
compensation linked to business performance (bonuses and restricted stock grants). Generally speaking, the fixed-amount compensation accounts
for around 70% of the total amount of compensation, and the performance-linked compensation makes up around 30%.
Compensation for external directors is comprised entirely of fixed-amount basic 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 specifics of their respective
director responsibilities, among other factors. Performance-linked compensation is calculated in light of the corporate earnings compared with theearnings forecasts. Of performance-linked compensation, the restricted stock grant is intended to provide an incentive for the directors to strive forthe sustainable growth of AFC’s enterprise value and also to promote the sharing of values with shareholders.

2. Procedures for determining the compensation amount
The Board of Directors conducts deliberations on a compensation proposal based on the policy on compensation and refers the proposal to theCompensation Committee, which advises the Board. Following the Compensation Committee’s deliberations and findings on the compensation proposal, theproposal 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 external directors, independent external members of the Board of Statutory Auditors andinternal directors in order to ensure the objectivity, transparency and validity of compensation and is chaired by an independent external director. It isconvened at least once every year.
Executive compensation in FY2021 is as follows:(Unit: Million yen)Compensation Amounts by Classification
Category of
Position

Compensation
Amounts

Basic
Compensation

Performance-linked Compensation, etc.
Monetary Compensation

Non-monetary
Compensation

Number of
Directors andStatutory
Auditors

Directors(External Directors)

280
(10)

190
(10)

68

21

12
(2)

Statutory Auditors(External Auditors)

49
(10)

49
(10)

-

-

4
(2)

Total

329

239

68

21

16

(Note) 1. The abovementioned directors include one who retired from directorship at the end of the 52nd general shareholders’ meeting, which was held on June 29, 2021.
2. The two sitting external directors and the external director who retired from directorship at the end of the 52nd general shareholders’ meeting on June 29, 2021, were notincluded in the number of directors indicated above because they received no compensation.

INTEGRATED REPORT 2022

52

CORPORATE GOVERNANCE

Status of development of the 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 or report 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 its legal advisors and police. AFC Group routinely 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 agroup-wide basis through day-to-day business activities and audit activities. The Board of Directors constantly checks whether the internal control system isfunctioning appropriately and reforms the system as necessary in order to continuously make improvements.

Compliance

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 grouporganizes the Compliance Committee comprised of all representative directors and full-time 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. It is chaired by Toshiaki Norita, who is AFC’s representative director, president and executive officer.
The activity policy of the committee in FY2021 is to ensure compliance in each division, complying with the corporate governance code, appropriate
management and storage of aviation and security information, protection of whistleblowers, measures taken regarding mental health, and instructions on safety
and sanitation in the cargo area. The committee identifies risks and reviews the state of compliance in each division, and confirms the impact of law amendments
on each business, in order to implement the PDCA cycle for compliance management.

Whistleblowing System
AFC has established a whistleblowing system in order to handle consultations and reports from executives and employees regarding illegal acts. Reports arereceived through internal contact points, including the General Affairs Department under the General Affairs Headquarters and the statutory auditors as well as
through an external 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.

Development of guidelines titled “OUR VALUE”
In October 2022, we formulated “OUR VALUE” to show the basic policy and attitude toward action that each of our officers and employees should value, based on the
Corporate Philosophy. With “OUR VALUE,” all employees are reviewing their own behavior and work processes, and raising awareness about compliance.

Risk management

Risk Management Policy
Since AFC Group builds, operates and manages facilities and functions necessary for airports, it is responsible for supporting the safe operation of airports and the flight
services of airlines. Therefore, in order to prevent AFC Group’s business risks from causing disruptions to the operation of airports and flight services, the group stives todevelop and improve its integrated risk management system. AFC Group has established the Risk Management Committee, which is comprised of directors, heads ofbusiness divisions, and representatives of subsidiaries, in order to identify risks and ensure appropriate operation and improvement of the risk management system. The
Risk Management Committee is convened twice every year. It is chaired by Kenya Inada, who is AFC’s representative director, chairman and executive officer.

53

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

Business risks and measures taken against each risk
Risk of relying on a limited number of clients
Major clients of our group are air carriers and aviation-related companies. Therefore, it is assumed that our business is affected by the decrease of aviation
demand. By utilizing the knowledge we had been developing for a long time, we are trying to steadily grasp various needs, including aviation demands and to
reduce the impact on risks.

Risks regarding the measures taken by the national government
It is expected that our group is affected by changes in airport plans and operational policies of the national government, which is the administrator of theestablishment of airports, and of administrative authorities and air carriers, in terms of our business plan and management and financial states. We are trying
to disperse the risk by closely watching the trends of the national government and administration, and by developing new business within and outside airports
and abroad.

Disaster risks
When natural disasters and fire occurs, it is assumed that our business plan and management and financial states are affected. 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 theoccurrence of disasters, we are trying to improve the communication and information gathering mechanisms and systems to restore functions promptly.

Risks regarding the impact of natural environment
The water supply and drainage business and area heating and cooling business tend to have an impact on our management and financial conditions withseasonal factors such as temperature rise.

Risks of overseas businessBusiness development abroad may have an impact on our business performance with exchange rate fluctuation and contingency situations caused due tothe political, economic, and social situation of the country. We are gathering information on country risks through our business contractors, and trying to
reduce such risks.

Risks of the impairment loss of non-current assets
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 due
to accounting for the impairment of assets, which may affect the management results and financial state.

Risks regarding the realizability of deferred tax assets
We have been judging the realizability of deferred tax assets based on the forecast and assumption on taxable income in the future. However, if it is decided thatsome 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.

Fluctuation risks of other business environments, etc.
Our group also faces other risks due to the fluctuation of business environments arising from various causes, including COVID-19, which may affect the
management results and financial conditions.

INTEGRATED REPORT 2022

54

THE P ROGRE SS OF F INANC I A L A N D N O N - F I N A N C I A L A F F A I R S

Key consolidated financial information for the period of eleven years
FY2011FY2012FY201320,80521,067

20,971

Real estate business

13,52814,354

14,857

Area heating & cooling business

4,357

4,244

3,720

Water Supply & Drainage Service and Other Business

2,919

2,468

2,393

2,770

3,362

3,498

Real estate business

1,472

2,345

2,577

Area heating & cooling business

1,125

839

634

172

177

286

Ordinary income [million yen]

2,711

3,490

3,090

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

1,728

1,781

1,092

Net assets [million yen]

47,27347,02647,998

Total assets [million yen]

74,86473,316

77,621

Interest-bearing liabilities [million yen]

18,093

15,92016,746

Business investment in plant and equipment [million yen]

7,177

3,166

7,541

Depreciation expense [million yen]

3,382

3,222

3,093

Net assets per share (BPS) [yen]889.58882.80900.07

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

33.46

34.48

21.15

12

12

12

Cash flows from operating activities [million yen]

2,860

5,521

3,897

Cash frows from investing activities [million yen]

(4,699)(3,832)(4,418)Cash flows from financing activities [million yen]

3,116

(3,515)14

Rate of ordinary income to the amount of total assets (ROA) [%]

3.6

4.8

4.1

Return on equity (ROE) [%]

3.7

3.9

2.3

Debt to equity [Times]

0.394

0.349

0.360

EBITDA + recovery [million yen]

4,688

5,341

5,443

Equity ratio [%]

61.4

62.2

59.9

Price-to-earnings ratio [Times]

11.60

18.10

36.03

Payout ratio [%]

35.9

34.8

56.7

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

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

Water Supply & Drainage Service and Other 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.

55

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

(Note) Amounts are shown by rounding down the amount below one million yen.

FY2014FY2015FY2016FY2017FY2018FY2019FY2020

FY2021

21,111

20,697

21,662

22,791

24,21324,855

24,15523,777

15,56815,311

16,131

16,95018,116

18,727

18,94018,845

3,192

3,166

3,200

3,208

3,242

3,274

3,379

2,957

2,350

2,219

2,330

2,632

2,854

2,853

1,834

1,974

3,165

2,944

3,825

4,103

4,129

4,186

3,831

3,280

2,345

2,021

2,560

2,919

3,105

3,086

2,922

2,862

605

830

1,143

1,034

787

849

1,097

452

214

92

122

148

237

250

(188)

(33)

3,164

3,173

3,492

3,726

3,338

3,802

3,617

2,962

1,505

1,935

2,151

2,219

2,104

2,227

(933)

821

50,71551,64453,41554,48255,74056,33354,96455,306

84,27085,21487,58087,961

101,384

104,483

100,429

102,468

22,112

24,00323,994

23,15933,70336,04534,71230,756

1,980

2,973

3,048

4,504

13,611

7,153

2,569

1,899

3,434

3,551

3,503

3,547

4,033

4,011

4,263

4,135

951.16965.69995.53

1,050.69

1,072.90

1,080.48

1,049.44

1,055.28

29.14

37.46

41.63

43.36

42.28

44.72

(18.71)

16.45

12

12

13

14

14

14

14

14

3,478

809

3,024

7,147

5,176

6,900

4,758

8,467

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

(449)

4,500

1,731

(137)

(2,909)

9,524

1,958

(1,907)(5,117)

3.9

3.7

4.0

4.3

3.5

3.6

3.5

2.9

3.1

3.9

4.2

4.2

3.9

4.1

(1.7)

1.5

0.450

0.481

0.466

0.443

0.519

0.669

0.663

0.584

5,367

5,176

6,161

6,737

7,501

7,835

7,619

7,464

58.3

58.5

58.7

59.4

52.6

51.5

52.1

51.4

23.13

13.59

13.52

14.60

13.07

8.98

-

32.94

41.2

32.0

31.2

32.3

33.1

31.2

-

85.1

INTEGRATED REPORT 2022

56

THE P ROGRE SS OF F INANC I A L A N D N O N - F I N A N C I A L A F F A I R S

Non-financial information highlights
FY2019FY2020

FY2021

Personnel affairs
Number of employees in the company

109

110

116

Number of employees in the group

116

115

122

Average hours of overtime work (in the company, monthly)

21 hours

17 hours

15 hours

Average years of continuous employment (in the company)

13 yearsand 6 months

14 yearsand 6 months

14 years
and a month

20.2%

24.5%

28.4%

0%

0%

7.0%

Consultation rate of medical checkups (including comprehensive
medical examinations)

100%

100%

100%

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

12 days

12 days

12 daysNumber of those newly employed (in the company)(number of women newly employed) *Including mid-career recruitments

（
3 1）

（
6 4）

（
8 4）

CO2 emission (consolidated; t-CO2)

42,15237,944

37,126

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

5,021

5,402

6,395

Water use (thousand m3)

1,946

1,138

1,233

Waste discharge amount (ton)

1,615

1,518

1,419

9.7

13.3

21.4

Ratio of female employees (in the company)
Ratio of those in the manager positions among female
employees (in the company)

Environment

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

57

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

Qualifications (including those who passed the examination)(As of March 31, 2022)

Real estatetransaction agents

Labor and social
security attorneys

Class 1 / class 2
health officers

29

4

14

Fire prevention
managers

First-class registeredarchitect

Certified Building
Administrators

Certified Construction
Managers of Japan

Second / third-class chief
electricity engineers

Boiler expert(first / second class)

3

18

27

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

First-class chief engineers
for piping work

First-class building work
process supervisors

3

2

Qualified Persons forEnergy Management

Certified environmental
measurer (concentration,
noise, oscillation)

Pollution control
manager

47

20
7

5

1

4

9
INTEGRATED REPORT 2022

58

S TO C K INF ORMAT ION / CO R P O R A T E I N F O R M A T I O NStock information(As of March 31, 2022)

Composition of shareholders(As of March 31, 2022)

The Company (Treasury stock)

Individuals

5.73％

Securities code

8864

Stock Listings

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

Total number of sharesauthorized (share)

124,800,000

Total number of sharesissued52,979,350

Number of shareholders

7,549

Share unit number

100

13.48％

Securities
companies

0.49％
Financial
institutions

21.52％

Overseas
investors

15.15％
Other Japanese corporations

43.63％

Corporate profile
Corporate name: AIRPORT FACILITIES CO., LTD.
(AFC)

Employees: 122 (consolidated)
116 (Non-consolidated) (As of March 31, 2022)

Established:

Location:

February 1970

Representative: Toshiaki Norita, President & Executive Officer
Capital:6,826.10 million yen

Group Companies

59

Head Office
No. 5, Sogo Building 1-6-5 Haneda Airport, Ota-ku, Tokyo
144-0041
Tel.: +81-3-3747-0251 (Main)(As of June 29, 2022)

Company Name

Location

CapitalTokyo Airport Heating & CoolingCo., Ltd.

Haneda Airport, Ota-ku,
Tokyo

2,900 million yen

AFC Asset Management Co., Ltd.

Haneda Airport, Ota-ku,
Tokyo

50 million yen

Real estate consulting business / Real estate fundbusiness

AFC TRADING Co., LTD.

Haneda Airport, Ota-ku,
Tokyo

30 million yen

Merchandising business at Haneda Airport

Aqua Techno Service Co., Ltd.

Haneda Airport, Ota-ku,
Tokyo

30 million yen

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

Blue Corner Co., Ltd.

Haneda Airport, Ota-ku,
Tokyo

20 million yen

Restaurant and concession stand business at Haneda
AirportS Cube Co., Ltd.

Heiwa, Chitose-shi,
Hokkaido

10 million yen

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

AIRPORT FACILITIES ASIA PTE. LTD.

Singapore

23.7 million SGD/ 18.9 million USD

Construction, acquisition and leasing business of aviationrelated 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 of aviationrelated facilities in Langley Regional Airport

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

Description of BusinessSupplying air conditioning to various facilities at Tokyo
International Airport

Major shareholders (top 10)(As of March 31, 2022)

Number of Shares Owned(thousands)

Ratio of Shareholding (%)

Japan Airlines Co., Ltd.

10,521

21.06

ANA HOLDINGS INC.

10,521

21.06

Development Bank of Japan Inc.

6,920

13.85

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

2,549

5.10

MLI FOR CLIENT GENERAL OMNI NON COLLATERAL NON TREATY-PB

1,637

3.27

BNYM AS AGT/CLTS NON TREATY JASDEC

1,231

2.46

BNYM AS AGT/CLTS TREATY JASDEC

881

1.76

Resona Bank, Limited.

800

1.60

Custody Bank of Japan, Ltd. (account in trust)

658

1.31

Tomio Banno

636

1.27

Shareholder(Note) 1. Our company holds 3,038,541 treasury shares but is excluded from the above major shareholders.
2. Ratio of shareholding is calculated by excluding the treasury shares.

Organization

General Meeting of Shareholders(As of June 29, 2022)
Nominating Committee
Compensation Committee

Board of Directors

Board of Statutory Auditors

President

Audit Office

Accounting Auditor

Compliance Committee
Information Security Committee

Management Council
Enlarged Management Council
Risk Management Committee

Environment Committee
Disaster Countermeasures
Committee
Safety Promotion Committee
Improvement Promotion
Committee

Construction Examination Committee

Accounting Department

Financial Affairs Department

Planning and Finance
Headquarters

Management Planning Department

Airport Business Planning Department

Overseas Business Department

Business Planning
Headquarters

Singapore OfficeMarketing Department

Business Development Department

Cargo Planning Department

Marketing Promotion
Headquarters

Facilities Planning Department

Facilities Management CenterFirst-class registered architect officeOsaka Office

Rinku International Logistics Center

Chitose Office

Facilities
Headquarters

General Affairs
Headquarters

General Affairs Department

Management Strategy Council

Sustainability Promotion Department

Sustainability Promotion Council

INTEGRATED REPORT 2022

60

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

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