Section 02

ESG
Initiatives

57

Environmental Initiatives

59

Social Initiatives

65

Governance Initiatives

73
TAKUMA CSR Report 2021

58

Section 02

ESG Initiatives

Environmental Initiatives

Environmental Initiatives

Helping Combat Climate Change While Conserving
Resources and Protecting the Environment
The Takuma Group recognizes the need to promote renewable energy (non-fossil energy), improve energy eﬃciency,
conserve resources and reduce environmental impacts, and use unutilized resources eﬀectively. As one way to do that,
we will work to alleviate the global issue of climate change and to reduce environmental impacts while helping realize asustainable society by supplying products and services that draw on technologies for eﬀectively utilizing energy andprotecting the environment that we have developed over more than 80 years of history.

TAKUMA Environmental Policy

Initiatives through our Energy Plant Business

Takuma has helped resolve customer issues for many years by delivering numerous boilers and energy plants of various
types and speciﬁcations as a pioneer of the boiler industry. In recent years, alleviating climate change and realizing adecarbonized society have been identiﬁed as issues that should be addressed on a society-wide level, and renewableenergy in the form of solar, wind, geothermal, small- and medium-scale hydro, and biomass will play an important role inthat eﬀort.
Because trees absorb CO₂ through photosynthesis during the growth process, wood biomass from forest thinning andother sources has the characteristic of being carbon neutral, in that use of energy from timber does not impact theatmospheric concentration of CO₂. We will help resolve issues faced by customers and society by promoting renewableenergy through utilization of wood biomass.

Contributing to society through business activities

Our company has established the TAKUMA Environmental Policy as follows, aiming to ensure employees contributeto global environmental conservation. We will help resolve the issues faced by society.
This policy applies to the activities of all company departments.

Environmental
Philosophy

Helping combat climate change

Promoting renewable energy
Preserving the environment:water, air, and mountain forests

Takuma is committed to preserving the environment and realizing an aﬄuent society throughbusiness activities under the Company Motto: Value Technology, Value People, Value the Earth .

Reducing CO₂ emissions
through carbon neutrality

Alleviating climate change andrealizing a decarbonized society

Operational Guidelines
1 All Takuma Group companies will recognize the importance of maintaining a balance between preservation of theenvironment and business activities.
2 Continuously develop activities to preserve the environment that comply with applicable environmental laws andordinances, and ensure environmental control and assessment systems conform to international environmental standards.
3 Promote development of improved technologies and products for society that preserve the environment.
4 Address resource conservation, energy eﬃciency, recycling, and minimization of waste generated
by all business activities.
5 Enhance employeesʼ awareness and understanding about the importance of preserving the environment throughenvironmental education and internal promotional activities.
6 Provide the community with information on the activities of Takuma to preserve the environment.

1

Advanced plant designs that can withstand stable operation
over the long term are essential so that we can ensure
customers can operate our energy plants with a sense ofassurance. We design each plant after choosing the optimal
combustion method based on customer requirements,
the technology we have developed over our long history, andour extensive track record of delivered facilities. We also oﬀer
service (through maintenance and our O&M business)
designed to ensure that plants can operate in a stable mannerover the long term with security and reliability.

2

Takuma's contribution to reducing CO₂ emissions
The municipal solid waste incineration plants and biomass power plants that we supply help
save about 4 million tons of CO₂ emissions every year by converting waste and biomass into energy.

Reduction of about 4 million tons from
Takuma products during FY2020!

Reduction in CO₂ emissions
from municipal solid waste
incineration plants
delivered by Takuma

Approx. 500,000
tons per year!

CO₂

Reduction in CO₂ emissions
from biomass power plants
delivered by Takuma

Approx. 3.5 million
tons per year!

59

Realizing stable, long-term operation of energy plants

Making eﬀective use of unutilized resources

Since biomass fuels are not uniform in terms of theirproperties, such fuels are characterized by the diﬃculty ofrealizing stable combustion. We specialize in drawing on our
extensive experience and advanced technology to utilize
various types of biomass eﬀectively by burning them in astable manner. We continually strive to increase energy
eﬃciency in our plant designs so that resources can beutilized to the greatest extent possible.

3

Initiatives to create a regional Sound Material-Cycle Society

Since establishing Takuma Energy Co., Ltd., in 2015 tooperate its Power Retail Business, the Takuma Group has
worked to realize a regional Sound Material-Cycle Society
through energy plants, for example by promoting the local
production and consumption of power through an initiative inwhich Takuma Energy purchases power generated by
Takuma-built plants and supplies it to regional public facilities
and other consumers.

Wood chips

Bark

Wood pellets

BagasseLivestock(poultry) manure

Rice husks

PKS

Corn residue
and other resources

Japan
Electric Power
Exchange(JEPX)

Power
purchases

Powerpurchases

Power sources

Takuma EnergyCo., Ltd.
Power supply

Local
production/
local
consumption
cycle
Disposal of waste
Supply of biomass fuelCustomers

TAKUMA CSR Report 2021

60

Section 02

ESG Initiatives

Environmental Initiatives

Conserving resources and protecting the environment

Conserving resources and protecting the environment

Initiatives through the Municipal Solid Waste Treatment Plant BusinessInitiatives through the Water Treatment Plant Business

Since delivering Japan's ﬁrst fully continuous mechanical waste incineration plant in 1963, Takuma has built anddelivered more than 360 municipal solid waste treatment plants, making Takuma the No.1 manufacturer in Japan. Most of
the treatment technologies used in our plants are the result of in-house R&D by Takuma, which continues to embrace thehighest standards of excellence while working to reﬁne its technologies in order to accommodate the needs of society as
they change over time.
Takuma contributes to resource conservation and environmental protection through a broad product line and after-sales
service based on an extensive track record as the industry's leading company.

We have operated our Water Treatment Plant Business with a focus on sewage facilities for more than 50 years,
and during that time we have worked to conserve water resources and the water environment required by society byproviding a variety of water treatment technologies. In recent years, companies in this sector have been called upon toaddress social needs involving priorities such as energy conservation, energy creation, and Life Cycle Cost (LCC)
reductions. In response, we have helped realize sustainable sewage systems by taking advantage of the reliable technology
and extensive experience we have developed to date.

Denitration
agent

ActivatedcarbonBoilerSteam turbine
generator[Principal equipment]
Upﬂow moving-bed sand ﬁltration system (Uniﬂow Sand Filter)[Principal equipment]
Low power agitator (Bio Blade Mix)
Stack

Initial settling pond
SewageintakeReaction tank

Final settling pond

Sand ﬁlter

Pre-processing
equipment

Discharge

Flue gas
Anaerobictank

Bag ﬁlter

Waste pit

Anoxictank

Bio Blade
Mix

Anoxictank

Disinfection tank

Aerobictank

ExcesssludgeIncinerator

Crude
sludgeMunicipal
solid waste

Hydratedlime

Advanced treatment facilities

Reaction tank facilities

Aeration panel
Aerobic tank

Drawn-oﬀ sludge

Bottom ash(to be recycled)

1

2

Resource conservation initiatives

Induced draft fan

Fly ash(to be recycled)

Separator liquid treatment equipment[Principal equipment]
Fixed-bed anammox process

Environmental protection initiatives

We contribute to the formation of a Sound Material-Cycle
Society by working to improve incineration and ﬂue gas
treatment technology, promoting recycling of ash, and reducing
use of chemical agents.

We safeguard the surrounding region's environment by
utilizing ﬂue gas treatment technology as well as various
technologies across combustion and maintenance management.

High-performance stoker furnace

Advanced combustion system

We draw on the treatment experience that comes fromhaving Japan's No.1 track record of deliveries to improve ourstokers. We pursue the ash recycling business by maintaining
stable combustion despite a diverse range of waste properties
and creating bottom ash with few embers that exhibits uniform
properties, making it well suited for use in cement production.

Through the development of our advanced combustion
system, which consists of components like proactive
combustion control, an approach that uses laser analytical
instruments to increase response, and a ﬂue gas recirculation
system, we are minimizing hazardous substances that are
given oﬀ during waste incineration, including dioxins, nitrogenoxides, and carbon monoxide.

100%

Moisture content

Municipal
solid waste

Maintenance ofstable combustion

Laser analytical
instruments

Bag ﬁlter

Ash content
DryingCombustion

BoilerBurn-out

Proactive
combustion control

Reduction in
unburnt content

Stack

Incinerator

Automatic
combustion control
Waste supply volume

Combustion system

Bottom ash

Combustion air volume Flue gas recirculation system

Denitration system using urea decomposition equipment

Fly ash circulation system

This system, which oﬀers excellent denitration performance,
consists of technology for converting an aqueous solution of urea
into ammonia gas using a urea decomposition reactor. It can reduceuse of chemical agents thanks to its superior reaction performancecompared to conventional uncatalyzed denitration technology, which
injects aqueous solution of urea into the furnace.

In the past, ﬂy ash collected by bag ﬁlters contained chemical
agents used to remove hazardous substances that retainedsome amount of removal capacity (speciﬁcally, hydrated lime
and activated carbon). This system, which consists oftechnology for circulating use of ﬂy ash that contains thesechemical agents, makes it possible to stabilize hazardous gas
removal performance without increasing use of chemical agents.

Reduced use of chemical agentsAmmonia sprayed into furnace
Fan

Chemical agents

Urea
decomposition
reactorHeaterStabilization of hazardous
gas removal performance
Reduction in use of chemical agents

Flue gas
To stack
Bag ﬁlter

Purchase and storage of urea
Urea
storage tank61

Sludge treatment facility[Principal equipment]Rotating drum-type concentrator

Digester tanks

Sludge treatment

Generator

Sludge-fueled power
generation facility

Return water

1

Upﬂow moving-bed sand ﬁltration system

Our upﬂow moving-bed sand ﬁltration system (Uniﬂow Sand Filter),which removes Suspended Solids (SS) from water, is primarily used forﬁnal treatment at sewage treatment plants to allow clean, treated water tobe released into rivers. Some treated water is also reused at the facility,
helping to conserve water resources. Uniﬂow Sand Filter systems boast
top domestic market share in moving-bed sand ﬁltration systems, and wehave delivered more than 2,700 of these long-selling products, whichfeature water quality puriﬁcation technology, in Japan. In recent years,
many of the systems we have delivered have been a new high-speed
model that delivers two to three times the treatment volume with the same
area as conventional ﬁxed-bed sand ﬁltration systems. We are also seeing
more projects that replace ﬁxed-bed sand ﬁltration systems with thissystem while retaining existing foundation work and related infrastructure.

2

Upﬂow moving-bed
sand ﬁltration system

Step grate stoker type sewage sludge incineration and power generation system

Sludge generated by the sewage treatment process is a type ofbiomass, and such resources are expected to be used as
renewable energy. Conventional sludge incinerators were net
consumers of energy because they required auxiliary fuel andused large amounts of electricity, but this system draws on thecore Takuma technologies of combustion technology and boiler
technology to make possible an energy-creating system thatgenerates more power than the incinerator consumes while using
sludge as fuel, as long as it operates at or above a certain scale.

Generator
SludgeWaste heat boiler
Dryinggrate
Step gratestoker furnace
Combustion grate
Burn-out grate
Bottom ash

Incinerator
Pump

Reinjectionof ﬂy ash[Principal equipment]
Step grate stoker type sewage
sludge incineration and power
generation system

Processing ﬂow in water treatment plant equipment at a sewage facility

Reduced NOx, CO, and dioxin emissions

Combustible content

0%Incinerator
Separator liquid treatment

Sludge-fueled power
generation facility
Fly ash(containing unreacted chemical agents)

Combustion air fan

TAKUMA CSR Report 2021

62

Section 02

ESG Initiatives

Environmental Initiatives

Environmental reporting

Dichloromethane (CAS No.75-09-2)
FY

2016

2017

2018

2019

2020

Ethylbenzene (CAS No.100-41-4)
FY

2016

2017

2018

2019

2020

Takuma reports the environmental impact of its business activities as well as the manner in which it takes environmental
considerations into account in accordance with the Environmental Reporting Guidelines (issued by the Ministry of theEnvironment). This environmental reporting program includes not only environmental information extracted from our overallbusiness activities from an environmental standpoint, but also information about related economic and social aspects of
those activities.

Emissions (tons per year)

0.43

0.45

0.27

0.08

0.00

Emissions (tons per year)

0.14

0.96

0.98

1.34

1.41

Toluene (CAS No.108-88-3)

Xylene (CAS No.1330-20-7)

FY

2016

2017

2018

2019

2020

FY

2016

2017

2018

2019

2020

Emissions (tons per year)

0.09

0.07

0.06

0.09

0.07

Emissions (tons per year)

2.85

1.18

1.12

1.47

1.54

These materials are used for antirust painting of boiler structures and so on.

Environmental data (non-consolidated)
Total energy input volume

Greenhouse gas emissions(GJ per year)(Tons-CO₂ per year)

90,000

Environmental accounting

4,500

60,00047,78945,04144,40647,902

Environmental accounting is the process by which companies and other entities recognize the cost of environmental
conservation in their business activities as well as the eﬀects of those activities and measure and communicate them in as
quantitative a manner as possible (either in terms of monetary amounts or amounts of materials) with the goal of pursuingenvironmental conservation initiatives in an eﬃcient and eﬀective manner while maintaining a good relationship withsociety so as to facilitate sustainable development.
We have disclosed our own environmental accounting system since FY2006 when we introduced it based on theEnvironmental Accounting Guidelines 2005 issued by the Ministry of the Environment. As our business activities mainly
involve environmental conservation plants and their equipment, Takuma Group employees have a signiﬁcant awareness ofthe need for environmental conservation, and we have been implementing approaches toward such issues within the
Takuma Group.

3,000

50,92730,000

1,911

1,795

1,758

2016

2017

2018

1,914

2,032

2019

2020

1,500

0

2016

2017

2018

2019

2020

(FY)

The total energy input volume of the fuel and the electricity consumed
at Takuma during FY2020 rose slightly compared to FY2019 levels.
We will continue to promote energy savings from here on out.

0

Total production of waste, etc.

Input volume of water(Tons per year)(m³ per year)

1,200

(FY)

The greenhouse gas emitted by Takuma is limited to carbon dioxide(CO₂). The amount of CO₂ emissions in FY2020 rose slightly
compared to FY2019 levels. We will continue striving to reduce CO₂
emissions.

Resource circulation costs

400

250

2016

364

334
83
2017

193
104
2018

25,3402019

23,40625,39025,17625,258

113
2020

(FY)

Although total production of waste, etc., grew during FY2020
compared to FY2019, total ﬁnal disposal volume of waste, etc., fell
thanks to appropriate treatment such as recycling. Going forward, we
will work to further reduce the amount of waste we generate. Although
we work to recycle and reuse waste, waste that cannot be reused isdisposed of in accordance with the Industrial Waste Control Manifest
System.

0

2016

2017

2018

2019

2020

(FY)

Water resource input during FY2020 rose slightly compared to
FY2019. We will continue striving to reduce water resource inputs.

PRTR target substance emissions
Although our business activities do not involve a wide variety of chemical substances on a massive scale, we use a few
designated chemical substances. Consequently, we report and register such chemical substances designated under the
Pollutant Release and Transfer Register (PRTR) Law, in accordance with relevant laws and ordinances, with the local
government.

63

Investment(thousand JPY)

Costs
(thousand JPY)

3,291

21,904

21,33922,724-

16,984-

26,17042,4201,607,800

Social activity costs-

10,442

Total

67,0501,706,024

Investments and expense related to the prevention, reduction, and/or
avoidance of environmental impact, removal of such impact, restoration
following the occurrence of a disaster, and other activities aremeasured in monetary value.

20,000314
120

R&D costs

40,000

558

507

471

125
0

Administration costs
731

Environmental conservation eﬀect

Business area costs

Global environmental
conservation costs

60,000432

Item

Pollution prevention costs■Total production of waste, etc.
■Recycling■Total ﬁnal disposal volume of waste, etc.
800

Environmental conservation cost

Item

FY2019FY2020(1) Environmental conservation beneﬁt related to resources input
into business activities
Total energy input volume (GJ)
Input volume of water (m³)

100,973

103,839

47,34047,295(2) Environmental conservation beneﬁt related to waste orenvironmental impact originating from business activities
Volume of greenhouse gas emissions (tons-CO )

4,273

4,422

Total waste emissions volume (tons)

1,047

1,209

Final waste disposal volume (tons)
Wastewater volume (m³)

155

164

47,34047,299Environmental conservation beneﬁts are measured in physical units
and are the beneﬁts obtained from the prevention, reduction, and/or
avoidance of environmental impact, removal of such impact, restoration
following the occurrence of a disaster, and other activities.

Economic beneﬁts of environmental conservation measures
Breakdown of
beneﬁts

Income from the sale of waste forrecycling, etc. (thousand JPY)

7,110

Economic beneﬁts of environmental conservation measures, deﬁned ascontributions to the proﬁt of a company or other entity derived fromhaving pursued environmental conservation measures, are measured inmonetary value.

Period covered: April 1, 2020, to March 31, 2021
Scope: Figures include the following companies.
In Japan: Takuma Co., Ltd., (Head Oﬃce, other oﬃces [including
overseas sites], and the Harima Factory); Nippon Thermoener Co.,
Ltd.; Takuma Technos Co., Ltd.; Hokkaido Sanitary Maintenance Co.,
Ltd.; Takuma Technos Hokkaido Co., Ltd.; Sunplant Co., Ltd.; Takuma
Engineering Co., Ltd.; Takuma System Control Co., Ltd.; Dan-Takuma
Technologies Inc.; Kyoritsu Setsubi Co., Ltd.; Kankyo Sol-Tech Co.,
Ltd.; and Takuma Plant Co., Ltd.
Overseas: Taiden Environtech Co., Ltd., and Siam Takuma Co., Ltd.

Environmental Management
The situation concerning the acquisition of ISO 14001
Our Harima Factory has acquired ISO 14001 certiﬁcation and has been implementing environmental management
activities based on an environmental management system established to comply with international standards. Our groupcompanies Nippon Thermoener Co., Ltd.; Takuma Technos Co., Ltd.; Hokkaido Sanitary Maintenance Co., Ltd.; andDan-Takuma Technologies Inc. have also acquired ISO 14001 certiﬁcation.

TAKUMA CSR Report 2021

64

Section 02

ESG Initiatives

Social Initiatives

Strengthening Relationships of Trust with
Customers and Communities

Participation in the Community

Working through initiatives to pursue customer satisfaction, ensure the stable and continuous operation of plants and equipment,
and create new value for regional resource recycling and communities, the Takuma Group will maintain and strengthen relations oftrust with customers and communities by supplying high-quality products and services that facilitate stable, long-term operation on
an ongoing basis in the form of infrastructure that supports regional society and customers businesses.

Takuma and its group companies strive to build relationships of trust with local communities and safe plants that inspire
peace of mind and trust on the part of local residents by working actively to participate in area activities and foster
interactions with those residents, for example by disclosing information in an appropriate manner; hosting events that bring
together residents, for example clean-up activities in areas around its facilities across Japan; and establishing shelters foruse in the event of a natural disaster. During FY2020, although the eﬀects of the COVID-19 pandemic forced a reductionof the scale of our activities, we continued to pursue these initiatives while working to combat the pandemic. This section
introduces some examples.

Pursuing customer satisfaction
With the level of consumer (stakeholder) attention to quality in a broad range of areas in addition to manufacturing andservice growing in recent years, Takuma's Head Oﬃce, branch companies, and other business oﬃces have earned
certiﬁcation under the ISO 9001 international standard on quality management systems, and the Harima Factory has
earned certiﬁcation under the ISO 9001 and ISO 14001 international standards on quality management systems andenvironmental management systems, respectively. Operations comply with the latest version (2015) of both standards.
In addition to working to improve the quality of our products in accordance with our Quality Policy and quality
management system, we are pursuing activities that emphasize customer satisfaction. In order to produce products andplants that customers truly appreciate, it is necessary not only to boost the quality of the product itself, but also to improve
the operations and quality as well as employees operational skills in each process from plant planning to delivery (sales,planning, design, procurement, manufacture, construction, and management).

1

Imabari City: Imabari City Waste
Management Center ( Bari-Clean )We joined Imabari High Trust Co., Ltd., which
Imabari City has contracted to operate Imabari City
Waste Management Center (informally known asBari-Clean ), in hosting the Imabari Environmental
Festival 2020 in October 2020. More than 1,400
local residents came to the festival, which implemented
a series of measures to prevent COVID-19 infections,
including taking attendees temperatures and ensuring
everyone wore masks. Attendees enjoyed attractions
including a ﬂea market, events designed to raiseawareness of environmental issues, and a dining areawith numerous food stalls.

Quality Policy

Takuma Co., Ltd., has adopted the following Quality Policy in order to provide satisfying products that meet customer
expectations and earn a high level of trust while continuously improving the eﬀectiveness of its quality management system.
Quality Policy

Manufacturing products that result in customer satisfaction

Based on that Quality Policy and the three priority items described below, Takuma is working to improve the quality of its
products and services through a variety of initiatives that address every process, including in sales, planning, design,
procurement, manufacture, construction, and management.

2

Suita City: Resource Recovery Energy Center
Suita City, to which we delivered a municipal solid waste treatment
facility, holds the Suita Environmental Education Festa, a participatory
event conceived to foster environmental conservation and creation, eachyear in order to deepen cooperation among stakeholders including
residents, businesses, schools, and government agencies. In FY2020, thefestival was held online due to the COVID-19 pandemic. We created andexhibited a video introducing the Suita City Resource Recovery Energy
Center, which Takuma delivered.

Priority items

Creating value to earn customer satisfaction ・・・・・ Ascertaining customer needs and making improvements based on past experience
Carrying out risk management・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・ Addressing changes in the business environment and human error
Implementing human resources management ・・・・ Implementing human resource development and ensuring skills are passed down to younger employees

3

Principal initiatives to improve quality●Establishing quality targets for each division's processes; monitoring, measuring, and evaluating implementation status(twice a year)●Holding QM Committee meetings (quality management reviews, twice a year)

Neighborhood of the Lake Administrative●Carrying out internal quality audits to verify the soundness of each division's processes (once a year)●Using an Operational Skill Achievement Checklist designed to improve employees

operational skills (once a year)

Affairs Association: Suwa Lakeside Clean Center

Customer satisfaction survey
We administer questionnaires targeting customers who hadconstruction work done by asking them to assess the overall
experience, including the nature of the work performed,
suitability of the delivered equipment, and the level of service
provided by Takuma staﬀ. The QM Committee analyzes thestatus quo and studies measures to improve quality based on
customer feedback while working to improve Takuma's
operational quality and the quality of products supplied tocustomers by quickly applying measures across the company'sorganization. Scores averaging higher than 85 points for each of
the last 10 years indicate a positive evaluation of these eﬀorts.

65(Points) ■Number of surveys
100
85.5

85.9

(Surveys)
40●Average score

85.8

87.7

88.2

86.8

85.6

86.3

86.1

EcoPon News

88.4
1

30

80

1

2

2

3

3
4

4
5
5

6

6

7

7
8

8

9

9
10

20

60

10

40

18

25

27

23

19

27

27

28

36

2011

2012

2013

2014

2015

2016

2017

2018

2019

22
2020 (FY)

10

11

11
12

12

13

Original-design mask

13

Suwako High Trust Co., Ltd., which operates Suwa
Lakeside Clean Center under contract, has been holding
eco Poppo Fellowship Festivals (as a venue to oﬀer
reports on facility operations) since FY2017 to inform abroad audience of residents about the role of the facility,
its importance, the state of its operations, and otherinformation. In FY2020, the festival was canceled due tothe COVID-19 pandemic. Although it was not possible tohost the event, we continued to work to promote
understanding on the part of local residents by publishing
EcoPon News, a newsletter featuring a proﬁle of the
facility and useful information for resident lifestyles.

Questionnaire average score (out of 10 0 possible points)

TAKUMA CSR Report 2021

66

Section 02

ESG Initiatives

Social Initiatives

Pursuing Partnerships and Innovation
Conventional products and services are undergoing a dizzying evolution against the backdrop of progress inthe fourth Industrial Revolution and the evolution of information and communications technology, fuelingfast-paced change in society. Working through initiatives to utilize digital technologies and promote open
partnerships and innovation, the Takuma Group will look to further bolster its strengths by focusing on proposals
based on society's and customers needs, R&D to facilitate them, and technological improvements so that it cankeep up with social change.

1

We are pursuing partnerships and alliances with companies in related ﬁelds as well as M&As in order to strengthen
our EPC capabilities.

TopicsAcquisition of Techno Links Inc.
We have acquired a 100% stake in Techno Links Inc., a manufacturer with operations
spanning the design, fabrication, and installation of environmental recycling systems*,
as well as associated after-sales service. By augmenting Takuma's overall plant design
capabilities with this new subsidiary's ability to design custom equipment to suit theproperties of speciﬁc waste streams, we will gain the ability to build more eﬃcientsorting systems.

Utilization of digital technologies (AI, IoT, robots, and more)
Progress in the fourth Industrial Revolution and the evolution of information communications technology are driving
fast-paced change in the nature of conventional products and services. Plant Engineering, Procurement, andConstruction (EPC), operation management, and maintenance are no exception, and we believe that the transition todigital technologies will only accelerate going forward against the backdrop of trends including labor shortages and thewidespread adoption of telework. We are pursuing development and other initiatives from a medium- and long-term
perspective so that we can create added value, including to realize remote operation and full automation technologies
for customers plants, streamlining and labor savings in the operation business through the use of data, andstrengthening of our competitiveness in EPC and after-sales service.

1*Equipment that makes up recycling plants (equipment for crushing, sorting, compacting, andtransporting drink containers; equipment for sorting and compacting other plastics; belt conveyors, etc.)2

Topics
Initiatives at Imabari City Waste Management Center

Increases in the added value of facilities and plants

Having adopted the concept of Phase Free *1 operations at waste treatment
facilities, Takuma built and operates Imabari City Waste Management Center as a
new type of waste treatment facility that contributes to its community during bothnormal times and times of emergency. The plant has a role as a disaster-prevention
base to safeguard residents in the event of an emergency as well as serving as afamiliar presence to residents during normal times, other than incinerating waste. In
addition to providing functionality to serve as a shelter where people can take refuge
with peace of mind, the facility is improving its ability to deal with any contingencies
that might arise in the event of a disaster and strengthening its cooperative
structures by joining the city, a Special-Purpose Company (SPC) *2, and local NPOs
as well as residents to hold annual training involving opening itself as a shelter andcarrying out improvements based on that training. Moreover, the Center is earning
praise not only for playing a role in times of emergency, but also for operating as a
Phase Free facility that maintains a familiar presence for residents in regular times by
allowing them to enjoy sports and events.

TopicsDevelopment of AI-based automatic combustion stabilization technology
We developed a combustion Artiﬁcial Intelligence (AI) that can makejudgments concerning incinerator operation on par with those of anexperienced operator. By combining the AI with a conventional automatic
combustion control system, we have reduced manual control inputs fromincinerator operators by 99% while maintaining stable combustion.

*1: A concept that augments daily operations with the ability to play a role in the event of a disaster.
*2: Imabari High Trust Co., Ltd., a Special-Purpose Company (SPC) established with investments by Takuma and Takuma Technos Co., Ltd., which is part of
the Takuma Group, is tasked with operating Imabari City Waste Management Center.

3
Strengthening of competitiveness in EPC operations, operation management, and maintenance service

Plant EPC, operation management, and maintenance require many
years of experience and expertise, and one of Takuma's strengths is theexperience it has accumulated in this area since its founding. To provide
higher-quality EPC and after-sales service, we are working to ensure thatexpertise and skills are reliably passed down to younger employees and tofurther improve individual workers' skills while making use of digitaltechnologies. Additionally, we are working to strengthen ourcompetitiveness in EPC and after-sales service by working to improve
productivity, for example through streamlining initiatives based on the useof Robotic Process Automation (RPA) and other technologies.

Open partnerships
To ensure that we can consistently supply the products and services demanded by customers and society, we will
accelerate R&D as well as eﬀorts to strengthen our proposal capabilities through further deepening of partnerships withother companies and organizations.

67

Initiatives to contribute to the maintenance and expansion of existing businesses

In an eﬀort to strengthen our ability to produce proposals for solving issues facing customers and communities, we are
pursuing collaboration with knowledgeable companies and organizations.

In addition to 24-hour remote monitoring and operational support,
Solution Lab, Takuma's remote monitoring and operational support facility,
is striving to realize stable plant operation, for example by optimizing
maintenance through the collection and analysis of operating data fromvarious plants.

2

Enhancement of resources and creation of synergies

Initiatives to create new businesses by promoting open innovation

In addition to joint research with universities and other companies, we are working in partnership with other companies
to develop new businesses and decarbonization technologies.

Pursuit of innovation
As demands have grown in recent years for realizing a decarbonized society through carbon-neutral technology and better
protecting the environment against the backdrop of the problem of climate change, we are focusing on R&D and technologicalimprovement in order to develop the technologies and products that are required by society and customers.

TopicsDevelopment of a CO₂ supply system for SARA Inc.
We developed a system for supplying a large volume of CO₂ in a safe,
economical manner from combustion ﬂue gas from a biomass power plant anddelivered it to SARA Inc. By locating the biomass power plant that incorporates thissystem next to a greenhouse, we have realized a biomass tri-generation system thatuses heat, electricity, and CO₂ in vegetable cultivation. Through this system, which
combines the expertise of SARA Inc., an expert in vegetable cultivation, with
Takuma's ﬂue gas treatment technology, we are contributing to smart agriculturethat utilizes the fertilizing eﬀects of CO₂ while realizing economic, carbon-negative *operation. The system received the Japan Machinery Federation Chairman Prize at
the Federation's 2020 Equipment and System Awards for Excellence in Energy
Savings.
*The system absorbs more CO₂ than it gives oﬀ (making it carbon-negative) as its CO₂ source iscombustion gases from wood biomass, which is carbon-neutral, and because it makes eﬀective useof the CO₂ in those gases.

TAKUMA CSR Report 2021

68

Section 02

ESG Initiatives

Social Initiatives

Promoting Activities of Human Resources

Initiatives related to human resources development

The Takuma Group's human resources have fostered and passed down key strengths in the form oftechnology, expertise, and trust-based relationships with customers. Through initiatives to strengthen the hiringand development of human resources as well as to promote diversity and improve employee satisfaction, we willcontinue to ensure that the Group's strengths are eﬀectively passed down and strengthened by using humanresources eﬀectively so that employees embodying a diverse range of values can take full advantage of theirabilities, and by putting in place structures to keep employee motivation high.

We oﬀer grade-speciﬁc educational programs, from new hires tomanagement candidates. We are also making use of the New TAKUMA
Building (Training Center), which was completed in October 2020, to
improve employees abilities, technical skills, and management skills.
Technical presentation by
2-year employees

New-employee training
Presentation by
10-year employees

Mid-career training

Thesis discussion by
5-year employees

Management training

Respect for human rights and the abolition of discrimination
Our company sets out its respect for basic human rights andprohibition of discriminatory acts in Takuma Group Ethics
Charter, Takuma Group Code of Conduct, and labor regulations.
In addition, we also support respect for human rights, without
contributing to human rights violations, elimination of forcedlabor/child labor, and the abolition of discrimination throughparticipation in the UN Global Compact. We are also working topromote employment of disabled and elderly individuals.

2● Takuma Group Ethics Charter (excerpt)

4.We shall respect fundamental human rights
and never practice discrimination.
● Takuma Group Code of Conduct (excerpt)【Respect for basic human rights】
9.Prohibition of discriminatory actions
10.Respect for personality, individuality, andprivacy of employees
11.Safe work environment

Promoting diversity

Initiatives to increase female participation
In addition to putting in place a workplace environment that provides ﬂexible workstyles and continuous employment,
we have continued to pursue initiatives that encourage employees to understand Takuma. As a result, the number offemale employees in management positions and the number of female employees on the main career track (including
individuals who have been tentatively oﬀered positions) as of March 31, 2021, increased to 25, which would be double
the corresponding number as of March 31, 2016. We will strengthen these initiatives over the next ﬁve years in an eﬀort
to increase the number of female employees on the main career track and in management positions by a factor of atleast two over corresponding numbers for the most recent ﬁve-year period (to 35 or more employees).
Initiatives to increase hiring of disabled individuals

Working with our employees
Making the most of each and every employee's abilities andusing human resources eﬀectively by ensuring employees feelengaged and motivated while working over the long term are top
priorities for Takuma as it works to promote activities of humanresources.

In addition to hiring people with disabilities to work primarily in general work in various departments and creating theOﬃce Support Section in the Human Resources Department to manage work by people with disabilities and outsource
internal tasks to them as part of an eﬀort to promote more broadly-based hiring, we currently employ ﬁve* workers withdisabilities who clean oﬃces, perform light work and other tasks, and help maintain and manage an employee social
welfare facility (cafe space). (*As of April 30, 2021)

Employee data
Number of employees

894(Including 819 men and 75 women)

Average age

43.1

Average years of service

15.3

Attrition rate

5.5% (past 3 years)

3*As of March 31, 2021

1

Securing and training human resources

Programs to ensure employees can work over the long term with peace of mind
We have introduced the following programs to facilitate healthy work-life balance and to help employees make themost of their skills and abilities while balancing their work with child-raising and nursing-care responsibilities.
Additionally, we will work to increase utilization of parenting support programs to at least 25%, which would double
current levels, by further enhancing those programs and spreading awareness of them.
● Half-day annual paid leave program

Initiatives related to securing human resources● Flex time program● Childcare leave program●Telework program● Leave program for husbands whose wives are giving birth

In addition to utilizing a variety of techniques in our hiring
activities to ease the labor shortage, we made 62 new andmid-career hires in FY2020, making active use of online
interviews due to the COVID-19 pandemic. Going forward, we
will continue to focus on securing human resources, including by
taking advantage of the Internet to hold information sessions forjob-seekers in distant areas and approaching other interested
applicants.

● Nursing-care leave program● Staggered working hours program● Shortened working hours program

Impressions from an employee who has taken advantage of Takuma's ﬂex time program
I was worried about whether I would be able to continue working while raising my child, but the ﬂex time program eased thoseconcerns. The most helpful part of the program is the ability to see my elementary school-age child, who leaves the house before
8:00 in the morning, oﬀ to school before heading to work. Even when I am scheduled for crossing-guard duty, which is 15 times a
year, I am able to get to work by core time without taking a half-day of paid leave in the morning. Naturally, the understanding andcooperation of my coworkers and supervisor help make this possible. (Clerical female employee in her 40s)

Initiatives to support career development

Number of new regular employees (based on when new employees
began working for Takuma; number of female employees in parentheses)

69

Improving employee satisfaction

FY2021FY2016FY2017FY2018FY2019FY2020New hires

18（1）

24（2）

21（2）

20（2）

25（3）

26（2）

Mid-career hires

11（1）

10（0）

22（1）

25（1）

37（2）

-

Total

29（2）

34（2）

43（3）

45（3）

62（5）

26（2）

*New hires only

We have established the following programs to support the development of employees careers.
● Supervisors schedule two interviews with each subordinate every year to review progress toward operational goals
and listen to their wishes and advice directly.
●A self-reporting program session is held every three years to facilitate long-term career development.
●A work group transfer program facilitates movement from clerical and labor positions to the main career track.
We have also introduced programs that give talented employees promotions without regard to whether they were a
new or mid-career hire.

TAKUMA CSR Report 2021

70

Section 02

ESG Initiatives

Social Initiatives

Ensuring Safety and Health

3

The Takuma Group will work to further strengthen its core strengths of technology and expertise as well as
relationships of trust with customers while preventing a decline in the quality of its products and services or in
the level of trust it enjoys from society by safeguarding workers physical and mental health and building anenvironment in which it is easy for employees to do their jobs. Speciﬁcally, we will accomplish these goals by
ensuring occupational safety and health, managing employee health, and putting in place an employee-friendly
workplace environment.

Occupational safety and health initiatives
Since FY2006, we have introduced TK-COHSMS based on an occupational safety and health management system
for the construction industry and worked actively and independently to improve our safety and health activities. We
believe that among these eﬀorts, the manner in which (1) safety inspections, (2) mandatory safety and health education(education for construction site representatives), and (3) creation of pre-work safety procedure checklists known as
SSAs have been steadily adopted by all departments and used to consistently improve the level of knowledge about
Takuma's safety and health is particularly noteworthy.
We have adopted the following safety and health objectives for FY2021: eliminating fatal accidents and accidents that
result in work stoppages (of four or more days); pursuing a thorough program of safety and health education, ensuring
adherence to safety inspection guidelines, and implementing the branch safety patrol plan; and strengthening
collaboration with the Safety and Health Cooperative Association. Branches, worksites, and involved contractors will
work together to revitalize safety and health activities companywide by reliably fulﬁlling their respective roles.
Rather than contenting ourselves with the status quo, we will pursue new safety and health initiatives to foster astrong awareness of the concept that underlies our safety and health policy ̶ Understanding the need for respecting
people and giving top priority to safety and health ̶on the part of everyone who is involved in our operations.

●April 2004 to

Cumulative number of trainees ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・ 36,470

March 2021

Number of trainees passing the completion exam ・・・・・・・・・・・・・・・・・ 19,804

4

Head Oﬃce venue (left) and Tokyo Branch venue (right)

Education that lets employees experience a hazard (falling) via Virtual Reality (VR)In FY2020, we began oﬀering education based on Virtual Reality (VR)at the Head Oﬃce, Tokyo Branch and other branches and worksites aspart of an eﬀort to prevent occupational accidents by increasing sensitivity
to hazards and raising safety awareness.
● Number of participants

during FY2020

Takuma employees ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・ 458
Attendees from partner companies ・・・・・・・・・・・ 128
Education that lets employees experience hazards via VR

Takuma recognized employees who worked to prevent occupational accidents at worksites
and set zero-accident records at an internal award ceremony held on the anniversary of thecompany's founding. Although we had planned to similarly recognize primary partnercompanies who helped set zero-accident records at the Safety and Health Promotion
Meeting, we were forced, with great regret, to cancel the event along with the awards
ceremony in FY2020 due to the COVID-19 pandemic. However, we were able to recognize
award recipients who set zero-accident records by sending them a commemorative award.

Safety inspection system

We maintain a system where any construction or installation work starts
only after the safety and health manager or other responsible oﬃcial ineach department conducts a successful safety inspection based on safety
and health plans for the construction or installation work as prepared byour primary partner companies.
We strive to ensure a safe work environment at all construction sites by
eliminating risk factors identiﬁed by those inspections before work begins.

Internal presentation ofa zero-accident record award

Occurrence of occupational accidents at Takuma in recent years(Number of casualties, accident frequency rate, and accident severity rate)

Safety patrols and safety lectures

Based on an annual plan, safety patrols are carried out at worksites by
the Safety and Health Committee (comprised of committee members andadvisors), Safety Control Department, and Construction Division alongwith safety lectures in a precisely targeted and eﬃcient manner.
Safety patrols focus on identifying and eliminating risks as early as
possible, while safety lectures are conceived to prevent occupational
accidents and raise employees safety awareness by oﬀering an
opportunity to hand out and explain materials such as examples ofaccidents. Both programs help ensure safety at worksites in the ﬁeld.

The total actual working hours for Takuma in 2020
was about 4.3 million hours. Both the number ofoccupational accidents and accidents resulting in work
stoppages increased signiﬁcantly from 2019.
Although the accident severity rate was signiﬁcantly
lower than the national average, the accident frequency
rate exceeded the national average, posing a serious
problem that needs to be addressed. We will work toeliminate occupational accidents through a uniﬁed andredoubled eﬀort by all involved to halt this trend whilestrengthening risk management and enhancing oursafety and health management structures.

Takuma's safety results
Accident frequency rate
Number of casualties
2.03
1.76

10

9

5

0.79
0.03

1.76
0.06

Accident severity rate
0.87
2.16

7

5
3

2016

2017

2018

2.0
1.5
1.0

3
0

2.5

1.62
0.03

0.5

2019

0
2020 (Year)*Accident frequency rate: Indicates the frequency
with which accidents occur as the number offatalities caused by occupational accidents per 1
million actual working hours.
Number of casualties due tooccupational accidents
Total actual working hours

× 1,000,000

Year
Takuma's accident frequency
rate and severity rate

A safety inspection meeting

Number of casualties (persons)● Number of safety inspections completed in FY2020:99

2

We continuously provide specialized safety and health education at branches
and worksites to increase the levels of safety awareness and knowledge of ouremployees and partner companies.
We are putting in place mechanisms for preventing accidents, including byassigning workers with extensive knowledge in areas such as safety andhealth-related laws and ordinances thanks to an education program that began
on April 1, 2004, to individual construction sites.

Safety and health awards in the Construction Division / Safety and Health Promotion Meeting

Safety and health activities and their results
1

Safety and health education (education for construction site representatives)

Accident
Accident
frequency rate severity rate

2016

0.64

0.11

2017

0.81

0.18

2018

1.09

0.30

2019

1.69

0.29

2020

1.30

0.24

Reference: Nationwide average
accident frequency and severity rates
for the construction industry(general construction)*Accident severity rate: Indicates theseriousness of accidents as thenumber of work-days lost per 1,000
actual working hours.
Total work-days lost
× 1,000
Total actual working hours

Managing employee health● Number of safety patrols implemented in FY2020

By Safety and Health Committee (members, advisors) ・・・・・・・・・・・・・・・・・・・・・・ 40
By Safety Control Department

・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・

110

By Construction Division ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・ 255

71

Safety patrols

We follow up on employees regular check-ups by working with industrial physicians to recommend tests andtreatments to individual employees and to provide health guidance from industrial physicians. Additionally, we areworking to assist employees who work excessively long hours, for example by assessing the conditions under which theywork, conducting interviews as necessary, and having their supervisors consider possible remedies. Furthermore, weoﬀer assistance to defray the cost of using cafeteria plans as an initiative to increase employee health.

TAKUMA CSR Report 2021

72

Section 02

ESG Initiatives

Governance Initiatives

Strengthening Corporate Governance6

Through eﬀorts to strengthen corporate governance, enhance risk management, and implement thoroughcompliance, the Takuma Group is working to build structures that make possible highly transparent andappropriate decision-making and to maximize its corporate value by assessing and managing risk in an
appropriate manner and by preventing the cessation of business operations and loss of social trust fromviolations of laws and regulations.

Corporate governance structures
1

Takuma's governance structures

We have put in place the following governance structures:

Reporting

Audit &
Supervisory
Committee'sOﬃce

Cooperation
Assistance

Reporting andstatement of views

Audit &
Supervisory
Committee

Appointment
and Dismissal

Auditing

Variouscommittees

Compliance & CSR
Promotion DivisionInternal auditing

Auditing
Cooperation

Nominating &Compensation
Advisory
Committee
Consultations

Reporting

Supervision

ReportingBoard ofDirectors

Discussion and reporting
Selection, dismissal, and supervision
Appointment and Dismissal

Representative
Director

Committee of
ExecutiveOﬃcersInternal Audit
Department

Internal
auditing

Discussion of andreporting onimportant matters(Deliberation of
Executiveof instructions
important matters) IssuanceOﬃcers Execution ofand communicationof information
responsibilities

Board of Directors

As of June 25, 2021, the Board of Directors was comprised of six directors (excluding directors who are members of the Audit& Supervisory Committee) and ﬁve directors (of whom four were outside directors). The Board of Directors meets regularly oncea month as a rule and whenever else it is necessary to make decisions about important issues related to business management
and issues established by law and ordinances, as well as to oversee the execution of the directors duties.
Directors: 11 (10 men and 1 woman), including 4 outside directors (3 men and 1 woman)

4

Executive Oﬃcers

In order to accelerate management decision-making and clarify where management responsibilities are placed, we haveadopted an executive oﬃcer system in which we appoint executive oﬃcers who are entrusted with the responsibility of executing
our business activities. As of June 25, 2021, there were 15 executive oﬃcers (including those who also serve as directors).
Moreover, we have also established a Committee of Executive Oﬃcers, which is chaired by the president/chief executive oﬃcer,
as an organization that deliberates matters that are brought up at meetings of the Board of Directors and other important issues
related to the execution of our business activities. This committee communicates and provides direction about items decided by
the Board of Directors and other important items related to the execution of our business activities appropriately to the divisions
that are to execute them.

5

Audit & Supervisory Committee

An Audit & Supervisory Committee that consists of ﬁve members, of whom four are outside directors, is responsible foraccounting and operational audits. Members of the committee attend important meetings, including those of the Board of
Directors and the Committee of Executive Oﬃcers, and they strive to understand and observe the status of business execution
in a timely and appropriate manner. Drawing on their professional background and experience, they express their opinions asnecessary from an objective perspective, and they conduct strict auditing of the business execution performed by the directors.
To facilitate the eﬀectiveness of audits carried out by the Audit & Supervisory Committee, the representative director holds
regular meetings with committee members to ensure good communication.

73

7

Nominating & Compensation Advisory Committee

To augment the structures described above, we have established a Nominating & Compensation Advisory Committee
comprised of independent oﬃcers, representative directors, and the oﬃcer in charge of human resources. The purpose of thecommittee, a majority of whose membership consists of independent outside directors, is to increase transparency andobjectivity in the selection of candidates for director and executive oﬃcer positions and in the determination of thecompensation and other terms so as to enhance the oversight function of the Board of Directors.

Appointment and dismissal criteria for directors and executive oﬃcers
1

Policy on the appointment and dismissal of executives

To maintain an appropriate number of members who can conduct eﬀective discussions and assure that the body canappropriately carry out its role of decision-making on basic policies and important matters related to the company's
management and supervision of directors and executive oﬃcers execution of their job responsibilities, Takuma takes various
steps to ensure that the Board of Directors membership exhibits a good balance of knowledge, experience, and ability. The
Policy on the Appointment and Dismissal of Executives put in place by the Board of Directors establishes appropriate processes
for appointing and dismissing executives along with basic requirements for director candidates and executive oﬃcers; criteria for
appointing director candidates, executive oﬃcers, and other positions; and criteria for dismissing directors and executive oﬃcers.

Observing andguidance

Reporting

Recommendations

Appointment and Dismissal

Education, instructions, and reporting
Reporting

Divisions and Centers

Auditing of accounts

Accounting
Auditors*As of June 25, 2021

ReportingAppointment
and Dismissal

ReportingGeneral Meeting of Shareholders

Reporting3

Takuma has established an Audit & Supervisory Committee's Oﬃce to help carry out the committee's work.

Basic policy on corporate governanceIn order to safeguard and steadily increase Takuma's corporate value over the long term, it is essential not only to ensure thedevelopment of the company's businesses, but also to clearly deﬁne governance in corporate operations̶that is, to ensure thatshareholders oversight of operations is carried out appropriately and that oﬃcers carry out their operational responsibilities by meansof a process that is clear, rational, eﬃcient, and legally compliant. For that reason, we believe that understanding the Corporate
Governance Code and putting it into practice in an autonomous and systematic manner are top-priority management issues.

2

Audit & Supervisory Committee's Oﬃce

2

Procedures for appointing and dismissing executives

The Nominating & Compensation Advisory Committee, whose membership consists of independent oﬃcers, representative
directors, and the oﬃcer in charge of human resources (with a majority of independent outside directors), discusses theappointment and dismissal of directors and executive oﬃcers, including the position of president and CEO, in accordance with
the Policy on the Appointment and Dismissal of Executives put in place by the Board of Directors. The Board of Directors
makes ﬁnal decisions in such matters after suﬃcient discussion based on factors including directors past and present
performance of their responsibilities while respecting reports and advice from the Committee.

Selection criteria for independent executives
Takuma designates all outside executives who satisfy certain qualiﬁcations as independent executives.
We assess the independence of outside directors based on standards of independence adopted by the Tokyo Stock Exchange
as well as our own internal Standards for Determining the Independence of Outside Executives.

Standards for Determining the Independence of Outside Executives
In Takuma's view, the following individuals do not exhibit suﬃcient independence to qualify as an independent executive:(1) Individuals/entities whose principal business partner is Takuma*¹ and their oﬃcers*²(2) Principal business partners of Takuma*³ and their oﬃcers(3) Consultants, accounting experts, and legal experts who are receiving ﬁnancial compensation or other assets in excess ofa certain amount*⁴ from Takuma, apart from executive compensation (If the entity receiving such assets is an organizationsuch as a corporation or an association, then this criterion refers to individuals belonging to that organization.)(4) Individuals/entities that receive donations or aid in excess of a certain amount*⁴ from Takuma, apart from executive
compensation (If the entity receiving such assets is an organization such as a corporation or an association, then thiscriterion refers to individuals belonging to that organization.)(5) Major shareholders*⁵ of Takuma and their oﬃcers*1: Individuals/entities whose principal business partner is Takuma refers to individuals and entities that earned at least 2% of their consolidated net
sales during the most recent business year from Takuma.
*2: Oﬃcers refers to managing directors, executive oﬃcers, and other personnel.
*3: Principal business partners of Takuma refers to individuals and entities whose payments to Takuma constituted at least 2% of Takuma's consolidated
net sales during the most recent business year.
*4: A certain amount refers to at least JPY 10 million (for individuals) or at least 2% of gross sales (for organizations) during the most recent businessyear.
*5: Major shareholder refers to an individual or entity that holds at least 10% of the total voting rights.

TAKUMA CSR Report 2021

74

Section 02

ESG Initiatives

Governance Initiatives

Compensation and other remuneration paid to directors(Except Audit & Supervisory Committee members)
1

Matters relating to the General Meeting of Shareholders resolution concerning director
compensation and other remuneration

Meeting on June 28, 2016, the 112th Annual General Meeting of Shareholders resolved to limit compensation and other
remuneration paid to directors (except Audit & Supervisory Committee members) to JPY 350 million per year. When the Annual
General Meeting of Shareholders in question ended, there were six directors (not counting Audit & Supervisory Committee
members).
Meeting on June 26, 2019, the 115th Annual General Meeting of Shareholders resolved to pay monetary compensation rights
not greater than JPY 90 million per year to directors (except Audit & Supervisory Committee members) for use in acquiring
restricted stock, separate from the above compensation limit. (The resolution limited the total number of shares of Takuma
common stock issued or disposed for this purpose to 120,000 shares per year.) When the Annual General Meeting of
Shareholders in question ended, there were six directors (not counting Audit & Supervisory Committee members).
Meeting on June 28, 2016, the 112th Annual General Meeting of Shareholders resolved to limit compensation and remuneration
paid to directors who are members of the Audit & Supervisory Committee to JPY 72 million per year. When the Annual General
Meeting of Shareholders in question ended, there were four directors that were members of the Audit & Supervisory Committee.

2

Method for formulating policies for determining of compensation and other remuneration

Takuma's Policy on Executive Compensation and Other Remuneration, which was established by resolution of the Board of
Directors, codiﬁes Takuma's policies for determining compensation and other remuneration for directors (except Audit &Supervisory Committee members). The policy is revised as necessary by resolution of the Board of Directors following
consultation with, and consideration of recommendations submitted by, the Nominating & Compensation Advisory Committee.

3

Overview of policies for determining compensation and other remuneration（1）Basic policies
Takuma has adopted the following basic policies concerning the determination of compensation:● Compensation should be suited to the role and responsibilities of the director in question, and it should help the company

secure talented human resources.
● The compensation system should reﬂect appropriate consideration of the need to motivate directors to increase ﬁscal year
performance as well as corporate value over the medium- and long-term.
● The process used to determine compensation should exhibit transparency and objectivity so that the company can fulﬁll its
obligation of accountability to shareholders and other stakeholders.

（4）Justiﬁcation for the Board of Directors determination that the compensation and other remuneration
for individual directors for the business year under review are in line with applicable policies
The suitability of compensation and other remuneration for directors during the business year under review was veriﬁed by the Nominating &Compensation Advisory Committee based on factors including the Group's performance, compensation levels for executives at othercompanies, and employee salary levels by means of a transparent and highly objective process in accordance with Takuma s Policies on
Executive Compensation and Other Remuneration, and the individual compensation packages were ﬁnalized by the Board of Directors after
suﬃcient discussion while respecting the Committee's report. As a result, the Board of Directors has determined that the contents of thosecompensation packages are appropriate and in accord with applicable policies.

（5）Matters related to performance-linked compensation
Because the Group's business operates primarily on a build-to-order basis and because it considers consolidated ordinary
proﬁt to be the most important management indicator, consolidated order value and consolidated ordinary proﬁt serve as key
performance indicators in calculating bonuses that are based on ﬁscal year performance.
Speciﬁcally, a calculation table is used to calculate a coeﬃcient based on the consolidated ordinary proﬁt for the businessyear in question, the rate of growth relative to the average consolidated ordinary proﬁt for the most recent three years, the extent
to which the consolidated ordinary proﬁt target has been achieved, and the extent to which the consolidated order value target
has been achieved. Bonus amounts are then determined based on this coeﬃcient. (Consolidated ordinary proﬁt performanceﬁgures are calculated before deducting executive bonuses at companies included in consolidated accounting.) Performance
forecasts included in the ﬁnancial brieﬁng announced in May are used as target values in the evaluation.
Targets and results for these indicators during the business year under review were as follows: actual consolidated order valueof JPY 188,563 million versus a target of JPY 180,000 million, and actual consolidated ordinary proﬁt of JPY 11,234 million(before deducting executive bonuses) versus a target of JPY 11,500 million.

（6）Non-monetary compensation and remuneration
Takuma oﬀers directors stock compensation in the form of shares of restricted stock as a medium- and long-term incentive
and as a means of sharing shareholder value. Transfer is restricted for a period of 30 years from the date on which theallocation of Takuma common stock is made, and the restriction is removed when that period ends or if the individual inquestion passes away, completes his or her term, retires, or otherwise ends his or her involvement with the company before theperiod ends for a legitimate reason approved in advance by the Board of Directors.

（7）Total amounts of compensation and other remuneration for directors
Executive category
Director (except Audit & Supervisory Committee member)
Director (Audit & Supervisory Committee member) (outside director)

Total compensation Total compensation and other remuneration by type (millions of yen)
Number ofand other
Performance-linked
Non-monetary
executives
Basic
remunerationcompensation andcompensationcompensation
includedother remunerationand other remuneration(millions of yen)283
56（36）

196

40

45

56（36）（2）Compensation system
Compensation for directors and executive oﬃcers consists of ﬁxed compensation, bonuses paid according to ﬁscal year
performance, and stock compensation (compensation in the form of restricted stock), which is used to motivate recipients toincrease medium- and long-term corporate value.
● Fixed compensation
Fixed compensation is set depending on the role and responsibilities of each position and paid on a monthly basis.
● Bonuses
Takuma has adopted a set of standards for calculating bonuses based on indicators such as ﬁscal year performance andachievement of targets, and the Board of Directors determines whether to pay bonuses and, if so, in what amount using
those standards as a guide. Bonuses are paid at predetermined times each year. As a general rule, bonuses are capped at
a maximum of 25% of ﬁxed salary (annual amount).
● Stock compensation
Stock compensation takes the form of shares of restricted stock that are granted in advance. Monetary compensation rights
set depending on the role and responsibilities of each position are allocated at predetermined times each year, and sharesin Takuma are granted in exchange for the pay-in of those rights. As a general rule, stock compensation is capped at a
maximum of 30% of ﬁxed salary (annual amount), with the percentage increasing with seniority of position.

Evaluation of the eﬀectiveness of the Board of Directors（3）Procedure for determining compensation

Internal control

The Nominating & Compensation Advisory Committee, whose membership consists of independent oﬃcers, representative
directors, and the oﬃcer in charge of human resources (with a majority of independent outside directors), discusses mattersrelated to compensation and remuneration programs, the amount or calculation standard for each director s compensation andother remuneration, and other executive oﬃcers compensation and other remuneration in accordance with the Policy on
Executive Compensation and Other Remuneration and reports the results to the Board of Directors. Having received that report,
the Board of Directors makes ﬁnal decisions on related matters after suﬃcient discussion while respecting the Committee's
report.
In determining the amounts of individual compensation packages, the suitability of those packages is veriﬁed based on factors
including the Group's performance, compensation levels for executives at other companies, and employee salary levels.
Compensation and other remuneration for the business year under review were discussed by the Nominating & Compensation
Advisory Committee, which addressed the amounts and calculation standards for each director while referring to executive
compensation research data from an outside research organization, and determined by the Board of Directors based on theCommittee's report.

75

6
7（6）

*Performance-linked compensationand other remuneration consistsof bonuses awarded to directors(exce pt Au dit & S u p er viso r yCommittee members).
*Non-monetary compensation andother remuneration consists ofshares of restricted stock granted
to directors (except Au dit &Supervisory Committee members).

In order to increase the eﬀectiveness of the Board of Directors, all directors participate in a questionnaire and interviews
about the body s eﬀectiveness. Those results are then analyzed, evaluated, reported to the Board by the executive in charge ofthe evaluation process, and discussed by the Board.
In the FY2020 evaluation, the eﬀectiveness of the Board of Directors was analyzed and evaluated from four perspectives: thebody's composition, its operation, the responsibilities of its members, and its overall eﬀectiveness. This evaluation found thatthe Board had operated in an eﬀective and eﬃcient manner, for example by holding meetings online and working to provide
materials on a paperless basis, and that it was implementing ongoing initiatives to improve its functionality and ensure its
eﬀectiveness, for example by evaluating items recorded in meeting minutes, from the standpoint of facilitating energetic
meetings and enhancing discussions. As a result, the Board was determined to be functioning in an eﬀective manner. At thesame time, the process identiﬁed areas where improvements could be made, including discussing and providing information
about progress towards strategic themes informed by a long-term perspective. We will continue to work to improve theeﬀectiveness of the Board of Directors based on the results of this analysis and evaluation.

Takuma has adopted a Basic Policy for Establishment of an Internal Control System (the full text is available on our website)in accordance with the Companies Act. We continue to review and improve this policy in response to changing circumstances.
Working towards thorough compliance, Takuma built a compliance promotion organization in FY2006 in order to continuously
implement enlightenment and educational activities that make corporate ethics, related laws and ordinances, and internal rules
fully understood. To control the danger of loss, we have also prepared a Risk Management Code that determines the person
in charge of each risk, and we set up our risk management organization according to that Code. When the unexpected occurs,
emergency headquarters are established with the company president as the director in charge of risk management, and anorganization is put in place in order to minimize and prevent further damage through prompt action.
Internal control, constructed and evaluated in order to report on and prevent misstatements in our ﬁnancial reporting, is basedon the Financial Instruments and Exchange Act. This internal control on ﬁnancial reporting for the Group has resulted in reportsthat indicate this system has been eﬀective. In this way, we will continue to work in the future to ensure thorough compliancewhile carrying out business properly and eﬃciently while also deepening risk management.

TAKUMA CSR Report 2021

76

Section 02

ESG Initiatives

Governance Initiatives

Executive Proﬁles*As of June 25, 2021

Directors

President and Representative Director & Chief Executive Oﬃcer

Director & Senior Managing Executive Oﬃcer

Director (Audit & Supervisory Committee Member)

Outside Director (Audit & Supervisory Committee Member)

Hiroaki Nanjo

Tsuyohito Nishiyama

Keizo Masugi

Osamu Iwahashi

April 1982 Joined the Company
April 2009 General Manager of Environmental Engineering
Department 1, Project Center, Engineering Group
September 2010 General Manager of Energy Engineering
Department 1, Project Center, Engineering Group
April 2013 Executive Oﬃcer of the Company
Deputy Executive Manager of Project Center,
Engineering Group and General Manager ofEnergy Engineering Department 1
April 2014 Executive Manager of Project Center,
Engineering Group
June 2015 Director & Executive Oﬃcer of the Company
April 2016 Director & Managing Executive Oﬃcer of the Company
Executive Manager of Engineering Group and
Executive Manager of Management Center
April 2018 Director & Senior Managing Executive Oﬃcer
April 2019 President and Representative Director & Chief
Executive Oﬃcer (up to the present)

Mr. Hiroaki Nanjo has mainly been engaged in the Planning Technology Division,and currently supervises the overall management as Chief Executive Oﬃcer, after
serving as a Director & Senior Managing Executive Oﬃcer and Executive Managerof the Engineering Group. He possesses abundant experience and knowledge
regarding operations and management of the Company.

Mr. Tsuyohito Nishiyama has mainly been engaged in the Business Administration
Division, the Marketing Division and the Corporate Planning & Administration
Division, and currently serves as a Senior & Managing Executive Oﬃcer andExecutive Manager of Corporate Marketing Group that supervises overall marketing.
He possesses abundant experience and knowledge regarding operations andmanagement of the Company.

January 2001 Joined the Company
April 2014 General Manager of Accounting Department,
Corporate Planning & Administration Division
April 2016 General Manager of Corporate Planning Department,
Corporate Planning & Administration Division
April 2018 General Manager of General Aﬀairs Department andGeneral Manager of Legal Aﬀairs Department,
Corporate Services Division
April 2021 Assistant General Manager of Audit & Supervisory
Committee's Oﬃce
June 2021 Director (Standing Audit & Supervisory Committee
Member) of the Company (up to the present)

April 1974 Joined the National Police Agency
March 1985 First Secretary, Embassy of Japan in Thailand
August 1995 Chief Constable of Kumamoto Prefectural Police
August 1999 Director General for Crisis Management Policy
Coordination of Cabinet Security and Crisis
Management Oﬃce, Cabinet Secretariat
June 2004 Director General of Commissioner-General's
Secretariat, National Police Agency
March 2005 Director General of Kinki Regional Police
October 2006 Joined ALL NIPPON AIRWAYS CO., LTD.
(currently ANA HOLDINGS, INC.)
Senior Advisor
September 2007 Outside Corporate Auditor of SANKO MARKETINGFOODS CO., LTD.
June 2012 External Auditor of the Company
November 2013 Retired from ANA HOLDINGS, INC.
December 2013 Executive Director of Public Interest Incorporated
Foundation Japan Police Scholarship Association
June 2016 Director of the Company (Audit & Supervisory
Committee Member) (up to the present)
September 2019 Resigned from Outside Corporate Auditor of
SANKO MARKETING FOODS CO., LTD.

Mr. Keizo Masugi has mainly been engaged in the accounting department and Corporate
Planning & Administration Division, and served as General Manager of General Aﬀairs
Department and Legal Aﬀairs Department handling shareholder response and other generalaﬀairs duties and as well as preventive legal work and other legal aﬀairs. He currently serves
as a Standing Audit & Supervisory Committee Member. He possesses abundant experienceand a wide range of knowledge regarding operations and management of the Company.

Mr. Osamu Iwahashi has served in many important positions in the National Police
Agency, and in addition to possessing abundant experience and a high level of insight
regarding various types of risk management, has served for many years as an External
Auditor and Director who is an Audit & Supervisory Committee Member of listedcompanies, including the Company, and possesses knowledge regarding ﬁnance andaccounting from his experience participating in audit and supervisory operations.

Director & Senior Managing Executive Oﬃcer

Director & Managing Executive Oﬃcer

Outside Director (Audit & Supervisory Committee Member)

Outside Director (Audit & Supervisory Committee Member)

Hideki Takeguchi

Koji Tanaka

Tomomi Fujita

Yoshiaki Ito

April 1985 Joined the Company
April 2012 Deputy General Manager of Environmental
Engineering Department 1, Project Center,
Engineering Group
April 2014 General Manager of Environmental Engineering
Department 1, Project Center, Engineering Group
April 2015 Executive Oﬃcer of the Company
Deputy Executive Manager of Project Center,
Engineering Group and General Manager ofEnvironmental Engineering Department 1
April 2016 Executive Manager of Project Center, Engineering Group
June 2016 Director & Executive Oﬃcer of the Company
April 2018 Director & Managing Executive Oﬃcer
April 2019 Director & Senior Managing Executive Oﬃcer(up to the present)
Executive Manager of Engineering Group and
Executive Manager of Management Center(up to the present)

April 1986 Joined the Company
April 2009 Deputy General Manager of European Operations
Department, Corporate Planning & Administration Division
August 2011 General Manager of Corporate Planning Department,
Corporate Planning & Administration Division
April 2014 General Manager of Human Resources Department,
Corporate Services Division
April 2017 Executive Oﬃcer of the Company
Executive Manager of Compliance & CSR Promotion
Division, Executive Manager of Corporate Services
Division and General Manager of Legal Aﬀairs Department
June 2017 Director & Executive Oﬃcer of the Company
April 2018 Executive Manager of Compliance & CSR Promotion
Division and Executive Manager of Corporate
Services Division
April 2021 Director & Managing Executive Oﬃcer (up to the present)
Executive Manager of International Division and Executive
Manager of Compliance & CSR Promotion Division
June 2021 Executive Manager of International Division(up to the present)

Mr. Hideki Takeguchi has mainly been engaged in the Planning Technology Division,and currently serves as a Director & Senior Managing Executive Oﬃcer andExecutive Manager of Engineering Group that supervises overall engineering. He
possesses abundant experience and knowledge regarding operations andmanagement of the Company.

Mr. Koji Tanaka has mainly been engaged in the Information Systems Division, neutral
divisions such as human resources, Corporate Planning & Administration Division andthe International Division, and currently serves as a Managing Executive Oﬃcer andExecutive Manager of the International Division, which is responsible for theCompany's overseas business. He possesses abundant experience and a wide range
of knowledge regarding operations and management of the Company.

Director & Executive Oﬃcer

Director & Executive Oﬃcer

Outside Director (Audit & Supervisory Committee Member)

Kunio Hamada

Hiroshi Oishi

Tetsuya Kaneko

July 1990 Joined the Company
April 2012 Deputy General Manager of Cost Control & Project
Administration Department, Management Center,
Engineering Group
June 2013 General Manager of Cost Control & Project
Administration Department, Management Center,
Engineering Group
April 2018 Executive Oﬃcer of the Company
Deputy Executive Manager of Corporate Planning &Administration Division and General Manager ofCorporate Planning Department
April 2021 Executive Manager of Corporate Planning &Administration Division (up to the present)
June 2021 Director and Executive Oﬃcer of the Company(up to the present)

Mr. Kunio Hamada has mainly been engaged in the engineering division and costmanagement division, and currently serves as Executive Oﬃcer and Executive
Manager of Corporate Planning & Administration Division responsible for ﬁnance andformulation and implementation of corporate plans. He possesses abundant
experience and a wide range of knowledge regarding operations and management of
the Company.

77

April 1985 Joined the Company
April 2012 General Manager of Project Administration
Department 1, Business Administration Division,
Corporate Marketing Group
April 2014 General Manager of Corporate Planning Department,
Corporate Planning & Administration Division
April 2015 Executive Oﬃcer of the Company
Deputy Executive Manager of Corporate Planning &Administration Division and General Manager ofCorporate Planning Department
April 2016 Executive Manager of Corporate Planning &Administration Division
June 2016 Director & Executive Oﬃcer of the Company
April 2018 Director & Managing Executive Oﬃcer
April 2019 Director & Senior Managing Executive Oﬃcer(up to the present)
Executive Manager of Corporate Marketing Groupand Executive Manager of Business Administration
Division (up to the present)

April 1988 Joined The Dai-Ichi Kangyo Bank, Ltd.
(currently Mizuho Bank, Ltd.)
January 2008 Deputy General Manager of Human Resources
Department, Mizuho Securities Co., Ltd.
January 2013 Deputy General Manager of Corporate Planning
Department
April 2013 General Manager of Securities & Trust Promotion
Department, Mizuho Bank, Ltd.
April 2016 General Manager of Customer Service Department
and General Manager of Management Department,
Mizuho Financial Group, Inc.
August 2019 Executive Oﬃcer of the Company
Deputy Executive Manager of Energy Plant Division,
Corporate Marketing Group
April 2021 Executive Manager of Corporate Services Division(up to the present)
June 2021 Director and Executive Oﬃcer of the Company(up to the present)

Since joining The Dai-Ichi Kangyo Bank, Ltd. (currently Mizuho Bank, Ltd.), Mr. Hiroshi Oishi
engaged in various operations at the bank and its group companies including deposits, moneytransfers, loans, currency exchange, business planning, human resources and customer service.
At the Company, he has engaged in product and service sales in the marketing division, andcurrently serves as Executive Oﬃcer and Executive Manager of Corporate Services Division
responsible for general aﬀairs and human resources. He possesses abundant experience and awide range of knowledge regarding operations and management of the Company.

October 2004 Registered as Attorney at Law(Osaka Bar Association)
Joined Kitahama Partners
January 2012 Partner of Kitahama Partners
March 2016 Left Kitahama Partners
April 2016 Founded InnoventierPartner of Innoventier (up to the present)
February 2017 Director, Licensing Executive Society JAPAN
April 2018 Assistant Lecturer, Kyoto University Law School(up to the present)
June 2019 Director (Audit & Supervisory Committee Member)of the Company (up to the present)
June 2019 Outside Auditor of TAIYO YUDEN CO., LTD.
(up to the present)
February 2020 Vice President of Licensing Executives Society
JAPAN (up to the present)

Ms. Tomomi Fujita is involved in management of law ﬁrm Innoventier as a Partner whileserving as Vice President of the Licensing Executive Society Japan and Assistant Lecturerof Kyoto University Law School. She possesses abundant experience and expertise
regarding corporate law covering intellectual property, business revitalization, M&As, andthe Companies Act. In addition to serving as Outside Director who is an Audit & Supervisory
Committee Member of the Company, she serves as an Outside Auditor for a listed company.

April 1981 Joined The Dai-Ichi Kangyo Bank, Ltd. (currently Mizuho Bank, Ltd.)
September 2000 Deputy General Manager of Singapore Branch, The Dai-Ichi Kangyo Bank, Ltd.
April 2002 Deputy General Manager of Singapore Branch,
Mizuho Corporate Bank, Ltd. (currently Mizuho Bank, Ltd.)
November 2004 Associate Director of International Administration
Department, Mizuho Corporate Bank, Ltd.
April 2005 General Manager of Yokohama Sales Department,
Mizuho Corporate Bank, Ltd.
April 2008 General Manager of International Sales Promotion
Department, Mizuho Corporate Bank, Ltd.
April 2010 Deputy Director of Human Resources Management
Department, Mizuho Corporate Bank, Ltd.
July 2010 Deputy Director of Corporate Planning Department,
Mizuho Financial Group, Inc.
Seconded to Mizuho Research Institute Ltd., Senior ExecutiveOﬃcer; General Manager of Education Business Department
November 2010 Senior Executive Oﬃcer; General Manager of Education
Business Department, Mizuho Research Institute Ltd.
May 2011 Left Mizuho Research Institute Ltd.
June 2011 Director of KANEMATSU CORPORATION
June 2014 Managing Executive Oﬃcer of KANEMATSU CORPORATION
June 2019 Resigned from KANEMATSU CORPORATION
June 2019 Standing Auditor, Yushu Building Co., Ltd. (currently Yushu Corporation Ltd.)
June 2020 Director (Audit & Supervisory Committee Member) of
the Company (up to the present)
June 2020 President, Yushu Corporation Ltd. (up to the present)

Mr. Tetsuya Kaneko has served as Director and Managing Executive Oﬃcer at a global
company, KANEMATSU CORPORATION, for many years. He possesses abundant
experience and knowledge on corporate management, as well as knowledge on overseas
business from his abundant experience working overseas while he was serving at The
Dai-Ichi Kangyo Bank, Ltd. (currently Mizuho Bank, Ltd.).

October 1985 Joined Showa Ota & Co. (currently Ernst & Young
ShinNihon LLC)
July 2001 Partner, Showa Ota & Co.
July 2008 Senior Partner, Showa Ota & Co.
June 2014 Resigned, Showa Ota & Co.
July 2014 Representative, Ito Certiﬁed Public Accountant
Oﬃce (up to the present)
March 2015 Outside Director, NAIGAI TRANS LINE LTD.
(up to the present)
June 2020 Director (Audit & Supervisory Committee Member)of the Company (up to the present)

Mr. Yoshiaki Ito has engaged in audit business, IPO support and consulting business,
etc., for listed companies for many years while he was serving at Showa Ota & Co.
(currently Ernst & Young ShinNihon LLC). After serving as Senior Partner at Showa
Ota & Co., he has been also serving as Outside Director of a listed company for many
years, and possesses abundant experience and expert knowledge on ﬁnance andaccounting as well as abundant experience and knowledge on audit and supervision.

Executive Oﬃcers

Ryoji Tani

Norito Uchiyama

Managing Executive Oﬃcer
Executive Manager,
Construction Center

Managing Executive Oﬃcer
Executive Manager,
Engineering Center

Mitsuaki Adachi

Akira Taguchi

Managing Executive Oﬃcer
Executive Manager,
Energy Plant Div.

Managing Executive Oﬃcer
Executive Manager,
Technology Center

Hidetoshi Tomita

Norio Maeda

Executive Oﬃcer
Executive Manager,
Environmental Plant Div.

Executive Oﬃcer
Executive Manager,
Project Center

Keiji Nakamura

Yasushi Enomoto

Executive Oﬃcer
Deputy Executive Manager,
Construction Center

Executive Oﬃcer
Executive Manager,
Compliance & CSR Promotion Div.

Kiyoshi Shibata
Executive Oﬃcer
Deputy Executive Manager,
Engineering Center

TAKUMA CSR Report 2021

78

Section 02

ESG Initiatives

Governance Initiatives

Messages from Outside Directors

I became an outside auditor at Takuma nine years ago afterworking for more than 32 years as a civil servant, primarily at the
National Police Agency, and then serving in a variety of positions,
including as an outside auditor at another listed company. At thetime, I was only one of two outside executives at Takuma, but our
number subsequently grew to three and then four. Today, ourdiversity has grown thanks to the appointment of a female member,and all of us have become directors who are members of the Audit& Supervisory Committee, strengthening the institutional
underpinnings of our role. Of course, it is not possible to prevent
fraud and misconduct merely by putting in place formal structures.
Ensuring that such structures function in a substantial andmeaningful manner requires unceasing eﬀort on the part of boththe company and its outside executives. Takuma addresses thischallenge by working to deepen the understanding of outside
directors, for example by hosting regular sit-downs with thepresident for candid exchanges of views, holding interviews withexecutive oﬃcers, and orchestrating tours of subsidiaries andworksites, opportunities which we as outside directors actively takeadvantage of.
The company also takes a more proactive approach to disclosing
information than it did nine years ago, and I believe steps likeenhancing IR brieﬁngs and the website are helping increasetransparency from the standpoint of outside stakeholders. It is alsoa welcome development that Vision 2030, Takuma's long-term
vision, has set the target of doubling ordinary proﬁt, which is anambitious goal for a company in a mature industry. I expect that theway the vision has clariﬁed the relationship between Takuma's
business targets and the Sustainable Development Goals (SDGs)
will also serve to promote the company's ESG-centric stance.

One year has passed since I began serving as an outside director(Audit & Supervisory Committee Member) at Takuma in 2020.
I have gained a new appreciation of how Takuma prizes the valuesof fairness and sincerity, and how it is characterized by a high levelof compliance awareness, conﬁrming the impression I had before
accepting the position. All important matters are brought before theBoard of Directors as resolutions, and managing directors engage
in suﬃcient discussion of new projects and projects thatencountered problems in the past. As a result, I think that theBoard has established a suﬃcient level of transparency in thecompany's management.
Vision 2030, Takuma's long-term vision, and the 13th
Medium-Term Management Plan both started in FY2021. These
documents oﬀer detailed content that provides a more concrete
vision for the company's future while focusing on expanding its
businesses and strengthening its proﬁtability. They address not
only Takuma's domestic businesses, but also its advance into
overseas markets. With regard to the latter, careful attention will beessential as risk management is the paramount consideration.
The vision and plan also give suﬃcient consideration toenvironmental conservation in line with the SDGs, and I am
conﬁdent that they deserve high expectations.
Finally, I look forward to working closely with my three
counterparts in contributing as outside directors.

Osamu Iwahashi

Yoshiaki Ito

FY2020 began during the global chaos of the COVID-19
pandemic. In the midst of that confusion, Takuma went about its
daily business while taking steps to prevent the spread of thedisease, for example by moving quickly to enhance staggered
working hours and telework programs, so that the company could
contribute to society through its environmental and energy plantbusiness. I believe that the Board of Directors, along withcommittees and councils, has been able to utilize online meetingsand paperless meeting systems eﬀectively to facilitate the candid
exchange of views. While we as outside directors are notresponsible for carrying out the company's operations, each of us
takes advantage of the specialized knowledge he or she has gained
to oﬀer opinions and contribute to robust discussions with
Takuma's inside directors.
With FY2021, a new stage has begun for Takuma under the 13th
Medium-Term Management Plan. Environmental conservation andutilization of renewable energy have become important global
issues, and I believe that the development and expansion of
Takuma's businesses will serve the interests of its stakeholders aswell as society in general. I look forward to contributing to
Takuma's growth as one of its outside directors.

I have participated in meetings and discussions of the Board of
Directors and other bodies as an outside director, and I feel thatthose discussions are always sincere and fruitful. The number of
meetings convened online has grown, and they have been held so
as to ensure that all participants feel involved.
Those discussions have left me with an impression that the highlevel of trust Takuma has built with customers through its businessmodel, which is characterized by long-running customer
relationships, serves as the basis for the expansion of its
businesses, and that the company is steadily investing in futuretechnological innovation, as symbolized by the completion of the
New TAKUMA Building (Training Center) and the start ofconstruction of the new Harima Factory. A strategy that focuses onboth the present and the future is exactly what Takuma needs, andI believe that spirit has been reﬂected in the long-term vision(Vision 2030) and in the 13th Medium-Term Management Plan,
both of which started with FY2021.
I have high expectations towards the further development of
Takuma as it takes advantage of its current strengths and afavorable environment where the SDGs are becoming a central
theme in the global economy.
Although I was not able to see much with my own eyes over thelast year due to the COVID-19 pandemic, I look forward to visiting
plant sites once things calm down and making a contribution that isbased on a more ﬁnely attuned appreciation of what is going on out
in the ﬁeld.

Tomomi Fujita

Tetsuya Kaneko

Outside Director (Audit & Supervisory Committee Member)

Outside Director (Audit & Supervisory Committee Member)

79

Outside Director (Audit & Supervisory Committee Member)

Outside Director (Audit & Supervisory Committee Member)

TAKUMA CSR Report 2021

80

Section 02

ESG Initiatives

Governance Initiatives

Strengthening risk management

Fair business practices

Risk management structure

Compliance measures

We consider it necessary to eﬀectively
address risks that could interfere with thegroup's achievement of its business goals sothat we can safeguard and steadily increase
our corporate value over the long term.
Takuma follows a Risk Management
Policy that connects company-wide risks andseparately classiﬁes them into project risks
related to our core business, i.e., plant
construction; DBO project risks and DBO
project operation, maintenance andmanagement risks related to our DBO
business; and potential risks, actualized risks,
and ﬁnancial reporting risks related to othercorporate business activities.
Group companies also work to develop andstrengthen approaches to risk management
through the Takuma Group Coordinating
Committee for Compliance & CSR Promotion.

【Initiatives to ensure compliance with the Antimonopoly Act】
Towa rds e nsu ring p erma n e nt co m plia n ce with th e A ntim o n o p oly Act, Ta ku ma e nacte d R egulatio ns C o n cerning
Management of the Pledge of Antimonopoly Act Compliance , which provides for the submission of a written oath in regard toobserving the Antimonopoly Act. When employees interact with the sales department of a competitor, they must apply andreceive approval from the aﬃliated division or center manager in advance to ensure fair business contact.

Risk Management Policy[Basic purpose of risk management]

Risk refers to all phenomena that interfere with the Group s ability toachieve its business objectives or cause losses or harm to the interests ofstakeholders.
The Takuma Group practices risk management with the goal of increasing
its corporate value by working to maximize returns while minimizing thenegative impacts of risk.

【Introducing a Legislation Information Service】
Takuma has introduced a Legislation Information Service in order to gain a continuous grasp of the latest changes to laws
and ordinances.
【Utilizing the Compliance Manual】
We distribute a Compliance Manual that includes an explanation of the rules and standards of conduct as well as an FAQ
to all employees in accordance with Takuma Group Ethics Charter and Takuma Group Code of Conduct. This manual isutilized in the course of daily operations and departmental training.

[Risk management action guidelines]
1. The president and CEO is responsible for risk management at Takuma.
2. All oﬃcers and employees participate in risk management activities.
3. Risk management activities are carried out in accordance with applicableguidelines such as the Risk Management Rules.
4. Risk management activities are carried out in line with the Medium-Term
Management Plan and annual plan, and we work to make improvements on
an ongoing basis.

Compliance & CSR promotion education
Takuma oﬀers compliance and CSR promotion education
through the Compliance & CSR Promotion Organization,
which was established in order to spread awareness ofcompliance and CSR issues among employees. We oﬀered
the following four compliance and CSR promotion education
sessions during FY2020. We also host regular CSR lectures
for members of the company's executive leadership.

5. When risk manifests itself, we respond by taking responsible action quickly
to minimize any damage and creating provisional organizational entities asnecessary.
6. Group companies carry out risk management activities in accordance with
their own policies and plans, with support from Takuma.

1. In addition to implementing disaster-related measures to secure the safety ofcorporate oﬃcers and employees, maintain structures so as to enable
continuity of business operations while minimizing damage in an emergency.
2. Strive to respond to customer needs and recover from damage quickly byworking closely with suppliers and partner companies to maintain business
operations.
3. Earn the trust of numerous stakeholders, including employees, theirfamilies, shareholders, and nearby residents, and fulﬁll social needs bymaintaining business operations.

October 28, 2020

Lecture theme

Promoting ESG management

Lecturer

KPMG AZSA Sustainability Co., Ltd.

4

Number of participating departments:

45
4,453

Internal reporting system

Compliance & CSR promotion structure81

Number of sessions per year:

Total number of attendees:

Ensuring compliance

Board of Directors

President

Committee of Executive Oﬃcers

Compliance & CSR Promotion Organization
Chairman(Executive Manager of the Compliance & CSR Promotion Division)

Divisions and centers
Compliance & CSR Promotion
Administrator (division or center manager)
Department
Compliance & CSR Promoters (department manager)
Enlightenment/education
Staﬀ members
Compliance & CSR promotion structure

Takuma Group

Secretariat (CSR Department)

Coordinating Committee for Compliance & CSR Promotion

Takuma works to promote compliance and CSR through theCompliance & CSR Promotion Organization, which was established inorder to spread awareness of compliance and CSR issues among
employees. This organization is composed of a chairman (theExecutive Manager of the Compliance & CSR Promotion Division), a
secretariat (positioned in the CSR Department), and an executingorganization in each division, center, and department. As the person
in charge of promoting compliance and CSR in his or her division,
each division or center manager is appointed as a Compliance andCSR Promotion Administrator. As persons who implement
enlightenment and education in compliance and CSR in theirrespective departments, department managers are appointed as
Compliance and CSR Promoters. The initiative includes an annual
regular meeting at which Compliance & CSR Promotion Administrators
discuss the state of compliance and CSR promotion throughout thecompany as well as quarterly departmental meetings at which
Compliance & CSR Promoters are given training to help them better
carry out related activities in their departments. Additionally, weestablished the Takuma Group Coordinating Committee forCompliance & CSR Promotion, which brings together representativesof group companies to help ensure that compliance and risk
management are implemented throughout the group.

Date

1st te rm: Corporate misconduct:
Mechanisms that lead to fraudIntellectual property rights:
Copyright, trademark rights, and design rights
2nd term: Environmental course: Thinking about
environmental problems from a familiar perspective
3rd term: Overview of security export controls,
Takuma's CSR comprehension test 2020
4th term: Internal reporting system, insider trading

Business continuity plan (BCP)
In addition to formulating a BusinessContinuity Plan based on the policies listed
to the right to ensure proper and appropriate
continuity of business operations in the eventof a large-scale disaster, pandemic, or otheremergency, Takuma conducts disasterprevention exercise and other training on aregular basis.

CSR lecture for executives

Takuma has been operating an internal reporting systemsince FY2006, with the aim of promoting compliancemanagement by preventing illegal or unfair acts, uncovering
them as early as possible, and undertaking corrective
measures.
Reporting hotlines are set up internally at our Audit &Supervisory Committee and Compliance & CSR Promotion
Division as well as externally at an outside law oﬃce and a
dedicated outside company for anonymous e-mail reporting.
Our Internal Reporting Code and Takuma Group Code of
Conduct further declare that no informant shall be
subjected to disadvantageous treatment simply because heor she ﬁled a report.

Internal reporting process

Persons seeking consultation or making reports
Response

Consultation
or report

Compliance &CSR Promotion
Division

Audit &
Supervisory
Committee

Law
oﬃce

Outside reporting
company(Including via anonymous
e-mail if so desired)

Cooperation

Internal investigation departments

CSR awareness survey
We conduct an annual CSR awareness survey in order to quantitatively assess the level of compliance and CSR awarenessalong with the eﬀectiveness of related promotional and educational eﬀorts. The results of this survey are used whensummarizing the activities of each ﬁscal year and in formulating the upcoming year's action plan, as well as in futurecompliance and CSR promotion activities. We make active use of survey results, for example by oﬀering additional education,
particularly in areas that received lower scores than in the previous survey.

TAKUMA CSR Report 2021

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