ANNUAL REPORT

2020

PHILOSOPHY

To Create a Vibrant Environment for
All Members of Society
The Taisei Group creates “safe, secure, and attractive spaces” and“high value” in harmony with the nature, and strives to build a global society
filled with dreams and hopes for the next generation.
Taisei Spirit

Action Guidelines for Taisei Personnel
and the Taisei Group as a Whole

Active andTransparent
CultureWe value diversity and, through open and active communication lines andnetworks both internal and external to the Taisei Group, seek to cultivate
a transparent and active corporate culture in which all of our officers andemployees are able to reach their full potential.

Value
Creation

Not limited to our understanding of society at large, we carefully take into
account the needs of our clients and using all of the technology andknow-how at our disposal, together with our passion for innovation andingenuity, seek to construct innovative and valuable engineering projects
that inspire and impress our clients.

EvolutionofTradition

We aim to instill within the Taisei Group the Japanese tradition of monozukuri(precise, superb craftsmanship) and continually challenge ourselves toprovide ever more valuable contributions to society and ensure our continued
development and growth as a respected corporate group.

The Taisei Group engages in corporate activities as a group of
professionals who are cheerful, enthusiastic, sincere, and disciplined
as corporate citizens.

❶ Cultivating an open corporate culture●❷ Securing a pleasant working environment●❸ Respect for fundamental human rights●
and diversity❹ Creating a vibrant environment for all●
members of society❺ Striving to create value●❻ Pursuing customer satisfaction●❼ Ensuring and improving safety and quality❽ Respect for traditions●❾ Promoting partnerships with subcon●
tractors and suppliers❿ Promoting environmental conservationand creation⓫ Communication with local communities●⓬ Conduct in the international community⓭ Appropriate disclosure of information⓮ Fulfilling social responsibilities●

Our Structure of Values and Policies
Taisei Group Philosophy
To Create a Vibrant Environment
for All Members of Society

Taisei Spirit
Taisei Group
Philosophy

Objectives to be Pursued by the Taisei Group(Goals)Active and Transparent Culture /Value Creation / Evolution of Tradition
Key Concepts That All Taisei Group Officers andEmployees Must Adhere to in Order to Pursue
and Realize the Taisei Group Philosophy

Taisei Spirit

Action Guidelines for Taisei
Personnel and the TaiseiGroup as a Whole

Customers

WEB

Shareholders /Investors

Our Structure of Values and Policies

https://www.taisei.co.jp/english/profile/philosophy

1 T A I S E I ANNUA L R EPORT 2020

Overall
Principles ofConduct

OverallManagement
Perspective

Suppliers

Medium-term Business Plan
(FY2018 – FY2020)

Employees

Local
Communities

CONTENTS

03

About the Taisei Group
03 Message from the President
05 Our History
07 11-Year Financial and Non-Financial Summary09

The Strategy for Sustainable Growth
09 Value Creation Process of the Taisei Group
11 Communication with Stakeholders
12 Overview of Medium-term Business Plan (FY2018 – FY2020)

This report is intended to help readers better understand the creationof our corporate value as a whole, such as corporate activities,
financial statements, and management tasks in line with the TaiseiGroup Philosophy and the Action Guidelines for Taisei Personnel andthe Taisei Group as a Whole.
This report comprehensively and concisely discloses our key
ESG information that provides starting points for dialogues, including
the Discussion between the President and an Expert, External
Board Members’ Message, and SDGs dialogue, as well as our
initiatives on sustainability.
Further details about the initiatives related to ESG andsustainability are available in the CSR section on Taisei Corporation’s
WEB ①
official website

Scope of Coverage• Cultivation of Technical Staff and Securing Human Resources

In principle this report covers the activities of Taisei Corporation andthe Taisei Group companies (consolidated subsidiaries) as of March
31, 2020, unless otherwise noted.
Period of Coverage
The main subject of this report is the actual results for the fiscal year
ended March 31, 2020 (April 1, 2019 to March 31, 2020). Some
contents concern the data for the previous fiscal year or the mostrecent activities.
Guidelines on Non-Financial Information Disclosure
WEB ②• GRI Sustainability Reporting Standards • ISO26000: 2010 (International Organization for Standardization)• Integrated Reporting Framework (International Integrated Reporting
Council: IIRC)• Environmental Reporting Guidelines (2018)• Guidance for Collaborative Value Creation (METI)
Third-Party Opinions and Third-Party Assurance on This Report• Kanji Tanimoto, DBA, Professor, School of commerce, Waseda university• “Independent Assurance Report” on the environment data andindices by Ernst & Young ShinNihon LLC• Realization of an Attractive Working Environment That Is
Good to Work in

Date of Issue

13 Discussion between the President and an Expert
17 Talk on the SDGs
21 New Technology Contributing to SDGs
23 Future Created by Technology

25

Editorial Policy

ESG Section
25 Sustainability of the Taisei Group
29 Environment Section• Realization of a Sustainable and Environmentally Friendly Society
35 Social Section• Ensuring Quality and Improving Technology• Technical Development for Realizing a Sustainable Society• Promotion of Supply Chain Management• Thorough Management of Occupational Health and Safety• Promotion of Compliance
41 Governance Section• Corporate Governance• Management Members• External Board Members’ Message• November 2020

Note Regarding Forward-Looking Statements
This report has been produced in an environmentally friendly manner.
It is printed on lightweight paper to reduce the use of timberresources and transportation energy, using vegetable oil-based ink.

• Risk Management / Compliance59

ESG Evaluation (As of July 1, 2020)

Business Section
59 Civil Engineering
61 Building Construction
63 Real Estate Development

65

Explanation and Analysis of Business Results
65 Explanation and Analysis of Business Results

69

Data Section
69 Consolidated Financial Statements
96 Independent Auditor’s Report
99 Non-Financial Data of the Taisei Group
101 Third-Party Opinion
102 Outline of the Company
103 Taisei Corporation Organization Chart
104 Overseas Network* INCLUSION OF TAISEI CORPORATION IN ANY MSCI INDEX, AND THE USE OF MSCILOGOS, TRADEMARKS, SERVICE MARKS ORINDEX NAMES HEREIN,
DO NOT CONSTITUTE A SPONSORSHIP, ENDORSEMENT OR PROMOTION OF TAISEICORPORATION BY MSCIOR ANY OF ITS AFFILIATES. THE MSCI INDEXES ARE
THE EXCLUSIVE PROPERTY OF MSCI. MSCI AND THE MSCI INDEX NAMES AND LOGOSARE TRADEMARKS OR SERVICE MARKS OF MSCI OR ITS AFFILIATES.

WEB

① GRI

https://www.taisei.co.jp/english/csr/performance/iso26000/gri/pdf/gri.pdf

WEB

② CSR

https://www.taisei.co.jp/english/csr/

TA I SE I A N N UA L R E P O R T 2 0 2 02About the Taisei Group

Message from the President
Towards the Sustainable Development of the Society andthe Company

I, Yoshiro Aikawa, was inaugurated as President
and Chief Executive Officer of Taisei Corporationin June 2020. Since assuming office as President,
I have been feeling the great expectations towards
our Group from our stakeholders. I am willing tofulfill my responsibilities by exercising leadershipso that our Group can provide our stakeholders
with the value, satisfaction, and excitement thatexceeds their expectations and contribute to thedevelopment of the society.

Current Business Environment andMedium-term Business Plan
(FY2018 – FY2020)

President and Chief Executive Officer,
Representative Director

3 T A IS EI A NNUA L R EP O R T 2 02 0

In recent years, the business environment surrounding ourGroup has been steady on the background of the followings:
the demand for infrastructure development such as therecovery and reconstruction from the Great East Japan
Earthquake for building national resilience of Japan; theincrease in inbound demand; the projects related to theTokyo 2020 Olympics and Paralympics Games; and theredevelopment projects in the Tokyo metropolitan area.
Taisei Group’s FY2019 operating results achieved anincrease in revenues from the steady progress of our present
construction works, and maintained a high-level operating
income in terms of profit.
However, to our regret, FY2020 operating results are
forecasted to be lower than the Management Numerical
Targets for the final fiscal year of the current Medium-term
Business Plan due to signifi-cant decreases in revenues andprofits under the estimated impact by the spread of novel
coronavirus (COVID-19) infection.
The issue of COVID-19 completely overturns the fundamental nature of corporate activities and social values, andforces to change the conventional business models. From now
and on, I assume that companies in this world will be sorted
into two groups: Those can adapt to such changes andrevolutions in the market environment and take it as a chancefor further growth; and those cannot.
To be a selected and sustainable company over the future,
we would like to overcome this difficult situation with a flexible
way of thinking unbounded to conventional customs, and withthe ability to take action without hesitating changes.

About the Taisei GroupESG Section

Strategy for Sustainable Growth

Message fromthe President

Business Section

Explanation and Analysis ofBusiness Results

Data Section

Numerical management targets and business outlook in the last fiscal year of Medium-term Business Plan
(FY2020) (Consolidated)(Billions of Yen)
(Consolidated)

Numerical management targets in thelast fiscal year of the Medium-term
Business Plan (FY2020)

Business Outlook(FY2020)

Difference¥1,870.0¥1,450.0-420.0Operating income

187.0

81.0

-106.0Net income attributable toowners of parent

130.0

56.0

-74.0

12% or higher

About 7%—

About 25%

48.5%

—

Net sales

ROE
Dividend payout ratio
Interest-bearing debt
Net interest-bearing debt*

Less than ¥300 billion

Less than ¥230 billion—(Maintaining permanent state of substantive
debt-free management)——

40％ or higher——

Capital-to-asset ratio*Net interest-bearing debt = (Interest-bearing debt) – (Cash and deposit)

Towards the Next Medium-term
Business Plan
With the present Medium-term Business Plan launched in
FY2018, we have been aiming to expand our business scale
and improve profit levels under the Basic Policy of “Establishinga foundation for growth with the construction business at thecore.” We would like to continue this Basic Policy, anddevelop and expand furthermore.
In the civil engineering and the building construction
businesses, we will continue to provide reputable buildings
and structures fully utilizing our technological capabilities. We
will also concentrate on the engineering businesses, thebuilding renovation businesses, and the real estate development businesses that allow us to take advantage of theCompany’s strengths.
Particularly, we are focusing on the engineering businesses, which can utilize our Group’s advanced technologicalcapabilities and develop in the medium to long term in synergy
with the building construction businesses.
To expand these businesses, we will also promotetechnology development, innovation, human resource
development and the acquisition of highly specialized
technical personnel.

Continuing to be a Sustainable
Company
In the short term, the impact of COVID-19 will be significant.
However, putting our eyes on the world, we see a great number
of issues and risks which need to be solved from a long-term
perspective through cooperation among national government,
local municipality, and private companies. These challenges
include environmental issues such as climate change, expansionof energy demand, widening of disparity such as hunger andpoverty. On the other hand, inside Japan, there are the progressof falling birthrate and aging population, shortage of workers,
aging infrastructure and intensified natural disasters.
For our Group to keep achieving sustainable growth in thisexternal environment, we will further incorporate Environment,

Society, and Governance (ESG) viewpoints into our management. As for the Sustainable Development Goals (SDGs)
adopted by the United Nations, the timeline of the goal set for2030 is now less than 10 years and we need to keep theengagement in SDGs activity with an eye on the upcoming
future world.
To reflect sustainability viewpoints such as ESG and SDGs
to our management, our Group identified eight ESG issues(Materiality) in 2018. Since then, we have been monitoring the
progress of each of the Key Performance Indicator (KPI). We
will review these ESG issues in response to society’s changes
and respond appropriately and proactively to build a strong
business foundation unaffected by the changes in theexternal environment.

Message to Our Stakeholders
I consider that “the purpose of the Company” is to acquire
the trust of our customers by continuously providing many
values, satisfactions and excitement, and to contribute to thesociety by enhancing the happiness of our stakeholders.
In 2023, our Group will celebrate its 150th anniversary.
During our long history, we overcame numerous difficulties
associated with social changes, and contributed to theresolutions of various social challenges together with plentyof our stakeholders. In this era of increasing uncertainty,
what is required to our Group is “sustainability,” which lies
ahead of day-to-day efforts for continuing to change forthe future.
It is important for all of our Group officers and employees
to think about what we can do to achieve the Taisei Group
Philosophy of “To Create a Vibrant Environment for All
Members of Society,” to respect the Taisei Spirit of “Active
and Transparent Culture,” “Value Creation” and “Evolution of
Tradition,” and to take into the actions the Philosophy and the
Sprit. By unifying the directions of all officers and employees,
I would like to build more vibrant Group.
I sincerely appreciate your high expectations to ourGroup’s further growth as well as your continuous andinvaluable support.

TA I SE I A N N UA L R E P O R T 2 0 2 04

About the Taisei GroupOur History

Foundation – 1960
Foundations of the Business and Origin of the Corporate Name
The history of Taisei Corporation began when Kihachiro Okura (❶) established Okura Gumi Shokai in 1873. Kihachiro Okura
engaged in import-export trade and construction. He gathered competent engineers and delivered one successful project
after another, including the lock and tunnel at Lake Biwa, which became pioneer modernistic civil engineering work, as wellas the construction of the first subway in the East, 2.2 km between Ueno and Asakusa (the current Ginza Line) (❷).
Okura Gumi had difficulty surviving when designated as a target of the dissolution of zaibatsu (industrial group) but
started over again under a new name, Taisei Corporation, in 1946. Introducing an employee shareholder program,Taisei
Corporation became a non-family firm, which is rare among Japanese construction companies.
Derived from the Dharma name (posthumous Buddhist name) of the founder Kihachiro Okura. “Taisei” is taken from a line in
the Chinese classic texts, “Mencius.” It has a meaning of the “corpus” of people’s virtues, which can be associated with accomplishing something, or gathering many pieces to build up something. As such, it was chosen as the most suitable for ourcompany name. “Kensetsu” is a translation of the English word “construction,” and it represents the fields of both civil engineeringand building construction.

1961 – 2010
Technological Capabilities That Support and Help to Develop Society
Many infrastructure projects began for completion to coincide with the 1964 Tokyo Olympics, such as the National Stadium
Japan and the Metropolitan Expressway, adding color to this period.
This period also saw the completion of Hotel New Otani (❸), an international hotel with more than 1,000 guestrooms, aswell as The Hotel Okura Tokyo, which combined Japanese tradition with modern facilities. The construction technologies
acquired through these projects were adopted in skyscraper buildings in Shinjuku subcenter one after another and spread widely.
The Company kept rising to challenges to enhance its technological capability and comprehensive strengths, participating in national projects, such as North and South Bisan Seto Bridges, Seikan Tunnel, Cirata Hydroelectric Power Stationin Indonesia and Djibouti Palace Kempinski Hotel.

2011 – Present
Contributing to the Realization of a Sustainable Future at All Stages
In 2013, Taisei Corporation completed constructing the Bosphorus Strait Crossing Railway Tunnel in Istanbul, whichconnects European and Asia via railroad tunnels (❹).
The installation of a tunnel on the 60-meter deep bottom of the sea, a world-record depth for a submerged tunnel, wasvery challenging work. Nevertheless, we finally realized the Turkish people’s long-cherished dream with our collective best
technologies. In addition, our long list of achievements in the construction of domestic and international airports was
acknowledged in the world, and this brought us orders for Hamad International Airport Terminal Building in Qatar (❺) and
No. 2 Terminal Building Hanoi (Noi Bai) International Airport, a construction of the largest scale in North Vietnam . As such,
we are accelerating our efforts in overseas infrastructure projects.
In 2014, aiming for an urban office ZEB (an acronym for Net Zero Energy Building), we renovated the ZEB Demonstration
Building on the premises of the Taisei Advanced Center of Technology (see p.21). In 2019, we completed Japan National
Stadium (❻), a stadium blending in with the surrounding nature. In addition, we acquired three international certifications:
the world’s first WELL Certified Platinum in addition to ZEB certification and LEED (an acronym for Leadership in Energy andEnvironmental Design) certification, and is contributing to the realization of a sustainable future at all stages by creating officespaces that are friendly to people and the environment.
WEB

Chronological Table

https://www.taisei.co.jp/english/profile/history/

5 T A IS EI A NNUA L R EP O R T 2 02 0

About the Taisei Group

Strategy for Sustainable Growth

Our History

ESG Section

Business Section

Explanation and Analysis ofBusiness Results❶ Founder Kihachiro Okura❷ Tokyo Underground Railroad (Ueno – Asakusa)❸ Hotel New Otani Main Building❹ Bosphorus Strait Crossing Railway Tunnel, Turkey❺ Hamad International Airport, Qatar❻ Japan National Stadium

Data Section

TA I SE I A N N UA L R E P O R T 2 0 2 0

6

About the Taisei Group

11-Year Financial and Non-Financial Summary
TAISEI CORPORATION and Consolidated Subsidiaries
Years ended March 31, 2010 through 2020

Financial Highlights (Consolidated)

Millions of Yen(except for per share figures)

March 31, 2010

March 31, 2011

March 31, 2012

March 31, 2013

March 31, 2014

Net sales:
Construction contracts
Real estate development and otherTotal% change from previous year

¥ 1,289,809
152,166
1,441,975(12.1)%¥ 1,079,139
138,980
1,218,119(15.5)%¥ 1,171,927
151,577
1,323,504
8.7%¥ 1,254,291
162,205
1,416,496
7.0%¥ 1,321,289
212,184
1,533,473
8.3%

Costs and expenses:
Cost of sales
Selling, general and administrative expenses
Total
Operating income
Income before income taxes
Income taxes
Net income attributable to owners of parent

1,318,593
87,755
1,406,348
35,62735,516
14,462¥
21,222

1,100,022
81,803
1,181,825
36,294
19,3748,514¥
10,883

1,206,014
81,004
1,287,018
36,486
16,673
15,480¥1,181

1,304,677
76,213
1,380,890
35,60632,82812,399¥20,051

1,402,446
77,254
1,479,700
53,773
46,593
14,120¥32,089

¥

¥

¥

¥

¥

Revenue:

Per share data of common stock(in yen and dollars):
Net assets
Net income attributable to owners of parent
Cash dividends
Financial ratios:
Net income attributable to owners of parent
as a percentage of total revenue
Total costs and expenses as a percentage of total revenue
Dividends paid as a percentage of net income
Financial position data:
Current assets
Current liabilities
Tangible fixed assets
Long-term liabilities
Shareholders’ equity
Net assets
Other data:
New orders received during the year
Contract backlog at the end of year
Shares issued (thousands)¥

262.1519.74
5.00

253.94
9.58
5.00

255.601.04
5.00

299.8417.60
5.00

335.42
28.17
6.00

1.5%

0.9%

0.1%

1.4%

2.1%

97.5%
25.3%

97.0%
52.2%

97.2%
482.3%

97.5%
28.4%

96.5%
21.3%

912,895
894,026
238,534
250,083
274,779
297,179¥

847,467
808,052
232,000
235,607
290,282
290,598¥

982,931
921,196
212,639
219,101
284,714292,602¥ 1,012,639
907,281
206,076
292,514299,336
343,300¥ 1,076,213
946,097
181,051
268,802327,067
384,166¥ 1,244,439
1,571,414¥ 1,254,095
1,607,390¥ 1,379,572
1,663,459¥ 1,404,407
1,651,370¥ 1,645,896
1,763,793

1,090,622

1,140,269

1,140,269

1,140,269

1,140,269*1 U.S. dollar amounts were translated from yen, for convenience only, at the rate of U.S. $ 1 = ¥108.83*2 The net assets per share and the net income per share are calculated assuming that the consolidation of shares took place at the beginning of the year, because the consolidation ofshares, at the ratio of one share for five shares, was implemented on October 1, 2017.

Major Non-Financial Data
Number of Employees(Persons)
15,00012,0009,000

Number of employees(Consolidated)
Female ratio(Non-consolidated)

Accident Frequency Rate / Accident Severity Rate
Number of employees (Non-consolidated)
Male
FemaleFemale managers ratio(Non-consolidated)

(%)
0.70

13,977

14,032

14,433

14,562

25.0

17.4

17.9

18.1

12.5

1.2

1.7

3.2

18.4
3.8

8,415

8,501

8,490

8,507

1,470

1,524

1,541

1,570

Accident frequency rate
(Taisei Group companies)

Accident frequency rate
(Non-consolidated)

Accident severity rate
(Non-consolidated)

0.65
0.58

0.56

0.53

0.42

0.47

0.0

0.62

0.44
0.41

6,000

3,000

（%）

0.42

0.28

6,945

6,977

6,949

6,937

0.26

0.22

0.14

0.14
0.00

0

2016

2017

7 T A IS EI A NNUA L R EP O R T 2 02 0

2018

2019

(FY)

0.06
2016

2017

2018

2019

(FY)

• Frequency rate: The number of fatalities and injuries at worksites per one million
cumulative working hours• Severity rate: The severity of illnesses and injuries represented by the number of
workdays lost over one thousand cumulative working hours

Strategy for Sustainable Growth

About the Taisei GroupESG Section

Explanation and Analysis ofBusiness Results

Business Section

11-Year Financial and
Non-Financial Summary

Data Section

Thousands of
U.S. Dollars*1

Millions of Yen(except for per
share figures)(except for per share figures)

March 31, 2015

March 31, 2016

March 31, 2017

March 31, 2018

March 31, 2019

March 31, 2020

March 31, 2020

¥ 1,404,530
168,740
1,573,270
2.6%¥ 1,394,677
151,212
1,545,889(1.7%)¥ 1,342,455
144,798
1,487,253(3.8%)¥ 1,445,277
140,221
1,585,498
6.6%¥ 1,511,724
139,154
1,650,878
4.1%

¥

$

1,425,295
77,5581,502,853
70,417
66,98028,755¥38,177

1,348,302
80,1191,428,421
117,468
117,797
40,996¥
77,045

1,260,968
85,462
1,346,430
140,823
135,190
44,793¥90,566

1,318,880
84,7581,403,638
181,860
182,297
55,508¥ 126,788

1,409,418
88,136
1,497,554
153,324
160,777
48,075¥ 112,572

1,492,654
90,922
1,583,576
167,755
174,785
52,601¥122,088

$

¥

¥

¥

¥

¥

¥

$

32.62
5.27
1.20

418.61
33.52
8.00

442.6765.85
16.00

2,483.01
392.8720.00

2,975.02*2
561.36*2
85.00*3

3,302.86
511.90130.001612,498
138,833
1,751,331
6.1%

3,550.03
573.14130.00

2.4%

5.0%

6.1%

8.0%

6.8%

7.0%

95.5%
23.9%

92.4%
24.3%

90.5%
25.5%

88.5%
22.3%

90.7%
25.4%

90.4%

1,4816,668
1,275,687
16,092,355

13,715,464
835,450
14,550,914
1,541,441
1,606,037
483,332
1,121,823

22.7%¥ 1,136,497
984,762
169,973
258,373
370,140
492,114¥ 1,112,305
927,777
177,529
211,767
437,533
521,278¥ 1,223,572
986,994
175,983
202,271
485,396
570,814¥ 1,327,487*4
1,022,626
188,397
218,952*4
563,913669,020¥ 1,200,437
924,791
219,745
198,995
610,565
722,390¥ 1,299,023
957,438
204,400
178,642
673,730
753,916$

1,1936,258
8,797,556
1,878,159
1,641,477
6,190,664
6,927,465¥ 1,765,743
1,956,266¥ 1,671,061
2,081,438¥ 1,655,036
2,249,221¥ 1,743,498
2,407,221¥ 1,693,859
2,450,202¥ 1,680,052
2,378,923$

1,5437,398
21,859,074

1,171,269

1,171,269

1,146,753

224,541

224,541

224,541*3 Total annual dividends per share as of March 31, 2018 is ¥ 85.00, which is the sum of the interim dividend per share of ¥ 10.00 and the year-end dividend per share of ¥ 75.00. Due to theconsolidation of shares at the ratio of 1 share for 5 shares implemented on October 1, 2017, the year-end dividend per share of ¥ 75.00 reflects this consolidation, while the interim dividend
per share of ¥ 10.00 does not. If the interim dividend per share is calculated based on the consolidation of shares, it would be ¥ 50.00, making the total annual dividends per share ¥ 125.00.
*4 Effective from the year ended March 31, 2019, the Group retrospectively applied “Partial Amendments to Accounting Standard for Tax Effect Accounting” (ASBJ Statement No. 28,
February 16, 2018). The Group applied this change retrospectively and restarted the 11-Year Summary from the year ended March 31, 2018, accordingly.

Research and Development Expenditure/ Number of Patent
Applications filed, Number of Patent Rights Registered(Billionsof Yen)15.0

Research anddevelopment
expenditure(Consolidation)

9.0

11.1
232

(Cases)(103tCO2)

350

400

Total CO2
emissions(Taisei Group
companies)

Total CO2
emissions(Non-consolidated)

332

340

13.5

304
12.0

Number of patentrights registered(Non-consolidated)

Number of patentapplications filed(Non-consolidated)

CO2 Emissions

11.6
235
191

12.4

280

250
219

6.0

360

300

231

210

188

Emissions per value ofcompleted work
(Non-consolidated)

245

260

(%)
100

380

75

267

200

50

140

169

100

3.0

23.3

28.4

28.9

32.0
25

70

0

0

2016

2017

2018

2019

(FY)

0

0

2016

2017

2018

2019

(FY)

TA I SE I A N N UA L R E P O R T 2 0 2 0

8

The Strategy for Sustainable Growth

Value Creation Process of the Taisei Group
Recognizing social issues through stakeholder requests and expectations and solving them through business activities
are the starting points for the Company’s value creation. Under the Taisei Group Philosophy, the Taisei Group strives
to create value by optimally allocating its owned various management capital and leveraging the Group’s businessmodel to refine its capital. Through this cycle, we aim to realize the Taisei Group Philosophy and to achieve sustainable
development together with society.

Increase in Management CapitalManagement Capital
The figures shown as below are actual values for FY2018 or the endof FY2018.

Human capital• Promotion of diversity and inclusion• Number of employees*1 14,433 persons
Intellectual capital• Promotion of open innovation¥12.4 billion• R&D investment*1

Awareness of the Business Environment• Climate change problem• Expansion of energy demand
Worldwide• Spread of new coronavirus infections• Widening disparities such as hunger and poverty
Domestic• Aging society• Infrastructure obsolescence• Shortage of workers due to a decrease in theworking-age population

Overseas

Manufacturing capital

Solving Social Issues• Promotion of labor-saving and unmanned• Population growth• Global supply chain disrupted by rising protectionism

construction methods by introducing ICT• Number of worksites 633 (including 23

overseas locations) *2

Growth Strategies of the Taisei Group

Medium-term Business Plan (FY2018 – FY2020)

Social capital• Enhancement of information disclosure toinvestors• Promotion of CSR procurement incooperation with suppliers• Providing the optimal solutions for customers

Important ESG Tasks for the Taisei Group
p.27(Materiality)
Environment● Realization of a sustainable and environmentally friendly society● Ensuring quality and improving technology

Natural capital• Total energy consumption*1 5.76 109MJ• Fossil fuel consumption*1 105.0 103KL• Use of main building materials 6,540 103t

● Technical development for realizing a sustainable society● Promotion of supply chain management

Social● Thorough management of occupational health and safety● Cultivation of technical staff and securing human resources● Realization of an attractive working environment that isgood to work in

Financial capital• Total net assets*1• Interest-bearing debt*1• Cash and cash equivalents*1¥722.3 billion¥217.4 billion

Governance● Promotion of compliance¥437.5 billion

p.11*1 Consolidated*2 Number of worksites as of April 1, 2019

Communication with Stakeholders

Customers

9 T A IS EI A NNUA L R EP O R T 2 02 0

Shareholders /Investors

Suppliers

Employees

Local
communities

About the Taisei Group

Strategy for Sustainable Growth

ESG Section

Explanation and Analysis ofBusiness Results

Business Section

Value Creation Process of
The Taisei Group

Data Section

Objectives to be pursued
by the Taisei GroupTo Create a Vibrant
Environment for
All Members of Society
Providing Value to Society
Contributing to solving global challenges facing
Sustainable Development Goals (SDGs)

Business Model

Specific social challenges, such as SDGs and the Paris
Agreement have been set out as global common goals tobe achieved.
The Taisei Group will contribute to realization of asustainable and better world to resolve these challenges.

Value Chain
Renovation
anddemolition

Strategy,planning,
anddevelopment

The Taisei Group’s
Strengths

Identify key performance indicators (KPIs)
associated with materiality
The figures shown as below are actual values for FY2019 or the end of FY2019.

Source of
Our Competitive
Advantage● At construction stage: Reduction rate of CO2 emissions per

32.0%

construction cost (intensity)

pp.59, 61, 63

Operation andmanagement;
maintenance andpreservation

Expansion of Corporate Value

Designandengineering● At construction stage: Reduction rate of total CO2 emissions

43.7%● At building operation stage: Reduction rate of estimated CO2 emissions

39.5%● Final disposal rate of construction wastes

3.9%● Number of proposals and deployment of

biodiversity-related technologies

46 cases● Number of environmental accidents

1 cases● Customer satisfaction

Civil Engineering: 98% Building Construction: 88%
117*2● Productivity (Net sales/number of employees)

Procurement
and work
implementation

166 cases
188 cases● Number of patent applications filed

Number of patent rights registered● Number of fatal accidents

4 cases● Average implementation rate of CSR activities by suppliers

74.2%*3● Average overtime hours per month

39 hours
75.0%● Worksite registration rate of Construction Career Up System

Foundation for Sustainable Value Creation
ESG Management

Corporate Governance

p.25

p.41

698 persons
197 persons● Number of female engineers

Number of female managers● Turnover rate of employees within three years of hiring

7.4%● Rate of taking childcare leave by males

100%
0 cases● Number of major information security accidents● Response rate of Corporate Ethics Helpline and Group Helpline100%*2 The actual result for FY2016 is set at 100.
*3 The questionnaire results for FY2018.

¥1,751.3 billion● Net sales*¥167.7 billion● Operating income*● Net income attributable to owners of parent*

Deepening of Dialogue● ROE*● Interest-bearing debt*¥122 billion
16.6%¥208.1 billion*Consolidated

TA I SE I A N N UA L R E P O R T 2 0 2 0 10

The Strategy for Sustainable Growth

Communication with Stakeholders
We are striving to increase corporate value through dialogues with various stakeholders.

Customers•Responses in line with the ISO9001/ISO14001 •Survey of customer satisfaction •Website/Integrated Report•Company introduction videos, advertisements etc.
Shareholders/Investors• General Meeting of Shareholders/Securities Report • IR briefing • Website/Integrated Report• Responses to ESG survey companies etc.
Suppliers• Various training and seminars by Soyukai and the Safety, Health, and Environment Cooperation Association• Responses in line with the ISO26000/Procurement Policy • CSR procurement questionnaire survey etc.
Employees• Exchanging opinions with the labor union • Holding various training seminars • Employee satisfaction surveys• Responses in accordance with the Human Rights Policy • Internal and external consultation windows • Intranet/in-house newsletter etc.
Local communities• On-site tours/briefings, tours of the Taisei Advanced Center of Technology, and open innovation• Support for global human resource education through scholarships, etc., and support for natural environment conservation activities• Promotion of construction culture through the lending of architectural works etc.

Participation in Initiatives
The Taisei Group signed (participated in) the United Nations Global Compact in 2018
and, as a member corporation, will contribute to the resolution of global issues such as
Sustainable Development Goals (SDGs).

United Nations Global Compact

Sustainable Development Goals (SDGs)

The United Nations Global Compact (hereinafter

The construction industry has been playing an“GC”) is a voluntary initiative for companies andimportant role in making countries robust enoughorganizations to demonstrate responsible andto protect people’s lives and properties fromcreative leadership, act as good members of society,serious disasters. We recognize that this will

and participate in the creation of a global framework
for achieving sustainable growth.
The Taisei Group participated in the GC in April 2018 and iscontribute to the Sustainable Development Goals (SDGs) adopted
by the United Nations in 2015. In order to focus on SDGs, the TaiseiGroup has introduced the relationship between ESG tasks (materiali-

committed to disseminating and implementing the 10 Principles inties) identified by the Group and SDGs. In addition, in order tothe four areas of human rights, labor, the environment, andpromote business as a member of the construction industry whileanti-corruption.

always being aware of its contribution to SDGs, the Group is

Based on this GC philosophy, we are developing and disseminating technologies to resolve social issues and working on SDGs.

11 T A IS EI A NNUA L R EP O R T 2 02 0

working to ensure that SDGs are widely disseminated, discusses
how to reflect them in our business strategies, and the like.

About the Taisei Group

Strategy for Sustainable Growth

ESG Section

Business Section

Value Creation Process of
The Taisei Group

Explanation and Analysis ofBusiness Results

Data Section

Overview of the Medium-term Business Plan (FY2018 – FY2020)
Basic Policy
Building the foundation for growth centering
the construction business at our core
Aims of the Basic Policy●

To drive the sustainable growth of our overseas business and promote the conversion to a
corporate structure that functions effectively in overseas markets●

To create higher added value and to expand revenue opportunities for construction andrelated business●To take the unified initiative in addressing “Work Style Reform” and “Advancing Productivity”●

To obtain higher customer satisfaction by ensuring safety and quality
Management Goals

1

Sustainable growth of overseas business

2

Strategic investment of management resources in the focused fields

3

We will drive the sustainable growth of our overseas business and promote the conversion to a
corporate structure that functions effectively in overseas markets.

With our focus on medium and long term market conditions from 2020 and onwards, we will invest
management resources (human resources and capital) to the focused fields and differentiated technologies in order for the Taisei Group to achieve higher added value and expand revenue opportunities.

Reformation of the construction productivity system (advancing productivity):“TAISEI i-Innovation”

We will interpret the present brisk construction market environment as an opportunity, and conquer
busyness and improve productivity by reforming the construction productivity system throughtechnology development, enhanced operational efficiency and strengthened collaboration with our
subcontractors and suppliers.

4

Creation of an attractive work environment (work style reform): “TAISEI Lively Plan”

5

Pursuit of safety and quality: TAISEI QUALITY

6

Reinforcement of management infrastructure

As one of the leading companies in the industry, we aim to lead in work style reform by creating an
attractive work environment where all officers and employees of the Taisei Group and all workers
engaged in the construction industry work in a lively setting, inspiring future workers in the industry.

We will reaffirm our understanding of the importance of “safety” and “quality,” which are the basic
cornerstones of the construction industry. We will maintain the highest standards of safety andquality even during peak periods.

We will drive forward with advancing our management infrastructure to meet the demand of society
and of the times, and gain trust and high evaluation from all stakeholders.

TA I SE I A N N UA L R E P O R T 2 0 2 0 12

The Strategy for Sustainable Growth ◦ Discussion between the President and an Expert“To Become a Company that Leads
the Creation of a Sustainable Society”
How should the Taisei Group foresee the future and aim for new growth under the circumstanceswhere not only the construction industry but also society as a whole is suffering from unprecedentedchanges such as the intensification of natural disasters and the spread of COVID-19?
New President Aikawa and Professor Takeshi Mizuguchi, who specializes in Responsible Investment(ESG Investment) and Non-Financial Report, held a discussion regarding the above matters.

Efforts for Human Resource Development and Establishment of
the Medium- to Long-Term Vision
Mizuguchi: As you assume the role of president and takeover the helm of management, which parts of current operations do you intend to make changes to or keep as they are?
Aikawa: We are currently promoting the Medium-term
Business Plan, and the final year of the Plan falls in this fiscal
year ending March 2021. Accordingly, we will continue
pursuing the Basic Policy of “Establishing a foundation forgrowth with the construction business at the core.”At the same time, I believe that human resource development will be one of our most important management issues.
We have been focusing on human resource development
through education and training. However, as the external
environment is rapidly changing, I would like to take initiatives in further reviewing and strengthening our humanresource development.
Another important issue would be the establishment of
the medium- to long-term vision. Without getting stuck witha short-term performance-based perspective, we would liketo formulate a new Medium-term Business Plan that will startin the next fiscal year after determining how the Company

13 T A IS EI A NNUA L R EP O R T 2 02 0

shall achieve sustainable development and aim to contributeto society in the future.
Mizuguchi: What are the most important skills required forthe human resources of Taisei Corporation?
Aikawa: I think “communication capabilities” are the mostimportant. Our role of building and providing products andservices that satisfy our customers in an optimal
construction method can be achieved through communication with our customers and business partners as our
suppliers. Therefore, the human resources of Taisei
Corporation are asked whether they have the superior
ability to do so. We also need flexibility and resourcefulness to independently device how to work in thesechanging times.
Mizuguchi: Of course, short-term profits are important forcompanies, but you recognize that Taisei Corporationneeds to develop a new medium- to long-term vision for
the future growth of the Company. To do so, it is necessary
to identify how society will change from medium- to longterm perspectives. How do you view global trends?

About the Taisei Group

Strategy for Sustainable Growth

ESG Section

Business Section

Discussion between
the President and an Expert

Takeshi Mizuguchi

Explanation and Analysis ofBusiness Results

Data Section

Profile:Professor, Faculty of Economics, Takasaki City University of Economics(PhD in Business Administration)
In 1984, he graduated from the College of Policy and Planning Science,
Third Cluster of Colleges, University of Tsukuba. After working at Nichimen
and Eiwa Audit Corporation, he became a full-time lecturer at Takasaki City
University of Economics in 1997 and assumed his current position in 2008.

Aikawa: Obviously, the situation is extremely uncertain in the
short term due to the impact of COVID-19, however in thelong-term prospects by 2030 or 2050, there are concernsthat natural disasters will become more severe due toclimate change. Therefore, the infrastructure development tostrengthen the foundation of the country, such as flood control
measures including underground detention ponds and flood
control tunnels which our Company has been also involved in,will be essential. The shortage of workers due to a decline in
the working-age population is also a problem. What I am
particularly concerned about is the economic gap between
metropolitan areas and other regions. The gap has a tendency
to expand further, and I feel it is important to consider how theconstruction industry should be involved in this matter.
I was Chief of the Kyushu branch until 2016. During thethree years that I spent in Kyushu, I saw firsthand how rural
areas are becoming impoverished due to the effects of
population outflows and declining economic and social
sustainability. On the other hand, Tokyo is becoming more
and more crowded and congested. If the negative effects ofthis concentration continuously emerge, I am afraid that it
will become a serious problem.
Mizuguchi: In Tokyo, redevelopment is progressing, and theconstruction market remains strong. However, if otherregions become impoverished, the construction industry
market as a whole will shrink.
Aikawa: As long as Japan is centralized, for example, if a
big earthquake such as a Nankai Trough Mega Earthquake
occurs and urban areas including Tokyo, Nagoya, or Osaka
are hit, the impact will spread to the whole country, including
the areas not directly affected. From such point of view, I
think Japan should aim for decentralization. In this context,
we shall promote the conversion of cities into compact,
smart cities as well as the creation of the communities where
the elderly can live comfortably. In addition, we need to fulfill
our role as a developer including conducting business
investment. In other words, it is an effort to generate andrevitalize regions. It is not an agenda that our Company cantackle alone, and we need to work together with government
agencies and local governments.

TA I SE I A N N UA L R E P O R T 2 0 2 0 14

The Strategy for Sustainable Growth ◦ Discussion between the President and an Expert

Taisei Corporation

Yoshiro Aikawa
President and Chief Executive Officer,
Representative Director

How the Construction Industry Should Aim to Create a Livable Environment
Mizuguchi: Because, in the construction industry, contractors perform its works based on the contract, contractors
traditionally have built what clients wanted. If you are goingto create the attractiveness of cities based on your proposal,
what challenges would you face?
Aikawa: Without a place for young people to work, regional
development cannot be sustained. In Kyushu, especially in theareas other than prefectural capitals, factories which have been
supporting local employment and development for a long time
are gradually withdrawing, and the areas are declining. I believethat the government should take the initiative in encouraging
factories that have been relocated overseas to be broughtback to Japan, as well as creating new production andemployment opportunities in local areas. For the vitalization ofsuch regions, we would like to contribute to areas such asurban redevelopment projects in core local cities, airport
concession projects including the operation of regional airports,
and participation in regional area management projects.
Mizuguchi: In the wake of the COVID-19 pandemic, there
seems to be a movement to reconsider overseas shifts anda trend to utilize local areas with work-at-home. If more
people move to regional cities, they will enjoy spacious land.
I think there will be many advantages.
Also, regarding the intensification of natural disasters
caused by environmental changes that you mentioned
earlier, I agree that heavy rain and floods will increase in the
future. The construction industry plays a role in the restoration and reconstruction of the affected areas as well as the
reduction of the environmental impact of buildings, which ispart of the root cause. Furthermore, what do you think about
making communities resilient?
Aikawa: It is important to take measures on rivers to prevent
flood damage. In Japan, many levees built in the Edo period
still play an important role. It is inevitable that not only levees
but also civil engineering infrastructure such as tunnels and

15 T A IS EI A NNUA L R EP O R T 2 02 0

bridges face the issue of aging. It is important to aim for a
resilient infrastructure by continuously conducting maintenance and renewal. It is the most direct social contribution
by the construction industry, and we are proud of it.
Mizuguchi: When we think about the way the constructionindustry should be, we used to have the image of creating
new buildings one after another. But, I think that theconstruction industry in the future will require engagement increating a livable environment.
Aikawa: That’s right. Of course, our Company is implementing environmental measures, such as reductions in CO2emissions, industrial waste, and resources we use. We also
recognize the need to create new, livable environments.
Mizuguchi: I believe that it is necessary to change thedefinition of the concept of construction from merely“building structures” to “making places for people to live,”“reviving nature,” or “creating communities.” And if theconcept is expanded even more to “support our rich lives”
by doing so, we will be able to see what the constructionindustry should do in the future.
Aikawa: That is exactly how we should be in line with theTaisei Group Philosophy, “To Create a Vibrant Environment
for All Members of Society.”
It is important to respect nature and keep the balance
based on the recognition that, while the construction business generates value by establishing the foundation foreconomic and social development, it also has various impacts
on nature such as the transformation of nature, consumptionof resources and energy, and generation of waste.
Mizuguchi: In the future, people’s lifestyles and ways ofthinking will be different through the COVID-19 pandemic,
and perhaps values will change as well. Therefore, I thinkthat there will be a growing trend to appeal the attractiveness of nature in order to encourage people to return frommetropolitan cities to their hometowns in regional areas.

About the Taisei Group

Strategy for Sustainable Growth

ESG Section

Discussion between
the President and an Expert

Business Section

Explanation and Analysis ofBusiness Results

Data Section

Takasaki City University of Economics

Takeshi Mizuguchi
Professor

For the Future of the Taisei Group and the Construction Industry
Mizuguchi: Taisei Corporation alone has about 8,500
employees, and the Group as a whole has a little less than
15,000 employees. How many people are working, including
those from specialist construction companies?
Aikawa: We have about 37,000 people who are calledskilled construction workers or craftspersons working atconstruction and civil engineering project sites per day.
About 4,500 employees work at project sites. The number ofproject sites is about 400 for the building construction and alittle less than 200 for the civil engineering.
Mizuguchi: When we consider the theme of strengthening
human resources for the skilled workers of specialized
construction companies, it is targeting about 37,000 people.
It must be difficult to work on them directly.
Aikawa: The construction industry as a whole has a systemcalled “Construction Career Up System” (see p.39), and weare also actively engaged in this by taking a leadership role.
The system allows us to record and visualize the employment history and qualifications of skilled construction workers.
For skilled construction workers, it can improve their treatment
based on an appropriate evaluation of their abilities andexperience accumulated in the system. It will eventually
secure workers for the construction industry in a long run.
Based on the system, we are working with other industry
groups to improve the treatment of skilled construction
workers. For the construction industry, increases in theincome of skilled workers is one of the most important issues.
Mizuguchi: Isn’t the problem of income disparity expanding
due to the COVID-19 pandemic?
Aikawa: At our Company, we are taking all possible measures
to prevent infections and, in principle, we are continuing
construction without closing project sites. Many skilledconstruction workers are paid by the daily basis monthly
salary plan. So, we worried about influence on the lives of
the workers and their families.

How could we overcome such income gaps? I would liketo ask for your comment.
Mizuguchi: This problem is not only for the constructionindustry but also for the entire economy. As a company, I
think it is necessary to distribute profits fairly, while there arethings that can be done and cannot be done. In Japanese,
there is a word, “Sampuoyoshi (good for three parties: The
seller, the buyer and society),” which was coined a long timeago. Are we in the condition of “Sampouyoshi”? It is necessary to review the purpose of companies, so that the
distribution of wealth in society as a whole can be carriedout successfully.
Aikawa: I think the word of Oumi merchants, “Sampouyoshi,”is wonderful. It is a valuable way of thinking.
Mizuguchi: Could you tell us about your overseas business?
You must be focusing on overseas markets as an important
growth opportunity for the future. What are Taisei Corporation’s
strengths and how do you intend to earn the trust of local
communities when expanding overseas?
Aikawa: In foreign countries, I feel that the achievements insocial infrastructure development projects are highly emphasized. Taisei Corporation has an extensive achievements in
airports, and tunnel and bridge construction both in Japanand overseas. So, we shall gain the trust in the local markets
through the evaluation of these projects when expanding
overseas. In the areas where we are expanding, we intend
to make our Company’s high technological capabilities
recognized through alliances with local general contractors.
In addition, we can also work with global contractors onlarge projects. Again, our infrastructure-related achievements are important.
Mizuguchi: I would like to see Taisei Corporation driving thecreation of a sustainable society by playing a leading role inaddressing environmental issues and other tasks.

TA I SE I A N N UA L R E P O R T 2 0 2 0 16

The Strategy for Sustainable Growth ◦ Talk on the SDGs

Social Infrastructure That Is Passed onto the Future
In recent years, Japan has been significantly affected by natural disasters. Due to climate change, the severity ofnatural disasters is increasing on a global scale. As a result, the role of the construction industry is also becoming
more important than before in respect of the recovery and reconstruction activities and the infrastructure development.
Executive Vice President Shigeyoshi Tanaka, who manages our overall civil engineering business to develop social
infrastructure such as dams and bridges, talked about what we should do as the construction industry with an interviewer Mr. Keiichi Ushijima who are supporting many companies as an SDGs advisor.
Taisei Corporation

Expert and facilitator

Executive Vice President,
Members of the Board;
Chief of Civil Engineering
Division

CCaSS Leader and Partner
Ernst & Young ShinNihon LLC

Talk

Shigeyoshi Tanaka

Mr. Keiichi Ushijima
Profile:In 2002, Mr. Ushijima joined
Hitachi, Ltd. Since 2005, he wasengaged in CSR and sustainability
strategies for the entire HitachiGroup. He promoted theintegration of CSR andmanagement strategies, andstrived to realize the Company’s
philosophy and Group vision.
Since 2014, as EY’s CCaSS
leader in Japan, he has been
conducting research andproviding advice on global
business and sustainability.

How to Create “A Vibrant Environment for All Members of Society”
Ushijima: The vision of the society that the SDGs intend toachieve includes the goals that we cannot attain withoutchanging ourselves. With conventional ways of thinking, it is
impossible to achieve economic prosperity while protecting
the natural environment without leaving anyone behind. It is
now necessary to come up with all kinds of ideas andpromote the reform to pursue three aims simultaneously: thebenefits for the environment, the people’s happiness and theeconomic growth.
Based on this recognition, I would like to hear youropinion regarding the vision of society that Taisei Corporation
envisages. I believe that the civil engineering business of theTaisei Group upholding the Taisei Group’s Philosophy “To
Create a Vibrant Environment for All Members of Society,” isan extremely important task because it builds infrastructure
assets that will be passed onto future generations. On theother hand, in recent years, large-scale natural disasters
have frequently occurred, destroying the infrastructure
assets built by our predecessors. Meanwhile, how will thecivil engineering business of the Taisei Group recognize andrealize “a Vibrant Environment for All Members of Society” inthe coming era?

17 T A IS EI A NNUA L R EP O R T 2 02 0

Tanaka: I believe that the construction industry, especiallythe civil engineering business through the development of
infrastructure, can contribute to the realization of the society
as the 17 goals of the SDGs, particularly No. 9, 11 and 13,
intend to achieve.
The original meaning of the word “Civil Engineering” is“engineering to build a civilized society for citizens.” In otherwords, the important mission of our civil engineering projectis “Contributing to the development of a civilized society of
the future for citizens” through the development and maintenance of social infrastructure such as bridges, roads,
railways, water and sewerage systems, ports and dams, andat the same time contributing to the realization of the social
image the SDGs aim to achieve.
What is “a Vibrant Environment for All Members ofSociety”? From the perspective of civil engineering, it will beachieved when infrastructure that supports affluent lifestyles
and industrial development functions smoothly and comfortably. However, as you pointed out, in recent years, there havebeen large-scale natural disasters in Japan almost every year.
Immediately after the occurrence of such disasters, we startworking on road clearing and emergency restoration of leveeAbout the Taisei Group

Strategy for Sustainable Growth

ESG Section

Talk on the SDGs

Business Section

Explanation and Analysis ofBusiness Results
Related SDGs

breaks in rivers. However, before that, from the perspective ofthe disaster prevention and mitigation, it is necessary todevelop disaster-resistant cities and infrastructure. We believethat our fundamental role in protecting people’s lives and thebasis of the livelihoods will become increasingly important.
Ushijima: I think that the nature of the civil engineeringbusiness you mentioned have been developed in the long
history of Taisei Corporation. Now that the phase of theworld has begun to change, what should the civil engineeringbusiness change?
Tanaka: In recent years, I think there have been significant
changes from the viewpoint of environment-friendly construction and productivity improvement. For example, in the past,
the aggregate used in concrete for the dam construction had
to be crushed stone, which is a material obtained bycrushing natural rocks of good quality. Therefore, we needed
to have crushed stone, which was collected from a mountaindifferent from the dam construction site. In short, theconstruction of a dam had an impact on two places, thedam construction site and another mountain.
Recently, however, as the new dam technology*1 has
been developed, it is now possible to use materials otherthan high-quality natural rocks as concrete materials. This is

Data Section

9

11

13

an effort to protect the environment without excavating othermountains. In addition, it is also possible to reduce theoperation of heavy machinery by shortening the construction
period and by saving labor, or to reduce fuel consumption byusing fuel-efficient heavy machinery. In this way, there will befurther changes in the future, minimizing the total energy
consumption and reducing the resource input as well as
preventing adverse effects on the environment.
Ushijima: What is the driver of such technological innovation at Taisei Corporation? Also, how many years are you
looking ahead to improve such technology?
Tanaka: We establish a medium- to long-term strategies bybackcasting based on how we should be in 2030 and 2050
as aimed for in our Environmental Targets. We need topromote technological development for that.
Each of our employees has the spirit to challenge andovercome difficulties they face. Our mission is to solve various
problems utilizing technology, which is our driver of innovation. We take a lot of pride in creating products that are usefulto people as well as the foundation for our lives and economic
development. Our Group has a corporate slogan, “Work thatremains on a map®.” The joy of being involved in such work
must be great motivation for our employees.

We Solve Infrastructure-Related Challenges with Innovation
Ushijima: In 2015, when the SDGs were adopted, the agingof the population and natural disasters were identified as
challenges that the world would face in the future. Ahead of
the rest of the world, Japan is facing numerous issues,
including the decline in population due to the aging of thesociety. It is also a country with frequent disasters where many
earthquakes occur and typhoons pass. We have opportunities
to generate a number of innovative solutions while we executecivil engineering projects in Japan, a country which encounters many issues and limitations ahead of other countries.
Tanaka: That’s right. It is necessary for us to respond to the
problem of frequent disasters through innovation. For
example, these challenges led us to innovate solutions suchas unmanned heavy equipment with remote control functions by fully utilizing Information and Communication
Technology (ICT). This also leads to the improvement of
productivity and reduces the risk of contact between
workers and heavy machinery, enabling safer construction.
To give another example, in the past, workers whoconstructed tunnels had to work in an environment wherehigh levels of dust and noise exist. We developed andintroduced technologies that reduce the number of people
involved in such work, make work unmanned, or remotely
operate heavy machinery from a well-placed driver’s seat toexcavate tunnels. These technological developments greatly
improved the working environment.
Meanwhile, as for work at office, ICT adoption is advancing
in various areas including design work, which was promotedby the response to COVID-19. It has become clear that mostof the work can be done outside the office. At the same time,
we could identify the work that has to be done in the office,and the way to follow it up.
Ushijima: I found the utilization of ICT very interesting. If thedevelopment and transmission of technologies, which has
been the strength of Taisei Corporation, will be integrated
with ICT in the future, new capabilities (organizational abilities) will be required. How will you acquire them? That would
be another issue.
Tanaka: We used to employ mainly graduates who majoredin civil engineering, however, recently we have been hiring
people who are familiar with IT and AI and work in themechanical field. In addition, the civil engineering division is*1 New dam technology: Construction methods such as constructive solid geometry (CSG) using a mixture of cement and locally acquired materials such as stone and sand as materials.

TA I SE I A N N UA L R E P O R T 2 0 2 0 18

The Strategy for Sustainable Growth ◦ Talk on the SDGs

not developing technologies independently, but is working incollaboration with the Taisei Advanced Center of Technology
and civil engineering subsidiaries more than before. The Taisei
Advanced Center is also promoting open innovation withcompanies in other industries, small-and medium-sizedcompanies and venture corporations. For example, we areworking on i-Construction*2 using 5G in collaboration with
telecommunications carriers to develop remote control technology for heavy machinery. From now on, various humanresources will play an active role in a wide range of situations.
There is an example that I heard of at a major French
construction company that I am acquainted with. Among themembers of the technical development team for shieldtunnels are two data scientists who supported engineers by
utilizing the big data related to construction that had been
accumulated and analyzing interrelations. Since last year, wehave been trying to use the accumulated data to rationalize
operations at worksites and shorten construction period.
Ushijima: In the future, will there be any opportunities toutilize the data not only for infrastructure construction but
also for management business including maintenance?
Tanaka: In the construction of office buildings, we alreadystarted Digital Transformation (DX) business using data. We
developed the system to quickly assess the soundness ofbuildings immediately after an earthquake hits and notify
building owners and managers of the results in a timely
manner. In the civil engineering business, it is possible toconduct business such as regularly measuring cracks inbridges through image diagnosis using drones. However, inthe case of public works, infrastructures are subject topublic property management, which makes it difficult toutilize data.
If the data from various infrastructures becomes available
in the future, in addition to digitization such as surveys usingof drones, we will be able to create new value by changing
the entire business model, including the operation andmanagement business of infrastructures as you pointed out.

*2 i-Construction: The Ministry of Land, Infrastructure, Transport and Tourism’s efforts to improve the productivity of the entire construction production system and make construction
sites more attractive by introducing measures such as the full utilization of ICT (ICT construction work) at construction sites.

Providing Proactive Proposals for Urban and Social Development
Ushijima: From the perspective of the SDGs, Taisei
Corporation’s Civil Engineering Division in particular can
provide solutions to properly manage and operate infrastructure that should remain as shared assets of society for morethan 100 years.
The Stockholm Environment Institute in Stockholm, thecapital of Sweden, developed the SDGs Wedding Cake
Model*3, which takes a comprehensive view and represents
the SDGs concept by categorizing 17 SDGs into a model
consisting of three layers: Economy, Society, andEnvironment. The Economy is supported by the Society andthe Society is assisted by the Environment, with the goal 17“Partnerships for the goals” set at the top.
I would like to see Taisei Corporation’s civil engineeringbusinesses establish close partnerships with the national*3 An infographic created by the WWF by reference to the diagram developed by the
Stockholm Environment Institute(Source: “Living Planet Report 2018” WWF Japan)(https://www.wwf.or.jp/activities/data/201810lpr2018_jpn_sum.pdf)

19 T A IS EI A NNUA L R EP O R T 2 02 0

Economics
Society

Environment

Figure: Conceptual diagram of the SDGs
(Source: Created by Taisei Corporation based on “Living Planet Report 2018”
WWF Japan)

About the Taisei Group

Strategy for Sustainable Growth

ESG Section

Talk on SDGs

and local governments and make proactive proposals forurban and social development toward the achievement of
the SDGs. How would you think?
Tanaka: For infrastructure construction, there is an ordering
framework called ECI (Early Contractor Involvement). The
Ministry of Land, Infrastructure, Transport and Tourism andother organizations begun to adopt this framework as a way
for construction companies to engage in projects from theplanning stage and promote infrastructure development more
efficiently, economically, and speedily. Our Company also
recently received two orders for major construction projects*4 through the ECI framework. We will focus on these
initiatives to build partnerships with government agencies
and make proactive proposals.
There is another construction work management systemcalled BIM (Building Information Modeling)/CIM (Construction
Information Modeling/Management), which led to the aforementioned innovation. BIM is used in the architecture field,
and CIM is used in the civil engineering one. By sharing
information mainly through three-dimensional modelingsoftware, we aim to upgrade and improve the efficiency of
production systems. With further use of this system, we can
not only improve the productivity during construction, butalso utilize construction data for maintenance. We can also
administer and manage operations foreseeing throughout
the lifecycles of structures. It will become the means ofmanaging infrastructure planning, construction, operation,and maintenance. During the process, we are able to offer
various proposals to government agencies and local governments, and at the same time gain trust as a partner. This is
one of the innovations that will contribute to the development of future infrastructure development projects.
Ushijima: Whether the progress of global warming will
increase in severity or be alleviated by human efforts in the
future, the construction industry, especially infrastructuredevelopment, will continue to be a necessary business forthe society. However, if disasters and accidents, which aresaid to occur only once in 100 years, start happening
frequently, how infrastructure should be will change.
Furthermore, the evolution of technology and the increase in
the number of the elderly will also affect how infrastructure
should be.
While the construction industry is at a major turning point
in its long history during these couple of years, I believe that
Taisei Corporation is at the forefront of the battlefield against
the difficult challenges people are facing. I feel that there is areason for the existence of the Civil Engineering Division, whichconstructs the social infrastructure for people to live in safety

Business Section

Explanation and Analysis ofBusiness Results

Data Section

and security. I have high expectations for the infrastructurethat you will realize and a new way of “a Vibrant Environment
for All Members of Society.”
Tanaka: Japan’s vertically-long land is divided by many
chains of mountain. Japan has many earthquakes and isgeologically fragile. It is partially due to the fact that nearly
60% of the land is snowy and cold. There is no doubt thatJapan is a country in which infrastructure development ismore important than other countries because of the uniqueness of the land.
We should recognize that Japan’s economy will be
weakened if it does not place more importance on infrastructure development than other countries do. I think thatthe low labor productivity is partly attributable to the stateof infrastructure.
In order to enhance national power, we must support thefoundation for people’s livelihoods and vitalize the economy.
To do so, I would like to emphasize the necessity of asustain-able and resilient infrastructure.
We have the technology and human resources to realize
various possibilities and future visions for new infrastructure.
By improving our employees’ capabilities, we should aim tocreate the foundation of the country that will be handed down
to the future as the company with civil engineers who are
flexible enough to respond to social issues by utilizing a varietyof specialized knowledge, and with employees who will play
an active role in the creation of sustainable social infrastructure
systems that pursue technological innovation.
Mr. Ushijima, thank you very much for sharing yourinsights with us.

*4 ECI framework projects for which we received orders: (1) Shikoku Branch: National Highway Route 32, Kochi Bridge, Seismic Reinforcement Project (Client: Shikoku Regional
Development Bureau, Ministry of Land, Infrastructure, Transport and Tourism); and (2) Kyushu Branch: Tozaidoro Shield Tunnel Outbound Line Route in Kagoshima Prefecture(Client: Kyushu Regional Development Bureau, Ministry of Land, Infrastructure, Transport and Tourism)

TA I SE I A N N UA L R E P O R T 2 0 2 0 20

The Strategy for Sustainable Growth ◦ New Technology Contributing to SDGs

We will contribute to the achievement of SDGs by labor-saving with robots at construction sites andimproving work efficiency by introducing artificial intelligence (AI).

“TAISEI Creative Hub”
Creating an Attractive Workplace Environment
CASE

1

SDGs

Developing New Workplaces That Promote Health and Productivity Management and Work Style Reform

TAISEI Creative HubThis is the Company’s uniquepromotion activity to create an
attractive work environment thatis good to work in for each andevery employee.

As part of our efforts for health and productivity management and work style reform, we have launched a
new “TAISEI Creative Hub” initiative.
Taisei Corporation is promoting the creation of spaces with the aim of actively improving the physicaland mental health of working people to increase productivity, and is introducing new workplaces startingfrom our own facilities such as branch offices. To further evolve our efforts, we are now building a newworkplace that incorporates the ABW concept.
We believe that these efforts will create new value in the working environment, and that the various
data and knowhow obtained there will help our customers resolve issues to realize health and productivity
management and work style reform.

ABW
An abbreviation for Activity Based
Working, which is a method thatenables each employee toimprove his or her productivity andmotivation to work by selecting
the working environment
according to his or her purpose inorder to work optimally.

Case example 1 Suburban workplace:Open Meeting Space (Taisei Advanced Center of Technology)
A workplace that creates innovation through people-to-peopleinteraction in an open terrace-like space.

Renewal of Taisei Advanced Center of Technology ZEB
Demonstration Building as
CASE

2“Human Space Lab”

Case example 2 Temporary workplace:Wellness Worksite (Akasaka Junior High School, etc.,
Maintenance Work Worksite Office)
A workplace for employees and workers at the forefront ofconstruction.
ZEB has also been realized at the same time as the Wellness
Worksite (see p.31).

SDGs

Utilizing New Technology and AI/IoT to Further Improve ZEB
and Wellness Functions

WELL Certification Version 1
A health building performance
evaluation system in the UnitedStates. The WELL Certification
focuses on the health of working
people from the viewpoint of“human health,” and it hasestablished 100 unique
indicators in seven areas: Air,water, nourishment, light, fitness,
comfort, and mind. The status of
implementation is evaluated on
three levels; namely, platinum,
gold, and silver.

Replacement with high-efficiency wall
photovoltaic panels

The ZEB Demonstration Building at the Taisei Advanced Center of Technology (Totsuka-ku, Yokohama City,
Kanagawa Prefecture) is used as an office while verifying the adopted energy conservation technology andenergy creation technology using solar panels. The building itself has achieved annual zero energy balance
for five years since its completion. In May 2019, we became the first company in the world to acquire the
WELL Certification Platinum (entirely new/existing building), the highest rating in the building and indoor
environmental assessment system. Since its completion in 2014, the building has been providing a
comfortable indoor space that is harmonized with nature through natural lighting (T-Light Cube) and naturalventilation (T-Fresh Air), and has been highly evaluated for its enhanced health and comfort for workers.
In February 2020, we refurbished it as “Human Space Lab,” which simultaneously realizes functions ofa net zero energy building (ZEB) utilizing new technology and AI/IoT, and the Wellness, which takes into
account the promotion of physical and mental health, comfort, and intellectual productivity. Going forward,
we will further proceed with examination from both ZEB and wellness aspects, aiming to spread ZEB in
urban buildings as well as to expand the spread of support services for new work styles utilizing AI and
IoT, and of Wellness Offices.

Wellness Office in the Human Space Lab

21 T A IS EI A NNUA L R EP O R T 2 02 0

Building Energy-Efficiency Labeling
System (BELS): ZEB

WELL Certification (healthy building
performance evaluation system)

Related SDGs

“TAISEI i-Innovation”
New Technologies for Improving Corporate Value

7

9

11

12

13

17

SDGs

CASE Succeeded in Self-Driving of Heavy Machinery That Detect3

Humans with AI

T-iROBO® seriesThis is a series of work robots
developed by Taisei Corporationas unattended construction
machinery for the purpose ofcollaboration between humans
and robots. Since 2012, 11 typesof robots have been developed.

We are developing the latest version of the T-iROBO® series.
The newly developed self-driving carrier dump truck
T-iROBO® Crawler Carrier is a rough terrain carrier* that automatically carries out all of the series of carrying operations, inwhich earth and sand are transported on a specified route,unloaded at a specified location, and then the vehicle returns
to the loading site. Based on the crawler dump MST-2200
VDR (manufactured by Morooka Co., Ltd.), it is equippedwith a human body detection system with image processing
technology utilizing artificial intelligence (AI), and is compatible with 5th generation communication systems (5G).

Camera*Greencolor isan image

STOP

Yellow:
decelerationRed:
emergency stop

Human body detection system test
(conducted using dummies)*A vehicle built to carry earth and sand or other materials on rough terrain

CASE Realizing Reduced Burden on Hospital Staff and Efficient Radio Wave Management

4

T-Hospital® Wireless Viewer
The Company’s original simple
evaluation method for theelectromagnetic environment of
wireless telecommunications
equipment.

Medical information devices using radio waves, such as biometric monitors, have been rapidly introduced
at hospitals and emergency medical centers, and an environment to support patients has been established. On the other hand, the radio wave environment has become complicated due to the use of various
communication and information devices such as Wi-Fi carried by patients, and radio wave problems suchas equipment malfunction are increasing. For this reason, in the past, the radio wave environment wasmeasured by specialists for each medical information device and countermeasures were taken on acase-by-case basis, but it was difficult to grasp the changing radio wave environment in real time. To
address this issue, the Company has developed T-Hospital® Wireless Viewer as a technology forascertaining the locations of medical information devices and radio wave conditions. We have conductedevaluations of the radio wave environment at each stage of a hospital’s planning, design, construction, andoperation, and deployed a service to provide an environment in which medical information devices can beused with peace of mind since June 2018.
Furthermore, we expanded the functions of the T-Hospital® Wireless Viewer and developed atechnology that enables real-time monitoring of the results of automatic measurement of the radio wave
environment at various locations within the hospital.

CASE Development of T-Zone Saver® Connected That Accurately Identifies the Location

5of Individuals

T-Zone Saver®
An ultra-energy-saving
automatic environmental control
system for lighting and air
conditioning that uses nextgeneration human detection
sensors developed jointly by theCompany and Toko Electrical
Construction Co., Ltd.

In 2010, we developed a detection technology “T-Zone Saver®” that can identify the presence ofpeople with a high degree of accuracy. By linking this technology with air conditioning and lighting
control, we have introduced it to many buildings as a technology that achieves both indoor comfort andenergy conservation.
By combining T-Zone Saver® with positioning information obtained from “EXBeacon*,” a technologythat enables identification of individuals, we have jointly developed an algorithm with Waseda University toidentify not only the location of individuals but also each of them with high accuracy, and have newly
expanded the function as “T-Zone Saver® Connected.” The application of this technology enables theprovision of comfortable services, such as “providing spaces according to preference” that meet thevarious situations of office workers.
*EXBeacon is an IoT dedicated LAN built on a mesh network “WHEREmesh” developed by WHERE, Inc.

TA I SE I A N N UA L R E P O R T 2 0 2 0 22

The Strategy for Sustainable Growth ◦ Future Created by Technology

Encourage the Future“Does this technology encourage the future?”
The Taisei Group will continue to ask this question.
We have connected the strait between Asia and Europe,
built skyscrapers, and converted the power of nature
into energy.
We have always been thinking things on a global
scale, looking ahead for generations, and shaping thefuture strongly.
Now that the world is changing rapidly, it’s a time to usethat power to encourage the future.
We will construct a flexible future by smartly giving shapeto small ideas globally while joining hands with people
from different fields with keeping on an authentic
unchangeable way, a steady and sometimes playful spirit.
We believe that the technologies and ideas we create
will update the future and make people around the world
shine brightly.

Technologies of 2030,
and beyond
Long-term technological development toward a“Vibrant Future for All Members of Society”
While sophisticatedly shaping the small ideas to global ones
with keeping on an authentic unchangeable way, a steadyand sometimes playful spirit.
With the participation of young and mid-career researchers,
as well as specialists from various departments, we are
studying future societies that will take advantage ofleading-edge technologies that transcend the frameworkof the construction industry, and future societies thatcreate new businesses.

Future society, where people, things and eventsare linked and continue to evolve.

23 T A IS EI A NNUA L R EP O R T 2 02 0

Related SDGs

3

6

7

9

11

12

13

14

15

17

Future Transportation
Toward a city where everyone cantravel more safely and freely
In the future, Compact Plus Network* city
development will be promoted at many cities inRoad infrastructure linked toautomobiles

Japan. In the compact city, a new transportation
infrastructure can help to solve problems suchas the shortage of drivers, vulnerable road users
and traffic jams.
In addition, autonomous vehicles carry passengers
and commercial goods in the main artery of
traffic connecting megacities and smaller cities.
In 2030, we will be supporting universal mobility
services from our infrastructure in whichanyone can move freely to where they want togo and get what they need no matter where
they are.
* Compact Plus Network:
An initiative to network multiple compact cities by linking local public
transport.

Compact and high-density transportation system

Smart farms where everyone gathers andthat are resistant to disasters

Future Farm
Everyone will become familiar
with enjoyable agriculture andkeep the healthy and rich diet

A farm we imagine is not just a production site for agricultural products,
but a place where everything from research and development to production,
processing, distribution, and experience happen.
In Japan, a small island, it is possible to obtain fresh, safe, and delicious
food at any time by maintaining highly productive farms in every place andscene where people live.
In 2030, Taisei will have expanded the possibilities of agriculture throughthe installation of farm infrastructure in cities, the digitization of agriculture,and the smart development of agriculture, and will be supporting a society
in which anyone can naturally participate in agriculture.
Super high-rise farm buildings that make use of the urban
environment and are closely connected to daily life

TA I SE I A N N UA L R E P O R T 2 0 2 0 24

E S G S ect io n

Sustainability of the Taisei Group
CSR/ESG Framework
To pursue the Taisei Group Philosophy “to create a vibrantenvironment for all members of society,” all officers andemployees share the “Taisei Spirit,” and carry out corporate
actions based on the Action Guidelines for Taisei Personnel
and the Taisei Group as a Whole and Individual Policies“Overall Principles of Conduct” and “Overall Management
Perspective” and Medium-term Business Plan. The basic
principle of CSR and ESG is to realize a sustainable society inthe course of these actions through the wishes and expectations of our stakeholders, while being aware of the issues ofsustainable society and contributing towards their resolution.
Our Structure of Values
and Policies

Individual Policies and Standards on CSR/ESG

Environment• Environmental Policy• Environmental Targets• Declaration of Taisei Corporation on
Biodiversity Preservation

Society• Quality Policy• Safety and Health Policy• Procurement Policy• Human Rights Policy• Social Contribution Policy

Governance• Risk Management Policy• Policy on Business Continuity in Times ofTaisei Group Philosophy

Disaster• Fundamental Policy to Enhance Operational
Compliance Systems• Information Disclosure Policy• Policy on Intellectual Property• Policy on the Protection of Personal

Taisei Spirit

Information

Individual
Policies

WEB

Overall Principles
of Conduct

Overall Management
Perspective

Our Structure of Values and Policies

https://www.taisei.co.jp/english/profile/philosophy/

CSR/ESG Promotion System andManagement
The CSR Committee has been established to deliberate on
CSR and ESG measures. The CSR Committee, chaired by
an external member of the board and composed of sevenmembers including the President, consists of eight
members. It regularly discusses and reports on the TaiseiGroup’s non-financial initiatives, including CSR and ESG, forthe entire Group including the Company.
We have also established various committees to deliberate
on important matters related to CSR and ESG, including theCompliance Committee and the Environment Committee.

This
ReportWEB• Code of Conduct on the Use of Social Media• Fundamental Corporate Governance Policy• IR Policy• Tax Policy
WEB

Individual Policies

https://www.taisei.co.jp/english/profile/philosophy/policies/

Various committees related to CSR and ESG• CSR Committee

Chairperson: External Member of the Board• Compliance
Committee

Chairperson: External expert• Technology Committee

Chairperson: President, Representative Director• Central Safety

Chairperson: Vice President, Representative Director• Environment

Chairperson: President, Representative Director• Risk Management

Chairperson: Vice President, Representative Director

pp.61-62 Operations Committee/Special Committee• Central Labor Affairs

Chairperson: Vice President, Representative Director

CSR / ESG

• AI / IoT Business

Chairperson: Vice President, Member of the Board

Corporate Governance System

https://www.taisei.co.jp/english/csr/management/

25 T A IS EI A NNUA L R EP O R T 2 02 0

Committee
Committee
Committee
Committee
Committee

Frequency: twice a year
Frequency: once a year
Frequency: three times a year
Frequency: five times a year
Frequency: four times a year
Frequency: once a year
Frequency: five times a year
Frequency: twice a year

About the Taisei Group

Strategy for Sustainable Growth

ESG Section

Business Section

Sustainability

Explanation and Analysis ofBusiness Results

Data Section

Compliance with Declarations to Society and International Codes of Conduct, etc.
Seven Core Subjects of ISO26000

Council for Better Corporate Citizenship (CBCC)

The Taisei Group views CSR and ESG from a global perspective
and always conducts business activities in accordance withinternational codes of conduct. In addition to business activities
based on the Action Guidelines for Taisei Personnel and theTaisei Group as a Whole, Individual Policies, and the Mediumterm Business Plan, we focus on the seven core subjects of
ISO26000 (international guidance on organizational social
responsibility) and use them to promote CSR activities and strive
to disclose information in accordance with domestic and overseas reporting standards.

As a member company of the Council for Better Corporate
Citizenship (CBCC), an affiliated organization of Keidanren(Japan Business Federation), we participate in CBCC’s CSR
awareness activities.
By participating in lectures and dialogue by CSR-relatedorganizations on a wide range of topics related to CSR andsustainability, we are striving to grasp the trends of CSR and topromote it horizontally within the Group.

WEB

Sustainability Activities (By Core Subjects of ISO26000)

https://www.taisei.co.jp/english/csr/performance/iso26000/

Keidanren (Japan Business Federation)

Japan Forum of Business and Society (JFBS)

As a member of Keidanren, we respect the content of its Charterof Corporate Behavior and carry out activities toward the “realization of a sustainable society,” which Keidanren aims to achieve.
We participate in the Committee on Responsible BusinessConduct & SDGs Promotion to promote the development ofcorporate social contribution and the Committee on Diversity &Inclusion to promote women’s participation in society, and haveestablished the “voluntary action plan concerning the appointment of women to board members and managerial positions.”
We also participate in the Committee on Environment and Safety,
Keidanren Biodiversity Declaration Initiative, and the “Challenge
Zero” initiative, which are tackling global warming countermeasures, the formation of a recycling-based society, and theimprovement of environmental regulations and systems. We also
participate in the Committee on Digital Economy and theCommittee on Cyber Security which are working on innovation.

With regard to the relationship between companies and society
and various issues in sustainable development, we participate in
the JFBS, a forum for connecting theory, field, and policy throughwide-ranging cooperation between academic circles, industry,
government, labor circles, consumer organizations, NPOs, andNGOs in Japan and overseas. We make use of knowledge
gained at its annual conference and other events to promote
CSR activities.

United Nations Global Compact (GC), SDGs

Task Force on Climate-Related Financial Disclosures

The Taisei Group participated in the GC in April 2018 andcommitted to disseminating and implementing the Ten Principles
in the four areas of human rights, labor, the environment, andanti-corruption. At the same time, it is actively participating invarious subcommittees sponsored by the Global Compact
Network Japan (GCNJ), such as the Subcommittee on SDGs andthe Subcommittee on Human Rights Due Diligence (HRDD).
In addition, in order to promote business as a member ofthe construction industry while always being aware of contributions to SDGs, we are working to ensure that SDGs are widely
disseminated within the Group and discussing how to reflect
them in our business strategies, and the like.

At the request of the Group of 20, the Financial Stability Board(FSB) established the Task Force on Climate-Related Financial
Disclosures (TCFD) in 2015. In July 2020, Taisei Corporation
approved its recommendation aimed at identifying anddisclosing the financial impact of risks and opportunities posedby climate change.
We also participate in environment-related initiatives such as
the Science Based Targets (SBT) and the Carbon Disclosure
Project (CDP).

This
ReportWEB

Communication with Stakeholders

p.11 Participation in Initiatives
Important ESG Tasks (Materiality)

https://www.taisei.co.jp/english/csr/management/materiality/

CARE International Japan
We provide donations to CARE, an international cooperation
NGO engaged in humanitarian assistance activities in more than
90 countries around the world. At a symposium hosted by
CARE International Japan, our representative presented our
initiatives to empower women.

WEB

This
ReportSupport for “Task Force on Climate-Related Financial Disclosures (TCFD)”

https://www.taisei.co.jp/english/ir/news/2020/20200727_release.html
SBT Certification

p.37 For Realization of Low Carbon Society

TA I SE I A N N UA L R E P O R T 2 0 2 0 26

E S G S ect io n

Sustainability of the Taisei Group

Materiality of the Taisei Group
Materiality means important ESG tasks that the Taisei Group
must address. We believe this links global issues such as
UN’s SDGs and the Group Philosophy, and will have an
important impact on both society and the Taisei Group froma medium to long-term perspective. It serves as the foundation for the Group’s business activities. We will strive forsustainable growth by establishing key performanceWEB

Taisei Group Medium-term Business PlanWEB

Eight Materiality (Important ESG Tasks for the Taisei Group)https://www.taisei.co.jp/english/ir/plan/

https://www.taisei.co.jp/english/csr/management/materiality/

Environment

High
Importance to society

indicators (KPIs) in line with these tasks and resolving social
issues through our business activities.

❶ Realization of a sustainable and environmentally friendly society

Eight Materiality

Society(Important ESG Tasks for
the Taisei Group)❷ Ensuring quality and improving technology❸ Technical development for realizing a sustainable society❹ Promotion of supply chain management❺ Thorough management of occupational health and safety❻ Cultivation of technical staff and securing human resources❼ Realization of an attractive working environment that is good towork in

CSR / ESG Tasks
Importance to the Taisei Group’s management

High

Governance❽ Promotion of compliance

Materiality Identification Process
In 2018, based on the SDGs and other social issues, as wellas the opinions of experts, the Taisei Group incorporated
into its management issues the following eight materialities(important ESG tasks) and KPIs that are particularly important for the Group to contribute to in terms of the importanceto society and the Taisei Group’s management.

Survey and Organization of
the Company’s Businessand Social Issues

Social Perspective

Based on the 345 items (related
actions and expectations) of theseven core subjects of ISO26000,
we conducted our own questionnaire survey to the CSR related
divisions of the Group. We havenarrowed down the elements ofmateriality and set qualitative andquantitative targets by recognizing
and grasping the important impacts
on both society and the Company.

Based on the elements of materiality, we held a dialogue between
ESG specialists (four experts) andmanagement. Based on thespecialists’ opinions, we havereferred to the megatrends that theCompany views (SDGs, etc.),
discussed how to organize andtranslate the elements of materiality
into a language, and set quantitative targets as KPIs.

27 T A IS EI A NNUA L R EP O R T 2 02 0

The CSR Committee regularly reviews the operation
status of KPIs and discloses information in the integrated
report. Activities related to other CSR and ESG tasks arereported on the Taisei Corporation website according toISO26000 (international guidance on organizational social
responsibility) core subjects.

Identification of Important
Tasks and Approval by
Management
The CSR Committee reviewed theidentified tasks and KPIs, andidentified the eight materialities andapproved them in the Board
meeting to incorporate them inmanagement issues.

Identified
materialities and
KPIs areperiodicallyreviewed in light ofchanges in theexternal
environment, etc.

About the Taisei Group

Strategy for Sustainable Growth

ESG Section

Explanation and Analysis ofBusiness Results

Business Section

Sustainability

Data Section

Materiality’s Impact and Related SDGs

❶ Realization of a Sustainable and Environmentally Friendly Society❺ Thorough Management of Occupational Health and Safety

Negative Impacts

Negative Impacts

Positive Impacts• Deterioration of creditworthiness and loss • Increased opportunities to receiveof opportunities to receive orders due toviolation of environmental laws andregulations or environmental accidents.

• Increased costs due to constructionsuspensions or delays resulting fromshortages of raw materials or electricity toaddress climate change.

6

7

8

9

11

12

orders due to development andpractical application of environmental
technologies.

• Market expansion due toPositive Impacts• Loss of social trust due to the• Maintenance of social trust throughoccurrence of fatal accidents

prevention of fatal accidents• Decreased productivity due to• Improved productivity as a result ofoccupational accidents

achieving a safe workplace environment.

reinforcement of infrastructure toaddress climate change.

13

14

15

17

3

8

9

11

12

13

15

17

❷ Ensuring Quality and Improving Technology❻ Cultivation of Technical Staff and Securing Human Resources

Negative Impact

Negative Impact

Positive Impact• Interruption or suspension of business,• Continuing business and creation ofloss of opportunities to receive orders,or financial loss due to the occurrenceof quality defects.

8

9

11

13

business opportunities throughcooperation and building trusting
relationships with customers.

• Increased organizational capabilities

and loyalty of personnel due toinsufficient human resources
development and lack of diversity.

4

17

Positive Impact• Decline in organizational capabilities

8

9

11

12

and loyalty of personnel by fostering
excellent and diverse human resources.

13❸ Technical Development for Realizing a Sustainable Society❼ Realization of an Attractive Working Environment That Is Good to Work in

Negative Impact

Negative Impacts

Positive Impact• Decline in market competitiveness and• Contribute to solving social issues byfinancial loss due to fewer application
track records for development of new
proprietary technology.

improving technological capability
through business and increase market
competitiveness.

Positive Impacts• Decline in organizational capabilities• Increased organizational capabilities

and loyalty of employees due toinsufficient human resources
development and lack of diversity

and loyalty of employees by acquiringand developing excellent and diverse
human resources.

• Difficulty in recruitment activities due• Maintenance of reputation by

to a decline in reputation.

7

9

11

13

4

17

5

8

9

10

preventing human rights risks.

16❹ Promotion of Supply Chain Management❽ Promotion of Compliance

Negative Impacts

Negative Impacts

Positive Impacts• Suspension of raw material supply due• Sustainable supply of raw materials

to occurrence of procurement risks.

due to procurement risk management.

• Decline in reputation owing to• Improved competitiveness as a result

occurrence of human rights risks.

4

8

9

11

12

of securing good-quality cooperatingcompanies.

13

Positive Impacts• Decline in reputation due to• Continuation of business and creation

occurrence of human rights or
corruption risks.

of business opportunities throughappropriate risk management.

• Interruption or suspension of business• Maintenance of competitivenessdue to information security accidents.

8

9

10

12

17

16

through appropriate information
management.

17

TA I SE I A N N UA L R E P O R T 2 0 2 0 28

E S G S ect io nMateriality ❶Realization of a Sustainable and Environmentally Friendly Society
Related SDGs

Policy and Management

6

7

8

9

11

12

13

14

15

17

TAISEI
Green Target 2050
The Company’s 2050 Environmental
Targets established in 2013. It waspartially revised in 2018 (2030
targets were added).

Environmental Policy and Environmental Targets
Based on the Group Philosophy “To Create a Vibrant Environment for All Members of Society,” theTaisei Group has set forth in its Environmental Policy and Environmental Targets, the formation ofhigh-quality social capital through corporate activities centered on the construction business inharmony with nature.
The construction industry, which is involved in the formation of social capital, is built on theburden on the environment. On the other hand, environmental problems are becoming more andmore serious on a global scale, and long-term countermeasures are required. In response to thesecircumstances, in 2018 we revised our medium and long-term goals, the 2050 Environmental
Targets (TAISEI Green Target 2050), based on environmental issues such as climate change,
recycling of resources, co-existing with nature, and environmental pollution risk. As a group, we are
striving to accomplish the “Realization of a Sustainable and Environmentally Friendly Society.”WEB
Environmental Policy

https://www.taisei.co.jp/english/

profile/philosophy/policies/
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Improvement of activities

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Medium- and Long-Term Initiatives
SBT initiative
Founded in 2015, this organization(initiative) requires companies toestablish “Science Based Targets(SBT)” to contribute to the Paris
Agreement, which has set the goalof limiting temperature increase toless than 2°C above the pre-industrial level.

29 T A IS EI A NNUA L R EP O R T 2 02 0

Taisei Corporation’s two CO2 emission reduction targets for 2030, which are benchmarks of “TAISEIGreen Target 2050,” have been certified by the SBT initiative. One is the CO2 reduction target atthe construction stage. To achieve this target, we are promoting initiatives to reduce the environmental impact (TSA) in which all employees participate, as well as energy conservation activities byspecialized contractors (cooperating companies) and the use of heavy machinery and vehicles withhigh energy efficiency. The other target is to reduce CO2 emissions in buildings used by customers.
The Company is promoting the provision of advanced energy conservation and ZEB technology, as
well as the accumulation of construction results. We will work with various stakeholders in the value
chain to achieve our targets.

About the Taisei Group

Strategy for Sustainable Growth

ESG Section

Explanation and Analysis ofBusiness Results

Business Section

Environment
Section

Data Section

Environmental Management System (EMS)
Taisei Corporation operates an environmental management system based on ISO14001 (hereinafter“EMS”) on a company-wide basis. We have set the Environmental Committee chaired by the
President, which deliberates and decides on important initiatives for environmental managementthat leads to the Environmental Policy, medium- to long-term targets, and external evaluations. In
addition, risks and opportunities concerning the environment are identified in the EMS, with reference
to the recommendations of TCFD, in consideration of compliance with related laws and regulations,as well as various internal and external environmental issues including climate change and social
demands. As for cross-divisional environmental issues, the CSR Committee, Central Safety Committee,
and the like, have been established to discuss initiatives to address them. In addition, the TaiseiGroup Environment Promotion Council has been established for domestic Group companies topromote group-wide initiatives.
Environment
Committee

President

Chief of Environment Division
Company-wide EMS
EMS of each division

ISO14001
An international standard for environmental management systems.
Since 1998, the Company has
acquired certification on acompany-wide basis (Head Officeand 13 branch offices).

TCFD
Task Force on Climate-Related
Financial Disclosures

Other organizations:• CSR Committee• Central Safety Committee• Energy-Saving Promotion
Council• Taisei Group Environment
Promotion Council

EMS of each branch

Achievements in Recent Years and Future Initiatives

TAISEI Sustainable Action (TSA)—An Initiative to Reduce
Environmental Impact
To achieve its Environmental Policy and Environmental Targets, Taisei Corporation is implementing
TAISEI Sustainable Action (TSA), an environmental impact reduction initiative in which all
employees participate. In proceeding with this initiative, it is particularly important for many parties
involved in construction, which has high CO2 emissions, to be aware of the importance of reducing
environmental impact. Therefore, in addition to the “CO2 Zero Action,” which is our basic initiativethat has been conducted at all worksites so far, effective specific technologies and activities are
summarized in the “Action List,” and the materials, products and technologies used are explainedin an easy-to-understand manner with photographs. In addition, the Company has established anaward system for activities aimed at achieving the Environmental Targets. Through this system weevaluate activities to reduce environmental impact, which serves as a model for other divisions, andwe work to raise employees’ environmental awareness.

Disclosure of Information on Environmental Initiatives
Taisei Corporation strives to improve its environmental performance by steadily carrying out activities
based on its Environmental Policy, and by actively disclosing information through the Company’s
website, the integrated report, and other means. We strive to increase the trust of our stakeholders,and deliver value to them and create sustainable business opportunities. In July 2020, the Company
agreed with TCFD and decided to actively disclose information on the impact of climate change on
its business activities.

KPIs

FY2018results

FY2019targets

FY2019results

FY2020targets

At construction stage: Reduction rate of CO2 emissions per construction cost (intensity)*1

28.9%

26%

32.0%

27%

At construction stage: Reduction rate of total CO2 emissions*1

44.7%

51%

43.7%

52%

At building operation stage: Reduction rate of estimated CO2 emissions*1,2

40.2%

39%

39.5%

40%

Final disposal rate of construction wastes

3.4%

3.4%

3.9%

3.4%

Number of proposals and deployment of biodiversity-related technologies

35 projects 30 projects 46 projects 30 projects

Number of environmental accidents

0 cases

0 cases

1 cases

TAISEI
Sustainable
Action (TSA)
Company-wide activities to reduce
environmental impact including fuelefficient driving of heavy machineryand vehicles, use of hybrid heavymachinery and renewable energy,
development of a wellnessconscious greening environment,
paperless meetings, and use ofLEDs for temporary lighting.

CO2 Zero Action
An initiative to reduce environmental impact undertaken by all
worksites. There are seven actions,
including eco-driving of heavymachinery and vehicles, inspection
and maintenance, and controlling
the temperature setting of air
conditioners.

WEB
Environmental Tagethttps://www.taisei.co.jp/english/
profile/philosophy/policies/

0 cases• KPIs: Key performance indicators • Responsible department: Environment Division (Environmental accidents: Safe Division)*1 Compared to FY1990 (a base year for emissions targets)*2 Including dissemination and promotion of ZEB.

WEB

ESG Date

https://www.taisei.co.jp/english/csr/management/kpi/
TA I SE I A N N UA L R E P O R T 2 0 2 0 30

E S G S ect io nMateriality ❶Realization of a Sustainable and Environmentally Friendly Society

For Realization of Low Carbon Society
Related SDGs

7

9

Risks and Opportunities

11

13

Green infrastructure
Initiatives to take advantage of naturalenvironments’ various functions inboth hard and soft aspects of social
capital development and land utilization for creating sustainable,
attractive national land or regions.
As measures to cope withclimate change, there are measures
to improve ground surface coverageby optimizing land management,
conserving green spaces, andpromoting greening; measures forCO2 sinks by utilizing green spaces,
seaweed beds, etc.; measures tostore and infiltrate rainwater byutilizing soil, permeable pavement,
etc.; and measures to mitigate heatby utilizing the evapotranspiration
effect of planting.

For the construction industry, rising temperatures in recent years, large-scale typhoons, anddisasters caused by extremely concentrated heavy rain pose risk factors such as interruptions anddelays in construction work. On the other hand, increased demand for net Zero Energy Buildings(ZEB), which is a measure to mitigate climate change, will lead to the creation of opportunities fororders. In the field of renewable energy, Taisei Corporation is working on ZEB and developing
technologies for floating offshore wind power generation facilities. In addition, we consider thegreen infrastructure promoted by the Ministry of Land, Infrastructure, Transport and Tourism as ameans of mitigating and adapting to climate change as one of the opportunities to receive orders
through our market expansion aimed at strengthening infrastructure, and we are promoting relevant
technology development and design proposals.
Achievements in Recent Years and Future Initiatives

SBT Certification and Medium- to Long-Term Targets
The 2030 reduction target of greenhouse gas emissions has been certified as Science Based Targets(SBT) by the international initiative on the reduction of greenhouse gas emissions. (See p.29)[Taisei Corporation’s SBT per scope]・Scope 1: Direct emissions associated with fuel use for heavy machinery andvehicles at construction worksites
・Scope 2: Indirect emissions associated with electricity use at construction worksites
Reduce greenhouse gas emissions (Scope 1 + Scope 2) by 26% from
FY2013 levels by 2030
・Scope 3: Indirect emissions associated with energy use during the operational
phase of the building delivered
Reduce greenhouse gas emissions by 25% from FY 2013 levels by 2030

ZEB Ready
It is a building that is very close to
ZEB, satisfies ZEB Ready requirements and has reduced annual
prime energy consumption volume
to almost zero by utilizing renewableenergy. It should fulfill the reductionof standard primary energy
consumption volume by 50% ormore (excluding renewable energy).

Acquired ZEB Ready Certification for the First Time in Japanas a Temporary Worksite Office
In order to further promote energy conservation at temporary
worksites, we obtained ZEB Ready certification for the first time inJapan for two advanced environment-conscious worksite offices. The
main feature of this initiative is that the combination of highly versatileequipment and materials meets the ZEB certification specifications.
These specifications are easy to install in temporary offices, which areoften covered by lease contracts. By presenting them as a standard
model of a worksite office in the near future, this initiative aims tospread energy-saving worksites throughout the industry.

Topic ●

Signing ceremony at the French
Embassy in Japan

31 T A IS EI A NNUA L R EP O R T 2 02 0

Akasaka Junior High School, etc.,
Maintenance Work Worksite Office*Our Taisei Advanced Center ofTechnology ZEB Demonstration
Building “Human-Space Lab” also
obtained BELS and WELL
certifications. (See p.21)

Memorandum of Understanding Signed for Joint
Development of Floating Offshore Wind Facilities
We signed a memorandum of understanding with French
company Ideol SA on the development and market development of floating foundations for concrete floating offshore wind
power generation facilities. It is said that the potential of floating
offshore wind power generation in Japanese sea areas isapproximately three times larger than that of bottom-fixed wind
power generation. Going forward, we will accelerate theintroduction of concrete floating offshore wind power generation through cooperation with the company, aiming to develop
markets in Japanese sea areas.

About the Taisei Group

Strategy for Sustainable Growth

ESG Section

Business Section

Environment
SectionExplanation and Analysis ofBusiness Results

Data Section

For Realization of a Recycling Oriented Society
Related SDGs

Risks and Opportunities
Although it is important to control the quality, delivery time, and cost of materials and equipmentused in construction work, there is a growing need to promote sustainable procurement throughout
the supply chain, such as measures to deal with the problem of disposable plastics and othernatural environmental pollution caused by waste, resource conservation, and the use of materials
that can be recycled and reused.
At Taisei Corporation, we are working on waste management and the recycling of resources atworksites, adopting materials and equipment that take into account the lifecycle from the design
stage based on green procurement, and providing technologies to extend the life of buildings.

11

12

17

Achievements in Recent Years and Future Initiatives

Utilizing the Green Procurement Guideline in Cooperation with Suppliers
In 2001, the Taisei Corporation Green
Procurement Guideline was established andput into effect to promote the use ofmaterials, equipment and building methods
that have small environmental impact during
the design, construction, operation anddemolition of structures.
By referring to and reflecting the content
of the Green Purchase Law, we review thesubject items every year. In FY2019, 93 items
were included in the guideline.
Through CSR procurement, we are also
promoting environmental consideration for
procurement when we work with suppliers.

Adoption of Green Procurement Item
(Construction design phase: non-consolidated)
Other items 6%• Greening of roofs, etc.
Structural items 15%• Recycled steel
materials• High-strength
concrete, etc.

Details of
Adopted Items

Construction items 22%• Heat insulating and door
• Ceramic tile

Facilities 57%• LED light• Automatic faucet• Western-style toilet(water-saving type)• Automatic cleaning
equipment andbuilt-in urinal(water-saving type)• Energy-saving
electric toilet seat
• Highly efficienttransformer, etc.

See CSR Procurement Guidelines on p.37

Plastics Smart

Effective Use of Waste Plastics
Construction materials, packaging materials,
and other waste plastics are sorted thoroughly
and properly recycled by specialized disposal
companies. Large foamed materials may bemelted with a solution to reduce the volume to
be treated. In addition, we are implementing
measures to utilize waste plastic by combining
it with waste wood products and creating
artificial recycled wood products.
Taisei Corporation supports the Plastics
Smart Campaign by the Ministry of theEnvironment.

Sortingresources

Recycling
resources

Reusingresources

Sorting andcollection of waste
plastics

Dissolving
Styrofoam(foam material)

Using recycled wood
• Louver (photograph)• Walking decks,etc.

A campaign by the Ministry of theEnvironment to promote “a smart
way of dealing with plastic” nationwide, including thorough eliminationof littering and illegal dumping, andthorough reduction of single-use
plastic and sorting and collection.

Taisei Corporation supports the Plastic
Smart Campaign by the Ministry of
the Environment.

Recycling of Resources and Effective Utilization of Rainwaterat Worksites
The emission volume of construction waste varies depending on the scale and type of construction.
In general, the bigger the construction is, the larger the amount of waste becomes. Taisei Corporation
strives to reduce the amount of final disposal in the amount of waste generated (final disposal ratio) bystrict sorting, proper recycling, and intermediate treatment.
As part of our efforts to recycle water resources, we are implementing “utilization of rainwater andspring water on site” as a basic activity to reduce the environmental impact of our worksites. The
water is stored in sedimentation tanks and water storage tanks, and is effectively used as a measureagainst heavy rain and dust on site.
TA I SE I A N N UA L R E P O R T 2 0 2 0 32

E S G S ect io nMateriality ❶Realization of a Sustainable and Environmentally Friendly Society

For Realization of a Nature Co-Existing Society
Related SDGs

11

14

Risks and Opportunities

15

17

There is always a concern that construction would significantly affect the surrounding environment
including nature. During the planning phase, we extract risks such as the violation of environmental
laws and regulations as well as opportunities including chances to add value. We pay attention tobiodiversity until the operation and management support phase after construction, and provide
solutions to create a rich environment to customers. We will contribute to the achievement of asociety that cohabits with nature by properly evaluating the value of natural resources to utilize forthe development of infrastructure and buildings and reducing the influence of construction.
Achievements in Recent Years and Future Initiatives

WEB
Declaration of Taisei
Corporation on Biodiversity
Preservation

https://www.taisei.co.jp/english/
profile/philosophy/policies/

Concierge Series
Ikimono Concierge
Our unique tool for predicting andidentifying animals that can be
attracted by a planning site

Mori Concierge
Our unique tool enabling the selection of plants that can adapt to theenvironment of a planning site

Mizube Concierge
Our tool for developing a uniqueplan to conserve and compensate
waterside rare flora and fauna
whose ecosystems may be affectedby construction

Mizube Concierge through the use oftablets

Volunteer activities
to make dormouse
nest boxes

Declaration of Taisei Corporation on Biodiversity Preservation
Taisei Corporation has agreed to the Declaration of Biodiversity by Keidanren, and formulated the“Declaration of Taisei Corporation on Biodiversity Preservation” in September 2010, in order toclarify its corporate stance on the conservation and creation of biodiversity.

Biodiversity-Conscious Investigation, Planning, Construction and Monitoring
We are engaged in the conservation and regeneration of the natural environment with Ecological
Planning, our proprietary environmental planning tactics. We improve quality of social capital byinvestigating and analyzing not only planned sites but also their surrounding environments to carryout construction under a plan that takes into account regional characteristics. We conduct
monitoring after completion and learn from feedback to deepen our technology. As the third roundof the “Concierge Series,” we have newly designed “Mizube Concierge” to apply to a project that
calls for conservation of rare flora and fauna, striving to contribute to the realization of a society thatco-exist with nature.

Improvement of Facility Value through Biodiversity Conservation and Creation
An environmental certification that proves natural environmental consciousness of a facility
increases the value of the facility and appeals to customers as proof of an environmentallyconscious company. Taisei Corporation takes advantage as a comprehensive constructor having
the integrated capabilities from facility planning to design and construction, through which itsupports customers’ environmental activity such as biodiversity conservation and creation,
including the acquisition of environmental certifications.
At the stage of planning and design of the ESR Amagasaki Distribution Center (ordered by
ESR), a logistic facility located at the Osaka bay-side area, for example, an outer green area wasplanned, designed, and constructed by Taisei Corporation to help improve the biodiversity without
affecting capabilities as a logistics facility. The facility earned the “Business Innovation in Harmony
with Nature and Community” certification from the Association for Business Innovation in Harmony
with Nature and Community (ABINC) as a logistics facility that respects biodiversity.

Implementation of Activities to Contribute to Environment andSociety in Cooperation with Various Stakeholders

Volunteer activities to create nest
boxes for dormice, a rare animal
species, in cooperation with theAnimal-pathway & Wildlife
Association.

Tokyo Greenship
ActionParticipated in the “Tokyo Greenship
Action,” a nature conservation
program hosted by Tokyo
Metropolitan Government.

33 T A IS EI A NNUA L R EP O R T 2 02 0

Dormouse nest boxes made involunteer activities

Our approach to enhancing biodiversity is guided by Environmental
Policy and Declaration of Biodiversity Preservation, and demonstrated as a company-wide activity to reduce environmental
impact under our unique biodiversity conservation guidelines, etc.
Not limited to biodiversity consideration in the business, our efforts
include offering volunteer opportunities for the Group employees
and their families to make nest boxes for dormice as part ofnatural environmental education through forest conservation
activity, and to participate in Tokyo Greenship Action for morethan ten years.

About the Taisei Group

Strategy for Sustainable Growth

ESG Section

Business Section

Environment
SectionExplanation and Analysis ofBusiness Results

Data Section

For Realization of a Safety Secured Society
Related SDGs

Risks and Opportunities
Environment pollution caused by construction has a significant impact on the surroundings andsociety. Compliance with environmental laws and regulations is always one of the most importantenvironmental issues. We keep contributing to the reduction of environmental risks of society bypromoting the proper management of construction waste, the development of new technologies
and measures to cope with the regulations for soil pollution which are expected to become stricter
than now.

6

11

12

Achievements in Recent Years and Future Initiatives

Risk Measures at Worksite
With a worksite environment patrol, the Environment Department of the Head Office and branches
conduct an internal audit to check the observance of the environment law at worksites. As for thefindings, we establish corrective and preventative measures for continuous improvement. At aworksite, based on the Environment Management manual, we provide environmental education to
our employees and specialized contractors. By sharing the cases that could result in an environmental
accident, issuing notifications of the proper management of toxic substances such as asbestos and
PCB, and reinforcing adequate control and treatment of polluted soil, we have been raising awarenessof the importance of environment management and the prevention of environment-related accidents.
Regarding the management of water resources, Taisei Corporation is working to “prevent water pollution
caused by construction wastewater, and the like” as a management priority.

Complaint to Worksites and Handling Thereof
We take proper measures regarding
environment-related complaints addressed
to a workplace, make a record and reportusing a communication sheet based on anenvironment management system (EMS)
procedure and share the information
horizontally among concerned departments
or within the entire Company as required. In
addition, we are properly handlingcomments given by citizen groups.

Percentage by Complaint Item

Others 35%

Dust 29%

Percentage ofcomplaint
items

Traffic obstruction 2%

Noise 21%

Radio disturbances 4%
Water pollution 4%

Vibrations 5%

Technical Case Study ●Developed a Cutting-Edge Method of Demolishing Skyscrapers Known as“Tecolep-Light system”
We successfully developed “Tecolep-Light system,” a cutting-edge method of demolishingskyscrapers. The Tecolep system is an environmentally-conscious method of demolishingskyscrapers by repeatedly jacking down from the upper level, while minimizing dust, noise,and other particles, etc. which may negatively affect the surrounding environment. Unitizedlightweight roof structures can reduce the time to create a closed space, allowing demolition
work to be completed in a shorter period of time.

TA I SE I A N N UA L R E P O R T 2 0 2 0 34

E S G S ect io nMateriality ❷Ensuring Quality and Improving Technology
Related SDGs

8

9

Policy and Management

11

13

17

TAISEI QUALITY®
Our Group’s activities for quality
promotion are summarized into
TAISEI QUALITY®. The Taisei Group
employees are proud to dedicate toquality, and strive to earn the trust ofcustomers and society.

Quality Policy and Organization
In light of the Taisei Group’s mission to provide customers and society with quality construction products and related services efficiently and continuously, the Taisei Group sets forth “Pursuing customer
satisfaction” and “Ensuring and improving safety and quality” as Action Guidelines for Taisei Personnel
and the Taisei Group as a Whole. We promote efficient production activity in line with Quality Policy
along with Individual Policies established for each division. Under the slogan TAISEI QUALITY®, theGroup as a whole strives to provide customers with safe and secure construction products and aftersales service under a quality control system.
Each of the divisions and the Group companies has obtained ISO9001 and implements certified
quality management. The Civil Engineering Division and Building Construction Division have prepared
their own manuals and action guidelines, operate their own management systems, and conductcustomer satisfaction surveys after delivery.
WEB

Quality Policy • ISO acquisition status

https://www.taisei.co.jp/english/csr/performance/iso26000/consumer/

Achievements in Recent Years and Future Initiatives

T-CIM®
T-CIM® is our proprietary systemthat integrates a construction
system utilizing Information andCommunications Technology CIM(Construction Information Modeling)
proposed by the Ministry of Land,
Infrastructure, Transport andTourism, with attribute information
associated with a 3D model of eachconstruction project.

BIM
BIM, an abbreviation for Building
Information Modeling, is a construction information database whichlinks a 3D building model createdwith a computer and attribute information including the specification,layout and cost of building components and equipment.

Field Pad®
Field Pad® is used for overall
construction management operation including the storing andreporting of construction progress
photos at worksites, contributing toshortening work time, andincreasing productivity.

Field Pad ®

Implementation of Customer Satisfaction Surveys
The results of the customer satisfaction survey of FY2019 showed a satisfaction rate of 98% (96% in
FY2018) and 88% (92% in FY2018) for the Civil Engineering Division and the Building Construction
Division, respectively. We will keep sharing research results, and eliminate complaints throughcooperation between the Head Office and branches.

Leveraging ICT to Realize Immediately Effective Productivity
Improvements
Since FY2017, Taisei Corporation has been pursuing an initiative aimed at productivity improvement
and technological innovation based on ICT, under the name “Taisei i-innovation®.” We are striving
to implement this initiative company-wide, with approximately 80 employees responsible for its
promotion assigned to the Head Office and branches. Apart from utilizing T-CIM® and BIM for
managing information obtained through planning, design, construction and operation, we makemost of ICT as a measure to raise production capacity at construction worksites in the most efficientand immediate manner.
Specifically, mainly at worksites, we steadily introduced a network called “Worksite Net,” whichfacilitates information sharing between personnel involved in projects, both internal and external,
as well as Field Pad®, which helps improve the efficiency of operations such as viewing andrecording construction management information. As a result of our continuous efforts to improve
productivity, the Group’s productivity (net sales/number of employees) in FY2019 was 117*1 (upfrom 111 in FY2018).
This
ReportNew Technology Contributing to SDGs

p.22

KPIs

FY2018results

FY2019targets

FY2019results

FY2020targets

CE: Customer Satisfaction

96%

100%

98%

100%

BC: Customer Satisfaction

92%

100%

88%

100%

Productivity (Net sales/number of employees)*

111

110

117

110

• CE: Civil Engineering / BC: Building Construction • Responsible department: Civil Engineering Division / Building Construction Division*The actual result for FY2016 is set at 100. 110 is the target for the end of FY2020.

35 T A IS EI A NNUA L R EP O R T 2 02 0

About the Taisei Group

Strategy for Sustainable Growth

ESG Section

Business Section

SocialSectionExplanation and Analysis ofBusiness Results

Data Section

Materiality ❸Technical Development for Realizing a Sustainable Society
Related SDGs

Policy and Management

7

Innovation Management
The Group’s source of value creation is technology and, therefore, the Group’s business is foundedon research and development and intellectual property activities. As declared in the section “Striving
to create value” of the Action Guidelines for Taisei Personnel and the Taisei Group as a Whole, we
strive to create value by “always mobilizing our technology and know-how as well as through technological innovation and ingenuity” and “always looking ahead and advancing knowledge andskills.” Our research and development is focused on themes selected in terms of contributions to
SDGs, under the leadership of the Technology Committee chaired by the President, centering on
renewal and replacement, nuclear power, environment, engineering, and urban development.
Furthermore, in order to enhance the intellectual property capabilities of Taisei Corporation and
its Group companies, we have set forth “Striving to create value” under the Action Guidelines for
Taisei Personnel and the Taisei Group as a Whole and established the Policy on Intellectual Property,
while steadily promoting intellectual property strategies by creating, protecting and utilizing intellectual
property, reducing the risks associated with intellectual property, and taking advantage of our brand.
We strategically manage and utilize all intellectual property including patents, copyright, construction
and business know-how to promote management that is focused on intellectual property. Regarding
management of intellectual property, we intend to improve operational efficiency through preparing a
database for managing patents and building a search function for our own patents.
This
ReportNew Technology Contributing to SDGs

pp.21-22

WEB

9

11

13

17

Renewal andReplacement
Renewal and Replacement refers toa business area where we improvevalue to buildings that have physically deteriorated over time byrepairing and renewing their attractiveness, and adding the latest
technology and functions byproposing energy-saving ideas, etc.
according to the phase (condition)of buildings.

Policy on Intellectual Property

https://www.taisei.co.jp/english/profile/philosophy/policies/

Achievements in Recent Years and Future Initiatives

Research and Development Activity
In order to respond to more sophisticated and diversified
technical needs and increase the efficiency of investment
into technological development, we actively promote
external alliances with universities and other research
institutes, companies of the same and different industries,
etc. as well as open innovation activities.

Patent Ownership Status

研究開発支出Open Innovation

Research and Development
Expenditure (Consolidation)(Billions of Yen)

11.6

11.1

12.4

13.5

150
120

Open Innovation refers to a methodology for innovation by mobilizing
cross-organizational knowledge andtechnology.

90
60
30

2016

2017

■4週８休以上2018 2019 (FY)0

■4週7休以上

To indirectly support cross-sectorial technologies from the aspect of intellectual
we■4週6休以上property,■4週5休以上
strategically and actively acquired and utilized intellectual property rights, which led us to the No. 1
position in the 2019 patent assets size ranking in the general construction industry issued by
Patent Result Co., Ltd., a comprehensive evaluation of patent assets holdings in both quality andquantity. Besides technology related to the projects of the New National Stadium Development
Project (2nd Period), we also further strengthened the focus area selected by the Medium-term
Business Plan among our continuous research and development of “differentiation technology” and“labor-saving construction technology.” As a result, in the two categories, we applied for 119 and43 patents in total respectively during the last five years from FY2015 to FY2019.
FY2018results

KPIs

FY2019targets

FY2019results

FY2020targets

Number of patent rights registered

250 cases 180 cases 169 cases 180 cases

Number of patent applications filed

213 cases 230 cases 188 cases 230 cases• Responsible department: Taisei Advanced Center of Technology

TA I SE I A N N UA L R E P O R T 2 0 2 0 36

E S G S ect io nMateriality ❹Promotion of Supply Chain Management
Related SDGs

4

8

Policy and Management

9

11

12

13

Procurement
Guideline (Summary)
1. Compliance with laws, regulations and public morals
2. Impartial and fair transactions
3. Respect for human rights
4. Promotion of safety and hygiene
5. Environment protection activities*
6. Assurance and improvement ofsafety and quality
7. Information disclosure
8. Reinforcement of information
security
9. Social contribution activities
10. Business continuity at the timeof a disaster
11. Promotion of CSR procurement*See Green Procurement Guideline
on p.32

CSR—Policy and System of Procurement
We strive for “promoting partnerships with subcontractors and suppliers” and “ensuring fairbusiness transactions” as stated in the Action Guidelines for Taisei Personnel and the Taisei Group
as a Whole, along with the Procurement Policy established in reference to ISO26000, an international standard providing guidelines for social responsibility. The CSR Procurement Guidelines
provide matters to be implemented by both Taisei Corporation and suppliers to advance CSR
procurement within the entire supply chain. The effort to raise awareness of CSR procurement
includes holding educational training and seminars tailored to individual responsibility levels such as
officers and employees at all levels, branch managers, procurement managers, worksite managers,
and overseas worksites, etc.; and providing suppliers with opportunities to participate in meetings
with branch managers, e-learning, on-site surveys and questionnaires, etc., among other various
activities. Plans and results of these activities and future developments are discussed at the CSR
Procurement Committee composed of responsible personnel from relevant divisions including Civil
Engineering, Building Construction, Procurement, and Safety Administration.
WEB

Procurement Policy

https://www.taisei.co.jp/english/profile/philosophy/policies/

Achievements in Recent Years and Future Initiatives

CSR—Activity Survey
Major suppliers
Partner companies primarily
including the members of Taisei
Corporation’s proprietary organization for core subcontractors(Soyukai)

We conduct biennial CSR procurement questionnaires on
Supply chain monitoring result in FY2018
compliance with our procurement guidelines. In response
Number of major suppliers
1,060
surveyed in FY2018:
to the recent social requirement for human right andPercentage of companies surveyed
environmental issues, we have also revised the procureapprox. 49%
on a contract value basis:
ment guidelines in 2020.
Number of responding companies:
841
In 2020, we will carry out a CSR procurement questionResponse rate:
79.3%
naire and a survey on the systems for managing foreigntechnical interns as we did in 2018. By expanding the scopeof survey participants and providing additional information beneficial to the activity of each of thesecompanies, we seek further cooperation from not only primary suppliers but the entire supply chain.
When the questionnaire is completed, we will also conduct on-site supplier surveys across the country.

Efforts to Promote Sustainable Procurement of Materials and Equipment
WEB
Promote CSR procurement

https://www.taisei.co.jp/english/
csr/performance/iso26000/
fair_operating/

We conducted a traceability survey*1 of suppliers of procured materials and equipment to seek theirunderstanding and cooperation for our CSR procurement initiatives. Particularly, in an effort to alignthe supply chain of wooden materials of wooden frames and furniture with what is suggested byNGOs and groups on the issues concerning human rights of native people of deforested areas inSoutheast Asia, we visited suppliers, wholesalers, and general trading companies to discuss thecurrent situation and the future use of domestic timber and certified timber.

Educational Activities Overseas
We conducted CSR procurement meetings with an emphasis onforced labor, child labor, and other human right violations, for our
local worksites, local affiliates, and local suppliers in Taiwan (2015),
Singapore (2017), Vietnam (2018) and Myanmar (2019). Meetings
will also be held in 2020.
Overseas CSR Procurement Seminar(Myanmar)

KPIs

Average implementation rate of CSR activities
by suppliers

FY2018results

FY2019targets

FY2019results

FY2020targets

74.2%

—*2

—*2

75%

• Responsible department: Corporate Communication Department (CSR Promotion Section)*1 To make a production history and distribution channel traceable.
*2 Questionnaire survey for suppliers in FY2019 was absent due to biennial implementation.

37 T A IS EI A NNUA L R EP O R T 2 02 0

About the Taisei Group

Strategy for Sustainable Growth

ESG Section

Business Section

SocialSectionExplanation and Analysis ofBusiness Results

Data Section

Materiality ❺Thorough Management of Occupational Health and Safety
Related SDGs

Policy and Management

Health and Safety Policy and System
Taisei Corporation’s safety-first policy is expressly stated in the Action Guidelines for Taisei
Personnel and the Taisei Group as a Whole that “We strive to maintain a safe and hygienic work
environment and prevent occupational accidents.” Based on this, our proposal to eliminate
accidents and disasters and prevent disasters involving third parties is organized in the form of
TAISEI OHSMS, a system to manage occupational health and safety. TAISEI OHSMS is operated
in light of the Health and Safety Policy announced by the President to achieve zero fatal accidents
and zero serious accidents, combining day-to-day efforts of not only our employees but also theGroup companies and partners as a whole to make safety concrete.
In addition, we have established the Central Safety Committee where safety management,
prevention of environmental accidents, as well as issues related to the safety, health and environment of specialized contractors are discussed and reported to the President. A Branch Safety
Committee, composed of branch supervisory health and safety managers, employees, and labor
unions is also held to communicate with labor unions periodically.
Conceptual Diagram of TAISEI OHSMS (Occupational Health and Safety Management System)
Head Office

Branch Office•Implementation•Operation

matters requiring priority action, matters requiring
priority management, and identification of particularly
dangerous work and other dangerous work, etc.

•Safety and health education•System enhancement•Dissemination of safety information•Specialized contractors guidance

Feed backDO

Feed back•Planning

Branch Safety Committee•Branch Health and Safety Management Plan Paper:

Instruct

CHECK•Checking

ACT•Improvement

Formulated annuallyin January•Giving worksite patrols and corrective

Safety Council

Accident Analysis Conference andAccident Investigation Committee•Accident analysis and preventive measures•Identification of hazardous or harmful factors
and matters for action (company-wide risk
assessment)

Report to

13

15

17

11

12

TAISEI OHSMS
Our proprietary occupational healthand safety management systemdeveloped in reference to theguidelines issued by the ILO andthe Ministry of Health, Labour andWelfare.

WEB
Improving Health and
Safety Standards

https://www.taisei.co.jp/english/
csr/performance/iso26000/labor/•Safety and Health Management Policy forWorksites Paper•Construction Plan and Health and Safety Plan Paper:
Health and safety management plan/emergency
response plan/basic construction plan

•Giving site patrols and corrective instructions

instructions•Accident analysis and preventive measures•Identification of hazardous or harmful
factors and matters for action (branch risk
assessment)

9•Preparation of work-specific construction plan
•Confirmation of construction outlines andwork procedures•Consultation on accident prevention•Meeting on health, safety, and environment ofconstruction work
Instruct •Keeping concerned contractors and workers identified•Safety and health education•Examination of construction plans•System enhancement•Dissemination of safety information•Specialized contractors guidance•Giving internal audits and guidance to branches•Giving Head Office’s selective patrols andcorrective instructions

8

Formulated annually in January

Reflect

Targets, matters requiring priority action,
implementation plan for branches

Feed backCentral Safety Committee

Reflectannually•President’s Health and Safety Formulated
in JanuaryManagement Policy Paper•Health and Safety Management Policy Paper: Targets,

PLAN

Construction Site

3

Accident Prevention Council

Report to•Handling accidents and disasters•Identification of hazardous or harmful factors
and matters for action (worksite risk
assessment)

Review of the system*Risk assessment and a PDCA cycle are
implemented to improve health and safety
standards constantly.

WEB

Safety and Health Policy

https://www.taisei.co.jp/english/profile/philosophy/policies/

Achievements in Recent Years and Future Initiatives

Improvement of Health and Safety Standards

President’s Award

In 2019, we experienced 77 accidents accompanied by lost worktime, and 60 accidents accompanied by four or more lost workdays, resulting in an incident rate of 0.62.
In addition, awards were granted to encourage improving the quality of health and safety, including
the President’s Award, which was granted
President’s Award (Ministry of Health, Labour andin FY2019 to three worksites for excellence
Welfare Award-Winning Worksites)
in workplace health and safety.
• Relocation and Construction for the Obihiro Kosei Hospital
For thorough health and safety(Hokkaido)
management based on TAISEI OHSMS,
Construction for the Facilities of Akasaka 9-chome North•we will continue to conduct worksite
Area Category I Urban Redevelopment Project
patrols and safety education for(Tentative Name) Construction for the New Head Office•
employees and on-site workers, among
Building of Kinki Sangyo Kumiai (Osaka)various other measures, in 2020.

We have established several award
systems including the President’sAward granted to business sites,
specialized contractors, foremen’s
associations and Group companies, as well as worksites that have
won the Ministry of Health, Labourand Welfare Award for excellencein workplace health and safety.

KPIs

Number of fatal accidents• Responsible department: Safety Administration Division

FY2018FY2019targets

FY2019FY2020targets

2 cases

0 cases

4 cases

0 casesTA I SE I A N N UA L R E P O R T 2 0 2 0 38

E S G S ect io nMateriality ❻Cultivation of Technical Staff and Securing Human Resources
Related SDGs

4

8

Policy and Management

9

11

12

13

Construction Career
Up System (CCUS)
An initiative to enhance the coordination with cooperating companies
and their organizations to visualize
and share skills, experience, qualifications, and the status ofenrollment in social insurance
programs, etc., of each of theskilled construction workers underuniform rules of the industry.

Kensetsu Komachi
Kensetsu Komachi is a nickname
for all women who work for theconstruction industry. The opportunities for work extend fromengineers and specialists who workat construction sites and designersof civil engineering structures andbuildings, to administrative staff
and sales staff who support theoperation of business, researchers,
and other positions.

Promotion of Work Style Reform
Taisei Corporation is committed to managing working hours properly and addressing long working hours.
In 2018, we formulated Roadmap to 2024 for “addressing long working hours” with annual targetsof “appropriate overtime working hours from a health point of view,” “regular leave and compensatory
leave,” and “closures of worksites,” which are expressly stated in the Medium-term Business Plan andpromoted under the leadership of internal consultation bodies including the “Committee for the
Reduction of Working Hours” and “Work Style Reform Conference.” As for the closures of worksites
on weekends, industry-wide efforts are being made by the members of the Japan Federation ofConstruction Contractors (hereinafter referred to as Nikkenren), including Taisei Corporation.
As an initiative of both the public and private sectors, organizations including the Ministry ofLand, Infrastructure, Transport and Tourism, Nikkenren, Zenken, and the National Federation ofConstruction Workers’ Union jointly promote the widespread of Construction Career Up System(CCUS) as an important infrastructure to obtain and retain future workers and improve the work
conditions of skilled construction workers.
Furthermore, as part of the promotion of female participation at construction sites, we support
Nikkenren’s Kensetsu Komachi activity, which is an effort to increase the participation of female engineers.
Since 2014, Civil Engineering and Building Construction divisions have also offered female engineersopportunities for dialogue with executives to reflect women’s viewpoints more aggressively, including
building a work environment to be more female gender-friendly. We believe this will create new value.
WEB

Creating a Pleasant Working Environment

https://www.taisei.co.jp/about_us/csr/performance/iso26000/labor/

Achievements in Recent Years and Future Initiatives

Efforts to Address Long Working Hours
The number of employees who acquired 104 days of “regular leave and compensatory leave” a year
(eight leaves in four weeks) increased to 91.8% (up from 91.1% in the previous fiscal year). In addition,
six days of worksite closure in four weeks was achieved by 73.5% of the construction sites and75.8% of the civil engineering sites. In order to change employees’ awareness and behavior, allemployees are expected to discuss and carry out practical measures according to the conditions ofindividual workplace situations. Activities that positively contributed to addressing long working hours
are shared across Group companies and continuously promoted to maintain momentum.

Promotion of Construction Career Up System (CCUS)
As a result of our efforts to promote CCUS, the platform has been introduced at 75% of our worksites(on a construction contract value basis) as of the end of March 2020, by increasing the coverage fromthe initial plan to those with ¥100 million or more construction contract value, in principle. We willcontinue promoting CCUS and encourage our cooperating companies to register more service
providers and skilled persons.

Kensetsu Komachi
Empowerment
Award
The Kensetsu Komachi
Empowerment Award was established by Nikkenren with theobjective of hiring and retaining
workers, advancing diversity, andrenewing the image of theconstruction industry for greater
female participation in the industry.

Promoting Female Participation through Kensetsu Komachi
Our worksite was granted the best award and the special award of the Kensetsu Komachi
Empowerment Award in FY2019. We have shared this successful improvement case study withother construction worksites while continuing to build a work environment where women candemonstrate their abilities. The number of female new graduates and mid-career hires reached 698,
up from the previous year by 35.
FY2018results

KPIs

Average overtime hours per month*1
Worksite registration rate of Construction Career Up System*2
Number of female engineers*1• Responsible department:*1 Human Resources Department*2 Civil Engineering Division / Building Construction Division

39 T A IS EI A NNUA L R EP O R T 2 02 0

FY2019targets

FY2019results

FY2020targets

37.8 hours 35 hours 39.0 hours 35 hours—

60% or more

75%

80% or more

663 persons 690 persons 698 persons 740 persons

About the Taisei Group

Strategy for Sustainable Growth

ESG Section

Business Section

SocialSectionExplanation and Analysis ofBusiness Results

Data Section

Materiality ❼Realization of an Attractive Working Environment That Is Good to Work in
Related SDGs

Policy and Management

Promotion of Diversity and Inclusivity
Determined to “ensure basic human rights and diversity” in our Action Guidelines for Taisei
Personnel and the Taisei Group as a Whole, and “respect for diversity” in the corporate philosophy
expressed as the Taisei Spirit, we are committed to nurturing a culture that seeks to achieve
diversity and inclusion. Moreover, we clearly referred to this as a management challenge in theMedium-term Business Plan (FY2018 – FY2020) and established the Human Rights Policy aiming to
improve the workplace environment where diversity in religion, gender, age, nationality, disabilities,
value, work style and career, etc., are respected and people can exert their abilities.
WEB

Human Rights Policy

https://www.taisei.co.jp/english/csr/performance/iso26000/human_rights/

4

5

16

17

8

9

10

Taisei Spirit
Key concepts that all Taisei Group
officers and employees must adhere
to in order to pursue and realize theTaisei Group Philosophy

Taisei Group Philosophy

Achievements in Recent Years and Future Initiatives

Promotion of Women’s Participation and Advancement

Taisei Spirit

The number of participants in Female Leader Training, an internal program conducted as a measure
to increase female participation, reached 188, and the number of participants in the Diversity
Management Seminar targeting senior personnel reached 531. In July 2020, Taisei Corporationagreed with the Cabinet Office’s Declaration on Action by “A Group of Male Leaders Who Will Createa Society in which Women Shine.” We will continue to focus on promoting female participation.

Support the Balance between Work and Family/Childcare
Taisei Corporation has put in place a variety of systems to help employees raise children in a better
work environment, including the Childcare System and Flexible Working Hours for Employees
During Childcare. In recent years, our focus has expanded to supporting male employees duringchildcare. The percentage of male employees who took childcare leave reached 100% and theaverage number of leaves taken was 7.9 days (as of the end of March 2020).

Overall
Principles ofConduct

OverallManagement
Perspective

Active and Transparent Culture
We value diversity and, throughopen and active communicationlines and networks both internal andexternal to the Taisei Group, seek tocultivate a transparent and active
corporate culture in which all of ourofficers and employees are able toreach their full potential.

Recruitment and Retainment of Human Resources
We provide work descriptions in detail during the recruitment process to avoid mismatching. For
young new employees, we offer the opportunity for private interviews after joining the Company,
including a trial of a mentor system in some cases, while conducting a biennial employee satisfaction survey (satisfaction rate of 80.8% in FY2019) for further employee satisfaction.
FY2018results

KPIs

Number of female managers

FY2019targets

FY2019results

FY2020targets

167 persons 180 persons 197 persons 230 persons

Turnover rate of employees within 3 years of hiring

5.4%

4%

7.4%

4%

Rate of taking childcare leave by males

94.2%

100%

100%

100%

FY2018results

FY2019targets

FY2019results

FY2020targets

Number of major information security accidents*1

0 cases

0 cases

0 cases

0 cases

Response rate of Corporate Ethics Helpline and Group Helpline*2

100%

100%

100%

100%

• Responsible department: Human Resources Department

Materiality ❽Promotion of Compliance
See Risk management/Conpliance on pp.53-56

KPIs

Related SDGs

8

9

10

12

16

17

• Responsible department:*1 Information Planning Department*2 General Affairs Department

TA I SE I A N N UA L R E P O R T 2 0 2 0 40

E S G S ect io n

Corporate Governance
Our Basic Approach to Corporate Governance
The Company aims to achieve sustainable development and improvement in the medium- to long-term value of the Company
and its subsidiaries and affiliates (collectively, the Taisei Group) in accordance with the philosophy of the Taisei Group, being “tocreate a vibrant environment for all members of society” (the Taisei Group Philosophy) and the so-called “Taisei Spirit,” which
embodies our commitment to “Active and Transparent Culture,” "Value Creation” and “Evolution of Tradition.”
The Company’s fundamental approach to corporate governance is to conduct the management and decision-making of thebusiness in a swift, appropriate, fair and transparent manner in order to continue to grow as a corporation in a sustainable andsocially responsible manner.
Please refer to our “Fundamental Corporate Governance Policy” on this website, which was established based on theabove basic approach, responding to each principle of the Corporate Governance Code.

WEB

Fundamental Corporate Governance Policy

https://www.taisei.co.jp/english/profile/governance/

Main History of Corporate Governance at Taisei Corporation
Strengthening the Board’s management decisions and supervisory function●

Introduced a System of
Executive Officers●

Number of Members of theBoard: 12 (Including 2 External

Number of Membersof the Board: from 49 to 12

1999

Introduced Independent External
Members of the Board

Members of the Board)

2003

●

Members of the Board: 12

Established
Fundamental
Corporate
Governance
Policy2015(Including 4 External Members of the Board)

Audit & Supervisory Board Members: 6(Including 4 External Audit & Supervisory Board Members)

2020

Chart of Corporate Governance System❶ Shareholders / General Meeting of Shareholders
Appointment/Dismissal❾ Accounting Auditor

Appointment/Dismissal❻ Audit & Supervisory
Board Members/
Audit & Supervisory Board

Cooperation

Audit

6 Audit & Supervisory Board Members(including 4 External Audit &Supervisory Board Members)❷ Members of the Board/
Board
12 Member of the Board(including 4 External
Members of the Board)❸ Committees of the Board
Prior
Consultation
and Repor❺ Executive Officers

Cooperation❽ Auditing Department❹ Management Committee
President andChief Executive Officer

Report/AdviceGroup Companies

Support/Guidance/
Cooperation

41 T A IS EI A NNUA L R EP O R T 2 02 0

● Remuneration Committee● CSR Committee, etc.

Internal Audit

Operations Committee● Environment Committee● Risk Management Committee, etc.

Report/AdviceSpecial Committee● Compliance Committee

Audit
Internal Audit● Executive Personal Committee

Appointment/Dismissal/Supervision❼ Audit & Supervisory Board
Members’ Department

Cooperation

Appointment/Dismissal

Direction/Supervision

Operating Divisions

About the Taisei Group

Strategy for Sustainable Growth

ESG Section

Business Section

Governance❶ Shareholders /General Meeting of
Shareholders(Held on June 24, 2020)❷ Members of theBoard / Board(Convened 13 times in FY2019)❸ Committees of the
Board

Explanation and Analysis ofBusiness Results

Data Section

The Company shall endeavor to dispatch the convocation notice of its General Meeting of Shareholders at least two
weeks prior to the scheduled date of such General Meeting of Shareholders in order to provide its shareholders time tosufficiently consider the exercise of their voting rights. In addition, about two weeks prior to dispatching each notice,
the Company shall announce the information through its official website.
In order to facilitate the growth of the Company in a sustainable manner and improve its corporate value in the medium tolong term, the Board shall appropriately fulfill its roles and responsibilities mainly in (1) indicating the major direction of its
corporate strategy, etc., (2) creating an environment that supports appropriate risk-taking by senior management, and (3)conducting highly effective supervision of management and directors from an independent and objective standpoint.
The Board is composed of 12 Members of the Board (eight Internal Members of the Board and four External
Members of the Board).
Nominations of candidates for Members of the Board are determined by the Board after deliberation by the Executive Personal Committee established within the Board.
In order to ensure the effectiveness of independent and objective supervision of business execution, at least two
Members of the Board shall be appointed as Independent External Members of the Board, and efforts are made toincrease the number to at least one third.
The External Members of the Board (three males and one female), who have objective viewpoints based on theirexperience and insight, bring diversity to the deliberations of the Board while contributing to the strengthening of thesupervision of management.
For the purpose of invigorating deliberations by the Board, the Company has established committees such as the
Executive Personnel Committee, the Remuneration Committee, and the CSR Committee within the Board. The major
members of each committee are Independent External Members of the Board to clarify independence and objectivity.

Composition of the Executive Personnel Committee / Remuneration Committee
Name

Executive Personnel Committee

Remuneration Committee

Chairperson

External Members of the Board

External Members of the Board

Composition(including the Chairperson)

Four Internal Members of the Board
Four External Members of the Board

Four Internal Members of the Board
Four External Members of the Board

Number of meetings convened in FY2019

Eight times

Three times❹ Management
Committees

The Management Committee has been established as a decision-making body for business execution.

❺ Executive Officers

For the purpose of enabling agile business execution, the Company has adopts the executive officer system.

❻ Audit & Supervisory
Board(Convened 14 times in FY2019)

As an organization that is independent from the Members of the Board and the operating divisions, the Audit &Supervisory Board Members (two internal and four external members) attend Members of the Board meetings andlisten to reports on the business conditions to audit the execution of duties by the Members of the Board in accordance with the audit policy established by the Audit & Supervisory Board.
The Audit & Supervisory Board Members and the Representative Director, the Audit & Supervisory Board and the
Accounting Auditor hold regular meetings to communicate with each other and to improve the effectiveness of audits.

❼ Audit & Supervisory
Board Members’
Department

In order to assist Audit & Supervisory Board Members in the performance of their duties, the Audit & Supervisory Board
Members’ Department has been set up independently of the Board as a dedicated organization to support Audit &Supervisory Board Members with the collection of appropriate information and other tasks.

❽ Auditing Department

Based on the annual auditing plan, the Auditing Department conducts internal audits of administrative and management
systems as well as the legality and rationality of the management of corporate affairs at all in-house departments andGroup companies.

❾ Accounting Auditor

The Accounting Auditors submit reports on the audit plan and the audit results to the Audit & Supervisory Board, the
Accounting Department and other internal control departments as needed.
To ensure the external accounting auditors conduct fair and appropriate audits, the management of the Company,
Audit & Supervisory Board Members, and the Auditing Department shall have meetings on a regular and as-neededbasis, and exchange their opinions with the external accounting auditors.

❿ Special Committee

To reinforce the promotion of compliance, the Company has set up the Compliance Committee chaired by an external
expert as a Special Committee that responds to consultations with the President. (see p. 54)⓫ Operations
Committees

The Company has established operations committees such as the Environmental Committee and the Risk Management
Committee to deliberate on matters related to the consultation of the management meeting and the President.

TA I SE I A N N UA L R E P O R T 2 0 2 0 42

E S G S ect io n

Corporate Governance▍Promotion of Internal Controls▍Implementation of Executive Training

At Taisei Corporation, the Board established the Fundamental
Policy to Enhance Operational Compliance Systems in May
2006 (revised in April 2020) to ensure systems for conducting
operations in an appropriate and efficient manner as a Groupand the reliability of financial reporting. Through thesesystems, we deliver enhanced risk management and compliance. The Company implements various measures, including
training relating to legal compliance with the Antimonopoly
Act with the participation of outside lawyers, mainly for
officers and employees in the sales division.

As necessary training for Members of the Board and Audit &Supervisory Board Members in order to fulfill the function ofsupervising and auditing the Company’s businesses, training on
related laws and regulations, the articles of incorporation, andinternal rules that stipulate the Company’s important policies areprovided at the time of appointment.
In addition to the training described above, we also continue
to provide Members of the Board and Audit & Supervisory
Board Members with opportunities to receive training fromthird-party organizations.
When necessary, we hold worksite visit tours and otherevents for External Members of the Board and External Audit &Supervisory Board Members to deepen their understanding of
the Group and business activities.

WEB

Fundamental Policy to Enhance Operational Compliance Systems

https://www.taisei.co.jp/english/profile/governance/▍Ensuring the Credibility of Financial Reporting
Internal controls on financial reporting based on the Financial
Instruments and Exchange Act are recognized as one of themost important issues for a corporation. We have set up theinternal systems including daily monitoring to ensure thecredibility of the financial reporting disclosed to the public.
The effectiveness of the system is evaluated by the Auditing
Department and audited by KPMG AZSA LLC. The results
are disclosed in the Internal Control Report and in the Audit
Report of Internal Controls. We will fulfill our social responsibility as a corporation by continuing to ensure the effectiveness of these internal controls.
In order to continue to operate the internal control
systems relating to financial reporting in a sound manner,
we are also publishing messages from the President, implementing e-learning, and other campaigns to raise awarenessamong officers and employees.

▍Support System for External Members of
the Board and External Audit & Supervisory
Board Members
The Secretarial Department is responsible for assisting operations of External Members of the Board, and the Audit & Supervisory Board Members’ Department, which is independent ofMembers of the Board, is responsible for assisting operations ofExternal Audit & Supervisory Board Members. The responsible
officers and employees of the Secretarial Department distributematerials and provide explanations concerning proposals toExternal Members of the Board prior to the meetings of theBoard held in principle once a month.
For External Audit & Supervisory Board Members, theresponsible employees of the Audit & Supervisory Board Members’ Department provide explanations and distribute materials
in advance regarding proposals. Information is also provided in atimely manner to External Members of the Board and External
Audit & Supervisory Board Members.

43 T A IS EI A NNUA L R EP O R T 2 02 0

▍Accountability
Taisei Corporation established the Information Disclosure
Policy, and has set forth principles for ensuring appropriate
information disclosure and transparency in the Fundamental
Corporate Governance Policy. These policies form the basis forour practice of timely and appropriate information disclosure.
In 2015, the Company established the IR Policy and has
been promoting constructive dialogue through discussions
with shareholders and investors, IR briefings, and the annual
general meeting of shareholders.
Furthermore, we strive for fair information disclosure via
the Taisei Corporation official website, where we publish
explanatory material with commentary, summaries of the
President’s speeches and the main question and answer
sessions (in Japanese and English) on top of the Mediumterm Business Plan and materials distributed at results
briefings. In addition, we disclose information to overseas
investors in English in our annual reports and on the Taisei
Corporation official English website. We also report on key
business activities and environmental, social and governance(ESG) initiatives in the shareholder newsletter in order tofurther deepen our shareholders’ understanding of our corporate activities.
WEB

Information Disclosure Policy/ IR Policy

https://www.taisei.co.jp/english/profile/philosophy/policies/

About the Taisei Group

Strategy for Sustainable Growth

ESG Section

Governance▍Effectiveness of the BoardAt Taisei Corporation, we analyze and evaluate the effectivenessof the Board on the whole every year.
Since FY2020, the Company has reviewed its governancestructure and reexamined the scope of the Board’s businessexecution functions in order to revitalize and substantiatedeliberations at the Board, and to further strengthen theoversight function. At the same time, the scope of authority
delegated to management (execution side) has been expanded
to speed up decision-making.
In FY2019, we analyzed and evaluated the effectiveness ofthe evaluation of the governance system review and expectations for the new system. Specifically, the Members of the Board
and Audit & Supervisory Board Members conducted a selfevaluation, followed by deliberations by the Board with reference
to an overall evaluation by the External Members of the Boardand a third-party opinion from a lawyer.
The results of the evaluation indicate that the governancesystem of the Company is functioning effectively, as seen in thefact that the governance system was strengthened throughin-depth discussions among the relevant parties, and the highlevel of awareness of governance among executives is evident.
From the perspective of continuing to improve the effectiveness of the Board of the Company, recommendations that theoperation of the Board should be continuously and flexibly
reviewed as circumstances dictate, that information devices
should be used to share information in a timely manner, that a
concise, to-the-point document should be created, that discussion from a medium- to long-term perspective should be further
enhanced, and that greater efforts should be made to fully utilize
the new governance structure in order to strengthen competitiveness in a changing business environment were among other
opinions noted.
The Company aims to further enhance the operation of theBoard based on the results of the FY2019 evaluation.

Business Section

Explanation and Analysis ofBusiness Results

Data Section▍Remuneration for Officers❶ Policies and procedures in determining remuneration
Remuneration for the Members of the Board is determined froma comprehensive perspective that includes the scale, content,
and performance of our business, as well as individual job
specifications and responsibilities. Based on a resolution passed
at the 146th Annual General Meeting of Shareholders on June27, 2006, the sum total of monthly remuneration for the Members of the Board shall not exceed ¥70 million. Based on a
resolution passed at the 134th Annual General Meeting of
Shareholders on June 29, 1994, the sum total of monthly
remuneration for Audit & Supervisory Board Members shall not
exceed ¥12 million.
The remuneration for the Members of the Board has been
determined based on a compensation system that reflects theperformance of each member. The total amount of remuneration
for the Members of the Board and the amount of remuneration
by position were discussed at the Remuneration Committee,
which carries out preliminary reviews ahead of the Board, heldon June 10, 2020, and then determined at the Board meeting
held on June 24, 2020.
Remuneration for the Audit & Supervisory Board Members isdetermined through discussions at the Audit & Supervisory Board.
(Performance-Linked Remuneration)
Remuneration for the Members of the Board of the Company
consists of performance-linked remuneration set by position(including the position of Executive Officer when concurrently
serving as Executive Officer) and the remuneration, etc., otherthan performance-linked remuneration, and the amount of
remuneration is determined and promoted by position. The
indicators associated with performance-linked remuneration
represent the sum of income before income taxes on the nonconsolidated statement of income of the most recent businessyear and the total amount of bonuses for employees borne in
the most recent business year, and these indicators are selectedon the grounds that they are approximate to the added value of
the Company. In determining the amount of the performancelinked remuneration, the Remuneration Committee holds discussions on the following matters and addresses them to the Board.
(1) Total amount of remuneration and others paid to Membersof the Board and the amount by position(2) Establishment of and revisions to internal rules concerning
remuneration for Members of the Board and others

TA I SE I A N N UA L R E P O R T 2 0 2 0 44

E S G S ect io n

Corporate GovernanceTargets and results of indicators associated with performance-linked remuneration are as shown below.
(Millions of Yen)

June 24, 2020

Date of resolution by the Board

June 26, 2019 (ReferenceI)

July 2020–June 2021

Applicable period of remuneration

July 2019–June 2020

TargetResults

TargetResults

Income before income taxes in the most recent business year

¥127,000¥144,973¥115,000¥137,235

Total amount of bonuses for employees borne in the mostrecent business year

(Note)

29,903(Note)

33,738

Total(Note)

174,877(Note)

170,973

Target or Result

Note: Since no target value is set for the total amount of bonuses for employees, only the result is indicated.

(Stock Remuneration)
At the 160th Annual General Meeting of Shareholders held on June 24, 2020, the Company decided to introduce a performancebased stock remuneration plan “Board Benefit Trust (the Trust)” in order to further clarify the linkage between remuneration for
Members of the Board, and the Company’s business performance and stock value as well as to encourage Members of the Board
to contribute to medium- to long-term improvement in corporate performance and enhancement of corporate value by sharing not
only the merit from the increased stock price but also the risk of the decreased stock price with the shareholders. The maximum
amount that may be contributed to the Trust shall be the amount obtained by multiplying the number of business years pertaining to
the applicable period by ¥100 million, and the maximum number of points granted shall be 35,000 points per business year.

❷ Total amount of remuneration, etc. by officer category, total amount of remuneration, etc. by type and number ofapplicable officers
Internal executives
Category

Number of recipients

Members of the Board

11

Fixed remuneration(Millions of Yen)

Performance-linked remuneration(Millions of Yen)

378

Total amount of remuneration(Millions of Yen)

304

682

Audit & Supervisory Board Members

4

65

—

65

Subtotal

15

444

304

748

External executives
Category

Number of recipients

Fixed remuneration(Millions of Yen)

Performance-linked remuneration(Millions of Yen)

Total amount of remuneration(Millions of Yen)

Members of the Board

6

58

—

58

Audit & Supervisory Board Members

4

54

—

54

Subtotal

10

112

—

112

Total amount
Category

Number of recipients

Members of the Board

17

Fixed remuneration(Millions of Yen)

Performance-linked remuneration(Millions of Yen)

437

Total amount of remuneration(Millions of Yen)

304

741

Audit & Supervisory Board Members

8

119

—

119

Total

25

556

304

860

Note: All remuneration, etc. paid to Audit & Supervisory Board Members and Members of the Board are basic remuneration.

❸ Total amount of consolidated remuneration, etc. by officer (only for those whose total consolidated remuneration,etc. is no less than ¥100 million)
Name

Total amount ofconsolidated
remuneration, etc.
(Millions of Yen)

Officer classification

Company classification

Amount of remuneration on a consolidated basis, etc. by type(Millions of Yen)
Fixed remuneration

Performance-based
remuneration

Stock remuneration

Takashi Yamauchi

123

Chairman, Representative Director Reporting company

70

53

—

Yoshiyuki Murata

123

President, Representative Director* Reporting company

70

53

—

* As of the submission date, the officer classification is classified as Vice Chairman, Representative Director.

45 T A IS EI A NNUA L R EP O R T 2 02 0

About the Taisei Group

Strategy for Sustainable Growth

ESG Section

Business Section

Governance

Explanation and Analysis ofBusiness Results

Data Section

The reasons for nomination as a candidate for External Member of the Board
Name

Atsuko Nishimura

Takao Murakami

Norio Otsuka

Fumiya Kokubu

Attendance at meetings in
FY2019

Independent
Director

Reasons for appointment (significant concurrent positions as of June 24, 2020)

Term

Yes

Ms. Atsuko Nishimura has expressed useful opinions at the Board meetings based on her
rich international perspective that she has developed through her experience as a diplomat,
and is expected to contribute to the further improvement of corporate value over the
medium to long term from a neutral standpoint, and to the strengthening of management
supervision through decision-making on important matters such as election and dismissalof executive management and international business.
● Outside Director of INPEX CORPORATION

Three
years

Attendance at the Board
13 out of 13 meetings

Yes

Mr. Takao Murakami has many years of experience as a director and corporate auditor at
Sapporo Holdings Ltd. and several other companies. He can be expected to supervise
management from an objective, neutral point of view, revitalize the Board’s meetings andcontribute to further improvement of the value of the Company contribute to further improvementof the value of the Company.
● External Auditor of FUJIO FOOD SYSTEM Co., Ltd.
● External Member of the Board of Television Hokkaido Broadcasting Co.,Ltd.

One
year

Attendance at the Board
10 out of 10 meetings

Yes

Mr. Norio Otsuka has a wealth of experience and broad insight into the management at NSK
Ltd. and several other companies over many years. He can be expected to contribute to therevitalization of the Board meetings and further improvement of the value of the Company
through decision-making on important matters such as election and dismissal of executive
management and management strategy by making use of a wealth of experience in managing
multiple companies amid a rapidly changing management environment.
● Outside Director of Idemitsu Kosan Co., Ltd.
● Outside Director of Sojitz Corporation

One
year

Attendance at the Board
10 out of 10 meetings

Yes

Mr. Fumiya Kokubu has a wealth of experience and broad insight into the management at
NSK Ltd. and several other companies over many years. He can be expected to contribute to
the revitalization of the Board meetings and further improvement of the value of theCompany through decision-making on important matters such as election and dismissal of
executive management and international business by making use of his broad knowledge
based on international point of view as a former top executive of a general trading company.
● Chairman of the Board of Marubeni Corporation● Outside Director of Honda Motor Co., Ltd.

One
year

Attendance at the Board
9 out of 10 meetings

Number of meetings attended/total number of meetings

The reasons for nomination as a candidate for External Audit & Supervisory Board Member*
Independent
Director

Reasons for appointment (significant concurrent positions as of June 24, 2020)

Term

Yes

Mr. Yasuhiro Sato, as Chairman of the Board of Directors of Mizuho Financial Group Corporation, has ample
experience in corporate management, finance and accounting through the management of the financial
institution group, as well as deep knowledge and excellent insight gained through such experience, and can be
expected to contribute to the enhancement of audit and supervision by Audit & Supervisory Board of the Company.
● Chairman, Member of the Board of Directors of Mizuho Financial Group, Inc.

Four years from June
2020

Tateshi Higuchi

Yes

Mr. Tateshi Higuchi, who was involved in policy-related work for many years, has deep knowledge andexcellent insight cultivated through his abundant experience in risk management and crisis management aswell as through that experience, and can be expected to contribute to the enhancement of audit andsupervision by Audit & Supervisory Board of the Company.
● Member of the Audit and Supervisory Board (Outside) of Daiichi Sankyo Co., Ltd.
● Outside Director of MIURA CO., LTD.

Four years from June
2020

Seishi Tashiro

Yes

Mr. Seishi Tashiro, who was involved in the work of the Board of Audit for many years, has deep knowledge
and outstanding insight that he has developed through his rich financial and accounting experience, and canbe expected to contribute to the enhancement of audit and supervision by Audit & Supervisory Board of theCompany.

Four years from June
2020

Yes

Ms. Keiko Ohara, who has been involved in legal practice both in Japan and overseas for many years, has
deep knowledge and excellent insight cultivated through her abundant experience in legal matters and herexperience, and can be expected to contribute to the enhancement of audit and supervision by Audit &Supervisory Board of the Company.
● Partner, Kamiyacho International Law Office● Director, Member of the board (Independent) of Financial Products Group Co., Ltd.
● Outside Director of FUJI KYUKO CO., LTD.
● Auditor of Save the Children Japan

Four years from June
2020

Name

Yasuhiro Sato

Keiko Ohara* Audit & Supervisory Board Members: Mr. Shigeru Morichi, Mr. Kiwamu Miyakoshi, and Mr. Kunitoshi Saito’s terms of office expired at the conclusion of the 160th Annual General Meeting of Shareholders held on June 24, 2020,and of the Audit & Supervisory Board Members elected at the 159th Annual General Meeting of Shareholders held on June 26, 2019, Mr. Terunobu Maeda resigned on December 31, 2019.

TA I SE I A N N UA L R E P O R T 2 0 2 0 46

E S G S ect io nManagement Members (As of December 1, 2020)
Members of the Board
Takashi Yamauchi

Chairman, Representative Director
1969.06
1999.06
2002.04
2004.06
2005.06
2007.04
2015.04

Yoshiyuki Murata

Vice Chairman, Representative Director
1977.04
2011.04
2013.04
2013.06
2015.04
2020.06

Shigeyoshi Tanaka

2017.04
2019.04
2020.06

Hiroshi Shirakawa

1979.04
2012.04
2015.04
2019.04
2019.06

Atsuko Nishimura

2001.06
2004.09
2008.06
2012.04
2014.04
2016.072017.06

Norio Otsuka

2004.06
2007.06
2009.06
2015.06
2018.06
2019.06

Shigeyuki Sakurai

2015.04
2017.04

Norihiko Yaguchi2017.04
2020.04

Joined NSK Ltd.
Executive Officer
Managing Executive Officer,
Member of the Board
Senior Managing Executive Officer,
Representative Director
Executive Vice President,
Representative Director
President and Chief Executive Officer,
Representative Director
Chairman, Member of the Board
Advisor of NSK Ltd. [Present Position]
Member of the Board of Taisei Corporation[Present Position]

2020.06

47 T A IS EI A NNUA L R EP O R T 2 02 0

Joined the Company
Executive Officer
Managing Executive Officer
Managing Executive Officer,
Member of the Board
Senior Managing Executive Officer,
Member of the Board
Deputy Chief of Marketing &Sales Division (Integrated);
Supervising Marketing & Sales (Civil
Engineering) Divisions;Chief of Marketing & Sales (Civil Engineering)
Division [Present Position]

External Board Member
1969.04
1999.03
2001.03
2003.072004.032005.03
2011.032018.032019.06

Fumiya Kokubu

Joined the Company
Executive Officer
Managing Executive Officer
Managing Executive Officer,
Member of the Board
Senior Managing Executive Officer,
Member of the Board
Executive Vice President,
Member of the Board
Chief of Marketing & Sales Division[Present Position]

Director
1982.04
2015.04
2018.04
2019.06

Takao Murakami

Joined the Company
Executive Officer
Managing Executive Officer
Managing Executive Officer,
Member of the Board
Senior Managing Executive Officer,
Representative Director
Executive Vice President,
Representative Director
Chief of Business Administration Division[Present Position]

Director
1978.04
2012.04
2015.04
2015.06

Joined Ministry of Foreign Affairs of Japan
Minister/Counsellor of Permanent Mission ofJapan to the United Nations
Minister of Embassy of Japan in Belgium
Professor of Tohoku University Graduate School of Law
Administrative Vice President of the Japan Foundation
Advisor of Japan Oil, Gas and Metals National Corporation
Ambassador Extraordinary andPlenipotentiary to Grand Duchy of Luxembourg
Ambassador Extraordinary and Plenipotentiary for
Women, Human Rights and Humanitarian Affairs
Member of the Board of Taisei Corporation[Present Position]

Joined the Company
Executive Officer
Managing Executive Officer
Managing Executive Officer,
Member of the Board
Senior Managing Executive Officer,
Member of the Board
President and Chief Executive Officer(Representative Director) [Present Position]

Representative Director
1979.04
2011.04
2013.04
2013.06

Hiroshi Kimura

External Board Member
1973.04
2000.04
2002.06

2020.06

Joined the Company
Executive Officer
Managing Executive Officer
Senior Managing Executive Officer
Senior Managing Executive Officer,
Member of the Board
Chief of Marketing & Sales (Building
Construction) Division II[Present Position]

External Board Member
1979.04
1999.082020.04

Joined the Company
Executive Officer
Managing Executive Officer
Senior Managing Executive Officer
Senior Managing Executive Officer,
Member of the Board
Executive Vice President,
Member of the Board
Executive Vice President,
Representative Director
Executive Vice President,
Representative Director
Chief of Civil Engineering Division[Present Position]

Director

President, Representative Director
1980.04
2013.04
2016.04
2019.06

Joined the Company
Executive Officer
Managing Executive Officer
Managing Executive Officer,
Member of the Board
President and Chief Executive Officer,
Representative Director
Vice Chairman, Member of the Board(Representative Director) [Present Position]

Representative Director
1979.04
2011.04
2013.04
2015.04
2015.06

Yoshiro Aikawa

Joined the Company
Executive Officer
Managing Executive Officer
Senior Managing Executive Officer
Senior Managing Executive Officer,
Member of the Board
President and Chief Executive Officer,
Representative Director
Chairman, Member of the Board(Representative Director) [Present Position]

Joined Sapporo Breweries Limited(Present: Sapporo Holdings Limited)
Executive Officer
Managing Executive Officer
Member of the Board; Senior Managing Executive Officer of
Sapporo Breweries Limited (new company)
Managing Executive Officer, Member of the Board of
Sapporo Holdings Limited
President and Chief Executive Officer,
Representative Director, Group CEO
Chairman of the Board, Representative Director
Honorary Counsellor of Sapporo Holdings Limited [Present Position]
Member of the Board of Taisei Corporation [Present Position]

External Board Member
1975.04
2005.04
2008.04
2008.06
2010.04
2012.04
2012.06
2013.04
2019.04
2019.06

Joined Marubeni Corporation
Executive Officer
Managing Executive Officer
Managing Executive Officer,
Representative Director
Senior Managing Executive Officer
Executive Vice President
Executive Vice President,
Representative Director
President and Chief Executive Officer,
Representative Director
Chairman, Member of the Board[Present Position]
Member of the Board of Taisei Corporation[Present Position]

About the Taisei Group

Strategy for Sustainable Growth

ESG Section

Business Section

Explanation and Analysis ofBusiness Results

Akihiko Noma

Audit & Supervisory Board Member (Full-Time)

Governance

Data Section

Audit & Supervisory Board Members
Takashi Hayashi

Audit & Supervisory Board Member (Full-Time)1974.04
2006.04
2008.10
2009.04
2012.04
2017.04
2017.06
2019.06

Yasuhiro Sato

External Audit & Supervisory Board Member
1976.04
2009.04
2009.06
2011.06
2013.072014.04
2014.06
2018.06
2020.06

Seishi Tashiro

Joined the Company
Executive Officer
Chief of Housing Business Division
President and Representative Director of
TAISEI HOUSING CORPORATIONManaging Executive Officer of Taisei
Corporation
President and Representative Director of
Taisei-Yuraku Real Estate Co., Ltd.
Member of the Board
Senior Advisor
Audit & Supervisory Board Member ofTaisei Corporation [Present Position]2013.03
2014.04
2015.04
2016.04
2017.102019.102020.06

2016.04

2019.06

Tateshi Higuchi

Joined Board of Audit of Japan
Deputy Director General, Secretariat, General
Executive Bureau, Board of Audit of Japan
Director General, 4th Bureau, Board of Audit Japan
Director General, 1st Bureau, Board of Audit Japan
Deputy Secretary General, Board of Audit of Japan
Secretary General, Board of Audit of Japan
Advisor of Chiba Institute of Technology[Present Position]
Special Professor of Chiba Institute of Technology[Present Position]
Audit & Supervisory Board Member ofTaisei Corporation [Present Position]

2007.08
2009.032010.01
2011.08
2014.04
2018.06
2019.06
2020.06

Keiko Ohara

Joined the Company
General Manager of Contract &Claims Management Department,International Operations Headquarters
General Manager of International Business
Strategy Department,International Operations Headquarters
Audit & Supervisory Board Member ofTaisei Corporation [Present Position]

External Audit & Supervisory Board Member
1978.04
2003.02

Joined the Industrial Bank of Japan, Limited
President of Mizuho Corporate Bank, Ltd.
Member of the Board of Directors of Mizuho Financial Group, Inc.
President & Group CEO of Mizuho Financial Group, Inc.;
Member of the Board of Directors of Mizuho Bank, Ltd.
President & CEO of Mizuho Bank, Ltd.
Member of the Board of Directors of Mizuho Bank, Ltd.;
Member of the Board of Directors of Mizuho Trust & Banking Co., Ltd.;
Member of the Board of Directors of Mizuho Securities Co., Ltd.
Member of the Board of Directors, President & Group CEO of Mizuho
Financial Group, Inc.
Chairman, Member of the Board of Directors of Mizuho Financial
Group, Inc. [Present Position]
Audit & Supervisory Board Member of Taisei Corporation[Present Position]

External Audit & Supervisory Board Member
1979.04
2011.07

1981.04
2014.04

Joined National Police Agency
Director, Investigative Planning Division, Criminal Investigation Bureau
of National Police Agency
Deputy Director General of Policy Evaluation and Deputy Director
General in charge of Prevention of Crime Proceeds (International),
Commissioner-General’s Secretariat of National Police Agency
Deputy Superintendent General of Tokyo Metropolitan Police Department
Director General of Community Safety Bureau of National Police Agency
Superintendent General of Tokyo Metropolitan Police Department
Ambassador Extraordinary and Plenipotentiary to the Republic of
the Union of Myanmar
Member of the Audit and Supervisory Board (Outside)of Daiichi SankyoCo., Ltd. [Present Position]
Outside Director of MIURA CO., LTD. [Present Position]
Audit & Supervisory Board Member of Taisei Corporation [Present Position]

External Audit & Supervisory Board Member
1988.04
1992.09
1993.08
1993.10
2000.022017.032017.06
2018.122019.06
2020.06

Registered as a lawyer (Dai-Ichi Tokyo Bar Association);
Joined Komatsu Sogo Law Firm (currently Komatsu & Koma Law Firm)
Joined New York Office of Weil, Gotshal & Manges LLP.
Registered as a lawyer (State of New York)
Returned to Komatsu & Koma Law Firm
Founding Partner, Kamiyacho International Law Office [Present Position]
Auditor, Save the Children Japan [Present Position]
Chair of Committee on Foreign Lawyers and International Legal
Practice of Japan Federation of Bar Associations [Present Position]
Director, Member of the board (Independent) of Financial ProductsGroup Co., Ltd. [Present Position]
Outside Director of FUJI KYUKO CO., LTD [Present Position]
Audit & Supervisory Board Member of Taisei Corporation[Present Position]

Notes 1: Ms. Atsuko Nishimura, Mr. Takao Murakami, Mr. Norio Otsuka, and Mr. Fumiya Kokubu are External Members of the Board as defined by the Companies Act, Article 2-XV.
2: Mr. Kunitoshi Saito, Mr. Tateshi Higuchi, Mr. Seishi Tashiro and Ms. Keiko Ohara are External Audit & Supervisory Board Members as defined by the Companies Act, Article 2-XVI.
3: Ms. Atsuko Nishimura, Mr. Takao Murakami, Mr. Norio Otsuka, Mr. Fumiya Kokubu, Mr. Kunitoshi Saito, Mr. Tateshi Higuchi, Mr. Seishi Tashiro and Ms. Keiko Ohara are independent officers in accordance with the rules of Tokyo Stock Exchange and Nagoya Stock Exchange.

TA I SE I A N N UA L R E P O R T 2 0 2 0 48

E S G S ect io n

ChairmanVice Chairman

Takashi Yamauchi

Yoshiyuki Murata

Executive Officers
President and Chief Executive Officer
Yoshiro Aikawa
Vice Chairman and Executive Officer
Kazuhiko Dai
Executive Vice Presidents
Shigeyoshi Tanaka
Chief of Civil Engineering Division
Shigeyuki Sakurai
Chief of Business Administration Division
Katsuyuki Kanai
Supervising Urban Development Division
Norihiko Yaguchi
Chief of Marketing & Sales Division (Integrated)
Takao Kanai
Chief of Marketing & Sales (West Japan)Division
Senior Managing Executive Officers
Yoshinobu Shigeji
In charge of Marketing & Sales (Building Construction),
Marketing & Sales Division (Integrated)
Hiroshi Shirakawa
Chief of Marketing & Sales (Building Construction) Division II
Yasushi Yoshinari
Chief of Medical & Pharmaceutical Business Division
Masaharu Okada
Chief of Marketing & Sales (Building Construction) Division III

Jo Iwata
Chief of Proposal & Solutions Division;
In charge of Community Design & IR Development Department;
In charge of Olympic and Paralympic Projects
Fumihiko Sudoh
Chief of Tokyo Branch
Yuichi Kitaguchi
Deputy Chief of Marketing & Sales (Building Construction) Division III
Yasumitsu Sakurai
Deputy Chief of International Operations Headquarters
Shun Kitano
Chief of Safety Administration Division
Hiroshi Harada
In charge of Civil Engineering Projects, Civil Engineering Division
Yoshihiro Teramoto
Chief of Architecture & Engineering Division (Integrated);
Chief of Building Construction Division
Shimpei Oguchi
Deputy Chief of Marketing & Sales (West Japan) Division,in charge of Building Construction
Taku Yamamoto
In charge of Marketing & Sales (Building Construction),
Marketing & Sales Division (Integrated)
Atsushi Suzuki
Chief of Mechanical & Electrical Division

Jiro Taniyama
Chief of Corporate Planning Office

Makoto Ohta
General Manager of International Projects Management
Department, Civil Engineering Division

Hiroshi Tsuchiya
Chief of Marketing & Sales (Building Construction) Division I

Shinji Kawamura
Chief of Kyusyu Branch

Hiroshi Kimura
Deputy Chief of Marketing & Sales Division (Integrated),
Supervising Marketing & Sales (Civil Engineering) Divisions;Chief of Marketing & Sales (Civil Engineering) Division

Iwao Nishioka
Chief of Tohoku BranchManaging Executive Officers
Kazuhiko Hombu
In charge of Technology;
In charge of Energy & Environment
Masao Yoshikawa
In charge of Marketing & Sales (Building Construction),
Marketing & Sales Division (Integrated)
Takeshi Kagata
Chief of Kansai Branch
Keiji Hirano
Chief of International Operations Headquarters

Akira Nakaya
Deputy Chief of Marketing & Sales (Building Construction) Division II
Naohisa Hirata
Chief of Nagoya Branch
Masahiko Okada
Chief of Hokushinetsu Branch
Yoshio Abe
Deputy Chief of Marketing & Sales (Civil Engineering) Division;
In charge of Olympic and Paralympic Projects
Akira Ejima
Chief of Yokohama Branch

Noriaki Kon
Chief of Procurement Division

Executive Officers
Yasushi Kamezawa
General Manager of Design Department, Civil Engineering Division

Atsushi Yamamoto
Chief of Marketing & Sales Promotion Division

Shinsaburo Sawa
Deputy Chief of Marketing & Sales (Building Construction) Division I

49 T A IS EI A NNUA L R EP O R T 2 02 0

About the Taisei Group

Strategy for Sustainable Growth

ESG Section

GovernanceBusiness Section

Explanation and Analysis ofBusiness Results

Data Section

Yoshihiko Ikeuchi
Deputy Chief of Marketing & Sales (Civil Engineering) Division;

Yuji Ijiri
Chief of Nuclear Facilities Division

Ichiro Nagashima
Chief of Taisei Advanced Center of Technology

Tatsuya Sugawara
Chief of International Marketing & Business Development Division

Weiyu Chung
General Manager of Marketing & Business Development
Department (Taiwan), International Marketing & Business
Development Division

Junichi Kasahara
General Manager of General Affairs Department, Business
Administration Division

Katsuhiko Kitagawa
In charge of Marketing & Sales (Building Construction),
Marketing & Sales Division (Integrated)
Kenji Shirakawa
Deputy Chief of Civil Engineering Division;
General Manager of Civil Engineering Department

Masato Matsumura
Chief of Design Division
Hiroki Fukasawa
Deputy Chief of Tokyo Branch (Civil Engineering);
General Manager of Civil Engineering Department

Shinichiro Takahama
Chief of Engineering Division
Koichiro Okuhata
Chief of Kanto Branch
Shinichi Hirajima
Chief of Sapporo BranchToshihiko Aoki
Deputy Chief of International Operations Headquarters(Civil Engineering);
General Manager of Civil Engineering Department
Yasuji Yamauchi
In charge of Technology
Shigeo Ochi
In charge of Technology
Miyoshi Kato
Chief of Energy Division
Masaru Kamata
Deputy Chief of Marketing & Sales (Building Construction)
Division I

Executive Fellows
Toshihiko Tsuka
In charge of Information Planning, Corporate Planning Office
Hirotoshi Ikeda
Deputy Chief of Architecture & Engineering Division (Integrated)
Yozo Shinozaki
Deputy Chief of Design Division

Tsuyoshi Maruya
Deputy Chief of Taisei Advanced Center of Technology;
General Manager of Infrastructure Technology Research
Department
Takaharu Yamamura
Deputy Chief of Urban Development Division

TA I SE I A N N UA L R E P O R T 2 0 2 0 50

E S G S ect io nExternal Board Members’Message
Message from four of Taisei Corporation’s External Members of the Board
External Memberof the Board

AtsukoNishimura

Profile
1979
1999
2001
2004
2008
2012
2014
2016
2017

Joined the Ministry of Foreign Affairs of Japan
Minister/Counsellor of Permanent Mission of Japan to theUnited Nations
Minister of Embassy of Japan in Belgium
Professor of Tohoku University Graduate School of Law
Administrative Vice President of the Japan Foundation
Adviser of Japan Oil, Gas and Metals National
Corporation
Ambassador Extraordinary and Plenipotentiary to Grand
Duchy of Luxembourg
Ambassador Extraordinary and Plenipotentiary for
Women, Human Rights and Humanitarian Affairs
External Member of the Board of Taisei Corporation(incumbent)

Concurrent positions
Outside Director of INPEX Corporation

Reason for appointment
A broad range of insights, international sense, and objective
point of view based on many years’ experience as a diplomat

One of the important responsibilities of External Members of the Board is to appropriately supervise corporate managementfrom an independent perspective apart from internal officers who are directly involved in day-to-day business operations.
Recent expansion of ESG investment and the UN-led SDGs indicate the rise of global interest in social issues. Moreover,companies that fail to fulfill their social responsibilities are criticized severely by investors and shareholders, which would
have a major impact on their survival and development.
I would like to contribute to the growth of Taisei Corporation as a company that is highly valued by society, making useof my experience in tackling common social issues from a global perspective, as seen in the SDGs.
At our Company’s Board Meetings, directors present their opinions from various viewpoints, and carry out sincere andintense discussions. Last year, Mr. Murakami, Mr. Otsuka, and Mr. Kokubu, who have experience at companies in nonconstruction industries, were assigned as External Members of the Board. I believe that this has made our discussions
livelier than before. We have also set up briefing sessions by the divisions in charge as good opportunities to get firsthandknowledge of the changing business environment. Based on the collaboration among External Members of the Board andthe information we receive, External Members of the Board can provide expert advice. We are also working on the improvement of the effectiveness of the Board by reviewing agenda items for deliberation. I hope that these efforts will lead to fruitful
discussions on forward-looking management strategies at the Board as well as appropriate and timely decisions, and willfurther ensure our Company’s sustainable development.
Last year, the construction of the new Japan National Stadium was completed, and we have now many opportunities to see
it on the media including TV. Every time I see its beautiful and majestic structure, which is in harmony with nature, I am proudthat we have achieved this historic project by combining our outstanding technological, organizational, and comprehensive
capabilities. It is wonderful that next year our message for the future will be transmitted to people all over the world throughthe impressive construction. I think that the stadium symbolizes our Group’s efforts to realize the Taisei Group Philosophy of“To Create a Vibrant Environment for All Members of Society.” I hope that our Company will be a leader in overcoming thevarious difficulties that mankind and society will face with its leading-edge technological capabilities while considering theenvironment and being close to all stakeholders. I hope that Taisei Corporation will continue to shine as a company that
supports the future of people and society through the development of infrastructure.

51 T A IS EI A NNUA L R EP O R T 2 02 0

About the Taisei Group

Strategy for Sustainable Growth

ESG Section

Business Section

Governance

External Memberof the Board

1969

Takao
Murakami

1999
2001
2003

Explanation and Analysis ofBusiness Results

Data Section

Profile

2004
2005
2011
2018
2019

Joined Sapporo Breweries Limited (Present: Sapporo
Holdings Limited)
Executive Officer
Managing Executive Officer
Member of the Board; Senior Managing Executive Officer of
Sapporo Breweries Limited (new company)
Managing Executive Officer, Member of the Board of
Sapporo Holdings Limited
President and Chief Executive Officer, Representative
Director, Group CEO
Chairman of the Board, Representative Director
Honorary Counsellor of Sapporo Holdings Limited(incumbent)
External Member of the Board of Taisei Corporation(incumbent)

Concurrent positions
External Member of the Board of Television Hokkaido BroadcastingCo., Ltd.
External Auditor of FUJIO FOOD SYSTEM Co., Ltd.

Reason for appointment
Rich experience in managing multiple companies

I think a company is nothing more than its people. Taisei Corporation’s company culture consists of a group of people who
make decisions and those who conduct business. I believe that it is our mission as External Members of the Board to
improve and maintain a good culture. On the other hand, if our Company's common sense is not in line with society, thenwe should correct that.
I have observed some cases in which the Board had not deepened its discussions, perhaps because the proposals of theBoard are submitted after various discussions and deliberations within the Company. However, Members of the Board are
exchanging various opinions and having open discussions regarding the current status of the Board and the establishmentof the Management Committee. So, my evaluation is that governance reform is making progress in the right direction.
I am afraid that discussions on the priority of sales and profits in the current Medium-term Business Plan were not sufficient.
In addition, we have not made sufficient progress in the investment for growth and the expansion of overseas business. We
should strictly analyze the current situation, including the appropriateness of the initial targets, conduct risk analysis from a
global perspective, and allocate management resources efficiently and promptly to the regions and divisions where they areneeded. It is important to examine our strengths and weaknesses deeply and thoroughly discuss specific measures tofurther develop our strengths and overcome our weaknesses in order to improve our corporate value.
One of our important challenges is to eliminate serious accidents. Of course, we are taking various measures to achieve zeroaccidents, however, I am sorry to say that we are still observing accidents. It is necessary to thoroughly discuss construction
methods to prevent accidents, such as the promotion of unmanned construction.
Another important issue is diversity. In today’s society, female officers and executives are the driving force behind companies, so we should be more conscious and implement measures related to this.
Our Company has listed a number of issues, including management issues included in the Medium-term Business Plan andimportant ESG tasks (Materiality), however, it has become difficult to see the level of the importance of each. As I mentioned at
the beginning, a company is nothing more than its people. In other words, the company is a group of its employees. Each andevery employee has his or her own character, and the sum of these values leads to the corporate culture. Therefore, I believe it
is extremely important for management to identify prioritized actions and have employees focus on solving these issues.

TA I SE I A N N UA L R E P O R T 2 0 2 0 52

E S G S ect io nExternal Board Members’Message

External Memberof the Board

Norio
OtsukaProfile
1973
2000
2002
2004
2007
2009
2015
2018
2019

Joined NSK Ltd.
Executive Officer
Managing Executive Officer, Member of the Board
Senior Managing Executive Officer, Representative Director
Executive Vice President, Representative Director
President and Chief Executive Officer,
Representative Director
Chairman, Member of the Board
Advisor of NSK Ltd. (incumbent)
External Member of the Board of Taisei Corporation(incumbent)

Concurrent positions
Outside Director of Idemitsu Kosan Co., Ltd.
Outside Director of Sojitz Corporation

Reason for appointment
Rich experience in managing multiple companies

As an External Member of the Board, I would like to contribute to the enhancement of corporate value by expanding thebusiness operations of Taisei Corporation and the entire Group. I am particularly interested in safety initiatives because I
have a background in manufacturing. As for the current status with serious accidents, I believe that I can contribute to theeradication by using my own experience and examining the situation from a different perspective from that of our Company.
Furthermore, with regard to “Sustainable growth of overseas business” under the Medium-term Business Plan, I haveexperienced difficulties in expanding the overseas business in the companies for which I have worked. I believe that theknowledge I gained at that time will undoubtedly be useful for our Company’s overseas business.
The Board meetings of our Company discuss proposals that are closely related to our businesses. I think our meetings are
more reliable than those that always discuss paper plans. However, I think we should be visionary and start having discussions from a medium to long-term viewpoint.
In April 2020, we established the Management Committee, which mainly discusses business execution, and redefined
the Board as a supervisory body to discuss the broad direction of corporate strategy. I hope that this will function more
effectively in the future.
As for the formulation of the Medium-term Business Plan, it is necessary to envision how our Group should be in the future.
Then, we should understand the gap between that and our current status through backcasting, draw up strategies on how
to fill the gap from a medium to long-term perspective, and consider how to implement those strategies. Also, since all
officers and employees of our Group must execute the plan, it is meaningless if it is not understandable to all employees.
We intend to summarize the next Medium-term Business Plan from this perspective.
Moreover, the Medium-term Business Plan sets management indicators such as sales and profits, and ESG-related
initiatives such as safety, quality, and compliance, form the foundation of these indicators. It is important that top management make a strong commitment to actively address these non-financial issues as well.
Whether it is a building construction or civil engineering project, I think the construction industry provides us a wonderful job,which is truly “the work that remains on the map.®”
We would like to create an environment that allows all officers and employees of the Group to execute their daily operations while being aware of safety, quality, and compliance.

53 T A IS EI A NNUA L R EP O R T 2 02 0

About the Taisei Group

Strategy for Sustainable Growth

ESG Section

Business Section

Governance

External Memberof the Board

FumiyaKokubuExplanation and Analysis ofBusiness Results

Data Section

Profile
1975
2005
2008
2008
2010
2012
2012
2013
2019
2019

Joined Marubeni Corporation
Executive Officer
Managing Executive Officer
Managing Executive Officer, Representative Director
Senior Managing Executive Officer
Executive Vice President
Executive Vice President, Representative Director
President and Chief Executive Officer,
Representative Director
Chairman, Member of the Board (incumbent)
External Member of the Board of Taisei Corporation(incumbent)

Concurrent positions
Chairman of the Board of Marubeni Corporation
Outside Director of Honda Motor Co., Ltd.

Reason for appointment
Broad insight and an international perspective as the top managementof a general trading company

In general, I suspect that one of the reasons why board of directors in Japan do not have deep discussions is due to theculture of people try to sense others’ feeling and avoid being different from others.
I think it is important for External Members of the Board not to guess what others are thinking and avoid making judgements in that way. I would like to live up to the expectations of our stakeholders by acting from such a standpoint.
When I first joined Taisei Corporation's Member of the Board, I had the impression that the line between management andexecution was not always clear. However, as I witnessed that our Company’s corporate governance, including its management structure, has been reviewed with a sense of urgency, I became convinced of the effectiveness of the governance. I
expect that we can have deeper discussion focusing on the supervision of the management at the Board.
The current Medium-term Business Plan has a wide range of goals and measures, so it is difficult to see the priority of each
item. I wonder if they are incorporated into the actions that should be taken by each employee. We believe that the next
Medium-term Business Plan, whether bottom-up or top-down, should be a plan in which all officers and employees sharethe intention of the plan, from the formulation process to the establishment of targets and expected results, and understandwhat should be done in their daily work.
In recent years, environmental problems caused by climate change, such as hurricanes and forest fires, and social issues
such as hunger and poverty have become more serious. They led to the proposal of SDGs by the United Nations and the
expansion of ESG investment. In addition, the pandemic of COVID-19, which is a crisis shared by all humankind, forced us
to take sustainability more seriously.
In the post-COVID-19 era, which will likely be a different world, big companies such as our Company must proactively
propose or offer new added value to society, customers, and stakeholders in response to such social issues. As a construction company engaged in the most fundamental part of social infrastructure, in order to create new innovations, turn a crisis
into an opportunity, and make further progress, it is extremely important for future management to steer the Company
forward, and we, External Members of the Board, hope to play an active role utilizing our experience and expertise.

TA I SE I A N N UA L R E P O R T 2 0 2 0 54

E S G S ect io n

Risk Management / Compliance
Risk Management Policy and Systems
At Taisei Corporation, we have formulated a Risk Management Policy and built systems to implement risk management acrossthe entire Company in order to respond to risk escalation following changes in the business environment.
In terms of handling risk management, we set forth the Basic Risk Management Rules and we identify and select risks associated with our business activities, such as quality and technology, laws and regulations, compliance, information, safety, labor andemployment, the environment, natural disasters and others, to reflect these risks in the operational plans of each division. We
work on risk management through the PDCA cycle of reviewing, implementing, evaluating, and improving risk countermeasures.
In particular, in the event of an incident or accident that could have a serious impact on corporate management, informationis centrally handled by the CRO (Chief Risk Management Officer) Secretariat, and reports are made to the President, who are
the chief executives of risk management, and the Board. These risks include elements related to environmental, social andgovernance (ESG) such as infectious diseases, safety risks, and bribery. We share this information with the Risk Management
Committee and the Risk Management Council in order to prevent recurrence of such risks, and implement effective risk management across the whole company.
WEB

Risk Management Policy/Policy on Business Continuity in Times of Disaster

https://www.taisei.co.jp/english/profile/philosophy/policies/

Company-Wide Risk Management System
Board

ReportPresident & CEO
Chief Risk Management Officer
ReportIncident / Accident Response

Instruction / OrderCountermeasures and Prevention of Reoccurrence

CRO (Chief of Business Administration Division)
Surpervison of risk management

Risk Management Committee
CRO Secretariat

Risk Management Council
Head Office Risk Management Promotion Committee

Head Office

Branch Offices

Group Compannies

Branch Offices Risk Management Promotion Committee➡ Please refer to the business and other risks in the Securities Report for the main issues that may have a major impact on investor decisions.

▍Initiatives for Business Continuity
Planning (BCP)▍Countermeasures against New Coronavirus(COVID-19) Infections

To meet its responsibilities as a general construction company
supporting the infrastructure for social and economic activities
even in the event of a major disaster or accident, Taisei Corporation has established the Policy on Business Continuity in Timesof Disaster in 2005 and aims to become a company that gains
the trust of society. Based on this policy, we formulate the BCP
to be implemented in times of disaster, conduct disaster training
at least once a year, and fully review and update the BCP basedon the results of the training and other factors each time. In
recognition of our efforts to improve business continuity on acontinuous and regular basis, we received awards such as “BCM
rating certification.” In addition, since 2015 we have conductedannual joint training with the Japan Federation of Construction
Contractors to establish a company-wide recovery support
system that can immediately respond to requests for assistance.

To prevent the spread of COVID-19 infections, we at Taisei
Corporation provided our employees with policies on handling
COVID-19 infections (measures against infection, action restrictions, business continuity, travel restrictions, etc.) in February
2020. Since then, the policies have been updated as necessary
based on the infection situation in Japan and overseas, government policies, and the response guidelines of the Company, andmeasures are still being taken.
In addition, in response to the revision of the Act on Special
Measures concerning Countermeasures against Novel Influenza
in March 2020, we recognized the COVID-19 infectious as animportant risk, and decided to manage the information in an
integrated manner at the CRO Secretariat as the COVID-19
infectious countermeasures headquarters, according to which
the CRO will receive reports on the situation from time to timeand present a response policy.
Furthermore, in response to a request from the governmentin April, we decided to actively promote telecommuting and shift
work among office workers in the designated warning prefectures in the Declaration of Emergency Situations.

WEB[PICK UP] FY2019 Large-Scale Disaster Countermeasure Training based on BCP

https://www.taisei.co.jp/about_us/csr/performance/iso26000/
organization/#page_link02

55 T A IS EI A NNUA L R EP O R T 2 02 0

About the Taisei Group

Strategy for Sustainable Growth

ESG Section

Explanation and Analysis ofBusiness Results

Business Section

Governance

Data Section

Compliance Policy and Systems
At Taisei Corporation, we established the Action Guidelines for Taisei Personnel and the Taisei Group as a whole as a basic
principle of corporate behavior and a standard of conduct and judgment that all executives and employees of the Taisei Groupshould actively practice or comply with. We also have established a system that enables executives and employees to promptly
report important information, such as a violation of compliance, to top management in order to ensure thorough compliance.
As indicated in the diagram below, the Company has appointed managers, promoters, and implementers in each division,and has established an internal compliance promotion system. In addition, the Compliance Committee, chaired by an external
expert (lawyer), has been established as the Special Committee that responds to consultations with the President, andexchanges opinions on the promotion of compliance as appropriate. We strive to ensure thorough compliance by incorporating
recommendations from the Committee.
Compliance Promotion System

WEB

Overall Principles of Conduct

https://www.taisei.co.jp/english/profile/philosophy/

President & CEO
CP*1 Committee

Administrative Structure

Secretariat

Head Office Business Administration Div.
CP General Manager(Chief of Business
Administration Division)

CP Promotion Section*2

CP General Promoter(General Manager ofGeneral Affairs Department)

Implementation Structure
Head Office

Branches

Division CP Manager (Chief of Division)
Division CP Promoter(General Manager in Charge of Administration)

Division CP Manager (Chief of Branch)
Division CP Promoter (Administrative Manager)

CP Implementers (All Department General Managers)*3

CP Implementers (All Department General Managers)*3

All Executives and Employees

All Executives and Employees▍Whistleblowing and Consultation System
Based on the Whistleblower Protection Act, at the TaiseiGroup, we have established a system in which in- and outside
parties (business partners and other entities that have a directcontractual relationship with the Company) can report andconsult on illegal acts committed by executives and employees
and acts that violate (or an act intended to violate) the Action
Guidelines for Taisei Personnel and the Taisei Group as a
Whole, and we have established consultation desks in-houseand at an external organization (a law firm). In addition, inquiries from outside stakeholders other than those listed above
are handled through the Company’s website. When handling
Flow of Internal Whistleblowing Based on
the Helpline System*1 CP: abbreviation of compliance*2 Promotes and embeds compliance awarenessamong officers and employees. Also functions as asecretariat for the Compliance Committee.
*3 All heads of departments are appointed compliance implementers. The heads of each department
educate and inform all officers and employees intheir own departments about compliance.

whistleblowing reports, we treat all information about thewhistleblower as confidential and prohibit any adverse action
as a direct result of whistleblowing. Furthermore, we accept
anonymous tips in order to uncover information about any
illegal activities. We carry out fact-finding investigations on thewhistleblowing reports received and respond appropriately,
including taking corrective measures as needed.

WEB

Fair Operating Practices

https://www.taisei.co.jp/english/csr/performance/iso26000/
fair_operating/President & CEO / Board
ReportCSR Committee
ReportGeneral Manager: CRO*
Consultation Desk
Person in charge of implementation:
General Manager of General Affairs Dept.

Whistleblower (anonymous whistleblower accepted)
Taisei Corporation and its Group companies
Corporate officers

Employees

Employees on
secondment
Temporary workers

Dispatchedtemporary staff
Retired personnel

Post/EmailEmailIn-house consultation desk:Manager of Compliance Promotion Office*CRO: Chief Risk Management Officer
Instruction for investigation
Investigation, discussion on
corrective action, and report

Departmentsin charge

External consultation desk:
Law firm

TA I SE I A N N UA L R E P O R T 2 0 2 0 56

E S G S ect io n

Risk Management / Compliance▍Compliance Education and Training▍Information Security Measures

At Taisei Corporation, we conduct annual compliance training
for all executives and employees to raise compliance awareness. In addition, in order to strengthen compliance across theentire Group, we regularly hold meetings for legal affairs officers
to share information and opinions on legal affairs issues withGroup companies in Japan, and we hold group compliancehearings to confirm the status of compliance promotion andexchange opinions. In addition, compliance training is conducted annually for business partners (specialized contractors)
to ensure thorough compliance throughout the supply chain
through systematic education and training.

In the construction industry, sharing information with a large
number of stakeholders, such as clients and contractors(specialized contractors, etc.), is essential in the construction
process. Therefore, the Taisei Group has set forth“Management of information and intellectual property rights”
under the Action Guidelines for Taisei Personnel and the TaiseiGroup as a Whole, and has implemented various measuresrelated to information security.
At Taisei Corporation, we have compiled a booklet containing minimum rules to be observed and have been providing
education and guidance to all officers and employees as well as
business partners. Since FY2016, we have been working tostrengthen the information security environment at our overseas
sales offices and work sites. We also work to strengthen
measures against the risk of information leaks associated with
telecommuting (working from home using ICT) in FY2019.
In addition, in order to prevent and mitigate intellectual
property risks such as infringements of rights and technology
leaks that have a serious impact on corporate management, we
implement thorough risk management in all business processes.
To respond to the increasingly serious risk of cyber attacks,
we established the Taisei-Security Incident Response Team(SIRT) and work to collect the latest information on cyberattacks and take measures to prevent cyber attacks in cooperation with external organizations through the Nippon CSIRT
Association, which we joined in March 2013. In FY2019,
company-wide information security training was conducted fivetimes, with no major security incidents.

WEB

Education and Training for Raising Awareness of Compliancehttps://www.taisei.co.jp/english/csr/performance/iso26000/
fair_operating/▍

Fostering a Corporate Culture ofCompliance

In order to instill a sense of compliance among all officers andemployees and establish it as a corporate culture, we havebeen publishing the Compliance Newsletter since fiscal 2006,
which covers familiar topics related to compliance.
The back issues of the Compliance Newsletter are postedon the Company’s intranet for use in daily risk management
and education for officers and employees, and are also used
as educational materials for officers and employees of Group
companies.
In addition, a Compliance Questionnaire is conducted forall executives and employees with the aim of understanding thecurrent status and issues related to compliance within the
Taisei Group and further promoting compliance. The results of
the questionnaire are analyzed, and proposed measures arereviewed, reported to management, and disclosed to all
officers and employees through the Compliance Newsletter. In
addition, necessary measures are taken in cooperation withrelated departments to promote further compliance.

57 T A IS EI A NNUA L R EP O R T 2 02 0

About the Taisei Group

Strategy for Sustainable Growth

ESG Section

Governance▍Anti-Corruption Policy
At Taisei Corporation, we have set forth “Ensuring fair trade”
and “Maintenance of proper relationships with individuals or
entities engaged in politics and government” under the Action
Guidelines for Taisei Personnel and the Taisei Group as a
Whole, and we implement Group-wide initiatives to prevent
bribery and other misleading acts in accordance with laws andregulations and various internal rules.
In 2018 we signed the United Nations Global Compact,
and we have strengthened anti-corruption measures on a
global basis by conducting awareness-raising activities regarding “Prevention of bribery of foreign public officials” for all
executives and employees based on oneof the 10 principles, “Business should
work against corruption in all its forms,
including extortion and bribery.” There
were no dismissals due to corruption orbribery in FY2019.

WEB

Political donation

https://www.taisei.co.jp/english/csr/performance/iso26000/
fair_operating/▍ Response to Compliance Violations
In the event of a serious violation of compliance, we strive toaccurately ascertain the facts of the violation, thoroughly implement measures to prevent the recurrence of the violation, andhorizontally deploy them within the Company as necessary.
The perpetrators are subject to necessary disciplinary action,
including dismissal.

▍ Values and Policies

Thorough Awareness of Structure of

We created a portable card for the Structure of Values andPolicies (see p.1) which was restructured in 2010, and we haveworked to instill and firmly establish it. Since FY2011, we haveoperated annual training on the Structure of Values andPolicies based on an e-learning format in order to further
spread and consolidate the Structure of Values and Policies
while connecting it to social demands and in-house initiatives.
In FY2019, we conducted an e-learning program for
employees on the theme of the Structure of Values andPolicies, and the participation rate was 94%.

Business Section

Explanation and Analysis ofBusiness Results

Data Section▍the Antimonopoly Act

Specific Measures for Compliance withTaking the fact seriously that we were indicted on suspicion ofviolating the Antimonopoly Act in connection with the Linear
Chuo Shinkansen construction project, we have implemented
the measures indicated below based on deliberations by theCompliance Committee chaired by an external lawyer andresolution by the Board.

1 Revision and tightening of internal rules relating tocontacts with competitors (September 2018)

2 Reinforcement of procedures to confirm the appropriate
ness of the bidding process (September 2018)

3 Carrying out re-education to ensure compliance with the
Antimonopoly Act
4 Implementation of e-learning for all officers and employees (September 2018 and June 2019)

5 Implementation of training by an external lawyer for

officers and employees in the sales departments and thetechnical departments that engage in operations related
to taking orders (October/November 2018 and February/March 2020)▍and Eliminate Anti-Social Forces

Initiatives to Ensure Fair Subcontracts

At Taisei Corporation, we have set forth “Promoting partnerships
with supply chains” under the Action Guidelines for Taisei
Personnel and the Taisei Group as a Whole, and declares“Promoting partnerships with subcontractors and suppliers” andstipulates that we build fair, trustworthy relationships with ourbusiness partners and conduct transactions on an equal footing.
Furthermore, we have set out Measures for Dealing with AntiSocial Forces and Organizations, stipulating that we will take aresolute stance against anti-social forces and will not comply
with illegitimate demands. In order to eliminate anti-social forces,
we have included a condition in our contracts, including thebasic contract for specialized subcontractors, declaring that the
supplier is not an anti-social force and that if revealed otherwise,
the contract may be canceled without notice.

▍Regulations (Guidance)

Verification of Compliance with Laws andIn order to ensure the legitimacy of bids, Taisei Corporation operates
an in-house system whereby the heads of branch offices confirm
that there are no inappropriate acts in the process of bidding operations, produce the documents, and keep all bids on file.
Every year, the legal department verifies the legitimacy of bids
and checks compliance with the Construction Business Act,
the Antimonopoly Act and the Subcontractors Protection Act.
The results are reported to the in-house Auditing Department.
TA I SE I A N N UA L R E P O R T 2 0 2 0 58

E S G S ect io n

Civil Engineering
To protect the safety and security of people’s lives, we have supported Japan’s
economic and social growth through the development of social infrastructure,including tunnels and bridges. In recent years, with the aim of establishing nextgeneration construction production systems, we have actively promoted the use of
information and communication technology (ICT) in civil engineering work to
improve construction quality and productivity at construction sites.
Major Businesses
Construction of civil structures such as tunnels, bridges, dams, railways,
and expressways
Executive Vice President,
Members of the Board;
Chief of Civil Engineering Division

Shigeyoshi Tanaka

Major Subsidiaries● TAISEI ROTEC CORPORATION (Design and construction of pavement and civil engineering works, andmanufacture, sales, and recycling of construction materials)● SEIWA RENEWAL WORKS CO., LTD. (Civil engineering, renewal work, production, and sales of
construction machinery, etc.)

Business Strategies

Strategies and measures●

Strengthening ofoverseas civilengineering business

●
●

●

●

Upgrading of on-site
capabilities

Expansion of official development assistance (ODA) projects such as the Philippines
North-South Commuter Railway Extension Project CP01 construction area (Manila City)
Expansion of target areas for large-scale transportation infrastructure businesses
Expansion of new business fields and strengthening of collaboration among Group
companies in preparation for overseas expansion

Achievement of targets for overtime work and closure of work sites based on the work
style reform roadmap
Promotion of the utilization of ICT tools and strengthening of the development of laborsaving and unmanned construction technologies＊Mountain tunnels, etc.:
Promotion of technology to detect falling rocks through image recognition and issuance of analarm, and mechanization and automation technology to ensure maximum safety for workers
using artificial intelligence (AI), etc.
＊Dams, bridges, railways, etc.:
Strengthening of construction management technologies to improve productivity, including
concrete quality management using Taisei Construction Information Management (T-CIM*1)●

Establishment of technology to maintain and renew social infrastructure in cooperation
with Group companies

Promotion of winning orders for dam restoration and renewal projects such as replacement of expressway floor slabs*2● Initiatives for power generation business, renewable energy, carbon dioxide (CO2) capture, etc.
●

＊Contribution to the introduction and market growth of concrete foundations for floating
offshore wind power generation facilities in Japan through the signing of a memorandum of
understanding on the joint development and market development in Japan of concrete foundations
for floating offshore wind power generation facilities with a French company, Ideol S.A.

Involvement in New
Business Area●

Focus on receiving orders for large-scale construction projects through a new bidding system(the early contractor involvement, or early contractor involvement (ECI) framework, method) in
addition to initiatives in business fields such public private partnership (PPP) projects and theconcession*3 business (see p.60 ❶)*1 This is our proprietary construction information modeling system that manages
and shares construction-related information. The Company is currently promoting its introduction to engineering construction sites.
*2 This is a project to replace old reinforced concrete floor slabs of road bridges
with more durable ones.
*3 This is the sale of operation rights of airports, water supply, etc. by the government or other public entities to private companies while retaining ownership.

59 T A IS EI A NNUA L R EP O R T 2 02 0

WEB

Innovation of construction production system with T-CIM

https://www.taisei.co.jp/english/csr/performance/iso26000/consumer/About the Taisei Group

Strategy for Sustainable Growth

ESG Section

Business Section

Civil Engineering

Segment Overview
The figures include intersegment
transaction.

Data Section

Net sales in the Civil Engineering segment increased 4.8% year on year, to ¥491.1 billion.
Operating income rose 34.4%, to ¥71.3 billion as gross profit on completed construction
increased due to a turnaround in profit margin.

Composition by Segment

491.1¥71.3 billion¥491.1 billion

billionyen

26.6%

Kagoshima
Prefecture328(Up 4.8% YoY)

Sales / Operating margin

42.5%
SatsumaYoshida IC

billion
yen

tsu
m

oto

3

IC

15.3
11.3

58

Kagoshima-Nishi IC

JR KagoshimaChuo Station

Kagoshima IC(Up 34.4% YoY)
Yamada IC

468.6

491.1

JR
Nip
p

Operating10
incomeKagoshima-kita IC

Net sales
Ma

466.4

oM
a in

3

Operating income■ Sales (Billions of Yen) ● Operating margin (%)

Lin
e

Sales

71.3

Explanation and Analysis ofBusiness Results

224

225

Sakurajima

2017

2018

14.5

2019 (FY)Nakayama IC

Nakayama IC

225

Major New Orders Received
Kagoshima
Prefecture

JR
Nip
p

Kagoshima-kita IC

mo

to IC

Kagoshima IC

10

3

tsu

Tagami IC

oM
a in

3

Ma

JR Kagoshima-Chuo Station

SatsumaYoshida IC

Lin
e

328

Kagoshima Main Line58

Kagoshima-Nishi IC

JR KagoshimaChuo Station

Kagoshima IC

Yamada IC

225

224

Sakurajima

Nakayama IC❶ Construction
work
for restoration of the Tozaidouro Shield Tunnel outboundNakayama IC
225line route 3 in Kagoshima Prefecture (Kagoshima-shi, Kagoshima)
Owner: Ministry of Land, Infrastructure, Transport and Tourism Kyushu Regional
Development Bureau❷ Onikoube Solar Power Plant new construction
PV civil engineering work (Osaki-shi, Miyagi)
Owner: Toshiba Energy Systems & Solutions Corporation

JR Kagoshima-Chuo Station
Tagami IC
Major
Project Completed
Kagoshima IC

Kagoshima Main Line❸ Construction work of Tokyo Outer Ring Road
(Tajiri Section) (Ichikawa-shi, Chiba)
Owner: East Nippon Expressway Company Limited❹ The Shield Tunnel on the Yokohama Circular
Northwestern Route (Kohoku Bound)(Yokohama-shi, Kanagawa)
Owner: Metropolitan Expressway Company Limited

TA I SE I A N N UA L R E P O R T 2 0 2 0 60

E S G S ect io n

Building Construction
We provide a wide range of buildings that meet a variety of needs, such as
safety, security, comfort, and convenience in light of social demands forenvironmental and energy issues, longer life of structures, and reduced life
cycle costs.
Major Businesses
Construction of airports, condominiums, offices, commercial facilities, factories,
schools, hospitals, etc.
Managing Executive Officer,
Members of the Board;
Chief of Building Construction Division

Yoshihiro Teramoto

Major Subsidiaries● TAISEI U-LEC CO., LTD. (Planning, design, and construction of housing complexes)● TAISEI SETSUBI CO., LTD. (Air conditioning, sanitation, electrical equipment, and interior finishing)● TAISEI HOUSING CORPORATION (Design, construction, and sales of order-made individual housing)

Business Strategies

Strengthening ofcustomer-oriented
construction business

Strategies and measures●

Strengthening of competitiveness in order receipt in the renewal field by leveraging thecomprehensive strengths of sales, design, and construction●

Focus on the field of airport construction by taking advantage of the strengths cultivatedthrough the construction results of many international airports (see p.62 ❶ )●Achievement of stable earnings by promoting businesses that resolve social issues,
such as energy-saving buildings, net zero energy buildings (ZEB), and business
continuity planning (BCP) support●

Enhancement of engineering capabilities to meet customer needs●

Achievement of targets for overtime work and closure of work sites based on the work
style reform roadmap●

Enhancement of productivity in the construction process through the introduction of
ICT and through the Digital Product Center and the Worksite Operation Promotion
Center, which are the construction site support departments, with the use of building
information modeling (BIM)*●

Improvement of the treatment of technical staff and securing the human resources bypromoting the introduction and operation of the Construction Career Up System(CCUS) (see p.39)●

Establishment of business models and generation of revenue sources by leveraging
our technologies in the ICT field●

Active initiatives such as business alliances with Japanese and foreign information
technology (IT) and venture companies

Strengthening of on-site
capabilities

Establishment of a new
business model* This is a construction information database that links a 3D building model created with a computer and attribute information including the specification, layout, and cost ofbuilding components and equipment.

61 T A IS EI A NNUA L R EP O R T 2 02 0

About the Taisei Group

Strategy for Sustainable Growth

ESG Section

Business Section

Building Construction

Segment Overview
The figures include intersegment
transaction.

Sales

Data Section

Net sales in the Building Construction segment increased 8.4% year on year, to ¥1,224.8
billion. Operating income fell 5.7%, to ¥82.6 billion due to a decline in gross profit oncompleted construction resulting from lower profitability.

Composition by Segment

1,224.8billionyen¥1,224.8 billion

66.2%(Up 8.4% YoY)

Sales / Operating margin¥826 billion■ Sales (Billions of Yen) ● Operating margin (%)

49.2%
1,060.5

Operating income

82.6

Explanation and Analysis ofBusiness Results

Net salesbillionyen

Operatingincome1,130.4

9.0(Down 5.7% YoY)

2017

7.8
2018

1,224.8

6.7
2019 (FY)

Major New Orders Received❶ Package ‘A’ - Passenger Terminal Building and AssociatedWorks on Bandaranaike International Airport Development
Project Phase ll Stage 2 (Democratic Socialist Republic of
Sri Lanka)❷ Mitsui Shopping Park LaLaport ❸ Large-scale renovation workof Funabashi Race Track
TAICHUNG (tentative name)(Funabashi-shi,
Chiba)
Project (Taiwan)
Owner: SAN ZHONG EAST DISTLALAPORT CO., LTD.

Owner: Yomiuri Land Co., Ltd.

Owner: Airport and Aviation Services (Sri Lanka) Ltd.

Major Project Completed❹ New National Stadium Development Project(2nd Period) (Shinjuku-ku and Shibuya-ku, Tokyo)
Owner: Japan Sport Council❺ Toyosu 2nd District 2-1 Project (Towers A and C)(Koto-ku, Tokyo)
Owner: Mitsui Fudosan Co., Ltd.

TA I SE I A N N UA L R E P O R T 2 0 2 0 62

E S G S ect io n

Real Estate Development
We are involved in about 20% of the legally mandated redevelopment projects
in Japan, and we are strongly promoting urban planning by utilizing abundant
expertise and networks that are the most experienced among major generalcontractors. From business planning proposals to design, construction,
management, and operation, we propose profitable plans through a variety ofbusiness schemes, and provide new value rooted in the local culture.
Major Businesses
Chief of Urban Development Division

Takashi Yamazaki

Redevelopment, private finance initiatives (PFIs), property management, andcondominium sales projects, etc.
Major Subsidiaries● Taisei-Yuraku Real Estate Co., Ltd. (Real estate development, facility management, etc.)

Business Strategies

Strategic investments inJapan and overseas

Enhancement of large
projects development,
urban redevelopment
business, and PPP/PFI
business

Strategies and measures●

Expansion of development areas in Southeast Asian countries including Taiwan
following Vietnam●

Strengthening of new profit opportunities such as investment in existing profitablebuildings in the United States●

Promotion of appropriate portfolio strategies in real estate development projects that we
promote as project operator, such as The Okura Prestige Tower (office) (see p.64 ❸ )and the development of the (tentative name) Nambanaka 2-chome Development Project(site A) (see p.64 ❶ )●Investment in human resources by assigning employees to Southeast Asian countries
and hiring local staff●

Promotion of large-scale projects that combine civil engineering, construction, anddevelopment, such as the reconstruction of large terminal stations in central Tokyo●

Participation in large-scale private development projects utilizing a range of urban
development methods●

Participation in community planning projects in regional core cities●

Continuous participation in large-scale redevelopment projects●

Further promotion of PPP/PFI projects●

Expansion of businesses based on requests from society including efficient use of public
facilities and enhancement of disaster prevention functions in towns, such as domestic
airport concession projects (facility operation business), public housing reconstruction
projects, and initiatives to reduce the area covered by wooden buildings, in collaboration
with Group companies●

Participation in development projects based on urban planning strategies using newarea development methods, such as the activities of the Shinjuku Subcenter Area
Environmental Improvement Commission

Creation of new
business opportunities

63 T A IS EI A NNUA L R EP O R T 2 02 0

About the Taisei Group

Strategy for Sustainable Growth

ESG Section

Business Section

Real Estate Development

Explanation and Analysis ofBusiness Results

Data Section

The figures include intersegment
transaction.

Net sales in the Real Estate Development segment fell 2.9% year on year, to ¥118.3 billion due
mainly to a decline in the number of condominiums delivered by the consolidated subsidiaries.
Operating income decreased 2.7% year on year, to ¥12.5 billion as gross profit on development
business declined reflecting mainly lower sales.

Sales

Composition by Segment

Segment Overview

118.3

Sales / Operating margin¥118.3 billion

billionyen¥12.5 billion

6.4%■ Sales (Billions of Yen) ● Operating margin (%)

7.5%(Down 2.9% YoY)

119.8

Operating income

12.5

OperatingincomeNet salesbillionyen(Down 2.7% YoY)

10.8

2017

121.8

118.3
10.6

10.5

2018

2019 (FY)

Major New Orders Received❶ (Tentative name) Nambanaka 2-choume
Development Project (site A) (Osaka-shi, Osaka)
Owner: Centara Osaka Tokutei Mokuteki Kaisha (Centara Hotels & Resorts,
Taisei Corporation, Kanden Realty & Development Co., Ltd.

❷ (Tentative name) Hakata-Eki Higashi 1-chome Project(Fukuoka-shi, Fukuoka)
Owner: NTT Urban Development Corporation, Taisei Corporation

Major Project Completed❸ The Okura Prestige Tower (office)(Minato-ku, Tokyo)
Office Owner: Aoicho TMK* Hotel Owner：Hotel Okura Co., Ltd.

❹ 141, Tremont, Street (Boston, MA, United States)ⓒ KOKYU MIWA ARCHITECTURAL PHOTOGRAPHY

Owner: Co-owned with NTT Urban Development
Corporation and Synergy Investments

TA I SE I A N N UA L R E P O R T 2 0 2 0 64

Risk Management / ComplianceE x p lanat io n a nd A na ly si s o f B u s i n e s s Re s u l ts

Explanation and Analysis of Business Results
Basic Capital Policy
Taisei Corporation will strive to maintain and improve its solid financial base to enable stable and sustainable growth.
As a precondition, we will return profits to our stakeholders in an appropriate manner by considering capital efficiency basedon the dividend payout ratio and ROE, while maintaining long-term stable dividends as our basic policy.

Financial Results for FY2019 and Outlook for FY2020
Business performance for the period of the Medium-term Business Plan (FY2018–FY2020) (Consolidated)

受注高

Orders Received(Billions of Yen)

(Billions of Yen)

2,000

2,000
1,500

売上高
Net Sales

1,693.9 1,680.1

1,540.0

1,500

1,650.9150

1,450.0

1,000

1,000

100

500

500

50

FY2018FY2019FY2018FY2020(Forecast)

当期純利益
当期純利益
Net Income Attributable to Owners of Parent(Billions of Yen)

200
150
100

112.6

130.0

122.0

FY2020(Forecast)

56.0

(%)

16.6

16.2

FY2019FY2020(Forecast)

有利子負債
Interest-Bearing
Debt

Less than

320

300.0

217.4

Target in
the Medium-term
Business Plan

208.1

(%)

48.5

30

25.4

15

25
Target in
the Medium-term
Business Plan

22.7

0FY2019FY2020(Forecast)

FY2020

自己資本比率EquityRatio

FY2018FY2019FY2020(Forecast)

FY2020

(%)

48
36

230.0

FY2020Target in
the Medium-term
Business Plan

配当性向
配当性向
Dividend Payout Ratio
45

7.4
FY2018FY2020Target in
the Medium-term
Business Plan

(Billions of Yen)FY2020(Forecast)

12 or higher

0

FY2018FY2019

60

5

0

187.0

167.7

81.0

FY2018FY2020Target in
the Medium-term
Business Plan

20

10

50

240

FY2019

ROE
ROE
ROE
15

153.3

0

0

0

(Billions of Yen)

200

1,870.0

1,751.3

営業利益
Operating Income

160

24

80

12

39.0

39.7

40.3

40 or higher
FY2020Target in
the Medium-term
Business Plan

00
FY2018FY2019FY2020(Forecast)

FY2020Target in
the Medium-term
Business Plan

FY2018FY2019FY2020(Forecast)

FY2020In FY2019, the initial target for orders received was not achieved because the timing of orders for several large-scale
projects in the domestic construction business was pushed back to FY2020 or later, but the amount of orders received
was generally at the same level as in FY2018. Net sales increased due to the steady progress of construction projects
on hand. Consequently, we recorded our second-highest-ever growth in all stages of profit, exceeding the level of
FY2018 due to higher net sales and profitability of the civil engineering business.
On the other hand, in FY2020 we expect orders received to decrease from the level of FY2019 due to the impact of
new coronavirus (COVID-19) infections. Net sales are also expected to decline due to lower orders received and delays
in manufacturing processes caused by construction interruptions. As for each stage of profit, in addition to the decline
in sales, we do not anticipate any uncertain upturn factors, such as the acquisition of additional works, and therefore we
forecast a decrease in all profit metrics.

65 T A IS EI A NNUA L R EP O R T 2 02 0

About the Taisei Group

Strategy for Sustainable Growth

ESG Section

Business Section

Explanation and Analysis ofBusiness Results

Data Section

Explanation and Analysis
of Business Results

Outlook for the Medium-term Business Plan (FY2018–FY2020)
The performance forecast for FY2020 is expected to be lower than the numerical targets set in the Medium-term Business Plan.
This is mainly due to the impact of the spread of COVID-19 infection, changes in the environment for orders received after the
Tokyo 2020 Olympics and Paralympic Games, and investment in growth for securing new business opportunities that did not
progress as expected.
The next Medium-term Business Plan will be discussed in light of the economic situation after the resolution of the COVID-19
infection and trends in construction investment.

Future Investment in Growth
As for investment in growth, we will continue to invest in research and development, ICT, and other investments that are
already underway and that are necessary for business continuity. However, until the COVID-19 infection is resolved, we
believe that the top priority is to increase our cash reserves to prepare for various risks and to enhance management safety.
Future investment plans will depend on when the COVID-19 infection subsides. The plans will be outlined in the next Mediumterm Business Plan.

Shareholder Return
The Company has made it a basic policy to pay long-term
stable dividends to shareholders. To prepare for future business development, the Company aims to increase retained
earnings and return profits to shareholders in line with business performance. We will pay a year-end dividend of ¥65 pershare for FY2019, taking into consideration the results of the
fiscal year under review and the future business environment.
As a result, the total dividend for FY2019, including the interim
dividend, will be ¥130 per share.

The Company has positioned the acquisition of treasury
stock as an ongoing capital policy, based on the recognition
that reducing the number of outstanding shares is a management issue for the Company. In FY2020, we decided toprovide ¥10 billion in consideration of the current situation. We
will continue to make timely decisions based on a comprehensive evaluation of the business environment and the cash
reserves required for business continuity.

Dividends

Repurchase of Treasury Stock and Total Return Ratio(Yen)■Treasury stock repurchased (Billions of Yen)
140

40

●

Total return ratio (%)

100

36
130

130

130

130

32

80

125
120

28

25

24

60

20
110
100

16

100

50.3

52.9

50.1
30.7

8

90

40

50.5

10

0
FY2016FY2017FY2018FY2019FY2020(Plan)

20
0

FY2015FY2016FY2017FY2018FY2019Note: In October 2017, the Company consolidated one share for every five shares ofcommon stock. The calculation is based on the assumption that the consolidation of shares was carried out at the beginning of FY2016.

Strategic Stockholdings
The Company maintains strategic stockholdings with the objective of building and strengthening long-term and stable cooperative
relationships with important business partners and improving its competitiveness and profitability. Of these shares, those that are notjudged to be economically rational over the medium to long term or have no future prospects as a result of the examination by the
Board, and are judged to be inconsistent with the Strategic Stockholdings Policy, will be sold in a timely and appropriate manner.
The Board will continuously verify the consistency with the purpose of holding and the medium- to long-term economic rationality and prospects of all listed strategic stockholdings based on a quantitative comparison of capital costs with the return andrisk of holdings.
TA I SE I A N N UA L R E P O R T 2 0 2 0 66

E x p lanat io n a nd A na ly si s o f B u s i n e s s Re s u l ts

Explanation and Analysis of Business Results
Overview of Business Results
During the fiscal year ended March 31, 2020, the Japanese economy experienced weakness mainly in the manufacturing industry due
to the prolonged trade-related issues in the global economy, and personal consumption and corporate earnings deteriorated rapidly
due to the global outbreak of COVID-19.
In the construction industry, public investment was firm and private capital investment increased moderately, but the spread of
COVID-19 infections began to have an impact on the industry
Given this situation, the operating results of the Taisei Corporation Group were as follows.
Orders received decreased in the Building Construction business due to the impact of postponement of orders for certain
large-scale construction projects in line with the spread of COVID-19 infections. However, orders received in in the Civil
Engineering business increased due to large-scale construction projects. Consequently, orders received were generally on a parwith the previous fiscal year, at ¥1,680.0 billion.
Net sales advanced 6.1% from the previous fiscal year, to ¥1,751.3 billion, due mainly to the smooth completion of a large
amount of construction works on hand in the Civil Engineering business and the Building Construction business.
Operating income grew 9.4% year on year, to ¥167.7 billion, due to higher gross profit in the Civil Engineering business, theacquisition of additional large-scale construction works in the final stage of construction, and an improved profit margin resulting
from cost reductions in line with the progress of construction. Net income attributable to owners of parent rose 8.5% year on year,to ¥122.0 billion, due mainly to growth in interest and dividend income and reversal of allowance for losses on Antimonopoly Act,
despite increases in write-down of marketable and investment securities, impairment losses on fixed assets, and income taxes
accompanying higher income before income taxes. Return on equity (ROE) rose 0.4 percentage point, to 16.6%.
Results according to the reporting segment are as follows (the results for reporting segments include internal transactions
between segments).
(1) Civil Engineering
In the Civil Engineering segment, net sales increased 4.8%
year on year, to ¥491.1 billion due mainly to the smoothcompletion of a large amount of construction works on hand.
Operating income rose 34.4%, to ¥71.3 billion, due to higher
gross profit, the acquisition of additional large-scaleconstruction works in the final stage of construction, and an
improved profit margin resulting from cost reductions in linewith the progress of construction.
(2) Building Construction
Net sales in the Building Construction segment increased 8.4%
year on year, to ¥1,224.8 billion, due mainly to the smoothcompletion of a large amount of construction works on hand.
Operating income fell 5.7%, to ¥82.6 billion, due to a decline ingross profit on completed construction projects reflecting lower
profitability in certain large-scale construction projects where
profit improvement did not progress.

(3) Real Estate Development
In the real estate industry, sales prices in the condominium
market remained high, and customers increasingly selected
locations mainly in urban areas and near train stations. In thebuilding leasing market, rents continued on a moderate
upward trend mainly in central Tokyo and the market
remained firm.
In the Taisei Group, on the other hand, net sales declined
2.9%, to ¥118.3 billion, due to a decrease in the number ofcondominiums delivered by consolidated subsidiaries.
Operating income declined 2.7% year on year, to ¥12.5 billion,
reflecting a decline in gross profit in real estate development
operations due mainly to lower sales.
(4) Other
Net sales rose 19.2%, to ¥14.4 billion, and operating income
grew 5.1%, to ¥1.2 billion.

Major new orders received during the fiscal year ended March 31, 2020:
Owner

Project

Airport and Aviation Services (Sri Lanka) Ltd.

Package ‘A’ - Passenger Terminal Building and Associated Works on
Bandaranaike International Airport Development Project Phase II Stage 2(Democratic Socialist Republic of Sri Lanka) (See p.62)

Ministry of Land, Infrastructure, Transport andTourism Kyushu Regional Development Bureau

Construction work for Gifu Prefecture Station (tentative name) on the Chuo
Shinkansen line
Construction work for restoration of The Tozaidouro Shield Tunnel
outbound line route 3 (Kagoshima-shi, Kagoshima) (See p.60)

Kawasaki City

Kawasaki City New Main Building Construction Project

Ministry of Land, Infrastructure, Transport andTourism Kanto Regional Development Bureau

Construction work of Ichigaya Police general office building

Central Japan Railway Company

67 T A IS EI A NNUA L R EP O R T 2 02 0

About the Taisei Group

Strategy for Sustainable Growth

ESG Section

Business Section

Explanation and Analysis ofBusiness Results

Data Section

Explanation and Analysis
of Business Results

Major projects completed during the fiscal year ended March 31, 2020:
Owner

Project

Japan Sport Council

New National Stadium Development Project (2nd Period)(Shinjuku-ku and Shibuya-ku, Tokyo) (See p.62)

Hotel Okura Co.,Ltd.

(Tentative Name) Toranomon 2-10 Project (Minato-ku, Tokyo)

Mitsui Fudosan Co.,Ltd

Toyosu 2nd District 2-1 Project (Towers A and C) (Koto-ku, Tokyo) (See p.62)
Construction work of Tokyo Outer Ring Road (Tajiri Section)(Ichikawa-shi, Chiba) (See p.60)
The Shield Tunnel on the Yokohama Circular Northwestern Route (Kohoku
Bound) (Yokohama-shi, Kanagawa) (See p.60)

East Nippon Expressway Company Limited
Metropolitan Expressway Company Limited
Orders received

Net sales

Millions of Yen

Millions of Yen

Reporting segment

2019

2020

Reporting segment

2019

2020

Civil Engineering¥ 411,058¥ 434,970

Civil Engineering¥ 439,109¥ 459,109

Building Construction

1,148,973

1,117,916

Building Construction

1,087,671

1,168,446

124,586

115,812

Real Estate Development

114,855

112,422

9,241

11,351Others9,241

11,351¥1,693,859¥1,680,051¥1,650,877¥1,751,330

Real Estate Development
Others
Total

Total

Note: In Orders received and Sales, transactions between segments have been eliminated.

Cash Flows(1) Cash Flows from Operating Activities
Net cash provided by operating activities totaled ¥77.4
billion (versus ¥71.0 billion in net cash used in the previous
fiscal year), due mainly to ¥174.7 billion in income before
income taxes.
Compared with the previous fiscal year, the main factors
behind the ¥148.5 billion improvement included an increasein advances received and progress billings on uncompleted
contracts and an improvement of ¥83.4 billion in the balanceof construction-related items.
(2) Cash Flows from Investing Activities
Net cash provided by investing activities totaled ¥33.2 billion(versus ¥82.2 billion in net cash used in the previous fiscal
year), due mainly to a decrease of ¥60.2 billion in time
deposits. This resulted in an improvement of ¥115.5 billion.

(3) Cash Flows from Financing Activities
Net cash used in financing activities totaled ¥66.6 billion(versus ¥96.1 billion in the previous fiscal year). The main
factors behind the ¥29.5 billion improvement were an
absence of ¥10.0 billion in redemption of bonds recorded in
the previous fiscal year and a decrease of ¥8.0 billion in
acquisition of treasury stock.
Accordingly, cash and cash equivalents at the end of the
fiscal year under review amounted to ¥482.6 billion, up¥45.0 billion over the previous fiscal year-end. The balanceof interest-bearing debt for fund-raising purposes amounted
to ¥208.1 billion, down ¥9.2 billion from the previous fiscal
year. Of the interest-bearing debt for fund-raising purposes,
non-recourse debt was ¥0.1 billion, up ¥0.1 billion.

Financial Position(1) Assets
Total assets at year-end climbed 2.4% or¥43.8 billion year
on year, to ¥1,889.9 billion, principally due to an increase intrade notes and accounts receivable (from completed
construction contracts).
(2) Liabilities
Total liabilities rose 1.1% or ¥12.2 billion, to ¥1,136.0 billion,
mainly reflecting an increase in advances received andprogress billings on uncompleted contracts.

(3) Net Assets
Net assets grew 4.4% or ¥31.5 billion, to ¥753.9 billion,
principally due to higher net income attributable to owners ofparent despite the acquisition of treasury stock and adecrease in unrealized holding gains on securities, net oftaxes due to a decline in stock prices. Consequently, theequity ratio rose 0.7 percentage point, to 39.7%.

TA I SE I A N N UA L R E P O R T 2 0 2 0 68

Da t a S e ct io n ● Consol ida ted Financial Statem ents

CONSOLIDATED BALANCE SHEETSTAISEI CORPORATION AND CONSOLIDATED SUBSIDIARIESAS OF MARCH 31, 2019 AND 2020

Thousands of
U.S. Dollars(Note 1)Millions of Yen
ASSETS

2019

2020

¥

¥

2020

Current assets:
Cash and time deposits (Notes 3 and 4) .....................................

467,750

482,723$ 4,435,569

Notes and accounts receivable, trade (Notes 4 and 7) ................

542,009615,037

5,651,355

Cost on uncompleted contracts ..................................................

42,47254,857504,061

Cost on development projects in progress ..................................

96,750105,488969,292

Other inventories .........................................................................

3,804

3,096

28,448Other current assets (Note 7) ......................................................

47,77337,989349,067

Allowance for doubtful accounts .................................................

(121)

(167)

(1,534)

Total current assets ..................................................

1,200,437

1,299,023

11,936,258

Buildings and structures (Notes 10,16 and 19) ........................

152,138

146,673

1,347,726

Machinery, vehicles and equipment (Notes 16 and 19) ...............................

60,38060,617556,988

Land (Notes 10,16,17 and 19) .................................................

135,939

120,572

1,107,893

Construction in progress .........................................................

1,255

685

6,294

Subtotal ...................................................................

349,712328,547

3,018,901

Accumulated depreciation .......................................................

(129,967)(124,147)(1,140,742)

Total tangible fixed assets ........................................

219,745

204,400

1,878,159

Intangible fixed assets (Note 16) ..................................................

13,02814,289131,296

Investment securities (Notes 4, 5 and 6) ..................................

367,627

317,6222,918,515

Net defined benefit asset (Note 11) ..........................................

11,387

13,205

121,336

Deferred income tax assets (Note 9) ........................................

3,915

12,747

117,128

Other assets (Note 6 and 14) ...................................................

31,80630,220277,681

Allowance for doubtful accounts ..............................................

(1,769)(1,510)(13,875)

Total investments and other assets ...........................

412,966

372,284

3,420,785

Total fixed assets ........................................

645,739

590,9735,430,240

Total assets .................................................

¥ 1,846,176¥ 1,889,996$ 17,366,498

Fixed assets:
Tangible fixed assets

Investments and other assets:

The accompanying notes are an integral part of these statements.

69 T A IS EI A NNUA L R EP O R T 2 02 0

About the Taisei Group

Strategy for Sustainable Growth

ESG Section

Business Section

Explanation and Analysis ofBusiness Results

Thousands of
U.S. Dollars(Note 1)Millions of Yen
LIABILITIES AND NET ASSETS

Data Section

Consolidated Financial
Statements

2019

2020

¥

¥

2020

Current liabilities:
Notes and accounts payable, trade (Notes 4 and 7) ....................
Short-term loans (Notes 4, 6 and 8) ............................................

507,335
59,924

491,569$ 4,516,852

58,401

536,626

Current portion of long-term debt (Notes 4, 6 and 8) ...................

31,34439,789365,607

Income taxes payable .................................................................

18,982

31,956

293,632

Advances received and progress billings on uncompleted contracts ..........

99,746

121,646

1,117,762

Deposits received (Note 4) ..........................................................

155,030

146,540

1,346,504

Allowance for warranty on completed contracts ..........................

3,475

3,605

33,125

Allowance for losses on construction contracts (Note 16) ............

2,761

2,270

20,858

Allowance for losses on Anti-Monopoly Act .................................

9,129

—

—

Other current liabilities (Note 7) ....................................................

37,06561,662566,590

Total current liabilities .....................................

924,791

957,438

8,797,556

Long-term liabilities:
Long-term debt (Notes 4 and 8) ..................................................

126,850

110,606

1,016,319

Deferred income tax liabilities (Note 9) .........................................

6,199

241

2,215

Deferred income tax liabilities for revaluation of land (Notes 9 and 17) .........

3,286

3,280

30,139Retirement benefits for directors and audit & supervisory board members ........

417

437

4,015

Allowance for losses on investments in subsidiaries and affiliates ........

16

—

—

Allowance for environmental spending ........................................

44

2

18

Net defined benefit liability (Note 11) ............................................

42,02245,045413,902

Other long-term liabilities .............................................................

20,161

19,031

174,869

Total long-term liabilities ..............................................................

198,995

178,642

1,641,477

Total liabilities .................................................

1,123,786

1,136,080

10,439,033

122,742

122,742

1,127,832

Net assets (Notes 12 and 20):
Shareholders’ equity:
Common stock
Authorized: 440,000,000 shares
Issued: 224,541,172 shares ....................................................
Capital surplus ............................................................................

60,19960,199553,147

Retained earnings .......................................................................

465,127

556,305

5,111,688

Less: Treasury stock, at cost (Note 22) ........................................

(37,503)(65,516)(602,003)

Total shareholders’ equity (Note 22) ...............

610,565

673,730

6,190,664

108,782

74,536684,885

Accumulated other comprehensive income:Unrealized holding gains on securities, net of taxes .....................
Deferred losses on hedging derivatives, net of taxes (Note 14) .........

(74)

(44)

(404)

Revaluation reserve for land (Note 17) .........................................

(1,245)

1,231

11,311

Foreign currency translation adjustments ....................................

(3,343)(3,165)(29,082)

Remeasurements of defined benefit plans, net of taxes (Note 11) .........

5,738

3,870

35,560Total accumulated other comprehensive income .........

109,858

76,428702,270

Non-controlling interests: ................................................................

1,967

3,758

34,531

Total net assets ..............................................

722,390753,916

6,927,465

Total liabilities and net assets .........................

¥ 1,846,176¥ 1,889,996$ 17,366,498

TA I SE I A N N UA L R E P O R T 2 0 2 0 70

Da t a S e ct io n ● Consol ida ted Financial Statem ents

CONSOLIDATED STATEMENTS OF INCOME
TAISEI CORPORATION AND CONSOLIDATED SUBSIDIARIESYEARS ENDED MARCH 31, 2019 AND 2020

Thousands of
U.S. Dollars(Note 1)Millions of Yen
2019

2020

Construction contracts ............................................................

¥ 1,511,724¥ 1,612,498$ 14,816,668

Real estate development (and other) (Note 10) ........................

139,154

138,833

1,275,687

1,650,878

1,751,331

16,092,355

Cost of sales (Note 18) ................................................................

1,409,418

1,492,654

13,715,464

Selling, general and administrative expenses (Note 18) ...............

88,13690,922

835,450

1,497,554

1,583,576

14,550,914

153,324

167,755

1,541,441

Interest and dividend income ......................................................

4,526

5,221

47,974

Interest expenses ........................................................................

(1,278)(1,112)(10,218)

Taxes and dues ...........................................................................

(445)

(222)

(2,040)2020

Revenue:
Net sales (Note 16):

Costs and expenses (Note 16):

Operating income (Note 16) ............................................................
Other income (expenses):Commission expenses ................................................................

(356)

(25)

(230)

Investment gain on equity method ..............................................

1,283

1,070

9,832

Gains on sales of investment securities (Note 5) ..........................

153

497

4,567

Gains on sales of tangible fixed assets ........................................

1,642

1,185

10,888

Reversal of allowance for losses on Anti-Monopoly Act ...............

1,565

3,043

27,961

Write-down of marketable and investment securities (Note 5) .........

(92)(1,502)(13,801)

Loss on disposal of fixed assets ..................................................

(188)

(78)

(717)

Loss on investments in related companies ..................................

(167)

—

—

Impairment losses on fixed assets (Notes 10,16 and 19) .............

(340)(1,338)(12,294)

Other, net (Note 5) .......................................................................

1,150

291

2,674

7,453

7,030

64,596

Income before income taxes ...........................................................

160,777

174,785

1,606,037

Current ....................................................................................

(43,594)(51,474)(472,976)

Deferred ..................................................................................

(4,481)(1,127)(10,356)(48,075)(52,601)(483,332)

Net income .....................................................................................

112,702

122,184

1,122,705

Income taxes (Note 9):

Net income (loss) attributable to non-controlling interests ...............
Net income attributable to owners of parent ...................................

(130)
¥

112,572

¥

(96)

(882)

122,088$ 1,121,823
U.S. Dollars(Note 1)

Yen
Amounts per share of common stock:
Net income (Note 20) ..............................................................

¥ 511.90¥ 573.14$ 5.27

Diluted net income (Note 20) ...................................................

—

—

—

Cash dividends applicable to the year (Note 12) ......................

130.00130.00

1.20

The accompanying notes are an integral part of these statements.

71 T A IS EI A NNUA L R EP O R T 2 02 0

About the Taisei Group

Strategy for Sustainable Growth

ESG Section

Business Section

Explanation and Analysis ofBusiness Results

Data Section

Consolidated Financial
Statements

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
TAISEI CORPORATION AND CONSOLIDATED SUBSIDIARIESYEARS ENDED MARCH 31, 2019 AND 2020

Thousands of
U.S. Dollars(Note 1)Millions of Yen
2019

2020

2020

¥ 112,702¥ 122,184$ 1,122,705

Unrealized holding gains on securities, net of taxes .....................

10,205(34,243)(314,647)

Deferred gains (losses) on hedging derivatives, net of taxes .........

8

1

9

Foreign currency translation adjustments ....................................

(239)

236

2,169

Remeasurements of defined benefit plans, net of taxes ...............

(3,351)(1,881)(17,284)

Share of other comprehensive income of associates accounted for by the equity method ...............

(35)

46

423

Total other comprehensive income ..............................................

6,588(35,841)(329,330)

Comprehensive income .................................................................

¥ 119,290¥ 86,343$ 793,375

Owners of parent ........................................................................

¥ 119,190¥ 86,182$ 791,896

Non-controlling interests .............................................................

100

161

1,479

Net income .....................................................................................
Other comprehensive income (Note 21):Comprehensive income attribute to:

The accompanying notes are an integral part of these statements.

TA I SE I A N N UA L R E P O R T 2 0 2 0 72

Da t a S e ct io n ● Consol ida ted Financial Statem ents

CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETSTAISEI CORPORATION AND CONSOLIDATED SUBSIDIARIESYEARS ENDED MARCH 31, 2019 AND 2020

Millions of Yen

Treasury stock

Total
shareholders’equity¥ 382,462¥ (1,490)¥ 563,913(29,907)—(29,907)

112,572—

112,572—(36,014)(36,014)

(0)

—

1

1

—

—

—

—

—

—

—

—

—

—

Commonstock

Capital surplus

Balance at March 31, 2018 .................................................

¥ 122,742¥ 60,199

Dividends ...........................................................................

——Net income attributable to owners of parent .......................

——

Acquisition of treasury stock ..............................................

——

Sale of treasury stock .........................................................

—

Reversal of revaluation reserve for land ..............................
Changes of scope of consolidation ....................................

Retainedearnings

Changes other than shareholders’ equity, net .....................

—

—

—

—

—

Balance at March 31, 2019 .................................................

¥ 122,742¥ 60,199¥ 465,127¥ (37,503)¥ 610,565

Dividends ...........................................................................

——(29,004)—(29,004)

Net income attributable to owners of parent .......................

——

122,088—

122,088

Acquisition of treasury stock ..............................................

—

—

—

(28,013)(28,013)

Sale of treasury stock .........................................................

—

—

—

—

—

Reversal of revaluation reserve for land ..............................

——(2,476)—(2,476)570

Changes of scope of consolidation ....................................

—

—

570

—

Changes other than shareholders’ equity, net .....................

—

—

—

—

—

Balance at March 31, 2020 .................................................

¥ 122,742¥ 60,199¥ 556,305¥ (65,516)¥ 673,730

Thousands of U.S. Dollars (Note 1)

Capital surplus

Retainedearnings

Treasury stock

Total
shareholders’equity$ 553,147$ 4,273,886$ (344,602)$ 5,610,263—(266,507)—(266,507)—

1,121,823—

1,121,823———(257,401)(257,401)

—

—

—

—

—

Reversal of revaluation reserve for land ..............................

——(22,751)—(22,751)

Changes of scope of consolidation ....................................

—

—

5,237

—

5,237

Changes other than shareholders’ equity, net .....................

—

—

—

—

—

Balance at March 31, 2020 .................................................

$ 1,127,832$ 553,147$ 5,111,688$ (602,003)$ 6,190,664

CommonStock
Balance at March 31, 2019 .................................................

$ 1,127,832

Dividends ...........................................................................

—Net income attributable to owners of parent .......................

—

Acquisition of treasury stock ..............................................
Sale of treasury stock .........................................................

The accompanying notes are an integral part of these statements.

73 T A IS EI A NNUA L R EP O R T 2 02 0

About the Taisei Group

Strategy for Sustainable Growth

ESG Section

Business Section

Explanation and Analysis ofBusiness Results

Data Section

Consolidated Financial
Statements

Millions of Yen
Unrealized
holding gains on
securities, netof taxes

Total
accumulated
othercomprehensive
incomeNoncontrollinginterests¥ 9,079¥ 103,240¥ 1,867¥ 669,020———(29,907)

—

—

—

—

112,572

—

—

—

—

(36,014)

—

—

—

—

—

1

—

—

—

—

—

—

—

—

—

—

—

—

—

—

Deferred losses
on hedging
derivatives, netof taxes

Revaluation
reserve for land

Foreign currencytranslation
adjustments¥ 98,579¥ (115)¥ (1,245)¥ (3,058)

—

—

—

—

—

—

—

—

—

—

—

—

—
—

Remeasurements of defined
benefit plans, netof taxes

Total net
assets

10,203

41

—

(285)

(3,341)

6,618

100

6,718

¥ 108,782¥ (74)¥ (1,245)¥ (3,343)¥ 5,738¥ 109,858¥ 1,967¥ 722,390

—

—

—

—

—

—

—

(29,004)

—

—

—

—

—

—

—

122,088

—

—

—

—

—

—

—

(28,013)

—

—

—

—

—

—

—

—

—

—

2,476

—

—

2,476

—

—

—

—

—

—

—

—

—

570

(34,246)

30

—

178

(1,868)(35,906)

1,791(34,115)¥ 74,536¥ (44)¥ 1,231¥ (3,165)¥ 3,870¥ 76,428¥ 3,758¥ 753,916

Total
accumulated
othercomprehensive
incomeNoncontrollinginterests

Thousands of U.S. Dollars (Note 1)
Unrealized
holding gains on
securities, netof taxes

Deferred losses
on hedging
derivatives, netof taxes

Remeasurements of defined
benefit plans, netof taxes

Revaluation
reserve for land

Foreign currencytranslation
adjustments$ 999,559$ (680)$ (11,440)$ (30,718)$ 52,724$ 1,009,445$ 18,074

—

—

—

—

—

—

—

(266,507)

—

—

—

—

—

—

—

1,121,823

—

—

—

—

—

—

—

(257,401)

—

—

—

—

—

—

—

—

—

—

22,751——

22,751

—

—

—

—

—

—

—

—

—

5,237

(314,674)

276

—

1,636

(17,164)(329,926)

16,457(313,469)$ 684,885$ (404)$ 11,311$ (29,082)$ 35,560

702,270$ 34,531$ 6,927,465$

Total net
assets$ 6,637,782

TA I SE I A N N UA L R E P O R T 2 0 2 0 74

Da t a S e ct io n ● Consol ida ted Financial Statem ents

CONSOLIDATED STATEMENTS OF CASH FLOWSTAISEI CORPORATION AND CONSOLIDATED SUBSIDIARIESYEARS ENDED MARCH 31, 2019 AND 2020

Thousands of U.S.
Dollars(Note 1)Millions of Yen
2019

2020

2020

¥ 160,777
7,856
340
(37)
(6,632)
6,235(1,565)(4,526)
1,278
92
(123)
167
(1,642)
188(1,283)(99,707)
7,641(10,239)(1,047)
11,545(1,822)(3,127)(48,947)(27,110)(2,309)(5,592)(19,589)¥ 174,785
9,885
1,338
(213)
(492)
3,021
(3,043)(5,221)
1,112
1,502
(452)
—
(1,185)78(1,070)(72,326)(12,382)(8,734)
1,854
10,955(1,818)(16,383)
21,866(8,607)22,866404
117,740$ 1,606,037
90,83012,294(1,957)(4,521)
27,759(27,961)(47,974)
10,21813,801(4,153)—(10,888)717(9,832)(664,578)(113,774)(80,254)
17,036100,662(16,705)(150,538)
200,919(79,087)
210,108
3,712
1,081,871

Cash received (paid) during the year for:
Interest and dividend received .....................................................
Interest paid ................................................................................
Income taxes paid .......................................................................
Penalty payments associated with Anti-Monopoly Act .................
Net cash provided by (used in) operating activities ...............

4,972(1,283)(55,128)—(71,028)

5,966(1,106)(39,039)(6,086)77,47554,819(10,163)(358,715)(55,922)711,890

Cash flows from investing activities:
Decrease (increase) in time deposits ...........................................
Purchase of property, equipment and intangible assets ...............
Proceeds from sale of property, equipment and intangible assets ...
Purchase of marketable and investment securities ......................
Proceeds from sale of marketable and investment securities .......
Acquisition of shares of subsidiaries resulting in changes of scope of consolidation ...
Other, net ....................................................................................
Net cash provided by (used in) investing activities ................

(30,056)(46,645)9,478(17,363)
2,117
—
180
(82,289)

30,166(12,991)
23,435(15,005)
14,789(7,114)(19)
33,261

277,185(119,370)
215,336(137,876)
135,891(65,368)(175)
305,623

Cash flows from financing activities:
Increase (decrease) in short-term loans .......................................
Proceeds from long-term loans ...................................................
Repayment of long-term loans ....................................................
Proceeds from long-term non-recourse loans .............................
Repayment of long-term non-recourse loans ..............................
Redemption of bonds .................................................................
Redemption of non-recourse bonds ............................................
Acquisition of treasury stock .......................................................
Cash dividends paid, including those to minority interest .............
Other, net ....................................................................................
Net cash provided by (used in) financing activities ................

(9,380)12,600(19,726)—(2,950)(10,000)(500)(36,014)(29,906)(322)(96,198)(1,523)
23,100(31,027)
181
(8)
—
—
(28,013)(29,004)(353)(66,647)(13,994)
212,258(285,096)
1,663
(74)
—
—
(257,401)(266,507)(3,244)(612,395)

Effect of exchange rate changes on cash and cash equivalents ......
Net increase (decrease) in cash and cash equivalents .....................
Cash and cash equivalents at beginning of year .............................
Increase (decrease) in cash and cash equivalents resulting from changes of scope of consolidation ...
Cash and cash equivalents at end of year (Note 3) .........................

(247)(249,762)
687,347—¥ 437,585

244
44,333
437,585737¥ 482,655

2,242
407,360
4,020,812
6,772$ 4,434,944

Cash flows from operating activities:
Income before income taxes .......................................................
Depreciation and amortization .....................................................
Impairment losses on fixed assets ...............................................
Increase (decrease) in allowance for doubtful accounts ...............
Increase (decrease) in allowance for losses on construction contracts ...
Increase (decrease) in net defined benefit liability .........................
Increase (decrease) in allowance for losses on Anti-Monopoly Act ...
Interest and dividend income ......................................................
Interest expenses ........................................................................
Write-down of marketable and investment securities ...................
Gain (loss) on sale of marketable and investment securities .........
Loss on investments in related companies ..................................
Losses (gains) on sales of tangible fixed assets ...........................
Losses on disposal of fixed assets ..............................................
Investment losses (gains) on equity method ................................
Decrease (increase) in trade receivables ......................................
Decrease (increase) in cost on uncompleted contract .................
Decrease (increase) in inventories ................................................
Decrease (increase) in other inventories .......................................
Decrease (increase) in accounts receivables - other ....................
Decrease (increase) in net defined benefit asset ..........................
Increase (decrease) in trade payables ..........................................
Increase (decrease) in advances received and progress billings on uncompleted contracts ....
Increase (decrease) in deposits received .....................................
Increase (decrease) in accounts payable - other ..........................
Other, net ....................................................................................

The accompanying notes are an integral part of these statements.

75 T A IS EI A NNUA L R EP O R T 2 02 0

About the Taisei Group

Strategy for Sustainable Growth

ESG Section

Business Section

Explanation and Analysis ofBusiness Results

Data Section

Consolidated Financial
Statements

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
TAISEI CORPORATION AND CONSOLIDATED SUBSIDIARIESMARCH 31, 2019 AND 2020

1. Basis of Presenting Consolidated Financial Statements
The accompanying consolidated financial statements of Taisei Corporation (the “Company”) and its consolidated subsidiaries (collectively the“Group”) have been prepared in accordance with the provisions set forth in the Japanese Financial Instruments and Exchange Law and its
related accounting regulations, and in conformity with accounting principles generally accepted in Japan (“Japanese GAAP”), which are different
in certain respects as to application and disclosure requirements of International Financial Reporting Standards.
The accompanying consolidated financial statements have been reformatted and translated into English (with some expanded descriptions)from the consolidated financial statements of the Company prepared in accordance with Japanese GAAP and filed with the appropriate Local
Finance Bureau of the Ministry of Finance as required by the Financial Instruments and Exchange Law. Certain supplementary information,
included in the statutory Japanese language consolidated financial statements but not required for fair presentation, is not presented in theaccompanying consolidated financial statements.
The translations of the Japanese yen amounts into U.S. dollars are included solely for the convenience of readers outside Japan, using theprevailing exchange rate at March 31, 2020, which was ¥ 108.83 to U.S. $ 1. The translations should not be construed as representations ofwhat the Japanese yen amounts have been, could have been, or could in the future be when converted into U.S. dollars at this or any other rateof exchange.

2. Summary of Significant Accounting Policies(a) Consolidation and equity method
The Company prepares the consolidated financial statements including the accounts of the Company and those of its majority-owned
subsidiaries, whether directly or indirectly controlled. The consolidated financial statements include the accounts of 42 subsidiaries for the year
ended March 31, 2020 (32 subsidiaries for the year ended March 31, 2019).
TAIMEI KOGYO Co., Ltd. and other 2 companies were included in the scope of consolidation as their importance has increased.
Newly established TAISEI USA LLC and its other 8 subsidiaries were included in the scope of consolidation.
TAISEI CONSTRUCTION CORPORATION and other 1 company were excluded from the scope of consolidation by liquidation.
Exclusion of certain small-scale subsidiaries from the scope of consolidation does not have material impact on the consolidated financial
statements.
All significant intercompany transactions, account balances and unrealized gains or losses have been eliminated in consolidation.
The financial statements of non-consolidated subsidiaries, and investments in affiliated companies in which the Group does not have control but
has the ability to exercise significant influence, are accounted for by the equity method.
The financial statements in 17 non-consolidated subsidiaries, mainly consist of EHIME HOSPITAL PERTNERS Co., Ltd. and OMIYA CROSSPOINT Co., Ltd. are accounted for by the equity method for the year ended March 31, 2020.
Investments in 41 affiliated companies are also accounted for by the equity method for the year ended March 31, 2020 (38 affiliatedcompanies for the year ended March 31, 2019).
Newly established 3 companies and other 1 company being increased in importance were included in the scope of equity method.
1 company that was included in the scope of consolidation, 1 company whose shares were sold by the Company and another 2 companies
that were liquidated were excluded from the scope of equity method.
Exclusion of certain small-scale non-consolidated subsidiaries and the affiliated company from the scope of equity method does not havematerial effect on the consolidated financial statements.
All consolidated subsidiaries other than 19 consolidated subsidiaries have the same balance sheet date, March 31, corresponding with thatof the Company. As for the 19 consolidated subsidiaries whose fiscal year ends at December 31, their financial statements as of December 31
are used in preparation of the consolidated financial statements. Significant transactions, if any, in the period from January 1 to March 31 havebeen adjusted in the consolidated financial statements.
(b) Valuation of Assets and Liabilities of Subsidiaries
In the elimination of the investments in subsidiaries, the assets and liabilities of the subsidiaries including the portion allocated to non-controllinginterests are recorded based on their fair value at the time the Company acquired control of the respective subsidiaries.
(c) Goodwill included in Intangible assets
Significant excesses of investment cost over net equity of consolidated subsidiaries and affiliated companies accounted for by the equity method
are recognized as goodwill (negative goodwill, if credit balance), and amortized principally over the estimated useful lives or less than twenty
years on a straight-line basis. However, immaterial goodwill is charged to income in the year of acquisition. Negative goodwill is credited toincome upon occurrence.
(d) Foreign Currency Translation
Receivables and payables denominated in foreign currencies are translated into Japanese yen at year-end exchange rates. The resulting
exchange gains and losses are reflected in the consolidated statements of income. All revenues and expenses associated with foreign currencies
are translated at rates of exchange prevailing when such transactions are made.
The financial statements of consolidated foreign subsidiaries and affiliated companies under the equity method are translated into Japanese
yen at exchange rates prevailing at the respective year-end dates except for shareholders’ equity accounts, which are translated at historicalrates. The resulting foreign currency translation adjustments are presented in accumulated other comprehensive income in the net assets sectionof the consolidated balance sheets.
(e) Cash and Cash Equivalents in the Consolidated Statements of Cash Flows
In preparing the consolidated statements of cash flows, cash on hand, readily available deposits and short-term highly liquid investments withmaturities not exceeding three months at the date of purchase and with insignificant risks of change in value are considered to be cash and cash
equivalents.
(f) Securities
Securities held by the Group are classified into (a) debt securities intended to be held to maturity, (b) equity securities issued by subsidiaries andaffiliated companies, and (c) all other securities that are not classified in any of the categories above (hereafter “available-for-sale securities”).
Debt securities intended to be held to maturity are stated at amortized cost. Equity securities issued by subsidiaries and affiliated companies
that are not consolidated or accounted for by the equity method are stated at moving-average cost. Available-for-sale securities with available
fair market value is stated at fair market value. Unrealized holding gains and losses on securities, net of taxes are reported as a separate
component of accumulated other comprehensive income in the net assets section. Realized gains and losses on sales of such securities arecomputed using moving-average cost. Other securities with no available fair market value are stated at moving-average cost.
TA I SE I A N N UA L R E P O R T 2 0 2 0 76

Da t a S e ct io n ● Consol ida ted Financial Statem ents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (cont.)
TAISEI CORPORATION AND CONSOLIDATED SUBSIDIARIESMARCH 31, 2019 AND 2020(g) Revenue Recognition of Construction
Revenue associated with construction contracts of which the outcome can be reliably estimated is accounted for by the percentage-ofcompletion method; otherwise contract revenue is accounted for by the completed-contract method. The percentage of completion at the endof the reporting period is determined by the percentage of the cost incurred to the estimated total costs.
(h) Inventories
The Company and its certain subsidiaries develop real estate projects on their own account. Cost on development projects in progress aremainly stated at the lower of cost based on the specific-identification cost method or net realizable value. For this purpose, the cost includes thepurchase cost of land, incidental costs, direct development costs and (in relation to certain developments by one of the subsidiaries) interest
expenses.
Cost on uncompleted contracts is mainly stated at cost based on the specific-identification cost method.
(i) Tangible Fixed Assets
Tangible fixed assets except for buildings and structures are recorded at cost and depreciated principally by the declining-balance method overthe standard useful lives prescribed in the Corporation Tax Law. Buildings and structures are principally depreciated by the straight-line method.
(j) Accounting for Lease Transactions
Finance leases, except for certain immaterial or short-term finance leases in which ownership is not transferred to lessee, are capitalized.
Capitalized leased assets whose ownership is transferred to lessee are depreciated by the same method of depreciation applied to property,
plant and equipment. Capitalized leased assets whose ownership is not transferred to lessee are depreciated to a residual value of zero by thestraight-line method over a useful life period corresponding to the lease contract period.
(k) Derivatives and Hedge Accounting
Derivative financial instruments are stated at fair value and changes in fair value are recognized as gains or losses unless derivative financial
instruments are used for hedging purposes.
If derivative financial instruments are used as hedges and meet certain hedging criteria, the Company and its consolidated domestic
subsidiaries defer recognition of gains or losses resulting from changes in fair value of the derivative financial instruments until related losses orgains on hedged items are recognized.
If interest rate swap contracts are used as hedge and meet certain hedging criteria, net amounts to be paid or received under the interest
rate swap contracts are added to or deducted from the interest on liabilities for which the swap contract were executed.
(l) Income Taxes
The Company and its wholly owned domestic subsidiaries apply the Consolidated Taxation System.
(m) Allowance for Doubtful Accounts
Allowance for doubtful accounts is provided to reserve for probable losses from bad debt. It consists of the estimated uncollectible amount ofcertain identified doubtful receivables and the amount estimated on the basis of the past default ratio for normal receivables.
(n) Allowance for Warranty on Completed Contracts
Allowance for warranty on completed contracts is provided as the amount estimated using an actual ratio of related losses during the pastcertain periods.
(o) Allowance for Losses on Construction Contracts
Allowance for losses on construction contracts is provided with respect to construction projects for which eventual losses are reasonably
estimated.
(p) Retirement Benefits for Directors and Audit & Supervisory Board Members
Retirement benefits for directors and audit & supervisory board members of certain consolidated subsidiaries have been set up in accordancewith each company’s regulations.
(q) Allowance for Losses on Investments in Subsidiaries and Affiliates
Allowance for losses on investments in subsidiaries and affiliates is provided for estimated losses from certain subsidiaries and affiliates inliquidation.
(r) Allowance for Environmental Spending
Allowance for environmental spending is provided based on estimated costs for disposal of Polychlorinated Biphenyl (“PCB”) waste, which is
obligated to dispose by the Act on Special Measures Concerning Promotion of Proper Treatment of PCB Waste.
(s) Allowance for Losses on Anti-Monopoly Act
Allowance for losses on Anti-Monopoly Act is provided based on estimated payment for penalties under the Anti-Monopoly Act.
(t) Accounting Method for Retirement Benefit
Net defined benefit liability is provided for severance and retirement benefits for employees and executive officers of the Company’s certain
consolidated subsidiaries based on estimated amounts of projected benefit obligations and plan assets at the year-end.
In calculating projected benefit obligations, the method of attributing estimated amounts of retirement benefits to the period until this fiscal
year is based on the benefit formula basis.
Past service costs are amortized using the straight-line method (some consolidated subsidiaries use the declining-balance method) over
1-10 years, which is not longer than an average remaining service period of the employees when the costs are incurred.
Actuarial gains and losses are amortized from the subsequent fiscal year (some consolidated subsidiaries amortize actuarial gains and losses
from the current fiscal year) using the straight line method (some consolidated subsidiaries use the declining balance method) over 1-10 years,
which is not longer than an estimated average remaining service period of the employees when the gains or losses are incurred.
(u) Net Income and Cash Dividends per Share
Net income per share is calculated by dividing net income available to common shares by the weighted average number of common shares
outstanding during the year. Cash dividends per share shown for each year represent dividends declared as applicable to the respective years.

77 T A IS EI A NNUA L R EP O R T 2 02 0

About the Taisei Group

Strategy for Sustainable Growth

ESG Section

Business Section

Explanation and Analysis ofBusiness Results

Data Section

Consolidated Financial
Statements(v) Reclassifications
Certain prior year amounts have been reclassified to conform to the current year presentation. These reclassifications have no impact onpreviously reported results of operations or retained earnings.
(w) Application of tax effect accounting for the transition from the Consolidated Taxation System to the Group Tax Sharing System
Regarding the transition from the Consolidated Taxation System to the Group Tax Sharing System, established by “Act on Partial Amendment of
the Income Tax Act and Others” (Act No.8 of 2020), and regarding items of the Non-Consolidated Taxation System that were revised inaccordance with the transition to the Group Tax Sharing System, the Company and part of its domestic subsidiaries, in accordance with thetreatment in paragraph 3 of “Practical Solution on the Treatment of Tax Effect Accounting for the Transition from the Consolidated Taxation
System to the Group Tax Sharing System” (PITF No.39, March 31, 2020) , did not apply the provisions in paragraph 44 of “Guidance on
Accounting Standard for Tax Effect Accounting” (Accounting Standards Board of Japan (ASBJ) Statement No.28, issued on February 16, 2018)
and calculated the amount of deferred income tax assets and liabilities based on the provisions of tax laws before the amendment.
(x) Accounting standard issued but not yet effective
The following standard and guidance were issued but are not yet effective- “Accounting Standard for Revenue Recognition” (ASBJ Statement No.29 (revised March 31, 2020), March 30, 2018)- “Implementation Guidance on Accounting Standard for Revenue Recognition” (ASBJ Guidance No.30 (revised March 31, 2020), March 30,
2018)(1) Overview
The IASB and the FASB jointly developed and issued a converged Standard on the recognition of ‘Revenue from Contracts with Customers’(IFRS 15 for IASB and Topic 606 for FASB.) in May, 2014. IFRS 15 will be applied from the fiscal year beginning on or after January 1, 2018 andTopic 606 will be applied from the fiscal year beginning after December 15, 2017. Under these circumstances, the ASBJ developed theconverged standard for revenue recognition and issued the “Accounting Standard for Revenue Recognition” along with “Implementation
Guidance on Accounting Standard for Revenue Recognition”.
In developing the ‘Accounting Standard for Revenue Recognition,’ the principal policy of the ASBJ is to incorporate the basic concept of
IFRS 15 from the perspective of comparability between financial statements, as one way to establish consistency with IFRS 15. The ASBJ will
add alternative treatments in the case that there are different accounting treatments prevalent in accounting practices in Japan that requireconsideration, to the extent that they do not impair comparability.
(2) Effective date
Effective from the beginning of the fiscal year ending March 31, 2022.
(3) Effects of the application of the standards
The Company and its consolidated subsidiaries are currently in the process of determining the effects of these new standards on the
consolidated financial statements.

3. Cash and Cash Equivalents
Cash and cash equivalents as of March 31, 2019 and 2020 consisted of the following:Thousands of
U.S. Dollars

Millions of Yen
2019
Cash and time deposits ..........................................................................

2020¥ 467,750

2020¥ 482,723$ 4,435,569

Less: Time deposits with maturities exceeding three months ..................

(30,165)

(68)

(625)

Cash and cash equivalents .....................................................................

¥ 437,585¥ 482,655$ 4,434,944

4. Financial Instruments(1) Policies for using financial instruments
The Group restricts investments to the low risk assets such as deposits, and raise funds by the indirect finance such as loans from bank as well
as by the direct finance such as issuing corporate bonds or commercial papers.
Derivative financial instruments are employed mainly for hedging fluctuation in interest rate and foreign currency exchange, not for
speculation.
Receivables: trade notes and trade accounts are exposed to the credit risks of customers. In order to reduce such risks, the Group conducts
strict credit examinations when orders are received, and afterward manage the receivables individually and make effort to detect reduction of
credit risks early.
For investment securities which are mainly debt securities intended to be held to maturity and shares held to keep the relationship withbusiness partners, the Group regularly monitors the fair value or financial positions of the invested companies, and revises the portfolio timely(except for debt securities intended to be held to maturity) considering the relationship with them.
Debts, trade payables: trade notes and trade accounts are debts mostly due within one year. Loans, commercial papers and bonds areprimarily for working capital, and have maturity dates of five years or less. Although the loans or bonds issued at variable rates are exposed tointerest rate fluctuation risk, the risk is hedged by derivative transactions (interest rate swap contracts).
The Group primarily utilizes derivative transactions related to interest rates in order to mitigate the fluctuation risk in interest rates or to reduce
financing costs, and derivative transactions related to currency in order to mitigate the foreign exchange risk. These transactions are exposed to
the fluctuation risk in interest rates and the foreign exchange risk. However, the Group is exposed to limited risk, because most of them arehedged by the corresponding transactions. They consider the credit risk to be low, because they conduct derivative transactions solely withreliable international financial institutions.
The Group executes and manages derivative transactions in accordance with internal rules. Their Finance Departments are responsible for
conducting, evaluating transactions and managing related risks.
(2) Fair Value of Financial Instruments
Book value of the financial instruments was included in the consolidated balance sheet, the fair value of said items as of March 31, 2019 and2020, was as follows. Items for which it is extremely difficult to calculate the fair value were not included in the following table (see “Note 2”
below).
TA I SE I A N N UA L R E P O R T 2 0 2 0 78

Da t a S e ct io n ● Consol ida ted Financial Statem ents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (cont.)
TAISEI CORPORATION AND CONSOLIDATED SUBSIDIARIESMARCH 31, 2019 AND 2020

Millions of Yen
2019Book Value

Fair Value

Difference

ASSETSCash and time deposits .................................................................................

¥ 467,750¥ 467,750

Notes and accounts receivable, trade ............................................................

542,009542,009¥—(0)

Investment securities
Debt securities intended to be held to maturity ..........................................

619

631

12

Available-for-sale securities ........................................................................

299,246

299,246—

Notes and accounts payable, trade ...............................................................

507,335

507,335—

Short-term loans and long term loans due within one year .............................

90,952

91,072(120)

LIABILITIESShort-term non-recourse loans payable .........................................................

—

—

—

Straight bonds due within one year ................................................................

—

—

—

Deposits received ..........................................................................................

155,030

155,030—

Straight bonds ...............................................................................................

40,00040,394

(394)
(724)

Long-term loans ............................................................................................

86,47287,196Long-term non-recourse loans ......................................................................

—

—

—

[Derivative financial instruments (*)] ................................................................

1

1

—

Millions of Yen
2020
Book Value

Fair Value

Difference

ASSETSCash and time deposits .................................................................................

¥ 482,723¥ 482,723

Notes and accounts receivable, trade ............................................................

615,037

615,046¥—
9Investment securities
Debt securities intended to be held to maturity ..........................................

281

288

7

Available-for-sale securities ........................................................................

253,004

253,004—

Notes and accounts payable, trade ...............................................................

491,569

491,569—

Short-term loans and long term loans due within one year .............................

87,93488,033(99)

LIABILITIESShort-term non-recourse loans payable .........................................................

15

15

(0)

Straight bonds due within one year ................................................................

10,00010,040(40)

Deposits received ..........................................................................................

146,540

146,540—

Straight bonds ...............................................................................................

30,00030,166(166)

Long-term loans ............................................................................................

80,03880,572(534)

Long-term non-recourse loans ......................................................................

158

174

(16)

[Derivative financial instruments (*)] ................................................................

12

12

—

Thousands of U.S. dollars
2020
Book Value

Fair Value

Difference

ASSETSCash and time deposits .................................................................................

$ 4,435,569$ 4,435,569

Notes and accounts receivable, trade ...........................................................

5,651,355

5,651,438

83

$

—

Investment securities
Debt securities intended to be held to maturity ..........................................

2,582

2,646

64

Available-for-sale securities ........................................................................

2,324,763

2,324,763—

Notes and accounts payable, trade ...............................................................

4,516,852

4,516,852—

Short-term loans and long term loans due within one year .............................

807,994

808,904(910)

LIABILITIESShort-term non-recourse loans payable .........................................................

138

138

(0)

Straight bonds due within one year ................................................................

91,88692,254(368)

Deposits received ..........................................................................................

1,346,504

1,346,504—

Straight bonds ...............................................................................................

275,659

277,185(1,526)Long-term loans ............................................................................................

735,441

740,347(4,906)Long-term non-recourse loans ......................................................................

1,452

1,599

(147)

[Derivative financial instruments (*)] ................................................................

110

110

—

(*) Note: The assets and liabilities are reported as net amounts.

79 T A IS EI A NNUA L R EP O R T 2 02 0

About the Taisei Group

Strategy for Sustainable Growth

ESG Section

Business Section

Explanation and Analysis ofBusiness Results

Data Section

Consolidated Financial
Statements

Note 1: The calculation method of the fair value of financial instrument and securities, derivative transactions
ASSETS∙ Cash and time deposits and Notes and accounts receivable, trade
The fair value of these financial instruments is almost equivalent to the book value, due to the short term settlements; although, the fair value of
receivables due after one year is based on the present value of discounted cash flows using the interest rate determined by the factors of theestimated collection terms and credit risks with respect to each receivables categorized by collection terms.
∙ Investment securities
The fair value of marketable securities is based on the quoted market value, and bonds are based on the market value, the price indicated by athird party such as broker or the present value of discounted cash flows.
See the notes on “5. Securities” for notes pertaining to securities categorized by the purposes for which they are held.
LIABILITIES∙ Notes and accounts payable, trade, Short-term loans and Long term loans due within one year and Deposits received
The fair value of these financial instruments are almost equivalent to the book value, due to the short term settlements; although, the fair value of
long-term loans due within one year is based on the same method as that for long-term loans.
∙ Short-term non-recourse loans payable, Long-term loans and Long-term non-recourse loans
The fair value of these financial instruments is based on the present value of discounted cash flows by the interest rate which may be applicablewhen the same kind of loans is conducted.
∙ Bonds
The fair value of marketable bonds is based on the quoted market value, otherwise the fair value of nonmarketable bonds is based on thepresent value of discounted cash flows using the interest rate determined by the factors of the estimated redemption terms and issuer’s credit
risk.
[Derivative financial instruments]
See the notes on “14. Derivative Transactions”.
Note 2: Financial instruments which are extremely difficult to calculate the fair value
Nonmarketable securities (book value amount to ¥ 67,762 million and ¥ 64,337 million ($ 591,170 thousand) as of March 31, 2019 and 2020,
respectively) are not included in the Assets Investment securities–Available-for-sale securities above, as it is extremely difficult to calculate thefair value because they have no quoted market prices and the future cash flows cannot be estimated.
Note 3: Scheduled redemption amounts after the consolidated balance sheet date for monetary claims and securities with period of maturities
as of March 31, 2019 and 2020 were as follows:
Millions of Yen
2019
Due after one year but
within five years

Due within one year
Time deposits ................................................................................................

¥

Notes and accounts receivable, trade ............................................................

467,333¥

Due after five years but
within ten years—¥ —540,248

1,761

—

337

83

199

Investment securities
Debt securities intended to be held to maturity
Government bonds ................................................................................
Available-for-sale securities
Government bonds ................................................................................

1

—

—

Total ..........................................................................................

¥ 1,007,919¥ 1,844¥ 199

Millions of Yen
2020
Due after one year but
within five years

Due within one year
Time deposits ................................................................................................
Notes and accounts receivable, trade ............................................................

¥

482,344¥

Due after five years but
within ten years—¥ —606,082

8,955

—

12

260

9

Investment securities
Debt securities intended to be held to maturity
Government bonds ................................................................................
Available-for-sale securities
Government bonds ................................................................................

0—

Total ..........................................................................................

¥ 1,088,438¥ 9,215—¥

9

TA I SE I A N N UA L R E P O R T 2 0 2 0 80

Da t a S e ct io n ● Consol ida ted Financial Statem ents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (cont.)
TAISEI CORPORATION AND CONSOLIDATED SUBSIDIARIESMARCH 31, 2019 AND 2020

Thousands of U.S. Dollars
2020
Due after one year but
within five years

Due within one year

Due after five years but
within ten years

Time deposits ................................................................................................

$ 4,432,087—$ —Notes and accounts receivable, trade ............................................................

5,569,071

82,284

—

110

2,389

83

$

Investment securities
Debt securities intended to be held to maturity
Government bonds ................................................................................
Available-for-sale securities
Government bonds ................................................................................

0

—

—

Total ..........................................................................................

$ 10,001,268$ 84,673$ 83

Note 4: See the notes on “8. Short-term Loans and Long-term Debt” for notes pertaining to the aggregate annual maturities of long term debt
after the consolidated balance sheet date.

5. Securities(1) Following tables summarized acquisition costs, book value and fair value of securities with fair value available as of March 31, 2019 and 2020:(a) Debt securities intended to be held to maturity:∙ Securities with fair value exceeding book value
Millions of Yen
2019
Type
Government bonds ....................................

Book value

Fair value

Difference

¥ 619

¥ 631

¥ 12

Millions of Yen

Thousands of U.S. Dollars

2020
Type
Government bonds ....................................

2020

Book value

Fair value

DifferenceBook value

Fair value

Difference

¥ 281

¥ 288

¥7

$ 2,582$ 2,646$ 64

Securities with fair value not exceeding book value were not applicable as of March 31, 2019 and 2020.
(b) Available-for-sale securities:∙ Securities with book value exceeding acquisition costs
Millions of Yen
2019
Type

Book value

Acquisition cost

Difference

Equity securities .........................................

¥ 281,476¥ 122,456¥ 159,020

Government bonds ....................................

—

—

—

Others .......................................................

1,104

642

462

Total ................................

¥ 282,580¥ 123,098¥ 159,482

Millions of Yen

Thousands of U.S. Dollars

2020

2020

Type

Book value

Acquisition cost

DifferenceBook value

Acquisition cost

Difference

Equity securities .........................................

¥ 210,090¥ 94,597¥ 115,493$ 1,930,442$ 869,218$ 1,061,224

Government bonds ....................................

—

—

—

—

—

—

Others .......................................................

595

346

249

5,467

3,179

2,288

Total ................................

¥ 210,685¥ 94,943¥ 115,742$ 1,935,909$ 872,397$ 1,063,512∙ Securities with book value not exceeding acquisition costs
Millions of Yen
2019
Type

Book value

Acquisition cost

Equity securities .........................................

¥ 16,551¥ 19,284

Government bonds ....................................

1

1

(0)

Others .......................................................

114

114

(0)

Total ................................

¥ 16,666¥ 19,399¥ (2,733)

81 T A IS EI A NNUA L R EP O R T 2 02 0

Difference¥ (2,733)

About the Taisei Group

Strategy for Sustainable Growth

ESG Section

Business Section

Explanation and Analysis ofBusiness Results

Millions of Yen

Data Section

Consolidated Financial
Statements

Thousands of U.S. Dollars

2020

2020

Type

Book value

Acquisition cost

Equity securities .........................................

¥ 41,919¥ 50,231

Government bonds ....................................

0

Others .......................................................
Total ................................

DifferenceBook value

Acquisition cost

Difference¥ (8,312)$ 385,179$ 461,555$ (76,376)

0

(0)

0

0

(0)

400

410

(10)

3,675

3,767

(92)

¥ 42,319¥ 50,641¥ (8,322)$ 388,854$ 465,322$ (76,468)(2) Total sales of available-for-sale securities and the related gains and losses for the years ended March 31, 2019 and 2020 were as follows:
Millions of Yen
2019
Type

Equity securities

Others

Total

Total amount of available-for-sale securities
sold .........................................................

¥ 472

¥—

¥ 472

Gains on sales of available-for-salesecurities .................................................

153

—

153

Losses on sales of available-for-salesecurities .................................................

31

—

31

Millions of Yen
2020
Type

Equity securities

Others

Total

Total amount of available-for-sale securities
sold .........................................................

¥ 801

¥—

¥ 801

Gains on sales of available-for-salesecurities .................................................

497

—

497

Losses on sales of available-for-salesecurities .................................................

45

—

45

Thousands of U.S. Dollars
2020
Type

Equity securities

Others

Total

Total amount of available-for-sale securities
sold .........................................................

$ 7,360$—$ 7,360

Gains on sales of available-for-salesecurities .................................................

4,567

—

4,567

Losses on sales of available-for-salesecurities .................................................

414

—

414

(3) Impairment losses on securities
The Group recognized impairment losses on the following securities for the years ended March 31, 2019 and 2020 were as follows:
Thousands of
U.S. Dollars

Millions of Yen
TypeWrite-down of investment securities ...........

2019
¥ 92

2020

2020

¥ 1,502$ 13,801

TA I SE I A N N UA L R E P O R T 2 0 2 0 82

Da t a S e ct io n ● Consol ida ted Financial Statem ents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (cont.)
TAISEI CORPORATION AND CONSOLIDATED SUBSIDIARIESMARCH 31, 2019 AND 2020

6. Pledged Assets
The following assets were pledged principally as collateral for loans of companies which were subsidiaries and affiliates as of March 31, 2019and 2020:
Millions of Yen
2019

Thousands of U.S. Dollars
2020

2020

Investment securities .....................................................................................

¥ 2,876¥ 2,490$ 22,880

Other assets ..................................................................................................

1,739

1,869

17,173

Total ..........................................................................................

¥ 4,615¥ 4,359$ 40,053

7. Amount of notes receivable and notes payable with maturity on the balance sheet date (the “Date”) and the day before the Date (thebank holidays)
Notes receivable and notes payable are processed on the clearing date or the settlement date. As the Date and the day before the Date werebank holidays for the year ended March 31, 2019, notes receivable and notes payable maturing on that days could not be settled and were
included in the consolidated balance sheets, as follows:
Millions of Yen
2019
Notes receivable (Trade) .............................................................................

Thousands of U.S. Dollars
2020

¥

2020

315

¥—

Electronically recorded monetary claims .....................................................

164

—

—

Notes receivable (Other) .............................................................................

29

—

—

$—

Notes payable (Trade) ................................................................................

5,606

—

—

Electronically recorded obligations .............................................................

30,407——

Notes payable (Other) ................................................................................

13

—

—

Electronically recorded obligations (Other) ..................................................

1

—

—

83 T A IS EI A NNUA L R EP O R T 2 02 0

About the Taisei Group

Strategy for Sustainable Growth

ESG Section

Business Section

Explanation and Analysis ofBusiness Results

Data Section

Consolidated Financial
Statements

8. Short-term Loans and Long-term Debt
Short-term loans as of March 31, 2019 and 2020 mainly consisted of short-term notes and overdrafts from banks. The weighted averageinterest rates of short-term loans as of March 31, 2019 and 2020 were 0.4% and 0.4%, respectively.
The Group has had no difficulty in renewing such notes and overdraft facility agreements, when they considered such renewal advisable.
Long-term debt as of March 31, 2019 and 2020 consisted of the following:
Millions of Yen
2019

Thousands of U.S. Dollars
2020

2020

Bonds and notes:
Issued by the Company:
0.67% yen bonds due in 2020 ...............................................................

¥ 10,000¥ 10,000

0.14% yen bonds due in 2022 ...............................................................

10,00010,00091,886

0.527% yen bonds due in 2022 .............................................................

10,00010,00091,886

0.38% yen bonds due in 2027 ...............................................................

10,00010,00091,886

Secured loans (*1) ......................................................................................

—

173

1,590

Unsecured loans ........................................................................................

117,499

109,571

1,006,809

Capital lease ..................................................................................................

695

651

5,983

158,194

150,395

1,381,926$

91,886Loans, principally from banks and insurance companies:

Amount due within one year ..........................................................................

(31,344)(39,789)(365,607)

Total long-term debt (due after one year) ........................................................

¥ 126,850¥ 110,606$ 1,016,319(*) Note 1: These are non-recourse liabilities for the Group.
The annual interest rates applicable to long-term loans due within one year averaged 0.7% and 0.6% as of March 31, 2019 and 2020,
respectively, and the annual interest rates applicable to long-term loans due after one year averaged 0.6% and 0.5% as of March 31, 2019 and2020, respectively.
The aggregate annual maturities of long-term debt (including current portion) as of March 31, 2020 were summarized as follows:Year ending March 31,

Millions of Yen

Thousands of U.S. Dollars

2021 ........................................................................................................

¥ 39,789

2022 ........................................................................................................

22,082$

202,904

365,6072023 ........................................................................................................

50,691

465,7812024 ........................................................................................................

12,349113,4702025 ........................................................................................................

15,377141,2942026 and thereafter .................................................................................

10,10792,870Total ..........................................................................................

¥ 150,395$ 1,381,926

TA I SE I A N N UA L R E P O R T 2 0 2 0 84

Da t a S e ct io n ● Consol ida ted Financial Statem ents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (cont.)
TAISEI CORPORATION AND CONSOLIDATED SUBSIDIARIESMARCH 31, 2019 AND 2020

9. Income Taxes
Taxes on income consist of corporation, enterprise and inhabitants taxes.
The reconciliations for the year ended March 31, 2019 and 2020 are not presented because the difference between the statutory tax rate
and the effective tax rate were less than or equal to 5% of the statutory tax rate.
Significant components of deferred income taxes at March 31, 2019 and 2020 were as follows:
Millions of Yen
2019

Thousands of U.S. Dollars
2020

2020

Deferred income tax assets:
Disallowed portion of expenses and losses:
Net defined benefit liability ......................................................................

¥ 37,037¥ 37,436$ 343,986

Inventories ..............................................................................................

8,188

9,399

86,364

Accrued bonuses ...................................................................................

7,148

7,357

67,601

Fixed assets ...........................................................................................

2,537

2,469

22,687

Advances received .................................................................................

2,180

983

9,033

Others ....................................................................................................

7,484

6,440

59,175

Tax loss carryforward .................................................................................

776

521

4,787

Unrealized profits .......................................................................................

7,414

7,429

68,262Sub-total ...................................................................................

72,76472,034

661,895

Valuation allowance ....................................................................................

(4,348)(3,921)(36,029)

Total ..........................................................................................

68,416

68,113625,866

Unrealized holding gains on securities ........................................................

(47,948)(32,861)(301,948)

Gains on securities contribution to employee retirement benefit trust ..........

(17,711)(17,711)(162,740)

Net defined benefit asset ...........................................................................

(3,920)(3,599)(33,070)

Others ........................................................................................................

(1,121)(1,436)(13,195)

Deferred income tax liabilities:

Total ..........................................................................................

(70,700)(55,607)(510,953)

Net total ....................................................................................

¥ (2,284)¥ 12,506$ (114,913)

In addition to the deferred income taxes shown above, deferred tax liabilities concerning revaluation of land amounting to ¥ 3,286 million and ¥3,280 million ($ 30,139 thousand) as of March 31, 2019 and 2020 were presented separately in the consolidated balance sheets.

85 T A IS EI A NNUA L R EP O R T 2 02 0

About the Taisei Group

Strategy for Sustainable Growth

ESG Section

Business Section

Explanation and Analysis ofBusiness Results

Data Section

Consolidated Financial
Statements

10. Investment and Rental Property(1) The Company and certain consolidated subsidiaries hold some office buildings for rent in Tokyo and other areas. The rental income on officebuildings for rent was ¥ 4,040 million and ¥ 3,728 million ($ 34,255 thousand) at the year ended March 31, 2019 and 2020, respectively.
Rental income is mainly booked in Real estate development and other of Net sales, and rental cost is mainly booked in Cost of sales.
(2) The amounts of investment and rental property which booked in consolidated balance sheets, the amounts of increase or decrease, and fairvalue as of March 31, 2019 and 2020 were as follows:
Millions of Yen
2019Book value
April 1, 2018
¥ 82,447

Fair value

Increase (decrease)

March 31, 2019

¥ 27,271¥ 109,718

March 31, 2019
¥ 138,796

Millions of Yen
2020
Book value
April 1, 2019
¥ 109,718

Fair value

Increase (decrease)

March 31, 2020

¥ (15,712)¥ 94,006

March 31, 2020
¥ 126,507

Thousands of U.S. Dollars
2020
Book value
April 1, 2019
$ 1,008,160

Increase (decrease)

Fair value
March 31, 2020

$ (144,372)$ 863,788

March 31, 2020
$ 1,158,293

Note 1: The carrying amount is stated at cost of acquisition less accumulated depreciation and impairment losses.
Note 2: The main reasons of increase for the years ended March 31, 2019 and 2020 were acquisition of fixed assets ¥ 36,460 million and ¥ 9,123
million ($ 83,828 thousand), respectively.
The main reason of decrease for the year ended March 31, 2019 was sales of fixed assets ¥ 7,686 million. The main reasons ofdecrease for the year ended March 31, 2020 were sales of fixed assets ¥ 21,516 million ($ 197,703 thousand) and impairment losses on
fixed assets ¥ 1,110 million ($ 10,199 thousand).
Note 3: The book value as of March 31, 2019 and 2020 included asset retirement obligations of ¥ 199 million and ¥ 192 million ($ 1,764
thousand), respectively.
Note 4: The fair value of investment and rental property as of March 31, 2019 and 2020 were mainly calculated by the Company according to
the Japanese Real Estate Appraisal Standards (it may include adjustments using official indices).

11. Employees’ Severance and Retirement Benefits
1. The Company and its main consolidated subsidiaries have adopted the defined-benefit pension plans and defined-contribution pension plans.
The defined-benefit pension plans adopted consist of defined-benefit corporate pension plans and lump-sum payment plans.
Liabilities and expenses for severance and retirement benefits of the Company and its consolidated domestic subsidiaries are determinedbased on amounts obtained by actuarial calculations. The Company may also pay additional retirement benefits which are not subject toactuarial calculation.
The Company has established a retirement benefit trust.
2. Defined-benefit pension plans(1) Movement in retirement benefit obligations
Millions of Yen
2019

Thousands of U.S. Dollars
2020

2020

Balance at beginning of the year ....................................................................

¥ 143,380¥ 139,848$ 1,285,013
58,789Current service cost ...................................................................................

6,454

6,398

Interest cost ...............................................................................................

877

767

7,048

Actuarial loss (gain) ....................................................................................

447(2,983)(27,410)

Benefits paid ..............................................................................................

(10,741)(9,751)(89,598)

Past service costs ......................................................................................

(808)

(183)

(1,682)Other .........................................................................................................

239

197

1,810

Balance at end of the year .............................................................................

¥ 139,848¥ 134,293$ 1,233,970

Some of the consolidated subsidiaries use simplified method for the calculation of retirement benefit obligations.
Retirement benefit expenses in the consolidated subsidiaries applying simplified method are recorded in current service cost.

TA I SE I A N N UA L R E P O R T 2 0 2 0 86

Da t a S e ct io n ● Consol ida ted Financial Statem ents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (cont.)
TAISEI CORPORATION AND CONSOLIDATED SUBSIDIARIESMARCH 31, 2019 AND 2020

(2) Movements in plan assets
Millions of Yen
2019

Thousands of U.S. Dollars
2020

2020

Balance at beginning of the year ....................................................................

¥ 117,153¥ 109,213

Expected return on plan assets ..................................................................

2,457

2,034

18,690

Actuarial loss (gain) ....................................................................................

(4,582)(3,500)(32,160)$ 1,003,519

Contributions paid by the employer ............................................................

1,060

1,107

10,172

Benefits paid ..............................................................................................

(5,811)(5,400)(49,619)

Other .........................................................................................................

(1,064)(1,001)

Balance at end of the year .............................................................................

¥ 109,213¥ 102,453(9,198)$941,404(3) Reconciliation from retirement benefit obligations and plan assets to net defined benefit liability (asset)
Millions of Yen
2019

Thousands of U.S. Dollars
2020

2020

Funded retirement benefit obligations ............................................................

¥ 136,731¥ 130,762$ 1,201,525

Plan assets ....................................................................................................

(109,213)(102,453)(941,404)

27,51828,309260,121

Unfunded retirement benefit obligations .........................................................

3,117

3,531

32,445

Net total at year-end ......................................................................................

30,63531,840292,566

Net defined benefit liability .............................................................................

42,02245,045413,902

Net defined benefit asset ...............................................................................

(11,387)(13,205)(121,336)

Net total at year-end ......................................................................................

¥

30,635¥31,840$292,566(4) Retirement benefit expenses
Millions of Yen
2019

Thousands of U.S. Dollars
2020

2020

Current service cost .......................................................................................

¥ 6,454¥ 6,398

Interest cost ..................................................................................................

877

767

7,048

Expected return on plan assets .....................................................................

(2,457)(2,034)(18,690)

Net actuarial loss amortization .......................................................................

721

(993)

9,124
(12,754)$ 58,789

Past service costs amortization ......................................................................

(1,334)(1,388)Other .............................................................................................................

6

13

119

Total retirement benefit expenses for the year ................................................

¥ 4,267¥ 2,763$ 25,388(5) Remeasurements of defined benefit plans
Items recorded in remeasurements of defined benefit plans (before considering tax effect) were as follows:
Millions of Yen
2019
Past service costs .........................................................................................

Thousands of U.S. Dollars
2020

¥

2020

(526)

¥ (1,205)

Actuarial loss (gain) ........................................................................................

(4,309)(1,510)(13,875)

Total balance as of March 31, 2019 and 2020 ...............................................

¥ (4,835)¥ (2,715)$ (24,947)$ (11,072)(6) Accumulated remeasurements of defined benefit plans
Items recorded in accumulated remeasurements of defined benefit plans (before considering tax effect) were as follows:
Millions of Yen
2019

Thousands of U.S. Dollars
2020

2020

Unrecognized past service costs ...................................................................

¥ (5,842)¥ (4,637)

Unrecognized actuarial loss (gain) ..................................................................

(2,451)(941)(8,646)

Total balance as of March 31, 2019 and 2020 ...............................................

¥ (8,293)¥ (5,578)$ (51,254)

87 T A IS EI A NNUA L R EP O R T 2 02 0

$ (42,608)

About the Taisei Group

Strategy for Sustainable Growth

ESG Section

Business Section

Explanation and Analysis ofBusiness Results

Data Section

Consolidated Financial
Statements(7) Plan assets
2019

2020

① Plan assets comprise:
Equity securities ........................................................................................

46%

42%

Bonds .......................................................................................................

21

24
19

General accounts ......................................................................................

18

Special accounts ......................................................................................

3

3

Short-term assets .....................................................................................

1

1

Other ........................................................................................................
Total ...........................................................................................

11

11

100%

100%

The retirement benefit trust established for corporate pension plans accounted for 40% and 40% of total plan assets, for the fiscal year ended
March 31, 2019 and 2020, respectively.
② Long-term expected rate of return
Current and target asset allocations, historical and expected returns on various categories of plan assets have been considered in determining
the long-term expected rate of return.
(8) Actuarial assumptions
The principal actuarial assumptions as of March 31, 2019 and 2020 were as follows:
2019

2020

Discount rate
The Company and its consolidated domestic subsidiaries

0.4∼1.5

Consolidated overseas subsidiaries

7.5∼8.0

4.8∼8.0

1.0∼3.0

1.0∼3.0

Long-term expected rate of return

0.4∼1.5

3. Defined-contribution pension plans
Amount payable for defined-contribution pension plans of the Company and its consolidated subsidiaries were ¥ 2,550 million and ¥ 2,591
million ($ 23,808 thousand), for the fiscal year ended March 31, 2019 and 2020, respectively.

12. Net assets
Net assets comprise three subsections; which are shareholders’ equity, accumulated other comprehensive income and non-controlling interests.
Under Japanese laws and regulations, the entire amount paid for new shares is required to be designated as common stock. However, acompany may, by a resolution of the Board of Directors, designate an amount not exceeding one-half of the price of the new shares as additional
paid-in capital, which is included in capital surplus.
Under the Japanese Corporate Law (“the Law”), when a dividend distribution of surplus is made, the smaller of an amount equal to 10% of
the dividend or the excess, if any, of 25% of common stock over the total of additional paid-in capital and legal earnings reserve must be set
aside as additional paid-in capital or legal earnings reserve. Legal earnings reserve is included in retained earnings in the accompanying
consolidated balance sheets.
Under the Law, appropriations of legal earnings reserve and additional paid-in capital generally require a resolution of the shareholders’meeting.
Additional paid-in capital and legal earnings reserve may not be distributed as dividends. Under the Law, however, all additional paid-in
capital and all legal earnings reserve may be transferred to other capital surplus and retained earnings, respectively, which are potentiallyavailable for dividends.
The maximum amount that the Company can distribute as dividends is calculated based on the non-consolidated financial statements of theCompany in accordance with the Law.
The number of treasury stock owned by the Company, consolidated subsidiaries and affiliated companies adopting the equity method as ofMarch 31, 2019 and 2020 were 6,420 thousand shares and 13,231 thousand shares, respectively.
Total annual dividends per share as of March 31, 2020 is ¥ 130.00 (U.S. $ 1.20), which is the sum of the interim dividend per share of ¥65.00 (U.S. $ 0.60) and the year-end dividend per share of ¥ 65.00 (U.S. $ 0.60).
13. Lease Transactions
Operating leases(a) Lessee
Future minimum lease payments as of March 31, 2019 and 2020 were as follows:
Millions of Yen
2019

Thousands of U.S. Dollars
2020

2020

Due within one year .......................................................................................

¥ 4,972¥ 4,707

Due after one year .........................................................................................

16,747

15,916146,246

Total ..........................................................................................

¥ 21,719¥ 20,623$ 189,497$ 43,251

TA I SE I A N N UA L R E P O R T 2 0 2 0 88

Da t a S e ct io n ● Consol ida ted Financial Statem ents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (cont.)
TAISEI CORPORATION AND CONSOLIDATED SUBSIDIARIESMARCH 31, 2019 AND 2020(b) Lesser
Future minimum lease receipts as of March 31, 2019 and 2020 were as follows:
Millions of Yen

Thousands of U.S. Dollars

2019

2020

2020

Due within one year .......................................................................................

¥ 3,549¥ 3,336

Due after one year .........................................................................................

16,70813,665125,562

Total ..........................................................................................

¥ 20,257¥ 17,001$ 156,216$ 30,654

14. Derivative Transactions(1) Derivative transactions of the Company and its consolidated subsidiaries as of March 31, 2019 and 2020 were as follows:① Derivative transactions which were not accounted for by the hedge accounting∙ Currency-related transactions
Corresponding derivative transactions for the year ended March 31, 2019 were not applicable. Information for the year ended March 31, 2020
was as follows:
Over-the counter transactions
Millions of Yen
2020
Contract amount
Forward foreign exchange contract (short commitment)
to sell U.S. dollars ..........................................................................................

Total

Due after one year

¥ 1,776

Unrealized gain (loss)

Fair value

¥—

¥9

¥9

Note: Fair value was determined at the quoted price obtained from the counterparty financial institutions.

② Derivative transactions which were accounted for by the hedge accounting as of March 31, 2019 and 2020 were as follows:∙ Currency related transactions
Main items hedged by forward foreign exchange contracts are accounts payable for construction contracts.
Millions of Yen
2019
Contract amount
Forward foreign exchange contract (short commitment)

Total

to sell U.S. dollars ..........................................................................................

Due after one year
¥ 60

Fair value¥—¥1

Millions of Yen
2020
Contract amount
Forward foreign exchange contract (short commitment)

Total

to sell U.S. dollars ..........................................................................................

Due after one year
¥ 706

Fair value

¥ 233

¥2

Thousands of U.S. Dollars
2020
Contract amount
Forward foreign exchange contract (short commitment)

Total

to sell U.S. dollars ..........................................................................................

Due after one year
$ 6,487

Fair value$ 2,140$ 18

Note: Fair value was determined at the quoted price obtained from the counterparty financial institutions.
∙ Interest Rate-Related Derivatives:
Main items hedged by interest rate swap contracts are long-term loans.
The following interest rate swaps are used as hedges. The net amounts to be paid or received are added to or deducted from interests.
Special treatment of swap
Millions of Yen
2019
Contract amount
Total
Interest rate swaps receive floating rate, pay fixed rate ..................................

89 T A IS EI A NNUA L R EP O R T 2 02 0

Due after one year
¥ 43,110¥ 27,890

Fair value¥—About the Taisei Group

Strategy for Sustainable Growth

ESG Section

Business Section

Explanation and Analysis ofBusiness Results

Data Section

Consolidated Financial
Statements

Millions of Yen
2020
Contract amount
Total
Interest rate swaps receive floating rate, pay fixed rate ..................................

Due after one year
¥ 39,030

Fair value¥ 28,700¥—

Thousands of U.S. Dollars
2020
Contract amount
Total
Interest rate swaps receive floating rate, pay fixed rate ..................................

Due after one year
$ 358,633

Fair value$ 263,714$—

Note: Fair value of interest rate swaps was included in the corresponding hedged long-term loans (long-term loans due within one year wasconsidered as short-term loans) as those interest rate swaps were recorded as an adjustment to the corresponding hedged long-termloans under the special treatment.

15. Related Party Transactions
The Company had no transaction with related individuals, including shareholders and directors, for the year ended March 31, 2019 and 2020.
The Company’s consolidated subsidiaries had the following transaction with related individuals, including shareholders and directors, for theyears ended March 31, 2019 and 2020.
Millions of yen
2019(a) Name(b) Attribution(c) Capital (Million yen)(d) Equity ownership percentage of the Company

Transactions during the year ended March 31, 2019(a) Takashi Yamauchi(b) The director of the Corporation(c) —(d) 0.03%

House renovation
work by Taisei
Housing Co., Ltd.

¥ 18

—

¥—

(a) Atsushi Yamamoto(b) The executive officer of the Corporation(c) —(d) 0.00%

Sale of condominium
apartment by Taisei
Yuraku Real EstateCo., Ltd.

¥ 72

—

¥—

Description oftransaction

Balance at the end of the year

AmountAccount

AmountNotes 1. Consumption taxes were not included in the transaction amounts.
2. Transaction conditions and policies to decide transaction conditions(1) The transaction price of house renovation was determined properly on an arm’s length basis as in the case of other generaltransactions. The amount of transaction above represents the contract price on the construction contract.
(2) The transaction price of sale of condominium apartment was determined properly considering normal market prices as in the caseof other general transactions. The amount of transaction above represents the contract price.
Millions of yen
2020(a) Name(b) Attribution(c) Capital (Million yen)(d) Equity ownership percentage of the Company

Transactions during the year ended March 31, 2020(a) Eri Teramoto(b) Close relative of the executive officer of the Corporation
(c) —
(d) —

Housing construction
by Taisei HousingCo., Ltd.

Description oftransaction

Balance at the end of the year

AmountAccount

AmountAdvances received
and progress billingson uncompleted
contracts

¥ 44

¥ 11

Thousands of U.S. Dollars
2020(a) Name(b) Attribution(c) Capital (Million yen)(d) Equity ownership percentage of the Company

Transactions during the year ended March 31, 2020(a) Eri Teramoto(b) Close relative of the executive officer of the Corporation
(c) —
(d) —

Housing construction
by Taisei HousingCo., Ltd.

Description oftransaction

Amount$ 404

Balance at the end of the year
Account
Advances received
and progress billingson uncompleted
contracts

Amount$ 101

Notes 1. Consumption taxes were not included in the transaction amounts and the balance at the end of the year.
2. Transaction conditions and policies to decide transaction conditions
The transaction price of housing construction was determined properly on an arm’s length basis as in the case of other generaltransactions. The amount of transaction above represents the contract price on the construction contract.
TA I SE I A N N UA L R E P O R T 2 0 2 0 90

Da t a S e ct io n ● Consol ida ted Financial Statem ents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (cont.)
TAISEI CORPORATION AND CONSOLIDATED SUBSIDIARIESMARCH 31, 2019 AND 2020

16. Segment Information(1) Segment Information(a) General information on reportable segments
Each reportable segment of the Group is a business unit in the Group, whose discrete financial information is available. Reportable segments
are reviewed periodically at the Board of Directors Meeting in order to determine distribution of management resources and evaluatebusiness result of each reportable segment.
The headquarters in the head office are established by the products of construction and the services. Each headquarter proposes
comprehensive domestic and oversea strategies with respect to products and services, and operates its business activities.
The Group consists of segments identified by products and services based on the headquarters, and identifies the three segments, “Civil
engineering,” “Construction contracts,” and “Real estate development” as reportable segments: “Civil engineering” delivering construction ofcivil engineering, etc.; “Construction contracts” delivering construction of building and housing, etc.; “Real estate development” deliveringpurchase, sale and rental of land and buildings, etc.
(b) Basis of measurement of net sales, profit or loss and other material items on reportable segment
The accounting methods for each reportable segment are the same as that set forth in the “Summary of Significant Accounting Policies”.
The profit (loss) of a reportable segment is based on the operating income (loss) before amortization of goodwill in Consolidated Statementsof Income. In addition, conditions of intersegment transactions and transfers are determined by considering market prices as in the case ofother general transactions.
Assets of the Group are not allocated to the segments. However, the corresponding depreciation expenses are allocated to the segments
according to the rational bases such as the usage of assets.
(c) Information of net sales, profit or loss and other material items on reportable segment
Segment information as for the years ended March 31, 2019 and 2020 was as follows:
Millions of Yen
2019
Reportable segments
Civilengineering

Construction
contracts

Real estatedevelopment

Others

Total

Adjustments

Consolidated

Net sales:
Customers ...................................

¥ 439,110¥ 1,087,672¥ 114,855¥ 9,241¥ 1,650,878

Intersegment ................................

29,54342,768

7,043

2,869

82,223¥(82,223)—¥ 1,650,878—

Total .......................

468,653

1,130,440

121,898

12,1101,733,101(82,223)1,650,878

Operating income ............................

¥ 53,098¥

87,686¥ 12,912¥ 1,144¥

154,840¥ (1,516)¥

153,324

Depreciation and amortization .........

¥

3,357

¥

2, 881

¥

1,753

¥

90

¥

8,081

¥

(225)

¥

7,856

Increase (decrease) in allowance forlosses on construction contracts ...

¥

(469)

¥

(6,164)

¥

—

¥

—

¥

(6,632)¥—¥(6,632)

Notes 1. “Others” presented businesses such as incidental business to the construction business, leisure business, and other service
businesses, which are not included in reportable segments.
2. Adjustments of operating income of ¥ 1,516 million included intersegment elimination of dividend income amounting to ¥ 1,433
million and amortization of goodwill amounting to ¥ 83 million.
3. Segment operating income was adjusted against operating income of Consolidated Statement of Income.
Millions of Yen
2020
Reportable segments
Civilengineering

Construction
contracts

Real estatedevelopment¥ 459,110¥ 1,168,446¥ 112,423

Others

Total

Adjustments

Consolidated

Net sales:
Customers ...................................

¥ 11,352¥ 1,751,331¥—¥ 1,751,331

Intersegment ................................

31,99556,389

5,909

3,081

97,374(97,374)—

Total .......................

491,105

1,224,835

118,332

14,433

1,848,705(97,374)

1,751,331

Operating income ............................

¥ 71,380¥

82,685¥ 12,560¥ 1,203¥167,828

¥

(73)

¥

167,755

Depreciation and amortization .........

¥

3,854

¥

3,342

¥

2,607

¥

135

¥

9,938

¥

(53)

¥

9,885

Increase (decrease) in allowance forlosses on construction contracts ...

¥

(496)

¥

4

¥

—

¥

—

¥

(492)

¥

—

¥

(492)

91 T A IS EI A NNUA L R EP O R T 2 02 0

About the Taisei Group

Strategy for Sustainable Growth

ESG Section

Business Section

Explanation and Analysis ofBusiness Results

Data Section

Consolidated Financial
Statements

Thousands of U.S. Dollars
2020
Reportable segments
Civilengineering

Construction
contracts

Real estatedevelopment

Others

Total

Adjustments

Consolidated

Net sales:
Customers ..........................................

$ 4,218,598$ 10,736,433$ 1,033,015$ 104,309$ 16,092,355

Intersegment .......................................

293,990

518,138

54,29528,311

894,734(894,734)—

Total ..............................

4,512,588

11,254,571

1,087,310

132,620

16,987,089(894,734)

16,092,355$—$ 16,092,355

Operating income ...................................

$

655,885$759,763$

115,410$ 11,054$ 1,542,112

$

(671)

$ 1,541,441

Depreciation and amortization ................

$

35,413$30,708$23,955

$

1,241

$

91,317

$

(487)

$

90,830

Increase (decrease) in allowance forlosses on construction contracts ..........

$(4,558)

$

37

$

—

$

—

$

(4,521)$—$(4,521)

Notes 1. “Others” presented businesses such as incidental business to the construction business, leisure business, and other service
businesses, which are not included in reportable segments.
2. Adjustments of operating income of ¥ 73 million ($ 671 thousand) included intersegment elimination amounting to ¥ 30 million ($ 276
thousand) and amortization of goodwill amounting to ¥ 43 million ($ 395 thousand).
3. Segment operating income was adjusted against operating income of Consolidated Statement of Income.
(2) Related Information(a) Information about products and services
The information about products and services is included in “(c) Information of net sales, profit or loss and other material items on reportablesegment” of “(1) Segment Information” for the years ended March 31, 2019 and 2020.
(b) Information about geographic areas∙ Net sales
The information about net sales was not presented for the years ended March 31, 2019 and 2020 since sales to unaffiliated customers in Japanaccounted for more than 90% of sales of Consolidated Statement of Income.
∙ Tangible fixed assets
The information about tangible fixed assets was not presented for the years ended March 31, 2019 and 2020 since the amounts of tangible fixed
assets that located in Japan accounted for more than 90% of the amounts of tangible fixed assets of Consolidated Balance Sheet.
(c) Information about major customers
The information about major customers was not presented for the years ended March 31, 2019 and 2020 since net sales to any customer wereless than 10% of the amounts of sales of Consolidated Statement of Income.
(d) Information about impairment losses on fixed assets of reportable segment for the years ended March 31, 2019 and 2020 was as follows:
Millions of Yen
2019
Reportable segments

Civil engineering
Impairment losses on fixed assets .............

¥ 327

Construction
contracts

Real estatedevelopment

¥ 13

¥—

Others¥—Elimination
and/orcorporate
¥—

Total
¥ 340

Millions of Yen
2020
Reportable segments

Civil engineering
Impairment losses on fixed assets .............

¥ 218

Construction
contracts

Real estatedevelopment¥—¥ 1,120

Others¥—Elimination
and/orcorporate¥—

Total¥ 1,338

Thousands of U.S. Dollars
2020
Reportable segments

Civil engineering
Impairment losses on fixed assets .............

$ 2,003

Construction
contracts

Real estatedevelopment$—$ 10,291

Others$—Elimination
and/orcorporate$—

Total$ 12,294

TA I SE I A N N UA L R E P O R T 2 0 2 0 92

Da t a S e ct io n ● Consol ida ted Financial Statem ents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (cont.)
TAISEI CORPORATION AND CONSOLIDATED SUBSIDIARIESMARCH 31, 2019 AND 2020(e) Information about amortization and unamortized balance of goodwill of reportable segment for the years ended March 31, 2019 and 2020
was as follows:
Millions of Yen
2019
Reportable segments

Civil engineering

Construction
contracts

Real estatedevelopment

OthersElimination
and/orcorporate

Total

Amortization of goodwill .............................

¥—

¥ 43

¥ 40

¥—

¥—

¥ 83

Unamortized balance of goodwill ...............

¥—

¥ 172

¥—

¥—

¥—

¥ 172

Millions of Yen
2020
Reportable segments

Civil engineering

Construction
contracts

Real estatedevelopment

OthersElimination
and/orcorporate

Total

Amortization of goodwill .............................

¥—

¥ 43

¥—

¥—

¥—

¥ 43

Unamortized balance of goodwill ...............

¥—

¥ 129

¥—

¥—

¥—

¥ 129

Thousands of U.S. Dollars
2020
Reportable segments

Civil engineering

Construction
contracts

Real estatedevelopment

OthersElimination
and/orcorporate

Total

Amortization of goodwill .............................

$—

$

395

$—

$—

$—

$

Unamortized balance of goodwill ...............

$—$ 1,185

$—

$—

$—

$ 1,185395(f) Information about gains on negative goodwill of reportable segment
Information about gains on negative goodwill for the year ended March 31, 2019 was not applicable, and for the year ended March 31, 2020, a
description is omitted because the amount is immaterial.

17. Revaluation Reserve for LandIn the year ended March 31, 2002, certain consolidated domestic subsidiaries executed revaluation of their land for business in accordance with
the Law Concerning Revaluation of Land (the “Law”).
As a result of this revaluation, deferred income taxes concerning the differences between the amounts after revaluation and the book value
before revaluation was stated in the assets and liabilities in the consolidated balance sheets. The differences between these amounts, net oftaxes, were stated as “Revaluation reserve for land” in “Accumulated other comprehensive income”.
The revaluation was executed in accordance with the method prescribed in the Article 2, Items 3, 4 and 5 of the Law on November 30, 2001
and March 31, 2002.
One of the consolidated subsidiaries, which was merged with another consolidated subsidiary on December 1, 2001, executed therevaluation on November 30, 2001.
Excess amount of the book value of the revaluated land over the fair value as of March 31, 2019 and 2020 was ¥ 2,472 million and ¥ 3,609
million ($ 33,162 thousand), respectively (including the excess amount of ¥ 1,285 million and ¥ △ 40 million ($ △ 368 thousand) related toinvestment and rental property as of March 31, 2019 and 2020, respectively).

18. Research and Development Expenses
Research and development expenses, which were included in selling, general and administrative expenses and cost of sales, amounted to ¥12,472 million and ¥ 13,564 million ($ 124,634 thousand) for the years ended March 31, 2019 and 2020, respectively.

19. Impairment Losses on Fixed Assets
Impairment losses on fixed assets for the years ended March 31, 2019 and 2020 consisted of the following:
2019
Use

Type of assets

Location

Idle assets

Machinery and equipment

Tokyo (1 lot)

Rental property

Land

Kanagawa (1 lot)

Assets for business use

Machinery and equipment, Building and others

Osaka and the others (8 lots)

93 T A IS EI A NNUA L R EP O R T 2 02 0

About the Taisei Group

Strategy for Sustainable Growth

ESG Section

Business Section

Explanation and Analysis ofBusiness Results

Data Section

Consolidated Financial
Statements

2020
Use

Type of assets

Location

Rental property

Building and Land

Chiba (1 lot)

Assets for business use

Land and others

Osaka and the other (2 lots)

Idle assets

Building and Land

Kanagawa (2 lots)

The Company and its consolidated subsidiaries grouped their fixed assets based on units, for which decisions for investments were made. Book
value of the fixed assets listed above was reduced to recoverable amounts and impairment losses were recognized as follows:
Millions of Yen
2019

Thousands of U.S. Dollars
2020

2020

Assets for business use
Buildings and structures .............................................................................

¥ 13

Land ..........................................................................................................

—

177

¥

—

$

—
1,627

Machinery and equipment ..........................................................................

35

—

—

Others ........................................................................................................

3

7

64

Subtotal .................................................................................................

51

184

1,691

Rental property
Buildings and structures .............................................................................

—

649

5,963

Land ..........................................................................................................

126

471

4,328

Subtotal .................................................................................................

126

1,120

10,291

Idle assets
Buildings and structures .............................................................................

—

4

37

Land ..........................................................................................................

—

30

275

Machinery and equipment ........................................................................

163

—

—

Subtotal .................................................................................................

163

34

312

Total ..........................................................................................

¥ 340¥ 1,338$ 12,294

The recoverable amount of the fixed assets for the year ended March 31, 2019 and 2020 was their net realizable value mainly based on amountdetermined by the sales contract price.

20. Per Share Data
Net assets per share and net income per share as of and for the years ended March 31, 2019 and 2020 were as follows:
Yen
2019
Net assets per share

U.S. Dollars
2020

2020

¥ 3,302.86¥ 3,550.03$ 32.62

Net income per share ....................................................................................

511.90573.14

5.27

Diluted net income per share .........................................................................

—

—

—

Diluted net income per share for the years ended March 31, 2019 and 2020 were not presented because the Company had no shares withdilutive effects.
Calculation bases for basic net income per share for the years ended March 31, 2019 and 2020 were as follows:
Millions of Yen
2019

Thousands of U.S. Dollars
2020

2020

Basic net income per share
Net income attributable to owners of parent ...............................................
Net income not available to common stock holders ...................................

¥

112,572—¥

122,088$ 1,121,823——

Net income attributable to owners of parent available to common stock ..........

112,572

122,088

1,121,823

Average common stock outstanding (in thousands share) ..........................

219,910

213,016

1,957,328

TA I SE I A N N UA L R E P O R T 2 0 2 0 94

Da t a S e ct io n ● Consol ida ted Financial Statem ents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (cont.)
TAISEI CORPORATION AND CONSOLIDATED SUBSIDIARIESMARCH 31, 2019 AND 2020

21. Comprehensive Income
Recycling adjustments and tax effects for each component of other comprehensive income were as follows:
Millions of Yen

Millions of Yen

Thousands of U.S. Dollars

2019

2020

2020

Unrealized holding gains on securities
Amount incurred ........................................................................................

¥ 14,697¥ (50,739)

Recycling ...................................................................................................

10

1,408

12,938Before Tax ..............................................................................................

14,707(49,331)(453,285)$ (466,223)

Tax effect ................................................................................................

(4,502)

15,088

138,638

Unrealized holding gains on securities, net of taxes ................................

10,205(34,243)(314,647)

Deferred gains or losses on hedging derivatives
Amount incurred ........................................................................................

23

3

27

Recycling ...................................................................................................

(12)

(2)

(18)

Before Tax ..............................................................................................

11

1

9

Tax effect ................................................................................................

(3)

(0)

(0)

Unrealized gains or losses on hedging derivatives, net of taxes ..............

8

1

9

1,608

Foreign currency translation adjustments
Amount incurred ........................................................................................

(246)

175

Recycling ...................................................................................................

7

61

561

Foreign currency translation adjustments ................................................

(239)

236

2,169

Remeasurements of defined benefit plans
Amount incurred ........................................................................................

(4,222)(334)(3,069)Recycling ...................................................................................................

(613)(2,381)(21,878)

Before Tax ..............................................................................................

(4,835)(2,715)(24,947)

Tax effect ................................................................................................

1,484

834

7,663

Remeasurements of defined benefit plans, net of taxes ..........................

(3,351)(1,881)(17,284)

Share of other comprehensive income of associates accounted for by the equity method
Amount incurred ........................................................................................

(35)

46

423

Total other comprehensive income .......................................

¥ 6,588¥ (35,841)$ (329,330)

22. Subsequent Event(1) Acquisition of treasury stock
The Company resolved the item related to the acquisition of treasury stock at the board of directors held on May 13, 2020, in accordancewith the article 156 of the Japanese Corporate Law (the “Law”), which is applicable as replacement of the article 165, paragraph 3 of thelaw, as detailed below.

① Reason of acquisition of treasury stock
The Company decided to acquire its treasury stock in order to enhance the shareholders’ value per share and to improve the capitalefficiency.
② Details(a) Type of stock to be acquired: Common stock of the Company(b) Number of stocks to be acquired: Up to 5,000,000 stocks (2.37% of the total outstanding stocks excluding treasury stock)(c) Total cost of acquisition: Up to ¥ 10,000 million ($ 91,886 thousand)(d) Period of acquisition: From May 14, 2020 to September 30, 2020

95 T A IS EI A NNUA L R EP O R T 2 02 0

About the Taisei Group

Strategy for Sustainable Growth

ESG Section

Business Section

Explanation and Analysis ofBusiness Results

Data Section

Consolidated Financial
Statements

Independent Auditor’s Report

TA I SE I A N N UA L R E P O R T 2 0 2 0 96

Da t a S e ct io n ● Consol ida ted Financial Statem ents

Independent Auditor’s Report

97 T A IS EI A NNUA L R EP O R T 2 02 0

About the Taisei Group

Strategy for Sustainable Growth

ESG Section

Business Section

Explanation and Analysis ofBusiness Results

Data Section

Consolidated Financial
Statements

TA I SE I A N N UA L R E P O R T 2 0 2 0 98

Da t a S e ct io n ● Non- Finan cial D ata
Human Resources Data (Non-Consolidated and Partially Consolidated)
Key Indicators

2016

2017

2018

2019

Number of employees (Consolidated)

13,977

14,032

14,433

14,562

Male (Consolidated)

11,734

11,718

11,906

11,971

Female (Consolidated)

2,243

2,314

2,527

2,590

13,25913,322

13,567

13,658

718

710

866

904

Japanese employees (Consolidated)
Non-Japanese employees (Consolidated)
Number of employees

Unit

8,415

8,501

8,490

8,507

Male

6,945

6,977

6,949

6,937

Female

1,470

1,524

1,541

1,570

Japanese

8,337

8,413

8,391

8,394

Non-Japanese

78

88

99

113

Twenties

15.0

15.9

16.5

17.1

Thirties

18.4

18.3

19.0

19.2

Forties

38.2

34.3

30.1

26.3

Fifties or more

37.4

28.4

31.4

34.4

Average age

42.9

43.0

43.0

43.0

Male

43.1

43.2

43.3

43.3

Female

41.7

41.7

41.8

41.8

Average service years

18.3

18.3

18.3

18.3

Male

18.6

18.6

18.6

18.7

Female

17.1

16.7

16.6

16.5

Number of hires (new graduates)

296

283

251

264

Male

244

228

207

215

Female

52

55

44

49

Number of mid-career hires

51

19

30

27

Male

42

17

29

22

Female92

1

5

Average annual salary

9,500

9,872

10,512

10,103

Turnover rate

1.1

1.0

1.1

1.2

Turnover rate of employees within three years of hiring ★KPI

5.0

4.3

5.4

7.4

Persons

Persons

Persons%

Years old

Years

Persons

Persons
Thausand yen%

Diversity and Inclusion Data (Non-Consolidated and Partially Consolidated)
Key Indicators
Number of female managers ★KPI

2016

2017

62

2018

83

2019

167

Unit

197

Persons%

Female managers ratio

1.2

1.7

3.2

3.8

Number of engineers

7,100

7,208

7,282

7,356

6,516

6,587

6,619

6,658

584

621

663

698

Male
Female ★KPI
Number of non-regular employees

Persons

1,220

1,118

1,134

1,173

Persons

Number of employees promoted from non-regular employees to regular employees

251

42

45

28

Persons

Rate of employment of handicapped persons

2.05

2.07

2.33

2.35

%

Number of employees reemployed after leave retirement

663

663

739

800

Number of employees reemployed after leave retirement (Taisei Group)

—

1,226

1,367

1,465

Number of former employees who took advantage of the Job-Return system*

15

1

2

2

Persons* A system under which employees who have voluntarily retired due to unavoidable reasons such as a spouse’s transfer are rehired at their own request.

Childcare and Nursing Care Data (Non-Consolidated)
Key Indicators
Number of employees taking leave for childcare

2016

2017

2018

2019

Unit

44

289

281

282

Male

4

243

244

241

Female

40

46

37

41
100

Rate of taking childcare leave

16.1

94.8

94.9

Male ★KPI

1.7

93.8

94.2

100

Female

100

100

100

100
98.1

Rate of return to work after childcare leave

100

98.1

100

Male

100

100

100

100

Female

100

97.5

100

97.8

Number of employees taking nursing care leave

2

3

0

1

Male

2

3

0

0

Female0001

99 T A IS EI A NNUA L R EP O R T 2 02 0

Persons%%

PersonsAbout the Taisei Group

Strategy for Sustainable Growth

ESG Section

Business Section

Explanation and Analysis ofBusiness Results

Data Section

Non-Financial Data

Data on Working Hours, Holidays, and Leave (Non-Consolidated and Partially Consolidated)
Key Indicators

2016

2017

2018

2019

Unit

Total hours worked per month

194.0

192.9

192.8

193.9

Average overtime hours per month ★KPI

38.4

37.5

37.8

39.0

Rate of paid leave utilization

37.3

42.9

47.5

46.2

—

41.4

48.5

49.7

Rate of milestone leave utilization

93.6

97.8

94.0

84.5

Rate of refresh leave utilization

89.1

89.1

92.2

91.9

Rate of paid leave utilization (Taisei Group)

Hours

％

Training and Career Data (Non-Consolidated)
Key Indicators
Total training hours for capacity development
Training hours per person

2016

2017

2018

—

—

2019

—

261,059

Unit

44.7

32.8

36.6

30.5

Training hours per person for new employees

—

—

38.8

38.8

Number of employees who participated in training at overseas worksites and research institutes

10

14

22

13

Hours
Persons

Data on Health, Safety, and Labor Relations (Non-Consolidated and Partially Consolidated)
Key Indicators

2016

2017

2018

2019

Unit

Accident frequency rate

0.47

0.41

0.42

0.62

Accident frequency rate (Taisei Group)

0.53

0.44

0.58

0.65

Accident severity rate

0.06

0.22

0.14

0.26

Number of occupational accident leaves (excluding fatal accidents)

77

55

50

74

Number of fatal accidents ★KPI

1

1

2

4

Health exam participation rate

100

100

100

100

Health exam participation rate (Taisei Group)

—

99.7

99.8

99.6

Implementation rate of stress checks

89.7

87.2

89.8

90.2

Labor union participation rate

100

100

100

100

Cases

%

Data on Information Security and Intellectual Property (Non-Consolidated)
Key Indicators

2016

Number of major information security accidents* ★KPI

2017
0

2018
0

2019
0

Unit
0

Cases
Times

Number of information security education sessions

16

15

19

5

Number of patents registered ★KPI

232

191

250

169

304

235

219

188

Number of patent applications filed ★KPI

Cases

* Number of publicly disclosed accidents

Data on Environmental and Social Contribution (Non-Consolidated and Partially Consolidated)
Key Indicators

2016

2017

2018

2019

Unit

Total CO2 Emissions

231

245

260

267

Total CO2 Emissions (Taisei Group)

332

340

360

380

At construction stage: Reduction rate of CO2 emissions per construction cost (intensity)*1 ★KPI

23.3

28.4

28.9

32.0

51.9

48.4

44.7

43.7

38.9

48.1

40.2

39.5

3.5

3.2

3.4

3.9

42

52

35

46

Number of environmental accidents ★KPI

0

0

0

1

Cases

Expenditures for social contribution activities

653

655

700

838

Million yen

At construction stage: Reduction rate of total CO2 emissions*1 ★KPI

At building operation stage: Reduction rate of estimated CO2 emissions*1, 2 ★KPIFinal disposal rate of construction wastes ★KPI

Number of proposals and deployment of biodiversity-related technologies ★KPI

103t-CO2％

Projects*1 Compared to FY1990 (a base year for emissions targets)*2 Estimated CO2 emissions from design and construction projects at the building operation stage (including dissemination and promotion of ZEB)

Quality and Productivity Data (Non-Consolidated)
Key Indicators
Customer satisfaction (Civil Engineering) ★KPICustomer satisfaction (Building Construction) ★KPI

Worksite registration rate of Construction Career Up System ★KPI
Productivity* (Net sales/number of employees) ★KPI

2016

2017

2018

2019

80

95

96

98

90

90

92

88

—

—

—

75

100

107

111

117

Unit
％

* The actual result for FY2016 is set at 100.

Data on Human Rights / CSR / Compliance and CSR Procurement (Non-Consolidated)
Key Indicators
Response rate of Corporate Ethics Helpline and Group Helpline ★KPI

2016

2017

100

100

Attendance rate at compliance training

100

Average implementation rate of CSR activities by suppliers* ★KPI

62.6

2018

2019

100

100

100

100

100

—

74.2

—

Unit
％

* Questionnaire survey for suppliers in FY2019 was absent due to biennial implementation.
● See Taisei Corporation’s website for non-financial data definition: https://www.taisei.co.jp/english/csr/management/kpi/

TA I SE I A N N UA L R E P O R T 2 0 2 0 100

Da t a S e ct io n ● Thi rd- Party Opinion

Instead of discussing social issues, such as those described in theSDGs, as individual topics, the future direction of how these issues
are going to relate to Taisei Corporation’s businesses and create
value should be clarified.

Kanji Tanimoto
Professor,
Ph. D. in Business Administration
School of Commerce,
Faculty of Commerce,
Waseda University

How can the vision on page 9, “Solving social issues throughour business is the starting point for our value creation,” berealized? In particular, I still sense some gaps between the visionand the explanations of the business strategies described in eachpart of the “Business Section.” They have to go one step further
and explain how the concept is integrated into each businessstrategy. I hope that the CSR Committee, which serves as a

Challenges in the Post-COVID-19 Era
In 2020, the Japanese economy was also greatly affected by thecoronavirus pandemic, and under the declaration of a state of
emergency, most businesses suspended physical operations andintroduced telecommuting. Taisei Corporation also switched totelecommuting, mainly in its departments for office work. In the
post-COVID-19 era, the ideal form of business will be redefined.
Taisei Corporation also needs to think about how it can contributeto the creation of a sustainable society and establish a new
business style under the new normal, rather than simply go backto how things were. The Company is required to take concretemeasures to address SDGs, particularly challenges that need to bereconsidered, such as measures to tackle global environmental
issues and work style reform. Although it was difficult for theCompany to show the direction in this report due to the lack offorum for discussing how individual Business Sections are
involved in the achievement of the major corporate philosophy, will
review its role once again and take the lead by indicating thefuture course of the Company.
An important aspect of the annual report, which I have noted
for the past two years, is to show how the financial goals set in
the Medium-term Business Plan are related to those of thenon-financial ESG. The ESG Section is easier to understand thanlast year, but what is important is not just to explain each one
individually, but to show specifically how individual activities arecontributing to the creation of new value and achievement ofbusiness results. This is an important and challenging issue not
only for Taisei Corporation, but for any company. An annual report
should have a storyline as a whole.

Innovation to Create the Future

time, the true value of its efforts to address these challenges will
be tested amid the severe economic environment under the new

In their efforts to address important ESG issues (materiality) andMedium-term Business Plan starting from the next fiscal year.

the challenge of “stimulating the future” (pp.23-24), I hope that the

To work on work style reform, Taisei Corporation has been

Company will engage with stakeholders concerned (not only

promoting various initiatives for several years. In addition tothrough having conventional dialogues as reported on p.11 andreducing scheduled working hours, the Company reviewed theface-to-face discussions) to obtain new ideas for solving specificentire business process and is promoting the introduction of newissues and tips that are helpful for making innovations. Aftersystems utilizing ICT to increase productivity. For example, theengaging with stakeholders, the ideas obtained thereby andCompany has reviewed the entire process from design to con-specific goals or commitments should be clarified, verified andstruction work, is pushing forward with the work style reform

incorporated into the next fiscal year’s plan. Another effective

undertaken by the entire industry under the amended new threemethod, I think, is to enumerate a few more key environmental andacts on responsible personnel (Act on Promoting Quality

social performance indicators, as they do for financial

Assurance in Public Works, Construction Business Act, and Act

performance, and show more clearly the overall goals andfor Promoting Proper Tendering and Contracting for Public Works),

outcomes.

and promoting various initiatives by Soyukai. Furthermore, now

Lastly, as I mentioned in the report for the previous year,that the employees have become familiar with how they should

obtaining and developing new human resources that have a global

balance their work and family time through hands-on experiencemindset and a sustainability mindset is becoming increasinglywith the telework system this time, the Company is required toessential to move forward with new initiatives in the future. This will

review their job responsibilities and how to evaluate them. I hope

be one of the important challenges for Taisei Corporation. To

that the policies and results of the new initiatives will be presented

address the challenge of “stimulating the future” in 2030 andon the website or in the Company’s report for next year.

beyond, the Company needs people who can engage,
communicate and make innovations with people who have

Challenges for Achieving Sustainability
The President mentions a “sustainable company” in his message,
but what kind of company does this refer to in Taisei Corporation’scase, and how are they going to develop into such a company?
The Company needs to reconsider the answers to those questions.

101 T A IS EI A NNUA L R EP O R T 2 02 0

different values. Mapping out strategies to acquire new humanresources is one of the challenges for the future.

About the Taisei Group

Strategy for Sustainable Growth

ESG Section

Business Section

Explanation and Analysis ofBusiness Results

Data Section

Outline of the Company

Outline of the Company
Corporate Data (As of March 31, 2020)
Name
Established
Paid-in capital
Number of
employees
Representative
Head office

TAISEI CORPORATION
December 28, 1917
¥122.7 billion

Domestic Network

8,507 people (non-consolidated)
Yoshiyuki Murata,
President and Chief Executive Officer
25-1, Nishi-Shinjuku 1-chome,
Shinjuku-ku, Tokyo, Japan
TEL. 81-3-3348-1111 (main number)

SapporoTohoku (Sendai)
Hokushinetsu (Niigata)
Kanto (Saitama)

Head Office
TokyoInternational Operations
Headquarters (Shinjuku, Tokyo)

Nagoya
Kyoto
Kobe

Chiba

Tokyo, Osaka, Nagoya, Fukuoka,
Sapporo, Sendai, Hiroshima,
Yokohama, Niigata, Takamatsu, Chiba,
Saitama, Kobe, Kyoto

Branches

Yokohama
Taisei Advanced Centerof Technology (Yokohama)Kansai (Osaka)

Taisei Advanced Center of Technology (Yokohama City)

Shikoku (Takamatsu)
Chugoku (Hiroshima)

Overseas Network (As of September 1, 2020)

Kyushu (Fukuoka)

Head Office
Branch Office
Taisei Advanced Centerof Technology

CSCEC-TAISEI CONSTRUCTION, LTD.
(Head Office)Beijing

INDIA

PAKISTANNORTH AFRICATAIPEITAISEI MYANMAR CO., LTD
MYANMAR

MIDDLE EASTSRI LANKATAISEI PHILIPPINE CONSTRUCTION INCORPORATEDPHILIPPINEVINATA INTERNATIONAL CO., LTD. VIETNAM (Head Office)
VIETNAM (Hanoi)

KUALA LUMPUR
PT.TAISEI PULAUINTANCONSTRUCTION INTERNATIONAL
JAKARTA

VINATA INTERNATIONAL CO., LTD. VIETNAM(Hochiminh City Branch Office)
VIETNAM (Hochiminh City)

PT. INDOTAISEIINDAH DEVELOPMENT

TAISEI (THAILAND) CO., LTD
THAILANDSINGAPORE

Share Information (As of March 31, 2020)
Major Shareholders (Top 10):

Status of Shares
Number of Shares Authorized
Number of Shares Issued*
Number of Shareholders

440,000,000
224,541,172
72,226

Name of Shareholder

Number of Shareholders:
Financial Institutions
78,988 thousand shares(35.18%)

Individuals and Others
62,537 thousand shares(27.85%)

Shareholder
Composition
Foreign Corporations etc.
59,939 thousand shares(26.69%)Stock Listings
Code
Transfer Agent

Securities Companies
6,559 thousand shares(2.92%)
Other Japanese Corporations
16,515 thousand shares(7.36%)

Tokyo, Nagoya
1801
Mizuho Trust & Banking Co., Ltd.
1-2-1, Yaesu, Chuo-ku,
Tokyo 103-8670, JapanThe Master Trust Bank of Japan, Ltd.
(Trust Account)
Japan Trustee Services Bank, Ltd.
(Trust Account)
Retirement Benefit Trust in Mizuho Trust(Mizuho Bank, Ltd. Account)
Japan Trustee Services Bank, Ltd.
(Trust Account No.7)
Taisei Associates’ Shareholding Plan
Japan Trustee Services Bank, Ltd.
(Trust Account No.9)
Japan Trustee Services Bank, Ltd.
(Trust Account No.5)
Taisei Employees’ Shareholding Plan
JPMorgan Chase Bank, N.A., 385151
State Street Bank West Client-Treaty 505234

Number of Shares
Held(Unit: Thousand
Shares)Ratio of
Shares Held(%)

18,053

8.54

14,753

6.98

7,857

3.72

5,368
5,319

2.54
2.52

4,704

2.23

4,262
3,563
3,519
3,083

2.02
1.69
1.67
1.46

Note: The Company’s own shares (13,230,679) are excluded in calculating
the Ratio of Shares Held.

* The number of shares issued includes the Company’s own shares of
13,230,679.

TA I SE I A N N UA L R E P O R T 2 0 2 0 102

Da t a S e ct io n ● Tai sei Co rporation O rganization C hart (As of September 1, 2020)★

Secretarial Dept.
Auditing Dept.

Engineering Planning Dept.

Industrial Affairs Dept.

Engineering Solution Dept.
Corporate Planning Dept.

Corporate Planning Office

Engineering Div.

Corporate Communication Dept.

Life-science Project Dept.Ⅱ

Information Planning Dept.

Industrial Facilities Project Dept.

Human Resources Dept.

Project Management Dept.

General Affairs Dept.
Business Administration Div.

Legal Dept.

Technology Strategy Dept.

Accounting Dept.

International Projects Management Dept.

Finance Dept.

Productivity Promotion Dept.

Safety Administration Dept.
Safety Administration Div.

Power Plant Construction Planning Dept.

Subcontractor Relations Dept.
Environmental Administration Dept.

Digital Product Center

Planning & Administration Dept.

Construction Sitework Promotion Center

Environmental Technology Innovation Dept.

Environment Div.

Building Construction Dept.

Natural Symbiosis Engineering Dept.

Building Construction Div.

Technology Planning Dept.
Intellectual Property Dept.
Urban Engineering Research Dept.
Infrastructure Technology Research Dept.
Advanced Technology Development Dept.
Production Engineering Technology Dept.

Architecture & Engineering Div.(Integrated)

Geo-Environmental Technology Dept.

Taisei Advance Center of Technology

Energy Projects Promotion Dept.

President

Nuclear Facilities Div.

Strategic Design Dept.
Administration Dept.
Architectural Design Depts.
Structural Engineering Depts.
Structural Planning Dept.
Design Div.

M&E Planning Dept.

Thermal Power & Next Generation Energy Dept.

Quality Management & Technology Dept.

Renewable Energy Dept.

Planning & Design Dept.

Planning Dept.

Construction Administration Dept.

Structural Engineering Dept.

International Projects Dept.

Advanced Analysis Technology Dept.

Nuclear Facilities Dept.

Civil Engineering Dept.

Planning Dept.

Environmental Engineering Dept.

Civil Engineering Dept.
Administration Dept.

Planning & Business Promotion Dept.

Civil Engineering Div.

Machinery Dept.
Design Dept.
Estimate Dept.

Project Solutions Dept.

Project Analysis & Information Dept.

Business Design & Master Plan Consulting Dept.

International Projects Management Dept.

Projects Information Analysis & Strategy Dept.

Coordination & Analysis Dept.

Facility Management Promotion Dept.

Procurement Dept.Ⅰ
Procurement Div.

AI & IoT Business Promotion Dept.

Marketing & Sales Div.(Integrated)

Construction Engineering Dept.

Customer Satisfaction Dept.

Renewal Promotion Dept.

Marketing & Sales (Building Construction) Div.Ⅰ

Marketing & Sales Depts.

Marketing & Sales (Building Construction) Div.Ⅱ

Marketing & Sales Depts.

Marketing & Sales (Building Construction) Div. Ⅲ

Marketing & Sales Depts.

Medical & Pharmaceutical Business Div.

M&E Engineering Depts.

ZEB & Smart Community Dept.

Real Estate Information Dept.

Proposal & Solutions Div.

Mechanical & Electrical Dept.
Operations Planning Dept.

Marketing & Sales Promotion Dept.
Marketing & Sales Promotion Div.

Technology Control Dept.
Estimate Dept.

Mechanical & Electrical Div.

Planning Dept.
Energy Div.

Life-science Project Dept.Ⅰ

Procurement Dept.Ⅲ
Planning & Administration Dept.

Administration Dept.

Marketing & Sales Depts.
Marketing & Planning Dept.

Procurement Dept.Ⅱ

Safety Administration & Environmental Dept.
BranchPlanning & Management Dept.

Marketing & Sales Depts.
Building Construction Dept.
Design Dept.

Project Development Dept.Ⅰ

Civil Engineering Dept.

Project Development Dept.Ⅱ
PPP Projects Dept.
Urban Redevelopment Dept.Ⅰ

Urban Development Div.

Urban Redevelopment Dept.Ⅱ

International Business Strategy Dept.

Development Business Dept.Ⅰ
Development Business Dept.Ⅱ

Marketing & Sales (Civil Engineering) Div.
Marketing & Sales (West Japan) Div.
International Marketing & Business Development Div.

Audit & Supervisory Board Member

103 T A IS EI A NNUA L R EP O R T 2 02 0

Safety Administration & Environmental Dept.

Development Business Dept.(International)

Building Construction & Engineering Dept.

Property Management Business Dept.

Civil Engineering Dept.

Marketing & Sales Depts.
Planning & Administration Dept.
Marketing & Sales Depts.
Marketing & Business Development Depts.
Sales Mindset/Skills Training Dept.

★

Administration Dept.
International Operations Headquarters

Community Design & IR Development Dept.
Audit & Supervisory Board Members’ Dept.

About the Taisei Group

Strategy for Sustainable Growth

ESG Section

Business Section

Explanation and Analysis ofBusiness Results

Data Section

Overseas Network

Overseas Network (As of September 1, 2020)
China

TaiwanCSCEC-TAISEI CONSTRUCTION, LTD. (Head Office)TAIPEI OFFICE

4th Floor, Building No. 8, Foreign Culture Creativity Park,
19 Chegongzhuang Xi Road, Haidian District, BEIJING, P.R.C. 100048
TEL 86-10-6845-1267 FAX 86-10-6845-1266

Zone B, 6F, No. 16, Sec. 4, Nan-Jing E. Road, Taipei,
Taiwan R.O.C.
TEL 886-2-2578-5656 FAX 886-2-2578-3300

Philippines
PHILIPPINE OFFICE
9th Floor, BDO Equitable Tower, Paseo de Roxas, Salcedo Village,
Makati City, Philippines
TEL 63-2-8403-9105 FAX 63-2-8478-9542

TAISEI PHILIPPINE CONSTRUCTION INCORPORATED
23rd Floor, BDO Equitable Tower, Paseo de Roxas,
Salcedo Village, Makati City, Philippines
TEL 63-2-8886-0670 FAX 63-2-8886-0663

Vietnam
VIETNAM OFFICE (Hanoi)
2nd Floor, Block A, Song Da Building Pham Hung Road,My Dinh1, Nam Tu Liem District Hanoi,
S.R. Vietnam
TEL 84-24-3553-5033 FAX 84-24-3553-5002

VIETNAM OFFICE (Hochiminh City)
VIETNAM CHAMBER OF COMMERCE AND INDUSTRY,
Hochiminh City Branch Building 7th FL,171 Vo Thi Sau St., Ward 7,
District-3, Hochiminh City, S.R. Vietnam
TEL 84-28-3932-1759 FAX 84-28-3932-1758

VINATA INTERNATIONAL CO., LTD. (Head Office)(Hochiminh City Branch Office)3rd Floor, Block A, Song Da Building
Pham Hung Road, My Dinh1, Nam Tu Liem District Hanoi,
S.R. Vietnam
TEL 84-24-3553-3839, -3840 FAX 84-24-3553-3788

7th FL, VIETNAM CHAMBER OF COMMERCE AND
INDUSTRY TOWER,171 Vo Thi Sau St., District 3,
Hochiminh City, S.R. Vietnam
TEL 84-28-3932-1765 FAX 84-28-3932-1764

Indonesia
JAKARTA OFFICE
L’Avenue Office Tower, 28th Floor, Jl. Raya Pasar Minggu Kav. 16,
Pancoran Jakarta Selatan, 12780, Indonesia
TEL 62-21-8066-7320 FAX 62-21-8066-7312

PT. TAISEI PULAUINTAN CONSTRUCTION INTERNATIONAL
L’Avenue Office Tower, 28th Floor, Jl. Raya Pasar Minggu Kav. 16,
Pancoran Jakarta Selatan, 12780, Indonesia
TEL 62-21-8066-7321 FAX 62-21-8066-7312

PT. INDOTAISEI INDAH DEVELOPMENT
Kawasan Industri Indotaisei, Kota Bukit Indah Sector IA, Block B
Karihurip, Cikampek, 41373, Karawan, Jawa Barat, Indonesia
TEL 62-264-351-003 FAX 62-264-351-026

Singapore

Malaysia

SINGAPORE OFFICE
60 Paya Lebar Road #04-57, Paya Lebar Square,
Singapore 409051
TEL 65-6280-0833 FAX 65-6280-0869

KUALA LUMPUR OFFICE
9-3, 9th Floor, Faber Imperial Court, Jalan Sultan Ismail,50250 Kuala Lumpur, Malaysia
TEL 60-3-2070-6155 FAX 60-3-2070-6010

Thailand
THAILAND OFFICE
19th Floor, Thanapoom Tower, 1550 New Petchburi Road,
Kwaeng Makkasan, Khet Rachtavee, Bangkok 10400, Thailand
TEL 66-2-207-0331

TAISEI (THAILAND) CO., LTD.
9th Floor, Thanapoom Tower, 1550 New Petchburi Road,
Kwaeng Makkasan, Khet Rachtavee, Bangkok 10400, Thailand
TEL 66-2-207-0330 FAX 66-2-207-0332

Myanmar
MYANMAR OFFICE
2nd Floor, Tokyo Enterprise Building, No.32, Pyay Road,61/2 miles,
Hlaing Township,Yangon, Myanmar
TEL 95-1-654-838 FAX 95-1-654-838

TAISEI MYANMAR CO., LTD.
2nd Floor, Tokyo Enterprise Building, No.32, Pyay Road, 61/2 miles,
Hlaing Township,Yangon, Myanmar
TEL 95-1-654-838 FAX 95-1-654-838

Sri Lanka

India

SRI LANKA OFFICEINDIA OFFICE

No.177, 3rd Floor, Galle Road, Colombo 03.
Sri Lanka
TEL 94-11-2446194 FAX 94-11-2446198#602, 6th Floor, Tower B, Global Business Park, M.G. Road,
Gurgaon, Haryana-122002, India
TEL 91-124-466-9800 FAX 91-124-466-9888

Pakistan

Qatar

PAKISTAN OFFICE
Office-A, 5th Floor, Block-A, Saudi Pak Tower, 61-A,
Jinnah Ave., Islamabad, Pakistan
TEL 92-51-8316620 FAX 92-51-8316629

MIDDLE EAST OFFICE (Doha)Corner Abdullah Bin Jassim St. United Bank Bldg. 4th Floor,
Facing QNB Bldg, Doha - Qatar, PO BOX 47366
TEL 974-4443-4174 FAX 974-4443-7176

Arab Republic of Egypt
NORTH AFRICA OFFICE
25th, Rd. No.10, Station Sqr, Maadi, Cairo, Arab Republic of Egypt
TEL 20-2-2378-3609 FAX 20-2-2380-1362

TA I SE I A N N UA L R E P O R T 2 0 2 0 104

[ On the Cover ]The geometric pattern represents
the increasingly complex and diverse roles
we will play in the years ahead.
The shining new growth represents
inheritance and development.

［ I n q u i r i es ］

TAISEI CORPORATIONCSR Promotion Section,
Corporate Communication Department,
Corporate Planning Office
URL : https://www.taisei.co.jp/english/

20.11.1600.T.S