CSR Report 2021

Leveraging+TAKUMA value
for a better future
Founder Tsunekichi Takuma established Takuma Boiler Manufacturing Co., Ltd.,the forerunner of today's Takuma, more than 80 years ago.
The founding spirit of this then young company,
Serve society through boiler manufacturing mirrored the thinking of Tsunekichi,
who poured his energy into inventing Japan's ﬁrst domestically manufactured boiler,
and it remains the foundation of Takuma's Management Principles today.
Takuma continues to provide new value for society through plants that leverage

SINCE1938

proprietary combustion technology, waste treatment technology,
water treatment technology, and other technologies developed since its founding.

Harima Factory when it ﬁrst started operations

Takuma's founder

The King of Boilers : Tsunekichi Takuma
Founder Tsunekichi Takuma made a major contribution to thedevelopment of Japanese industry by inventing the ﬁrst water tube
type boiler to be produced entirely domestically.
He started his quest to invent the boiler around the time he turned
40. Tsunekichi, a layperson who did not even understand thetechnical terms used in boiler textbooks, had to rely on a longprocess of trial and error in order to overcome the many diﬃculties
facing him before he could found Takuma, establish himself
among Japan's 10 greatest inventors of the Meiji and Taisho
periods, and earn himself the nickname, The King of Boilers .

01

TAKUMA CSR Report 2021

02

INDEX

Company Motto

Value Technology,
Value People,
Value the EarthManagement
Principles

Takuma will strive for social contribution, corporate value enhancement,
long-term corporate development and the satisfaction of all stakeholders by providing goods
and services that are needed and recognized as valuable in society.

+TAKUMA

The founding spirit of Takuma was Serve society through boiler manufacturing ,* which in present-day
language means to contribute to society by supplying goods and services that we provide . This spirit
can also be applied to the concept of Corporate Social Responsibility (CSR) that in recent years has
become a vital issue for corporate management. The management principles of the Takuma Group
companies are all based on the said founding spirit.
*Serve society through boiler manufacturing: It was the Company Motto of Takuma, then Takuma Boiler Manufacturing Co., Ltd., foundedby Tsunekichi Takuma, one of the ten great inventors of Japan during the Meiji and Taisho
periods (1868-1926).

Takuma Group
Ethics Charter

Takuma and the Takuma Group companies believe that it is essential for the sound developmentof the Group that all of the directors and employees remain aware of our social responsibilities andthe circumstances surrounding us as well as act in response to social ethics complying withapplicable related laws and ordinances. Bearing the above in mind, we have established and will
promote this ethics charter as our code of conduct, aiming to realize our management principles.

Section 01

GrowthStrategies

1. We shall strive for a proactive social contribution while establishing a harmonious
coexistence with the global environment as good corporate citizens.
2. We shall act in good faith in accordance with sound business custom,
while complying with applicable laws and regulations and committing ourselves to fair,transparent and free competition, as well as conducting lawful business activities.
3. We shall never have any relationship with antisocial forces or such organizations,which may pose a threat to the social order and security of civil society.
4. We shall respect fundamental human rights and never practice discrimination.
5. We shall strive to provide high quality products and services, based on our advanced
technologies, to attain high acclaim and conﬁdence from our customers.

Section 02

ESG
Initiatives

6. We shall strive to disclose corporate information to shareholders and investors throughInvestor Relations (IR) and other activities on a timely and equitable basis.
7. We shall strive to protect corporate assets as well as information, while never using either
for improprieties or any unjustiﬁable purpose other than normal business operations.

05

At a Glance

09

TAKUMA's Technologies

11

TAKUMA's Contributions

13

TAKUMA's History

15

TAKUMA's Work17

Features 01: New TAKUMA Building(Training Center)

19

Value Creation Process

25

Vision 2030 Long-Term Vision

29

Implementing ESG Management31

Key Issues (Materiality) for the Takuma Group32

Medium-Term Management Plan

35

Business Strategies

41

Our Achievements

51

Features 02: Hikarigaoka Incineration Plant

53

Helping Combat Climate Change, Conserving
Resources, and Protecting the Environment

59

Strengthening Relationships of Trust with
Customers and Communities

65

Pursuing Partnerships and Innovation

67

Promoting Activities of Human Resources

69

Ensuring Safety and Health

71

Strengthening Corporate Governance73

Executive Proﬁles /Messages from Outside Directors

Editorial Policy By augmenting growth strategies embodied in the Message from Top Management and the Group's business strategies

with a comprehensive presentation of non-ﬁnancial information like our Environment, Social, and Governance (ESG)
initiatives, the CSR Report 2021 aims to communicate our integrated approach to ESG management to all stakeholders.
In particular, this report describes how we are working to realize the company's sustained growth through our value
creation process; Vision 2030, the long-term vision that comprises our management strategy; and the key issues(Materiality) that characterize the Takuma Group's operations. We will use this report as a communications tool todeepen dialog with stakeholders, further improve CSR activities, and increase our corporate value.

Message from Top Management

Section 03

Corporate
Information

Financial Data

85

Stock Information

87

Company Outline

89

Publisher: Compliance & CSR Promotion Division, CSR Department, Takuma Co., Ltd.
Data Collection Period: From April 1, 2020, to March 31, 2021, in principle. In addition, some activities in FY2021 are included.
Coverage: This report applies to Takuma Co., Ltd., and its aﬃliates in principle. Time of Issue: October 2021

03

TAKUMA CSR Report 2021

04

Message from Top Management

We continue to help solve
social problems and contributeto the sustained developmentof the world by creating valuable
products and services.

We at Takuma oﬀer our heartfelt condolences for all
those who have lost their lives as a result of
COVID-19, and we hope that all those suﬀering fromthe disease will recover quickly and that the pandemic
will be brought under control as soon as possible.

Management Principles

Inventor Tsunekichi Takuma founded Takuma in
1938 with the philosophy of Serve society throughboiler manufacturing. Since that time the Takuma
Group has inherited that philosophy and used it toestablish businesses involving the full array of boilers
while taking advantage of technologies developed
through boilers to enter the environmental sanitationﬁeld with facilities such as waste treatment plants andwater treatment plants, broadening its businesses
with a focus on the ﬁelds of energy use andenvironmental protection, and contributing to society's
development and the resolution of social problems.
Our Management Principles lie in this founding spirit,and a dedication to contributing to the sustained
development of society over the long term throughbusiness activities remains the starting point of the
Takuma Group as well as a core expression of its
unchanging values.

Takuma Group Strengths

Along with the technologies and expertise that the
Takuma Group has accumulated through the repeated
improvement of products and services since its
founding, the relationships of sincerity and trust that
the Group has developed with longstanding customers
by providing after-sales service and solutions havebeen passed down unbroken as the tangible andintangible assets that embody its greatest strengths
and the source of its ability to compete successfully.

05

Reﬂections on the 12th
Medium-Term Management Plan
Under the 12th Medium-Term Management Plan
(FY2018 to FY2020), which represents the ﬁnal stage
in the Group's eﬀort to achieve the medium- andlong-term vision for FY2020 that it began in FY2012
of being an indispensable presence in society as aleading company in the ﬁeld of renewable energy
utilization and environmental protection and ofachieving ordinary proﬁt of JPY 10.0 billion in
FY2020, we have pursued the theme of increasing
our corporate capabilities in order to achieve ourcorporate vision and subsequently realize steady
growth. In addition to working to strengthen andexpand our revenue foundation, for example byproposing solutions based on customer needs in our
after-sales service business and launching an energy
plant O&M* business for private-sector companies, we
safeguarded our market position by continuing tosteadily turn robust demand into orders received in our
EPC business*. As a result of these initiatives, weachieved the targets set forth in the ﬁnancial plan (forconsolidated ordinary proﬁt).

Vision 2030 Long-Term Vision

Global issues that merit concern include thegrowing seriousness of the problem of climate change;
the worsening of the sanitation environment due torapid population growth and urbanization, particularlyin emerging nations; and increasing energy demand.
At the same time, domestic challenges like fallinginternal demand caused by the shrinking and aging ofJapan's population, shortages of human resources
and future leaders, tight ﬁnancial conditions aﬀecting

TAKUMA CSR Report 2021

06

Message from Top Management

national and local government, and aging
infrastructure are triggering major concerns about howa sustainable society can be realized going forward.
Based on these social conditions and issues, weformulated Vision 2030 as a long-term vision thatwould serve as new guidelines for the Group's
medium- and long-term management.
In keeping with this vision, the Takuma Group will
implement Environment, Social, and Governance(ESG) management, an approach that consists ofaddressing key ESG-related issues in an eﬀort toachieve sustained growth by resolving issues faced bycustomers and society through business activities. In
pursuing business activities built on a core of ESG
management, we will strive to become a great partner
for our customers by leveraging the technologies andexpertise related to energy utilization andenvironmental protection that are the Group's
strengths, along with the relationships of trust we havedeveloped with customers over the long term. Throughthe useful technologies and services created throughinnovation by the Group, which carries on the spirit ofa tenacious inventor, we will resolve challenges facedby customers and society, with a focus on the ﬁelds ofrenewable energy utilization and environmental
protection. We at the Group will work to achieve
ordinary proﬁt of JPY 20.0 billion in FY2030 byaddressing key ESG-related issues through ourbusiness activities and realizing sustained growthalongside our customers and society. P29-30

13th Medium-Term
Management Plan

The Takuma Group launched its 13th Medium-Term
Management Plan (FY2021 to FY2023) in April 2021
as the ﬁrst step towards realizing Vision 2030, ourlong-term vision. The plan's theme is laying the07

foundation for further growth based on the
management foundation and business foundation that
the Group has built to date.
The basic policy set forth in the 13th Medium-Term
Management Plan is strengthening conventional
businesses by reinforcing the Group's managementfoundation and at the same time accelerating our
response to future environmental changes. We will
strive to realize sustainable growth alongsidecustomers and society by implementing ESG
management through these business activities.
1) Implementing ESG Management
In order to realize sustained growth alongside ourcustomers and society by implementing ESG
management as set forth in Vision 2030, our long-term
vision, the Group approached the task of formulating
the 13th Medium-Term Management Plan byorganizing various ESG issues from the dual
standpoints of their importance for stakeholders andsociety on the one hand, and their importance for theGroup on the other. This process led to theidentiﬁcation of seven key issues (Materiality) thatdeserve to be given priority by the Group. P32-34
Helping combat climate change
Environment

Conserving resources and protecting
the environment
Strengthening relationships of trust withcustomers and communities

SocialPursuing partnerships and innovation

neutrality by 2050, the Group will work to strengthen
its management foundation through active allocationand investment of resources in human resources,
digital technologies, and other areas of our operations
while accelerating eﬀorts to strengthen conventional
businesses and accommodate future environmental
changes. P39-40
3) Financial Targets
In order to achieve the goal of posting ordinary proﬁtof JPY 20.0 billion in FY2030 as set forth in Vision
2030, our long-term vision, the 13th Medium-Term
Management Plan sets the achievement of steady
growth and a target of cumulative consolidated
ordinary proﬁt of JPY 36.0 billion over the course of
the plan (FY2021 to FY2023) as the ﬁrst step in thatprocess. We will work wholeheartedly to achieve
those goals. P37
Takuma has been a signatory to the United Nations
Global Compact* since 2006, and we support its 10
fundamental principles in the four areas of humanrights, labor, environment, and anti-corruption. We will
work to develop our business while understanding andrespecting these globally shared principles. The
Takuma Group has been helping resolve social issues
with technologies for reducing emissions ofgreenhouse gases like carbon dioxide through suchmeans as high-eﬃciency power generation using waste
and biomass since before the phrase renewableenergy entered into common usage. We believe that
initiatives to achieve the Sustainable Development
Goals (SDGs) P14 put forth by the United Nations
and the COP21 Paris Agreement align extremely wellwith the Group's businesses.
Finally, in compiling this CSR Report we havesought not only to provide a resource by means ofwhich a broad range of stakeholders can learn more
about the Takuma Group's activities, but also to help
each and every Group employee think carefully about
CSR and bring that perspective to bear in his or her
work. Additionally, this year's report provides moredetailed coverage of topics like the value creation
process and key issues. We at the Takuma Groupencourage readers to oﬀer their candid views andadvice, which we will carefully review in order that wemight better resolve social issues and contribute to thesustained development of society.

July 2021
Takuma Co., Ltd.
President and CEO
Hiroaki Nanjo

Promoting activities of human resources
Ensuring safety and health
Governance

Strengthening corporate governance2) Strengthening the Management Foundation
In order to anticipate change and realize additional
growth as environmental change gathers pace, forexample in the rapid development of digitaltechnologies and the goal of achieving carbon*O&M: Operation & Maintenance*EPC business: A business in which Takuma oﬀers a turnkey service extending from plant design to procurement and construction(Engineering, Procurement, and Construction)*United Nations Global Compact: The Takuma Group has joined the United Nations Global Compact (UNGC), which is a voluntary eﬀort to create a
global framework for implementing sustainable growth by having companies and groups exercise responsible andcreative leadership while acting as good members of society.

TAKUMA CSR Report 2021

08

At a Glance●Contribution to reducing CO 2 emissions

TAKUMA's strengths
Industrial waste
treatment plants●Established●Consolidated net sales (million JPY)

●Number of employees (consolidated)1938 146,726

3,925

P59

4 million tons

Reductionof about

from Takuma products during FY2020

Using advanced incineration
technologies, we properly treat toxic
substances and help the industry's
environmental protection eﬀorts.

（Fiscal year ended March 2021）●Our achievements (to date)

Municipal solid
waste treatment

No.1 sharein Japan360 +facilities

Biomass boiler(Japan)3,200 +

630+

Worldwide

Boiler

units

120 +

Worldwide

Upﬂow Moving-Bed
Sand Filtration System(Including biomass)

Worldwide

Industrial waste
treatment

units

facilities

We provide comfortable, clean
environments to customers in thesemiconductor industry as well as
many locations such as universities,
research institutions, and hospitals.

No.1 sharein Japan

2,700 +

Air-conditioning equipment
and clean systems

units

Municipal solid waste
treatment plants

General-purpose boilers
As the convergence of our
combustion technologies, ourboilers are a reliable brand thathas earned the support of a wide
range of industries.

We support the realization of a Sound
Material-Cycle Society using advanced
waste treatment technologies that meetthe needs of local communities.

Water treatment plants

Energy plants

We are working to purify
contaminated water with a holistic
perspective through a dialogue
with water .

Takuma's core technologies are
utilized in various types of boilers,from biomass-fueled boilers to total
systems.

●Share of the market for municipal solid waste treatment plants (cumulative to date)

No.1
09

in Japan in terms of bothscale and quantity

By number offacilities:

11.9%

By facility
capacity:

19.1%
TAKUMA CSR Report 2021

10

TAKUMA's

Technologies
From waste treatment

to energy creation

TAKUMA's technologies
support recycling worldwide.
The Takuma Group possesses advanced technologies related to waste
treatment, the creation and supply of energy using under-utilized resources,
and the recycling of wastewater.
In order to resolve global-scale environmental issues like climate change andrealize a Sound Material-Cycle Society, we operate businesses in theenvironmental and energy ﬁelds, including municipal solid waste treatment plants,
energy plants, and water treatment plants.

Treating
11

waste

Creating

heat and electricity

Supplyingpower to communities

Recycling

contaminated water

TAKUMA CSR Report 2021

12

TAKUMA'sContributions
Serving as a leading company

in the environmental ﬁeld

TAKUMA's pride:
Proven track recordand accumulated trust
Since our founding, we have provided a variety of products
and services to customers in Japan and around the world.
The track record and trust we have accumulated to datetestify to the essential role we play in the world,
and we take pride in having helped resolve issues faced bycustomers and society throughout our history.
We will continue to cultivate the ability to help realize
the sustainable development of society.

What can we do on behalf of the Earth?
Protecting the environment and utilizing
renewable energy.
We are harnessing a variety of technologies to help resolvethese critical global environmental issues, which are set
forth in the Sustainable Development Goals (SDGs)
adopted by the United Nations. Helping ensure that people
worldwide can enjoy aﬄuent and fulﬁlling lifestyles whilesafeguarding our planet's abundant environment... we willcontinue to embrace these challenges.

13

TAKUMA CSR Report 2021

14

TAKUMA's

History
It all began with one man's

pursuit of a challenge.

Passing on the spirit ofServe society through boiler
manufacturing to the future
Since Tsunekichi Takuma founded our business in 1938, Takuma, whose story
began with the manufacture of boilers, has marked more than 80 years of history
in pursuit of its mission of contributing to society through its business.
Today, we have grown into a company that leads its industry in the ﬁelds of theenvironment and energy, and we continue to move

1972
1958
1938
forwards to create a sustainable future.

Founding of Takuma
Boiler ManufacturingCo., Ltd.
Founder Tsunekichi Takuma invented theﬁrst water tube type boiler to be entirely
produced in Japan in 1912. The TAKUMA
boiler oﬀered performance that exceeded
the imported products of the time, and its
reputation spread. Takuma Boiler
Manufacturing Co., Ltd., was establishedin 1938. The Company Motto of Serve
society through boiler manufacturing wasformulated, establishing the philosophy thatwent on to become the foundation of
today's Management Principles.

Entry into theenvironmental andsanitation markets

Takuma established itself as amanufacturer not only of boilers, but also
environmental and sanitary equipment, forexample by developing waste heat recovery
boilers that use waste heat frommanufacturing plants, developing modern
technology for incinerating solid waste, andentering the water treatment market.
In 1963, the company delivered Japan'sﬁrst 24 hour operating waste incineration
plant.

15

Takuma worked to develop technologies to
respond to various needs as Japan's
economy grew rapidly, including demand forenergy savings in industry, countermeasures
for the growing volume and diversiﬁcation ofmunicipal waste, and improvements in water
quality by water treatment systems. In 1972,
Takuma Boiler Manufacturing Co., Ltd. which
had grown beyond its principal business ofboiler manufacturing, changed its name totoday's Takuma Co., Ltd. The company
transformed itself into an enterprise that
operates a range of multifaceted businesses,
including environmental equipment.

Building a resilient
managementfoundation

Takuma continued to reform itself, formulating
its ﬁrst Medium-Term Management Plan in1985 in order to accommodate abruptchanges in the economic environment. In
1992, the company introduced a new
Company Motto of Value Technology, Value
People, Value the Earth replacing the former
motto of Serve society through boiler
manufacturing . Capping the track record andtrust it had established to date, the company
delivered the largest waste incineration plantin Japan in 1998. The facility continues tooperate to this day.

Embracing global
challenges andbuilding a new era

Seeking to make further progress in theﬁelds of renewable energy andenvironmental protection, Takuma supplied
technologies for using energy from a variety
of waste types and biomass as well as
technology for rendering waste harmless.
We established local subsidiaries overseas
and continue to bring our technologies tocustomers not only in Japan, but alsoworldwide, particularly in Asia.

Realizing asustainable future

As contemporary society continues tochange at a dizzying rate, we face complex
problems such as climate change andchanges in demographic structure. Takuma
formulated Vision 2030, its long-term
vision, as well as the 13th Medium-Term
Management Plan in FY2021, identifying
the implementation of ESG management
as a priority. We will continue to work
towards further increasing our corporate
value and realizing a sustainable future
through business activities that leverage
the Group's strengths.

Delivery of an Energy Construction of thefrom Waste plant
Takuma Solarin Europe (2010)
Power Plant (2013)
Completion of the
Delivery of the
Amagasaki Head
Shin-Koto Incineration
Oﬃce Building (1995) Plant (1998)

Japan's ﬁrst 24 hour operating waste
incineration plant (1963)
Tsunekichi Takuma

Developing along withindustrial society

2021
2001
1985

Name change Start of mass production of(1972)
the Vacotin Heater ,the world's ﬁrst vacuum-type
hot water heater (1975)

Company emblem at thetime of Takuma's founding
The company emblem at the time of Takuma's founding stylized the company's
name (Takuma) with a triangular shape that combined the three core areas of its
operations: research, manufacturing, and installation. The design expresses thecompany's philosophy at the time, which focused on giving top priority to thecontinuous improvement of quality and on contributing to customers and society.

TAKUMA CSR Report 2021

16

TAKUMA’s WorkT h e p owe r to c h a n ge t h e wo rl d
As society's values and needs continue to diversify, respecting the personality andpotential of each and every employee so that they can make the most of theirabilities is an essential part of creating new value.
Takuma has a culture which encourages employees to embrace challenges in new
ﬁelds and to work together to reﬁne their skills, which allow us to contribute tosociety by resolving customers' and society's issues.

17

TAKUMA CSR Report 2021

18

Features

01

New TAKUMA Building (Training Center)
Construction of the New TAKUMA Building(Training Center) at Takuma's Head Ofﬁce wascompleted in October 2020.
The new facility, which consists of a Solution Lab
that provides remote support for operation
management of facilities such as municipal solid
waste treatment plants and biomass power plants,
which are ﬂagship Takuma businesses, as well as aTraining Center designed to enhance employee
education and skill development, makes extensive useof wood building materials like Cross-LaminatedTimber (CLT) to create a relaxing workplaceenvironment in which occupants are surrounded by
the warmth of wood.
In addition to a hybrid structure that combines
elements of wood and steel construction, the building
has high seismic performance due to the adoption of aseismic isolation structure, and it can be used as aregional disaster prevention site in the event of anearthquake or other natural disaster.

In 2020, we opened the

New TAKUMA
Building
19

Entrancehall

The ﬁrst step takes you into a wood-themed space.
Not only ﬂoors and walls, but also ceilings make active
use of wood materials, creating a relaxing ambiancethat surrounds occupants with the warmth of wood.

SolutionLab

The Solution Lab oﬀers customers safety and a senseof assurance by providing remote support for operation
management of municipal solid waste treatment
plants, biomass power plants, and other facilities. We
increased the reliability of our remote monitoring
system by moving it from the Head Oﬃce Building to
the seismically isolated new building.

TAKUMA CSR Report 2021

20

New value creation initiatives
start at the New TAKUMA Building
The New TAKUMA Building makes extensive use ofwood materials not only in its structure, but also in its
interior furnishings. Wherever people go in the building,they will find themselves in a space imbued with thewarmth of wood.
The Solution Lab, which was moved from the Head
Office Building following the completion of the New
TAKUMA Building, provides 24-hour remote support for
operation management of municipal solid waste treatment
plants, biomass power plants, and other customer facilities.
We increased the reliability of our remote monitoring system
by moving it to this seismically isolated structure.
Additionally, we have created space designed to spur free
and imaginative thinking in the Solution Lab, and we areworking to enhance our services and improve quality byactively utilizing that space.
Training rooms feature a creative design that allows them
to be subdivided into separate spaces or opened up to
create larger, integrated spaces so that they can be used
not only for large-scale training, but also meetings andother functions.

The lobby makes extensive use of wood materials.

Spaces are designed to encourage free, imaginative thinking.

Training sessions are held in training rooms
and a seminar room. Training rooms can be
conﬁgured in a variety of ways dependingon the amount of space required.

Along with open-feeling conference rooms
that oﬀer panoramic views of the pond next
to the building, each ﬂoor's foyer prompts
free, unconstrained discussion.

21

In addition to conference rooms and training rooms that
accommodate staff from Takuma as well as multiple Group
companies and to promote energetic discussions and free,imaginative thought by both employees and outside visitors,
the New TAKUMA Building incorporates a space designed
to trigger ideas through spontaneous conversation into
each floor's foyer. Conference rooms and training rooms,
which are also used by Group companies, accommodate adiverse range of workstyles with videoconferencing andother equipment.
Additionally, adoption of a seismically isolated structure
gives the facility a high level of earthquake resistance, andthe building provides disaster prevention functionality thatwill allow it to help coordinate responses to earthquakes
and other natural disasters.
The recently completed New TAKUMA Building isalready creating new connections between Takuma, itscustomers, and regional society.

The building's hybrid structure, which combines
elements of wood and steel construction, is designed tocoexist harmoniously with the environment
The starting point for the concept underlying the newbuilding was the idea of a building that coexists
harmoniously with the environment by giving shape to
Takuma's Company Motto of Value Technology, Value
People, Value the Earth .
In formulating the building's basic plan, personnel
studied how the building could make active use of woodmaterials, which are intimately connected to the field of
renewable energy, a core business for Takuma, particularly
with regard to biomass power plants, while drawing on
proposals from the construction company. The result was a
hybrid structure that combines elements of wood and steel
construction while incorporating seismic isolation, giving ita beautiful appearance aswell as being earthquake
resistant.
In addition to providing ahigh level of satisfaction tousers, the building has
earned praise for its
architectural features,
including by being selectedduring the construction
process for inclusion in the
Ministry of Land,
Wood-rich exterior appearance

Infrastructure, Transport and Tourism's FY2018
Sustainable Building Leading Program (Leading Wood
Structures) as a next-generation wood structure and byreceiving the Prize for Timber Utilization at the Award forInnovative Timber Utilization 24th following its completion.

New TAKUMA Building (Training Center)
Completed: October 2020
Structure: Wood + steel construction witha seismically isolated foundation
Size: Six stories above ground
Many of the building's wooden elements wereTotal ﬂoor space: 3,334m²
manufactured by MEIKEN LAMWOOD Corp.

Design and construction: Takenaka Corporation

Message from the New TAKUMA Building (Training Center) Project Team Secretariat

We are making improvements on a daily basis toensure the new building provides a pleasant experience.
As the department responsible for orchestrating a smooth
construction process and managing the facility after its
completion, the General Aﬀairs Department, to which I
belong, helps operate the building through small, cumulative
improvements, for example in how the facility's air
conditioning systems are operated and in the layout of its
furnishings, in response to daily feedback from building users.
I am pleased that the building, which serves as a symbol of
Takuma's businesses, has been generating results as aneﬀective promotional tool since its completion, as evidenced
by growing coverage of our company by television stations,magazines, and other media. In addition to providing robust

support for customer needs through remote monitoring ofcustomers' plants, the New TAKUMA Building is playing a
key role in Takuma's employees' education and skill
development. Going forward, we will continue our current
approach to managing the facility while pursuing operational
improvements in a way that satisﬁes all stakeholders.
Naoki Tsujita
General Aﬀairs Department, Corporate Services Division
New TAKUMA Building (Training Center)
Project Team Secretariat

TAKUMA CSR Report 2021

22

Section 01

GrowthStrategies

23

Value Creation Process

25

Vision 2030 Long-Term Vision

29

Implementing ESG Management31

Key Issues (Materiality) for the Takuma Group32

Medium-Term Management Plan

35

Business Strategies

41
TAKUMA CSR Report 2021

24

Section 01

Growth Strategies

Value Creation Process

Value Creation Process
We are working to create new value by strengthening initiatives that address key issues(Materiality) through businesses that tap the Group's strengths in light of medium- to long-term
trends and social issues.

External environment
World

Japan

Rising energy demand andwaste issues, particularlyin emerging nations
Increasingly serious problem
of climate change
Progress of the Fourth
Industrial Revolution

Management Resources
and Strengths

Business Strategies
The Takuma Group will strive to become a great partner for
its customers while resolving challenges faced by customers
and society through useful technologies and services that arefounded on innovation. We will seek to realize sustained
growth alongside our customers and society through theongoing repetition of this approach.

Relationships of trustwith customers

Shrinking population
Aging population
Increasingly large-scale
natural disasters
Tight ﬁnancial conditions
Aging infrastructure

Relationships of trust with customers
built up over the 8 3 years since ourfounding

Risks and opportunities
Rising expectations towards
renewable energy

12Conserving resources
and protecting
the environment

3

Strengthening relationshipsof trust with customers
and communities

4

Pursuing partnerships
and innovation

5

Promoting activitiesof human resources

6

Ensuring safety
and health

7

Strengthening
corporate governance

Customers andregional society
Protecting the environment in which welive through the construction andoperation of safe, secure municipal solid
waste treatment plants
Maintaining regional and industrial
infrastructure through the highly eﬃcientand stable supply of energy
Revitalizing the regional economy andstrengthening resilience through theconstruction and operation of facilities

Customers

Innovation

TakumaGroup

Our achievements (to date)

Helping combat
climate change

Creating clean energy
Reducing greenhouse gas emissions
Reducing environmental impacts

Sharing ofneeds andissuesEngineering throughout the plant life
cycle, from planning to construction
and operation

P32

The environment

Creative R&D

Technology and expertise

Initiatives to realize carbon
neutrality by 2050

Key Issues (Materiality)

Created Value

Society

Realizing Takuma's
Management Principles
andVision 2030

Shareholders

Boilers
3,200+ units *Municipal solid waste treatment plants
360+ facilities
Industrial waste treatment plants
120+ facilities

Takuma Group
VisionIncreasing corporate value

P29*Of which, biomass boilers: 630+ units

Business partners
Provision of technologies
and services

Resolution ofchallenges
Human resources
Tenacious, dedicated human resources
who will carry on Takuma's founding
spirit and work closely with customers
in the spirit of good faithConsolidated employees

3,925

Employees

Medium-Term Management Plan
Business activities

P41

Domestic Environment and Energy Business
Overseas Environment and Energy Business
Package Boiler Business
Equipment and Systems Business

A robust base to ensure customers canreadily depend on us over the longterm for 20 to 30 years
Net assets

JPY 90.5 billion

Capital adequacy ratio

50.7%

Rating (R&I)

A-

Strengthening
the management foundation

Realizing a workplace environment
characterized by health, safety, highproductivity, and high motivation

P35

The Takuma Group operates the following business segments:

Financial base

Building stable relationships of trust
through fair and safe business
transactions

P39

Human resources
Digital technologies
Partnerships
R&D (Manufacturing and engineering capabilities)
Capital investment
Compliance

Products / Services
Engineering, procurement, construction, and commissioning of municipal solid waste treatment plants, water
treatment plants and energy plants
After-sales service for plants (operation management, maintenance)
Power Retail Business
General-purpose boilers such as compact once-through boilers and vacuum-type
hot water heaters
Air-conditioning, water, and wastewater equipment installation services
Equipment
for use in the semiconductor manufacturing industry such as clean devices and cleaning systems

P85

FY2020 results

Net sales: JPY 146,726 million
Ordinary proﬁt: JPY 11,028 million
Proﬁt attributable to owners of parent: JPY 7,529 million
ROE: 8.6% Dividends: JPY 36 per share(As of March 31, 2021)(As of March 31, 2021)

25

TAKUMA CSR Report 2021

26

Section 01

Growth Strategies

Value Creation Process

The source of value creation
The Takuma Group's strengths include relationships of trust with customers as well as technology and expertise. These
strengths are the source on which we draw to create value in society, and we leverage them throughout the value chain,starting with R&D and extending to sales activities, design, procurement and manufacturing, construction management,
commissioning and after-sales service, and the Head Oﬃce functions that underpin those processes.

Motivated by a desire to solve issues facing customers, ourfounder Tsunekichi Takuma invented the TAKUMA boiler basedon a unique design following a period of painstaking research,making a signiﬁcant contribution to the development ofJapanese industry through its performance that overwhelmed
the foreign technologies that dominated the ﬁeld at the time.
Over more than 80 years from its founding in 1938 until
today, the Takuma Group has carried on its founding spirit ofServe society through boiler manufacturing by creatingproducts that support society, including not only boilers, but also
products such as waste incineration plants and water treatment
plants that apply boiler combustion technology and water
treatment technology, in response to the issues faced bycustomers and the needs exhibited by society over time,
including the rebuilding of Japan's economy following WorldWar II, the subsequent period of high economic growth, andeﬀorts to deal with the pollution that accompanied those phasesof the nation's history.
Through these products and the after-sales service oﬀered forthem, we have accumulated a variety of technology andexpertise related to after-sales service and plant engineering
around core combustion technologies developed through ourboiler business while contributing to the development of society
and helping solve issues faced by customers, including by
working to increase the production capacity of customers'
facilities, enhance society's environmental sanitation, andprevent pollution.
Today, we continue to provide optimal products and services
that meet customers' needs by drawing on our philosophy ofworking closely with customers, and on these technologies todesign and build plants that operate stably over the long term byburning a variety of fuels and waste types in a stable manner,and by oﬀering after-sales service for those facilities.

Our Founder Tsunekichi Takuma

The secret to Takuma's strengths

Relationships oftrust with customers
Relationships of trust with customers built up
over the 83 years since our founding

Proposals crafted from the customer's
perspective
Engineering capabilities developed throughmany years of experience
Custom-made designs based on
manufacturing technologies and capabilities
Fast, precisely-targeted after-sales service
Use of these to supply plants that operate
stably over the long term

Technology and expertise
The technology and expertise that comprise
Takuma's high-performance plant designand construction capabilities

Since our founding, we have earned customers' trust bycontinually drawing on extensive technology and expertise as apartner that works closely with customers to oﬀer proposals andservice that align closely with their needs, from the plant design
stage to construction and after-sales service. In addition to
generating proposals of solutions through after-sales service,this approach leads to orders received through repeat demand.
As software continues to evolve rapidly during the Fourth
Industrial Revolution, we will continue to resolve issues faced bycustomers and society by advancing our products and services,for example to save facility labor and automate operations,through the incorporation of digital technologies.

Combustion technologies for burning a variety
of fuels and waste types, including not only
biomass but also household waste andsewage sludge, in a stable manner, as
developed around core boiler combustion
technologies
Heat recovery technologies for eﬃciently
recovering heat as energy through boilers
Water treatment technologies developed from
improving supply water quality and purifying
waste water for boilers and waste incineration
plantsPollution-preventing technologies, forexample to treat (or clean) ﬂue gases
Technology for manufacturing boilers thateﬃciently convert heat into steam, electrical
power, and other forms of energy
Plant and system engineering capabilities
developed from boiler installation
technologies and through after-sales service
experience and expertise to take into accountthe entire life cycle, from construction tooperation and maintenanceOperation management and maintenancecapabilities accumulated through after-sales
service provided for a large number of plants

27

TAKUMA CSR Report 2021

28

Section 01

Growth Strategies

Vision 2030 Long-Term Vision
Vision for FY2030

The Takuma Group's
management strategy
The Takuma Group formulated Vision 2030
as its long-term vision for 2030.
To realize this vision, we are pursuing the necessary
investments and business strategies.

Company Motto
Management Principles
Vision 2030 Long-Term Vision
Implementing ESG management
13th Medium-Term Management Plan
(FY2021 to FY2023)
P37
Business Strategies

Based on these external environmental factors, the Takuma Group will implement Environment, Social, and Governance(ESG) management, an approach that consists of addressing key ESG-related issues in an eﬀort to achieve sustained
growth by resolving issues faced by customers and society through business activities.
In pursuing business activities built on a core of ESG management, we will strive to become a great partner for ourcustomers by leveraging the technologies and expertise related to energy utilization and environmental protection that are
the Group's strengths, along with the relationships of trust we have developed with customers over the long term throughafter-sales service and other interactions. Through the useful technologies and services created through innovation by theGroup, which carries on the spirit of a tenacious inventor, we will resolve challenges faced by customers and society, with afocus on the ﬁelds of renewable energy utilization and environmental protection.
Through the implementation of ESG management in this manner we will seek to achieve sustained growth alongside ourcustomers and society and realize a sustainable society while securing ordinary proﬁt of JPY 20.0 billion as a yardstick of
proﬁtability.

Aim to maintain our role of being an indispensable presence in society
as a leading company in the ﬁeld of renewable energy utilizationand environmental protection.

P41

Sustainable growth alongside our customers
and society through implementation of ESG management

FY2030

Provision of technologies and services

Vision 2030
Aim to maintain our role of being an indispensable presence in society
as a leading company in the ﬁeld of renewable energy utilization and environmental protection
by realizing sustained growth alongside our customers and society through implementation of ESG management.

Innovation

Ordinary proﬁt

20.0

Resolution ofchallenges

Long-Term Vision

JPYbillionCustomers

FY2020
Takuma Group

SocietyOrdinary proﬁt

11.0

JPY
billionCreative R&D

Sharing ofneeds and issues

Sustainable growth by implementing ESG management
Financial target

FY2030 ordinary proﬁt:

JPY 20.0 billion

External environment outlook
Global-scale concerns include a worsening of the problem of climate change; deterioration in the sanitation environment
due to rapid population growth and urbanization, particularly in emerging nations; and growth in energy demand. Concerns
in Japan include falling internal demand caused by the shrinking and aging of Japan's population, shortages of humanresources and future leaders, tight ﬁnancial conditions, and aging infrastructure.

GlobalDomestic(Japan)29

Rising demand for resources, food, water, energy, and waste treatment as the planet's population grows
Increasingly serious problem of climate change
Progress of the Fourth Industrial Revolution and the digital transformation (DX)
Shortages of human resources and future leaders caused by the shrinking and aging of Japan's
population; depopulation around large cities and in rural areas
Tight ﬁnancial conditions caused by declining tax revenues in the face of the shrinking
population and the need to deal with natural disasters and infectious disease
Contraction and streamlining of public services due to tight ﬁnancial conditions; increasing
reliance on private-sector companies
Demolition, consolidation, eﬀective use, and replacement of aging and underutilized
infrastructure, houses, etc.

Realizing solutions to challenges faced by customers and society,with a focus on renewable energy utilization and environmental protection

Provision of technologies and services
Expanding clean energy
Improving energy eﬃciency
Capturing and eﬀectively utilizing CO 2
Reducing power and manpower
requirements of plant facilities while
making them more resilient

Reducing greenhouse gas emissions
Realizing stable treatment of waste
Providing decarbonization
technologies

Saving energy
Utilizing unused resources
Realizing local production andconsumption of energy

Takuma Group business activities
EPC business

Recurring revenue model businesses

Overseas businesses

Engineering, Procurement,
and Construction (EPC) of a variety of plants

Maintenance, operation management,
O&M, energy services, etc.

EPC and after-sales service for Energy
from Waste plants and biomass power plants

Maintenance and expansion of position
as a leading company

Additional expansion
as a core driver of growth

Expansion with a focus on
emerging nations in Asiaand its development into a core businessfor the Group

Package boiler business

Equipment and systems businessNew businesses

Expanding business domain
as a manufacturer specializingin heating systems

Aiming for steady growthby strengthening corporate strength

Creating new business
opportunities centeredon the renewable energy
and environmental ﬁelds

TAKUMA CSR Report 2021

30

Section 01

Growth Strategies

Implementing ESG Management: Key Issues (Materiality) for the Takuma Group

Implementing ESG Management

Key Issues (Materiality) for the Takuma GroupWe are implementing ESG management, which seeks to satisfy all stakeholders and realize sustained growth for the Groupby strengthening initiatives that address ESG issues through our business activities.
In this approach, we have identiﬁed seven key issues (Materiality) related to ESG that deserve to be given priority whenbeing addressed through our business activities.
To realize a sustainable society, we will create positive outcomes by addressing these issues through our business activities.

The Group has identiﬁed seven key issues (Materiality) and 19 issues that deserve to be given priority when being
addressed through our business activities.
We are pursuing initiatives to strengthen our business activities and management foundation for each of these materialities
and issues.

Process for identifying key issues

Business activities
Domestic Environment and Energy Business

Package Boiler Business

Overseas Environment and Energy Business

Equipment and Systems Business

The following process was used to identify key issues.

Analyzing the status quo and organizing issues

Step1

Key Issues (Materiality)

We analyzed a variety of management issues that aﬀect the company from the dual
perspectives of the external and internal environment.
We compiled a list of 64 issues by analyzing the external environment from the standpointof ISO 26000, GRI, SDGs, FTSE, DJSI indicators and requirements, and the internal
environment from the standpoint of indicators provided by the Group's Management
Principles, strategies, current initiatives, and other yardsticks.

Evaluating their importance and verifying suitability

Step2
Helping combat
climate change

Conserving resources
and protecting
the environment

Strengthening relationshipsof trust with customers
and communities

Pursuing
partnerships and innovation

We created a matrix organizing the 64 issues identiﬁed in Step 1 by analyzing andevaluating their importance for stakeholders and society on the vertical axis and theirimportance for the Group on the horizontal axis. We then veriﬁed the suitability of the list
through a process that included steps such as an internal exchange of views to narrow
down the list of issues to 19 that deserved to be addressed by the Group.

Identifying key issues

Step3
Promoting activities ofhuman resources

Ensuring
safety and healthThrough discussions among members of the company's executive leadership, the following
list of key issues to be addressed by the Group was ﬁnalized based on the 19 issues.

Strengthening
corporate governanceOutcome

The environment
Creating clean energy
Reducing greenhouse gas emissions
Reducing environmental impacts

Customers and regional society
Helping create sustainable communities
Protecting the living environment
Maintaining industrial infrastructure

Shareholders, business partners
and employees
Increasing corporate value
Building stable relationships of trust
Realizing a workplace environment
characterized by high motivation

Takuma will strive for social contribution, corporate value enhancement,
long-term corporate development, and the satisfaction of all stakeholders by providing products
and services that are needed and recognized as valuable in society.

31

Importance for stakeholders and society

Extremely important

Key issues (Materiality) as identiﬁed
Helping combat climate change
Conserving resources and protecting the environment
Strengthening relationships of trust with customers and communities
Pursuing partnerships and innovation
Promoting activities of human resources
Ensuring safety and healthStrengthening corporate governanceImportant

Importance for the Takuma Group

Extremely important

TAKUMA CSR Report 2021

32

Section 01

Growth Strategies

Key Issues (Materiality) for the Takuma Group
Materiality and KPI (Key Performance Indicator)
Materiality

Helping combat climatechangeDetailed
description

P59

Issue

1. Promoting renewable energy(non-fossil energy)
2. Improving energy eﬃciency

E
Environmental
initiatives

Conserving resources
and protecting theenvironment

P59

1. Conserving resources andreducing environmental impacts
2. Making eﬀective use ofunutilized resources

1. Pursuing customer satisfaction

Strengthening
relationships of trustwith customers andcommunities

S

Pursuing partnerships
and innovation

P65

2. Ensuring the stable, continuous
operation of plants andequipment
3. Recycling local resources
and creating new value forcommunities

P67

1. Utilizing digital technologies(AI, IoT, robots, etc.)
2. Developing open partnerships
3. Pursuing innovation

Reason for selection

We will help alleviate the global
problem of climate change using
the technology and expertise wehave accumulated over more than
80 years.

We will contribute to the eﬀective
use of unutilized resources andto the conservation of resources
with Takuma technologies while
helping make it possible to reduce
environmental impacts and realize
a Sound Material-Cycle Society.

We will help resolve issues facing
customers and communities andstrengthen relationships of trust byproviding safe,
high-quality products and services
and undertaking initiatives that
address local resource recycling.

We will facilitate the supply of highvalue-added products and services
by introducing digital technologies
and expanding partnerships withoutside companies.

Socialinitiatives

Promoting activities ofhuman resources

P69

1. Securing, and training humanresources
2. Promoting diversity
3. Improving employee satisfaction

Ensuring safety andhealthG
Governanceinitiatives

33

Strengthening
corporate governance

1. Ensuring occupational safety
and healthP71

2. Managing employee health
3. Creating a comfortable working
environment

P73

1. Strengthening corporate
governance
2. Strengthening risk management
3. Ensuring compliance

Putting in place an environment
in which all employees canmake the most of their abilities isessential in order to facilitate thecompany s growth and strengthen
its competitiveness.

Safeguarding the physical andmental health of workers andbuilding a comfortable working
environment helps create a stablefoundation for Takuma s value
creation activities.

Strengthening corporate
governance both supports
companies stable growth and helps
avoid and reduce losses and otheradverse events by making possible
the organizational management of
risk.

Risks and opportunities【Risks】
Accommodation of policies and regulations intended to realize a decarbonizedsociety
Changes in customer requirements, for example additional improvements inenergy efficiency
Reduction in support from policies, for example as a result of the review of the
FIT program【Opportunities】
Growth in the market for renewable energy and environmental businesses due
to strengthening of environmental regulations
Growth in energy usage demand for biomass (including waste, sewage sludge,
and other resources) in order to alleviate climate change【Risks】
Reduction in domestic waste volume due to the shrinking of the population【Opportunities】
Growth of appropriate treatment of waste and growth in demand for use ofenergy from waste in emerging nations
Growth in expectations towards resource-saving and low-environmental-impact
systems and the eﬀective use of unutilized resources【Risks】
Loss of trust in the event Takuma fails to provide safe, high-quality products
and services
Shrinking budgets of local governments【Opportunities】
Growth in demand for biomass power generation as a type of energy that canbe produced and consumed locallyGrowth in expectations toward the creation of new value for communities, forexample through disaster prevention facilities and energy centers
Additional growth in the use of private-sector entities to provide government
services【Risks】
Opportunity loss due to lag in accommodating new technologies such as
Artificial Intelligence (AI) and the Internet of Things (IoT)【Opportunities】
Growth in demand for efficiency-boosting and labor-saving technologies inplant operation (remote monitoring and operation, data analysis, maximizationof amount of power sold, etc.)
Creation of revolutionary technologies and services as well as new business
opportunities through the expansion of partnerships【Risks】
Reduction in competitiveness due to a shortage of employees with specializedskillsDiscontinuity in the passing down of skills as highly experienced employees
reach retirement age and leave the workforce【Opportunities】
Strengthening of competitiveness through human resources development andmanagement that promotes diversity【Risks】
Reduction in productivity and social trust due to problems involving the safety
and health of employees and affiliates (loss of order opportunities due to theoccurrence of serious occupational accidents, etc.)【Opportunities】
Improvement in productivity and strengthening of competitiveness throughimprovements in the workplace labor environment【Risks】
Reduction in business sustainability due to a lack of appropriate
decision-making
Cessation of business due to violations of competition or environmental law or
regulations on conduct such as corruption, and associated reduction in social
trust【Opportunities】
Improvement in the ability to create value along with avoidance and reductionof risk as a result of strengthened corporate governanceSpeciﬁc initiatives

Supply of biomass power plants
Supply of fuel conversion (biomass, RPF, etc.) boilers
Supply of renewable energy and CO2-free power
Reduction in CO2 emissions (energy consumption) by Takuma
Improvement in energy efficiency at facilities Takuma operates
on a contractual basis
Proposal of energy efficiency improvements for customer
facilities and equipment

Supply of high-eﬃciency, low-environmental-impact Energy
from Waste plants
Supply of sewage sludge-fueled power plants
Supply of advanced treatment sand ﬁlter systems
Establishment of combustion technology for unutilizedbiomass
Development of technology for reusing incineration ash
Development of technology for recovering and using CO2

KPI

Magnitude of potential
reduction in CO2 emissions
due to newly delivered power
plants*
FY2023: 800,000 tons
per year
FY2030: 2.5 million tons
per year*Biomass power plants andEnergy from Waste plants
delivered from FY2021 toFY2030

Supply of products and services that satisfy customers
Improvements in the quality of Takuma s operation and O&M
businesses
Increasing sophistication of maintenance service
Initiatives addressing the Regional Circular and Ecological
Sphere (Regional CES), regional use, and decentralized power
supplies
Initiatives such as PPP that address additional use ofprivate-sector entities

Increases in the added value of facilities and plants
Strengthening of competitiveness in EPC operations, operation
management, and maintenance service
Pursuit of open innovation
Pursuit of new businesses that contribute to the enhancementof existing businesses and services
Development of technologies and products that are sought bysociety and customers

Hiring of new graduates and mid-career employees
Development of optimal human resources programs in
response to social changes
Development of an effective training system
Active hiring of diverse human resources and development ofcareer support programs

Number of main career trackand management positions
ﬁlled by women:
At least 35 (cumulative total
for FY2021 to FY2025)
Utilization of parenting
support programs:
At least 25% (average for
FY2021 to FY2025)
Number of fatal accidents: 0

Reduction in the occurrence of occupational accidents
Prevention of health problems and rectification of overwork
Implementation of workstyle reforms

Sustained improvement through practices such as evaluationsof the effectiveness of the Board of Directors
Continued conduct of appropriate internal audits
Additional improvement in the effectiveness of risk
management activities
Even more thorough project risk management
Implementation and ongoing reassessment of BusinessContinuity Planning (BCP)
Ongoing implementation of compliance education

Number of serious complianceviolations: 0

TAKUMA CSR Report 2021

34

Section 01

Growth Strategies

Medium-Term Management Plan

Medium-Term Management Plan

Summary of the 12th Medium-Term Management Plan (FY2018 to FY2020)

Corporate Vision (FY2012 to FY2020) and Medium-Term Management Plans to date
The Takuma Group worked to build business structures capable of consistently earning ordinary proﬁt of at least JPY 10.0
billion even as the business environment underwent major changes under the 10th to 12th Medium-Term Management
Plans in an eﬀort to realize its Corporate Vision of aiming to maintain our role of being an indispensable presence insociety as a leading company in the ﬁeld of renewable energy utilization and environmental protection and of achieving an
ordinary proﬁt of JPY 10.0 billion in FY2020.

As the ﬁnal stage of our Corporate Vision, we implemented business strategies based on a set of basic policies andpriority measures in an eﬀort to achieve cumulative ordinary proﬁt of JPY 33.0 billion over three years by building a resilientbusiness and management foundation that enables Takuma to respond to future changes in the business environment. In
terms of ordinary proﬁt, we were able to achieve the targets set forth in the Corporate Vision and Medium-Term Management
Plans to earn at least JPY 10.0 billion starting in FY2016, JPY 11.0 billion in FY2020, and a cumulative total of JPY 33.6
billion under the 12th Medium-Term Management Plan from FY2018 to FY2020.

Positioning of the 12th Medium-Term Management Plan
Final stage of the Corporate Vision that was launched in FY2012

Medium-and
Long-Term Vision

Medium- and Long-Term Vision (Corporate Vision)

Long-Term Vision

FY2012 to FY2020

FY2021 to FY2030

Through FY2011

Strive to achieve cumulative consolidated-basis ordinary proﬁt of JPY 33.0 billion over three years by building a resilient business andmanagement foundation that enables Takuma to respond to future changes in the business environment.

Results and issues
9th Medium-Term
Management Plan

10th Medium-Term
Management Plan

11th Medium-Term
Management Plan

12th Medium-Term
Management Plan

13th Medium-Term
Management Plan

(FY2009 to FY2011)(FY2012 to FY2014)(FY2015 to FY2017)(FY2018 to FY2020)(FY2021 to FY2023)

Proﬁtability throughselection and concentrationof resources

Reinforcement ofbusiness foundation forstability and proﬁtability

Steady expansion interms of both quantityand quality

Strengthening ofcorporate capability tofacilitate steady growth

Laying the foundations
for additional growth

Cumulative ordinary proﬁt results

Cumulative ordinary proﬁt results

Cumulative ordinary proﬁt results

Cumulative ordinary proﬁt results

JPY

1

2

Ordinary profit(right axis)

120
100

146.7

116.3
113.1

101.0

96.4

80

96.3
9.4

89.1
7.3

11.6

103.9
9.1

122.0
118.2

(Billion JPY)
16
14

134.5

12.3

10.7

8
7.2
6

4.4

4
2

35

2010

2011

2012

2013

2014

2015

2016

2017

2018

Initiatives to improve productivity, for example by utilizing
Information and Communications Technologies (ICT), havedelivered results but remain ongoing.

4

Promoting activities of human resources

The workforce situation remains tight despite signiﬁcant expansion
in the number of hires as we work to secure the necessary humanresources.

5

Continuing to pursue compliance management

Awareness of the importance of compliance has permeated theGroup thanks to ongoing educational activities. Developing evenmore eﬀective measures remains an issue.

Initiatives to maintain our position in sludge incineration and expand
the overseas business are ongoing.
Progress in eﬀorts to reﬁne core technologies and development ofproprietary technologies has generally been smooth.

１０

20
0

Increasing productivity,for example by reforming business processes

11.0

60
40

3

12
10.3

9.6

Achieving sustained growth

In the EPC business, we maintained our market position thanks tosteady or increasing orders for domestic waste treatment andenergy facilities.

at least JPY 10.0 billion even as the business environment undergoes major changes

Net sales(left axis)

Progress made in initiatives designed to reduce Life Cycle Costs(LCC), for example by using POCSYS ® P42 .

Firm orders secured for package boilers as well as equipment andsystems helped to contribute to stable consolidated-basis proﬁts.

Building structures capable of consistently earning ordinary proﬁt of

140

Orders increased as we proposed solutions based on customers
needs through recurring revenue model businesses (equipment
improvements and service life extensions).

Received multiple orders in our O&M business, including from theprivate-sector for the ﬁrst time, in our Energy Plant Business; began
operations and broadened the range of services we oﬀer.

13.7 billion JPY 25.7 billion JPY 31.9 billion JPY 33.6 billion(Billion JPY)
160

Strengthening and expanding our revenue foundation

20192020 (FY)

10th Medium-Term Management Plan

11th Medium-Term Management Plan

12th Medium-Term Management Plan

Reinforcement of business foundation forstability and proﬁtability

Steady expansion in terms of bothquantity and quality

Strengthening of corporate capability tofacilitate steady growth0

Financial targets and results under previous medium- and long-term vision andthe 12th Medium-Term Management Plan
Previous medium- and long-term vision:
FY2020 ordinary profit …………………………… Target JPY 10.0 billion → Result JPY
12th Medium-Term Management Plan:
Cumulative three-year ordinary profit ………… Target JPY 33.0 billion → Result JPY

11.0 billion
33.6 billion

TAKUMA CSR Report 2021

36

Section 01

Growth Strategies

Medium-Term Management Plan

13th Medium-Term Management Plan (FY2021 to FY2023)
We will develop measures to fuel additional growth as a plan for taking the ﬁrst steps towards realizing the ﬁnancial targetof ordinary proﬁt of JPY 20.0 billion as set forth in Vision 2030. Speciﬁcally, we will work to earn cumulative ordinary proﬁtof JPY 36.0 billion over three years while strengthening conventional businesses and accommodating future environmental
changes in every area of our business activities by strengthening six core areas of our management, including investments
in human resources and digital technology.

Positioning
Lay the foundations for additional growth and take the ﬁrst steps under the 13th Medium-Term Management Planas we prepare to realize the Vision 2030 target of ordinary proﬁt of JPY 20.0 billion.

On implementing
the 13th Medium-Term
Management Plan
Hideki Takeguchi

Tsuyohito Nishiyama

Director & Senior Managing
Executive Oﬃcer
Executive Manager
of Engineering Group

Director & Senior Managing
Executive Oﬃcer
Executive Manager
of Corporate Marketing Group

Financial target

JPY 36.0 billion

Cumulative ordinary proﬁt
from FY2021 to FY2023

Previous vision
12th Medium-Term Management Plan

Vision 2030

FY2020
The Group s ﬁnancial foundations
were strengthened prior to the 12th
Medium-Term Management Plan.
Ordinary proﬁt

11.0 billion

strategy towards implementation

FY2030First steps towards
realizing Vision 2030

JPY

Plan positioning and business13th Medium-Term Management Plan

Ordinary proﬁt

Laying the foundations
for additional growthJPY

20.0 billion

Three-year
cumulative ordinary proﬁt

JPY

36.0 billion

13th Medium-Term Management Plan ﬁnancial targets(cumulative 3-year targets)

Ordinary proﬁt: JPY 36.0 billion
Orders received: JPY 450.0 billion (reference)

Basic policy

The Group has worked throughout its history to resolve social

Based on the results and issues ofissues such as climate change and environmental protection

the 12th Medium-Term Management

through its business activities, for example by supplying municipal

Plan, the 13th Medium-Term Manage-

solid waste treatment plants and biomass power plants, and thisment Plan seeks to lay the foundations

approach aligns with the ESG management approach. The new

for additional growth while securing

Medium-Term Management Plan identiﬁes the Takuma Groupcumulative ordinary proﬁt of JPY 36.0

Materiality that deserve to be addressed on a priority basis throughbillion over its three-year period as theour business activities and establishes Key Performance Indicators

ﬁrst step towards realizing the target of(KPI) in order to clarify these initiatives. We will strive to achieve

ordinary proﬁt of JPY 20.0 billion as set

sustained growth by continuing to address materialities that help

forth in Vision 2030. To achieve theseresolve social issues through business activities that resolve

targets, we will steadily earn and carrycustomers issues and implementing ESG management.

out EPC projects with a focus on ourStrengthening conventional businesses by reinforcing the Group s management foundation

ﬂagship businesses, the Municipal Solid Waste Treatment Plant Busi-

and at the same time accelerating its response to future environmental changes

ness, Energy Plant Business, and Water Treatment Plant Business,

In addition to further developing an approach to ESG manage-

Striving to realize sustainable growth alongside customers and society by implementing ESG management

while expanding after-sales service such as operation management

ment that has already taken root at Takuma in order to achieve thethrough these business activities

and maintenance of facilities and equipment delivered across all oftargets set forth in the 13th Medium-Term Management Plan and,our businesses (recurring revenue model businesses). We will also

on a longer-term basis, in Vision 2030, we will further enhance

work to maintain and expand the Package Boiler Business and theand expand recurring revenue model businesses by treating themEquipment and Systems Business. Additionally, we will pursue initia-

as drivers of the Takuma G roup stives with goals such as expanding the Power Retail Business, study-

growth in order to realize stable opera-

ing new businesses, and growing overseas businesses as the foun-tion of facilities over the next 20 to 30

dation for realizing Vision 2030, and we will strengthen our manage-

years. At the same time, we will work

ment foundation through initiatives including hiring and training theto maintain and expand our position as

human resources who will be necessary in order to pursue thea leading company in the Engineering,Group s business strategies, pursuing a range of partnerships as well

Procurement, and Construction (EPC)

as R&D, embracing digitalization, and updating the Harima Factory.

business.

Implementing ESG management to ensure sustained growth

together to implement the 13th Medi-

Implementing ESG management
Pursuit of business activities that help resolve challenges faced by customers and society❶ Municipal Solid Waste Treatment
Plant Business❷ Water Treatment Plant Business❸ Energy Plant Business❹ Power Retail Business❺ Overseas Businesses❻ New Businesses❼ Package Boiler Business❽ Equipment and Systems
BusinessStrengthening
conventional
businesses

Human resources
R&D
Manufacturing and engineering capabilities

Digital technologies
Capital investment

P41-50

Responding
to environmental
changes

Conclusion

In this way, the Group will comeStrengthening the management foundation37

by actively pursuing ESG.

Partnerships
ComplianceWith a focus on evaluating companies from a non-ﬁnancial

um-Term Management Plan and create

standpoint, ESG provides a set of indicators for measuring how

a bright future by growing in a sustained

well a company is working to resolve social issues through its busi-

manner alongside its customers andness activities. We believe that sustained growth can be realizedsociety.

TAKUMA CSR Report 2021

38

Section 01

Growth Strategies

Medium-Term Management Plan

Strengthening the management foundation

Partnerships

We will work to strengthen the following six core areas of our management by allocating and investing management
resources to steadily implement our business strategies.

Human resources
In addition to systematically hiring and training thehuman resources who will be necessary in order tomaintain and expand the Group s business activities andto accommodate the changing times, we will strive tostrengthen the Group s competitiveness and realize
additional growth through initiatives in areas such as
promoting diverse workstyles and fostering employee
health.

Corresponding principal Materiality and issues
Promoting diversity
Managing employee health

Theme 1

Strengthening recruiting activities andreviewing employment systems

Systematically hiring new graduates and mid-career employees
Reviewing programs to make use of older workers and to hire
specialized workers

Theme 2

Reviewing the human resources development system

The Takuma Group is pursuing a partnership-based
initiative to operate municipal solid waste treatment plants,
which play a role as disaster prevention facilities. As theRegional Circular and Ecological Sphere (Regional CES)*
and activities to realize carbon neutrality by 2050 gather
momentum, we will continue to pursue initiatives to create
new value in communities while making use ofpartnerships with outside companies and organizations.

Making eﬀective use of unutilized resources
Recycling local resources and creating new value for communities
Developing open partnerships

Theme

Creating new value through alliances

Pursuing robust partnerships with non-group companies and otherstakeholders in a variety of contexts*An approach that seeks to make the most of regional energy through mutual
support and the supplementation of resources in line with regional
characteristics while facilitating the formation of autonomous, decentralized
communities and making maximum use of regional resources like beautiful
natural landscapes (source: website of the Ministry of the Environment)

R&D, manufacturing, and engineering capabilities
In addition to enhancing our technologies in plant-relatedﬁelds, we will strengthen our business competitivenessthrough further improvements to the safety and quality of
products and services supplied by the Group.

Implementing career development support measures such as job
rotation programs to help train engineers and other personnel,
programs to follow up on the development of young workers, etc.

Theme 3

Corresponding principal Materiality and issues

Corresponding principal Materiality and issues
Pursuing innovation
Pursuing customer satisfaction
Ensuring occupational safety and health

Theme 1

Strengthening R&D

Creating products and services required in this new era by utilizing
open innovation

Pursuing workstyle reforms andenhancing the workplace environment

Theme 2

Examining a diverse range of workstyles that allow workers to dotheir jobs without regard to time or place

Strengthening manufacturing andengineering capabilities

Reﬁning and improving the quality of core technologies, the overallplant, and main equipment

Implementing health-focused management

Increasing intrinsic safety in design and installation, and preventing
occupational accidents

Digital technologies
In addition to providing continuous remote monitoringand operational support for customer plants through our
Solution Lab, we are implementing initiatives to realize
stable, eﬃcient plant management by utilizing big datafrom plants through our POCSYS ® Plant Optimization
Comprehensive Support System. Going forward, we will
strive to realize additional growth for the Group by working
to improve plant added value and strengthen
competitiveness in EPC as well as after-sales service
through the use of digital technologies such as Artiﬁcial
Intelligence (AI) and Information and Communications
Technologies (ICT).

Corresponding principal Materiality and issues
Ensuring the stable, continuous operation of plants and equipment
Using digital technologies

Theme 1

Bringing digital technologies to products and services

Rolling out digital technologies to reduce manpower requirements
and streamline operations at plants, improve maintainability andfunctionality, and realize more stable operations

Theme 2

Capital investment
In implementing our plan for the new Harima Factory, we
will strive to realize a sustainable plant that is eﬀectively
CO 2 emission-free while further increasing productivity andquality.

Corresponding principal Materiality and issues
Improving energy eﬃciency
Pursuing customer satisfaction

Theme

Pursuing plans for the new Harima Factory

Developing a sustainable plan that aims to achieve eﬀectively zero
CO 2 emissions
Improving boiler manufacturing capabilities (quality and eﬃciency)

Improving management eﬃciency

Examining ways to utilize the Supply Chain Lab P42

Implementing paperless workﬂows and Robotic Process Automation(RPA)
Sharing knowledge and expertise on a companywide basis(Artist s conception of new Harima Factory)
Tentative completion: December 2022
Total investment: approximately JPY 13.0 billion

Compliance
We will continue to promote compliance as a key
foundation that sustains corporate activities throughongoing compliance education and other programs whileworking to realize further improvements in the eﬀectivenessof our risk management activities.

Corresponding principal Materiality and issues
Strengthening corporate governance

Theme

Increasing the eﬀectiveness of complianceand risk management

Improving and enhancing educational programsContinuing and improving risk management activities P81

39

TAKUMA CSR Report 2021

40

Section 01

Growth Strategies

Business Strategies

Domestic Environment and Energy Business
Municipal Solid Waste Treatment Plant Business

2

Strengths

Since delivering Japan s ﬁrst fully continuous mechanical waste incineration plant in 1963, Takuma has supplied more than 360
municipal solid waste treatment plants, more than any other manufacturer in Japan. In addition to supplying products and services thatmeet regional needs based on the technology and expertise that we have accumulated through a long series of improvements acrossmore than half a century, we are working to further increase the value we provide by incorporating leading-edge technologies like Artiﬁcial
Intelligence (AI) and the Internet of Things (IoT).

Our achievements (cumulative deliveries to local governments)

1

Business Summary

We provide solutions that extend throughout the plant life cycle, from construction (EPC) of municipal solid waste treatment plants
for local governments to maintenance, primary equipment improvement and service life extension, operation management, andoperation (O&M).

Waste incineration plants ……………………………………… over 360 facilities
Recycling plants …………………………………………………… over 90 facilities
Biogas recovery plants …………………………………………………… 2 facilities

3
Principle products
Waste incineration plants, biogas recovery plants, recycling plants, etc.

Market Environment

Some 1,000 facilities in Japan incinerate about 170,000 tons of waste per day, and those plants are aging, with more than 60% ofthem having been operating for at least 20 years. With many facilities built during the 1990s to address the problem of dioxin emissions
reaching the point in their service lives at which they need to be updated, we expect to see strong replacement and service life extension
demand continue for the time being.
Use of the O&M business, which comprises a comprehensive contract for facility operation management and maintenance, and DBO
arrangements, which comprise orders for both facility construction and operation (O&M), is growing from the standpoint of taking
advantage of private-sector expertise. At the same time, facilities are expected to provide functionality that creates new value for theirregion, for example by serving as regional disaster prevention facilities or energy centers, rather than simply treating waste.
Furthermore, as society works to realize carbon neutrality by 2050, we expect to see more sophisticated use of waste to generate
electricity and heat along with growing demand for biogas recovery (methane fermentation) plants and combined systems that pairincineration with methane fermentation and other technologies.

4

Initiatives

Strengthening conventional businesses
Improving quality and strengthening proﬁtability in the plant
operation business and after-sales service businessMaximizing proﬁtability by extending the service life of existing
facilities

Responding to environmental changes
Developing structures that will allow us to provide newservices, for example additional use of private-sector
partners and Regional Circular and Ecological Sphere(Regional CES) businesses

Ensuring a sustained ﬂow of orders by creating customer value

Currently, about 120 of the municipal solid waste treatment plants we have delivered continue to operate, and we are supporting safe,
stable, and appropriate waste treatment in their regions through after-sales service including regular maintenance, functional improvements, service life extension work, and operation management.
In an eﬀort to enhance its after-sales service oﬀerings, the Takuma Group began oﬀering remote support service for customer plants in
2004, and in 2016 we launched the POCSYS ® Plant Optimization Comprehensive Support System, which dramatically enhanced thatfunctionality. Then in 2019, we opened the Solution Lab as a remote monitoring and operation support facility. In addition to supplying safe,
secure, and stable plant operation to customers through 24-hour operational support, we are helping streamline plant operation, for example
to increase the amount of power sold and reduce chemical consumption, by analyzing, visualizing, and otherwise utilizing operating data.
Furthermore, we plan to launch the Supply Chain Lab, an after-sales service facility, in December 2022, and we will work to realize
additional quality and proﬁtability improvements in after-sales service by eﬀectively utilizing these resources.
Going forward, municipal solid waste treatment plants will be called upon to create new value in order to resolve regional issues, forexample by promoting the recovery and use of waste energy, serving as disaster prevention and energy facilities, and revitalizing regional
economies as part of the eﬀort to realize a decarbonized society and Regional Circular and Ecological Sphere (Regional CES) (local SDGs).
In addition to promoting power and labor savings in plant operation through the use of digital technologies while working to realize more
eﬃcient energy recovery through the reﬁnement of combustion technology and energy recovery technology, which are core Takuma
technologies, as well as use of Artiﬁcial Intelligence (AI) and the Internet of Things (IoT), we will help resolve regional issues by creating
new value through the expansion of our Power Retail Business and through partnerships with various companies and organizations.

Materiality

41

Helping combat climate change

Strengthening relationships of trust with customers and communities

Conserving resources and protecting the environment

Pursuing partnerships and innovation

TAKUMA CSR Report 2021

42

Section 01

Growth Strategies

Business Strategies

Water Treatment Plant Business

1

Business Summary

In addition to construction (EPC) and maintenance of water treatment and sludge incineration plants, particularly for sewage treatment
plants run by local governments, we supply operation management and other services.

Principle products
Sewage sludge-fueled power plants, moving-bed sand filtration systems (Uniflow Sand Filter), etc.

2Strengths

Since entering the water treatment ﬁeld in 1962, we have accumulated technology and expertise by supplying water treatment plants
and sludge incineration plants in a variety of ﬁelds, including sewage, human waste, and industrial wastewater. In recent years, we havebeen particularly focused on the sewage treatment ﬁeld, and we are helping resolve customers issues with unique technologies like anenergy-saving and energy-creating sludge-fueled power generation system featuring low emissions of the greenhouse gas N 2O andmoving-bed sand ﬁltration systems (Uniﬂow Sand Filter), of which we have delivered about 2,700 units since 1979.

Our achievements (to date)Moving-bed sand ﬁltration systems (Uniﬂow Sand Filter)…… over 2,700 units
Sewage sludge incineration plants……………………………… over 20 facilities

3

Market Environment

There are some 2,200 sewage treatment plants in Japan, and those facilities are aging, with more than 80% having been operating forat least 15 years.
Additionally, as we work to realize a decarbonized society, there is growing need to reduce greenhouse gases in sewage treatment andto utilize sewage sludge, a type of biomass, as a form of renewable energy.
At the same time, we expect utilization of the private sector through arrangements such as Public Private Partnerships (PPPs) andPrivate Finance Initiatives (PFIs) to increase in the future due to the challenging management environment in which sewage projects run
by local governments must operate.

4

Initiatives

Strengthening conventional businesses
Ensuring a sustained ﬂow of orders for sludge incineration
plantsResponding to environmental changes
Developing structures that will allow us to accept
long-term comprehensive contracts

Expanding the after-sales service business
Accommodating replacement demand from existing facilities

The sludge-fueled power generation system we developed diﬀers from conventional incinerators in that it does not require auxiliary fuel,and it excels in terms of environmental performance thanks to its low emissions of the greenhouse gas N 2O, an issue aﬀecting
incineration treatment of sewage sludge. Moreover, the system is capable of generating electricity, and its low consumption of poweroﬀers excellent energy-saving performance. We have received orders for three plants using this system to date, and we will help reducegreenhouse gas emissions in sewage treatment by continuing to earn more orders in the future.
Additionally, we have delivered numerous high-speed sand ﬁltration systems that boost ﬁltration speed by a factor of two to three while
adopting a compact, space-saving design. We will work to secure more orders by proposing updates that take advantage of thatspace-saving design for existing ﬁltration systems that are due for such service.

Materiality

43

Helping combat climate change

Strengthening relationships of trust with customers and communities

Conserving resources and protecting the environment

Pursuing partnerships and innovation

TAKUMA CSR Report 2021

44

Section 01

Growth Strategies

Business Strategies

Energy Plant Business

1

Business Summary

In addition to construction (EPC) and maintenance of energy plants for private-sector operators, we oﬀer operation (O&M) and otherservices.

Principle products
Biomass power and heat-use plants, RPF power and heat-use plants, industrial waste treatment plants, etc.

2Strengths

Since our founding in 1938, we have manufactured an array of boilers for industrial, power, marine, and other applications, and wehave delivered more than 3,200 boilers throughout Japan and around the world. Over the course of our long history, we have helped
reduce and eliminate dependence on carbon on the part of customers and society through the supply of plants that recover energy from avariety of biomass and non-fossil fuels such as wood, poultry manure, and RPF based on proprietary combustion and heat recovery
technologies that we have improved and evolved together with customers.

Our achievements (to date)
Boilers ……………………………………………………………… over 3,200 units
Of which, biomass boilers…………………………………………… over 630 units
Industrial waste treatment plants …………………………… over 120 facilities

3

Market Environment

Since Japan s 2012 launch of its Feed-In Tariﬀ (FIT) program, which imposes ﬁxed pricing on purchases of renewable energy, demandfor biomass power plants has grown rapidly. Takuma, which has long manufactured biomass boilers, has delivered more than 40 biomass
power and heat-use plants (including facilities that do not take advantage of the FIT program) since 2014, when it delivered its ﬁrst FIT
boiler. That said, as the FIT program is reviewed, we expect demand to shift towards small and medium-size biomass power and heat-use
plants as a way to implement regional-use power supplies and regional decentralized energy.
Additionally, many industrial boilers that use fossil fuels such as coal and heavy fuel oil, which are common in plant applications, aredue to be updated, and we expect that the level of need for conversions to non-fossil fuels such as biomass and RPF will grow as society
works to reduce and eliminate dependence on carbon.

4

Initiatives

Strengthening conventional businesses

Responding to environmental changes

Expanding our market presence through steady orders forbiomass power plants

Capturing demand for fuel conversions in industrial
boilers

Expanding our business through further promotion of proposals
for after-sales service businessWe expect that the business environment in which our customers operate will continue to exhibit major changes in the future, including
the drive to realize carbon neutrality by 2050 and the review of the FIT program.
We will help customers reduce and eliminate dependence on carbon in their business activities while promoting the use of renewableenergy by expanding the introduction of power and heat-use plants that utilize biomass and non-fossil fuels through plans and proposals
that precisely target customers issues and needs based on the technology and expertise we have accumulated through our extensive
track record.
Additionally, we will help customers resolve issues and further reduce and eliminate their dependence on carbon by pursuing not only
precisely-targeted maintenance, but also energy savings, power output increases, functional improvements and service life extensions forequipment, and O&M and other solution proposals for the many plants we have delivered to date.

Materiality

45

Helping combat climate change

Strengthening relationships of trust with customers and communities

Conserving resources and protecting the environment

Pursuing partnerships and innovation

TAKUMA CSR Report 2021

46

Section 01

Growth Strategies

Business Strategies

Overseas Environment and Energy Business

Power Retail Business

1

Business Summary

Takuma Energy Co., Ltd., a Group company, operates the Power Retail Business, which draws on power generated by municipal solid
waste treatment plants and biomass power plants that Takuma has delivered as its principal sources of power.

Overseas Businesses
1

2

Business Summary

We supply construction and maintenance services for biomass power plants and Energy from Waste plants with a focus on Thailand
and Taiwan, where we have local subsidiaries.

Strengths

Takuma Energy Co., Ltd., which was established in August 2015 to supply services that increase the amount of value added by plants
delivered by Takuma through the purchase and supply of power, operates the Power Retail Business.
The company is helping promote renewable energy power with a regional character in a way that takes advantage of the relationshipsthat link Takuma s customers and Group companies, for example by operating a business that facilitates the local production andconsumption of power by supplying power generated by municipal solid waste treatment plants and biomass power plants to public
facilities and other regional energy users in four regions.

Principle products
Biomass power plants,
Energy from Waste plants

Our achievements in local production and consumption of power
Hokutan region, Hyogo Prefecture ……………………… Starting in August 2016
Fujisawa, Kanagawa Prefecture ………………………… April 2017 to March 2021
Kizugawa, Kyoto Prefecture ……………………………… Starting in April 20182

Kasaoka, Okayama Prefecture ………………………… Starting in April 20193

Since delivering a bagasse ﬁred boiler (bagasse: ﬁber remaining after sugarcane is crushed) to a customer in Taiwan in 1949, we havedelivered more than 380 biomass boilers overseas, primarily to customers in Southeast Asia. Approximately 120 of those boilers weredelivered in Thailand, primarily to sugar mills, highlighting how we have contributed to the development of the country s sugar industry.
We have also delivered a total of 16 waste treatment plants to customers in Taiwan, China, South Korea, and the UK since delivering
our ﬁrst such plant overseas in the U.S. in 1986.

Market Environment

The need for decentralized energy as well as the local production and consumption of power is growing from the perspective ofsecuring energy supplies in times of emergency, utilizing energy eﬃciently, and revitalizing regions. We expect the importance of powerand energy services in the Group s business domain to grow in the future, for example in the development of the Regional Circular andEcological Sphere (Regional CES) in waste treatment and in regional-use power supplies in the FIT program.
Additionally, the level of need for renewable energy and CO 2-free power that have environmental value is growing from the perspectiveof reducing and eliminating dependence on carbon in business activities. The market is expected to grow further as society works torealize carbon neutrality by 2050.

43

Market Environment

Although we expect to continue to see a certain level of demand for bagasse-ﬁred biomass power plants in Thailand, competition with
Indian and Chinese manufacturers remains intense. At the same time, the Thai government has announced a policy of promoting biomass
power generation, and demand, including for biomass other than bagasse, is expected to grow.
On the other hand, Energy from Waste projects in the emerging nations of Southeast Asia are often derailed for reasons such as a lackof programs and standards related to waste treatment and insuﬃcient government funding, and a stable market has not yet developed.
That said, the level of need for waste-fueled power generation is rising signiﬁcantly due to population growth and urbanization, and we
expect the sector to remain a growth market over the medium and long term.

Initiatives

Strengthening conventional businesses
Expanding the scale of the business by enhancing products inareas such as renewable energy and CO 2-free power anddeveloping new sales channels

Responding to environmental changes
Examining expansion of our service menu to provide
the power demanded by communities and customers

In addition to working to expand our sales menu, for example with renewable energy power and CO 2-free power, we will seek to further
expand our business involving the local production and consumption of power through region-optimized schemes that maximize use ofenvironmental value and producing region value, with a focus on plants that Takuma has delivered. We will also work to expand our lineof services designed to resolve regional issues through partnerships with a variety of companies.

Materiality

Helping combat climate change
Strengthening relationships of trust with customers and communities

4

Initiatives

Strengthening conventional businesses
Ensuring a sustained ﬂow of orders for biomass power plants
Expanding the ﬂow of orders for maintenanceRealizing additional expansion in the local production andconsumption of power

47

Strengths

Pursuing partnerships and innovation

Responding to environmental changes
Capturing orders for Energy from Waste plants anddeveloping associated structures
Implementing global procurement

With regard to biomass power plants, we will strive to earn orders on an ongoing basis by both working to achieve further cost
reductions, such as by expanding the scope of overseas procurement, and by diﬀerentiating ourselves from Indian and Chinese
manufacturers, for example by enhancing maintenance services through our local subsidiary in Thailand.
With regard to Energy from Waste plants, we will put in place structures to secure orders, for example partnerships with local
companies, in an eﬀort to capture demand in the future, particularly in Thailand and Taiwan.

Materiality

Helping combat climate change

Strengthening relationships of trust with customers and communities

Conserving resources and protecting the environment

Pursuing partnerships and innovation

TAKUMA CSR Report 2021

48

Section 01

Growth Strategies

Business Strategies

Package Boiler Business

Equipment and Systems Business

Package Boiler Business

Equipment and Systems Business

1

1

Business SummaryGroup company Nippon Thermoener Co., Ltd., manufactures, sells, and maintains general-purpose boilers in addition to designing andbuilding related heat source equipment and systems for various types of manufacturing plants as well as hotels, hospitals, commercial
buildings, and other facilities.

Business SummaryGroup companies SUNPLANT Co., Ltd., and Dan-Takuma Technologies Inc. design and build various types of building equipment,
including air conditioning, water supply and drainage sanitation, and ﬁreﬁghting systems, and they manufacture, sell, and maintain equipment
for the semiconductor and electronic device industries, including clean rooms, chemical air ﬁlters, and magnetically shielded chambers.

Principle products

Principal products and services

Once-through Boilers (Equos)

Building equipment installation, chemical air ﬁlters,
environmental monitoring systems for use in clean rooms

Vacuum-type Hot Water Heaters (Vacotin Heater)
Heat-transfer Boilers (Thermoheater)
Flue and Smoke Tube Boilers (RE Boiler)
Hybrid Hot Water Systems, etc.

22Strengths

Over the many years since its establishment in 1961, Nippon Thermoener Co., Ltd., has supported consumer lifestyles as well as
industry by accumulating extensive experience in an array of package boilers, a type of boiler, which are used in a variety of industries
and applications. In an eﬀort to accommodate the changing times and environment as a manufacturer specializing in heat source
equipment, the company meets a diverse range of customer needs by developing new heat source systems such as hybrid hot water
systems based on the technological capabilities and expertise it has accumulated over its long history.

3

Market Environment

4

Initiatives

Strengthening conventional businesses
Maintaining and expanding the scale of orders in the existing
domestic general-purpose boiler market
Expanding our overseas businessResponding to environmental changes
Building and expanding a basis for proﬁt by developing
a new market for heating systems based on adecarbonized society

We will support consumer lifestyles as well as industry while working to maintain and expand the scale of orders received in the domestic
market by proposing optimal systems that meet individual customers needs based on our line of diverse products and to expand our overseas
business, particularly in Southeast Asia, where our Thai subsidiary is located. At the same time, we will help reduce greenhouse gases bypromoting energy-saving, high-eﬃciency systems.
Additionally, we will work to develop a new heat source equipment market that suits the characteristics of the decarbonized society of the future byoﬀering systems with greater energy-saving eﬀectiveness, for example hybrid hot water systems that combine heat pumps with vacuum-type hot water
heaters, and new heat source equipment that uses non-fossil energy sources, for example wood chip-fueled biomass boilers.

Materiality

49

SUNPLANT Co., Ltd., which operates a building equipment business, was established as a boiler installation company in 1941. After
entering the equipment construction business in 1965, the company began oﬀering a variety of building equipment for use in education
and research facilities, healthcare and social welfare facilities, commercial and cultural facilities, factories, railroad facilities, and othersites. In this way, it has supplied pleasant environments that are custom-made to suit a variety of applications and requirements based on
the technology and expertise it has accumulated over many years.
Since its establishment in 1969, Dan-Takuma Technologies Inc., which operates a semiconductor industry equipment business,
contributes to the development of the semiconductor and electronic device industries by supplying an array of clean technologies,
primarily to customers in the semiconductor industry, and by drawing on the high level of trust it has earned through its extensive trackrecord of deliveries to develop products that are customized in collaboration with customers.

3

Although the domestic general-purpose boiler market has matured and is on track to shrink over the medium and long term, the sector
remains broad in its reach. We expect a certain level of demand to continue for the time being, for example due to replacement demand.
Additionally, demand for energy-saving boilers is expected to increase overseas, particularly in emerging nations. Furthermore, eﬀorts todevelop boilers with additional energy savings and higher energy eﬃciency are expected to accelerate as part of the eﬀort to reduce andeliminate dependence on carbon, and over the long term, the ﬁeld is likely to transition to heat source equipment that uses non-fossil energy.

Helping combat climate change

Strengthening relationships of trust with customers and communities

Conserving resources and protecting the environment

Pursuing partnerships and innovation

Strengths

Market Environment

Although there are concerns that construction demand may be aﬀected by a temporary drop-oﬀ in private-sector investment due to theeﬀects of the COVID-19 pandemic, robust demand is expected to continue over the medium and long term thanks to the replacement
and repair of aging public facilities and the construction of new healthcare and social welfare facilities.
Additionally, the market for semiconductor manufacturing equipment is expanding thanks to rising semiconductor demand worldwide,
which is being fueled by the adoption of new technologies such as Artiﬁcial Intelligence (AI), the Internet of Things (IoT), and 5G̶allareas where there has been steady progress̶and by the trend towards digitalization. Going forward, markets serving the semiconductor
and electronic device industries are expected to grow over the medium and long term despite short-term ﬂuctuations.

4

Initiatives

Strengthening conventional businesses
Expanding the ﬂow of orders by improving sales andconstruction capability (equipment)

Responding to environmental changes
Improving functionality and expanding business
opportunities through alliances (systems)

Expanding market share by improving products
competitiveness (systems)

In the building equipment business, we will work to further strengthen our sales and installation capabilities by hiring, retaining, andtraining human resources, and we will strive to achieve steady growth in the scale of orders received by creating optimal environmentsthat are custom-made to suit a variety of applications and requirements.
For semiconductor manufacturing equipment, we will work to boost competitiveness by developing products that are customized incollaboration with customers and through joint research with universities, and we will strive to expand our business by supplying productsthat meet customer needs through a variety of alliances.

Materiality

Strengthening relationships of trust with customers and communities

Pursuing partnerships and innovation

TAKUMA CSR Report 2021

50

Section 01

Growth Strategies

Our Achievements

Main Recent Projects

Water Treatment Plants

This page introduces some of the main plants that Takuma supplied during FY2020 in the Domestic Environment and Energy Business.

Municipal Solid Waste Treatment Plants
New Construction
The Clean Plaza/
Regional Cleaning Union of thecity of Ota and three towns
Project name: Regional Cleaning Union of the city of Ota
and three towns Municipal Waste Treatment
Facility Construction and Operation Project
Location:
Gunma Prefecture
Capacity:
330 tons per day(165 tons per day × 2 units)
Power output: 9,700 kW

Tokyo Basin Sewerage Tamagawa Joryu
Water Reclamation Center
Project name: Tamagawa Joryu Water Reclamation Center Sludge Incineration
Facility Reconstruction Project
Location:
Tokyo
Capacity:
Sludge-fueled power generation system
Treatment capacity: 140 tons per day × 1 unit
Power output: 137 kW

Yahagi River Basin Sewerage
Yahagigawa Sewage Treatment Center
Project name: Yahagi River Basin Sewerage Water Treatment
Facility Equipment Project (No.1)
Location:
Aichi Prefecture
Capacity:
Moving-bed upﬂow continuous sand ﬁlter
Treatment volume: 20,000 m³ per day
Equipment speciﬁcations:
M60 × 6 units per pond, total of 2 ponds

Energy Plants
Miyazu-Yoza Clean Center
Project name: Miyazu-Yoza Wide-area Waste Treatment
Facility Development and Operation Project
Location:
Kyoto Prefecture
Capacity:
Waste incineration facility: 30 tons per day(30 tons per day × 1 unit)
Methane gasiﬁcation facility: 20.6 tons per day(20.6 tons per day × 1 system)
Recycling facility: 14.9 tons per day
Power output: 270 kW

Hikarigaoka Incineration Plant
Project name: Hikarigaoka Incineration Plant
Reconstruction Project
Location:
Tokyo
Capacity:
300 tons per day(150 tons per day × 2 units)
Power output: 9,150 kW

Eco Clean Center Nanetsu(No.1 Clean Center)
Project name: Nanetsu Seiso Kumiai(Sanitation Association)
New Waste Treatment Facility
Development and Operation Project
Location:
Fukui Prefecture
Capacity:
84 tons per day(42 tons per day × 2 units)
Power output: 1,470 kW

Primary Equipment Improvements

Tankou District Sanitation Center Incineration
Plant Waste Incineration Facility
Project name: Tankou District Sanitation Center Incineration
Plant Waste Incineration Facility Primary
Equipment Improvement Project
Location:
Iwate Prefecture
Capacity:
240 tons per day(120 tons per day × 2 units)
Power output: 1,990 kW

51

Clean OSHIMA
Project name:Clean OSHIMA Primary Equipment
Improvement Project
Location:
Hokkaido
Capacity:
126 tons per day(63 tons per day × 2 units)
Power output: 1,600 kW

Hitachiota City Clean Center
Project name:Hitachiota City Clean Center Primary
Equipment Improvement Project
Location:
Ibaraki Prefecture
Capacity:
100 tons per day(50 tons per day × 2 units)

Gifu Biomass Power Co., Ltd.
Project name: Power Plant No.2 Generation Equipment Installation Project
Location:
Gifu Prefecture
Capacity:
Fuel: Wood fuelSteam conditions (normal operation):
28 tons per hour × 5.98 MPaG × 465℃
Power output: 6,800 kW

Nihonkaisui Co., Ltd.
Project name: Ako Power Station No.2 Biomass
Power Generation Equipment Construction Project
Location:
Hyogo Prefecture
Capacity:
Fuel: PKS, Wood fuelSteam conditions (normal operation):
125 tons per hour × 6.0 MPaG × 460℃
Power output: 30,000 kW

TAKUMA CSR Report 2021

52

Features

02

Hikarigaoka Incineration Plant

The owner of the facility, Clean Authorityof Tokyo, is responsible for performingintermediate treatment of municipal waste inTokyo's 23 wards in a stable manner.
The newly completed Hikarigaoka
Incineration Plant is the result of demolishing
the former Hikarigaoka Incineration Plant,
which operated at the site until 2016, andbuilding a new plant in the same location.
Through this project, the outdated plant wasreborn as a state-of-the-art facility thatblends seamlessly into residents' lives while
contributing to stable waste treatment.

In 2021 in Tokyo's Nerima City, we completed
the next-generation, environmentally friendly

Hikarigaoka
Incineration Plant
Facility name: Hikarigaoka Incineration Plant
Incineration capacity: 300 tons per day (150 tons per day × 2 units)
Power generating equipment: Steam turbine generator (rated output: 9,150 kW)
Design and construction: Takuma-Konoike Special Construction Joint Venture
Construction period: June 28, 2016, to March 15, 2021

53

TAKUMA CSR Report 2021

54

A site surrounded by large apartment complexes
A construction process shaped by careful considerationof the impact on the neighboring area
Situated in the northern part of Tokyo's Nerima City,
Hikarigaoka Incineration Plant is surrounded by facilities
that are frequented by large numbers of residents,
including medium- and high-rise apartment complexes,
shopping centers, and Hikarigaoka Park, a municipal
park. In order to complete the rebuilding project in thislocation, it was necessary to give careful consideration to
the impact on the surrounding environment.
In demolishing the old plant, it was particularly
important to give adequate consideration to factors suchas noise and dust. To resolve these issues, we installed
an enormous, temporary tent that completely covered theold plant (measuring 121.5 meters by 78 meters in
footprint and 47 meters in height) that completely covered
the old plant. By incorporating soundproof sheets andsoundproof panels that provided dual functionality andkeeping the interior at negative pressure, the tent made it
possible for workers to do their jobs while minimizing theeﬀects of noise and dust on the neighboring area.

Former plant

construction and other workers at theconstruction site who worked diligently andclosely together, and also to the facility owneras well as the local residents for their kind
support and guidance. Going forward, myhope is that the facility will extend its roots
into the surrounding community while helping
residents enjoy a pleasant lifestyle.
Mr. Kenshin Nabeshima
Site Manager
KONOIKE CONSTRUCTION CO., LTD.

An exterior design that blends into
the surrounding environment
Because it is situated in the heart of a residential area,
the facility needed to incorporate a design that blends
into the surrounding environment by reducing theimposing appearance that such plants tend to produce.
By adopting an architectural structure that makes
extensive use of underground areas, we designed theplant so that buildings visible aboveground are shorter
than they were at the old plant.
Reﬂecting the need for the plant's color to give asense of cleanliness, we chose a cream color that
harmonizes with the surrounding residential areas for thebuilding and the same white color that was used at theold plant for the stack so that the facility would oﬀer thesame appearance as a landmark even as it blends into
the area.

55

Induced draft fan

Tour route

Solar panels

After being completely
covered with the tent

Message from our partner company
In June 2016, we began demolishing theformer plant building inside a large tent that
set a Guinness world record. Construction of
the new plant began in earnest in March2018. As a result of addressing various
issues in a forward-looking manner with plant
construction personnel and aligning oureﬀorts so that we could pursue a uniﬁed
approach, we were able to complete theproject without incident. I would like toexpress my thanks to everyone who wasinvolved, including the more than 130,000

Steam turbine

Maximizing surplus power andhelping prevent global warming
The facility's steam turbine generator operates athigher eﬃciency than did the former plant's, allowing it
to make eﬀective use of the energy contained inwaste.
Additionally, we took steps to reduce power
consumption by the plant's equipment, for example byusing high-eﬃciency compressors and implementing
inverter control for the plant's major fans and pumps.
Furthermore, we installed a circulating gas system* forthe incinerators to reduce emissions, decrease fan
power consumption, and reduce environmental
impacts.
We also worked to lower energy use by building

equipment, for example by using high-eﬃciency
hardware and LED lighting and otherwise greenifying
the building.
As another initiative, we installed solar panels andskylights so that the facility can make eﬀective use ofnatural energy.
In this way, the new facility combines high-eﬃciency
power generation with energy-saving measures tomaximize the surplus power that can be obtained by
its waste-to-energy power generation process.

* Combustion technology for drawing in combustion gas above theburn-out grate, where the oxygen concentration is comparatively highinside the furnace, and blowing it as circulating gas into theincinerator. In this way, the technology fosters complete combustion
while limiting generation of nitrogen oxides with less combustion air.

Message from the construction coordinator

Completing a landmark in Hikarigaoka whileaccommodating changes in the social landscape
The Hikarigaoka Incineration Plant
Reconstruction Project, which had a total
construction period of 57 months and aconstruction site located in a dense urban area,
unfolded successfully against the backdrop of avariety of changes in the social landscape,including soaring material and labor costs due tothe economic boom fueled by the Olympics,
ongoing workstyle reforms, and the COVID-19
pandemic.

This success was entirely the result of theunderstanding exhibited by the owner and by
residents of the surrounding area, and I would liketo express my thanks to them. My hope is thatthe plant will inspire aﬀection as a new
Hikarigaoka landmark.
Hideaki Kotani
Site Manager, Hikarigaoka Construction Site
Takuma Co., Ltd.
(Current Position: General Manager, Safety Control Dept.)

TAKUMA CSR Report 2021

56

Section 02

ESG
Initiatives

57

Environmental Initiatives

59

Social Initiatives

65

Governance Initiatives

73
TAKUMA CSR Report 2021

58

Section 02

ESG Initiatives

Environmental Initiatives

Environmental Initiatives

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

TAKUMA Environmental Policy

Initiatives through our Energy Plant Business

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

Contributing to society through business activities

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

Environmental
Philosophy

Helping combat climate change

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

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

Reducing CO₂ emissions
through carbon neutrality

Alleviating climate change andrealizing a decarbonized society

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

1

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

2

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

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

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

Approx. 500,000
tons per year!

CO₂

Reduction in CO₂ emissions
from biomass power plants
delivered by Takuma

Approx. 3.5 million
tons per year!

59

Realizing stable, long-term operation of energy plants

Making eﬀective use of unutilized resources

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

3

Initiatives to create a regional Sound Material-Cycle Society

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

Wood chips

Bark

Wood pellets

BagasseLivestock(poultry) manure

Rice husks

PKS

Corn residue
and other resources

Japan
Electric Power
Exchange(JEPX)

Power
purchases

Powerpurchases

Power sources

Takuma EnergyCo., Ltd.
Power supply

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

TAKUMA CSR Report 2021

60

Section 02

ESG Initiatives

Environmental Initiatives

Conserving resources and protecting the environment

Conserving resources and protecting the environment

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

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

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

Denitration
agent

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

Initial settling pond
SewageintakeReaction tank

Final settling pond

Sand ﬁlter

Pre-processing
equipment

Discharge

Flue gas
Anaerobictank

Bag ﬁlter

Waste pit

Anoxictank

Bio Blade
Mix

Anoxictank

Disinfection tank

Aerobictank

ExcesssludgeIncinerator

Crude
sludgeMunicipal
solid waste

Hydratedlime

Advanced treatment facilities

Reaction tank facilities

Aeration panel
Aerobic tank

Drawn-oﬀ sludge

Bottom ash(to be recycled)

1

2

Resource conservation initiatives

Induced draft fan

Fly ash(to be recycled)

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

Environmental protection initiatives

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

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

High-performance stoker furnace

Advanced combustion system

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

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

100%

Moisture content

Municipal
solid waste

Maintenance ofstable combustion

Laser analytical
instruments

Bag ﬁlter

Ash content
DryingCombustion

BoilerBurn-out

Proactive
combustion control

Reduction in
unburnt content

Stack

Incinerator

Automatic
combustion control
Waste supply volume

Combustion system

Bottom ash

Combustion air volume Flue gas recirculation system

Denitration system using urea decomposition equipment

Fly ash circulation system

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

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

Reduced use of chemical agentsAmmonia sprayed into furnace
Fan

Chemical agents

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

Flue gas
To stack
Bag ﬁlter

Purchase and storage of urea
Urea
storage tank61

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

Digester tanks

Sludge treatment

Generator

Sludge-fueled power
generation facility

Return water

1

Upﬂow moving-bed sand ﬁltration system

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

2

Upﬂow moving-bed
sand ﬁltration system

Step grate stoker type sewage sludge incineration and power generation system

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

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

Incinerator
Pump

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

Processing ﬂow in water treatment plant equipment at a sewage facility

Reduced NOx, CO, and dioxin emissions

Combustible content

0%Incinerator
Separator liquid treatment

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

Combustion air fan

TAKUMA CSR Report 2021

62

Section 02

ESG Initiatives

Environmental Initiatives

Environmental reporting

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

2016

2017

2018

2019

2020

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

2016

2017

2018

2019

2020

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

Emissions (tons per year)

0.43

0.45

0.27

0.08

0.00

Emissions (tons per year)

0.14

0.96

0.98

1.34

1.41

Toluene (CAS No.108-88-3)

Xylene (CAS No.1330-20-7)

FY

2016

2017

2018

2019

2020

FY

2016

2017

2018

2019

2020

Emissions (tons per year)

0.09

0.07

0.06

0.09

0.07

Emissions (tons per year)

2.85

1.18

1.12

1.47

1.54

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

Environmental data (non-consolidated)
Total energy input volume

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

90,000

Environmental accounting

4,500

60,00047,78945,04144,40647,902

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

3,000

50,92730,000

1,911

1,795

1,758

2016

2017

2018

1,914

2,032

2019

2020

1,500

0

2016

2017

2018

2019

2020

(FY)

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

0

Total production of waste, etc.

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

1,200

(FY)

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

Resource circulation costs

400

250

2016

364

334
83
2017

193
104
2018

25,3402019

23,40625,39025,17625,258

113
2020

(FY)

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

0

2016

2017

2018

2019

2020

(FY)

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

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

63

Investment(thousand JPY)

Costs
(thousand JPY)

3,291

21,904

21,33922,724-

16,984-

26,17042,4201,607,800

Social activity costs-

10,442

Total

67,0501,706,024

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

20,000314
120

R&D costs

40,000

558

507

471

125
0

Administration costs
731

Environmental conservation eﬀect

Business area costs

Global environmental
conservation costs

60,000432

Item

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

Environmental conservation cost

Item

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

100,973

103,839

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

4,273

4,422

Total waste emissions volume (tons)

1,047

1,209

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

155

164

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

Economic beneﬁts of environmental conservation measures
Breakdown of
beneﬁts

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

7,110

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

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

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

TAKUMA CSR Report 2021

64

Section 02

ESG Initiatives

Social Initiatives

Strengthening Relationships of Trust with
Customers and Communities

Participation in the Community

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

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

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

1

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

Quality Policy

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

Manufacturing products that result in customer satisfaction

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

2

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

Priority items

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

3

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

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

operational skills (once a year)

Affairs Association: Suwa Lakeside Clean Center

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

65(Points) ■Number of surveys
100
85.5

85.9

(Surveys)
40●Average score

85.8

87.7

88.2

86.8

85.6

86.3

86.1

EcoPon News

88.4
1

30

80

1

2

2

3

3
4

4
5
5

6

6

7

7
8

8

9

9
10

20

60

10

40

18

25

27

23

19

27

27

28

36

2011

2012

2013

2014

2015

2016

2017

2018

2019

22
2020 (FY)

10

11

11
12

12

13

Original-design mask

13

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

Questionnaire average score (out of 10 0 possible points)

TAKUMA CSR Report 2021

66

Section 02

ESG Initiatives

Social Initiatives

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

1

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

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

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

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

Topics
Initiatives at Imabari City Waste Management Center

Increases in the added value of facilities and plants

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

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

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

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

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

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

67

Initiatives to contribute to the maintenance and expansion of existing businesses

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

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

2

Enhancement of resources and creation of synergies

Initiatives to create new businesses by promoting open innovation

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

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

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

TAKUMA CSR Report 2021

68

Section 02

ESG Initiatives

Social Initiatives

Promoting Activities of Human Resources

Initiatives related to human resources development

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

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

New-employee training
Presentation by
10-year employees

Mid-career training

Thesis discussion by
5-year employees

Management training

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

2● Takuma Group Ethics Charter (excerpt)

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

Promoting diversity

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

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

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

Employee data
Number of employees

894(Including 819 men and 75 women)

Average age

43.1

Average years of service

15.3

Attrition rate

5.5% (past 3 years)

3*As of March 31, 2021

1

Securing and training human resources

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

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

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

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

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

Initiatives to support career development

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

69

Improving employee satisfaction

FY2021FY2016FY2017FY2018FY2019FY2020New hires

18（1）

24（2）

21（2）

20（2）

25（3）

26（2）

Mid-career hires

11（1）

10（0）

22（1）

25（1）

37（2）

-

Total

29（2）

34（2）

43（3）

45（3）

62（5）

26（2）

*New hires only

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

TAKUMA CSR Report 2021

70

Section 02

ESG Initiatives

Social Initiatives

Ensuring Safety and Health

3

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

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

●April 2004 to

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

March 2021

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

4

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

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

during FY2020

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

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

Safety inspection system

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

Internal presentation ofa zero-accident record award

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

Safety patrols and safety lectures

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

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

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

10

9

5

0.79
0.03

1.76
0.06

Accident severity rate
0.87
2.16

7

5
3

2016

2017

2018

2.0
1.5
1.0

3
0

2.5

1.62
0.03

0.5

2019

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

× 1,000,000

Year
Takuma's accident frequency
rate and severity rate

A safety inspection meeting

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

2

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

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

Safety and health activities and their results
1

Safety and health education (education for construction site representatives)

Accident
Accident
frequency rate severity rate

2016

0.64

0.11

2017

0.81

0.18

2018

1.09

0.30

2019

1.69

0.29

2020

1.30

0.24

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

Managing employee health● Number of safety patrols implemented in FY2020

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

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

110

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

71

Safety patrols

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

TAKUMA CSR Report 2021

72

Section 02

ESG Initiatives

Governance Initiatives

Strengthening Corporate Governance6

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

Corporate governance structures
1

Takuma's governance structures

We have put in place the following governance structures:

Reporting

Audit &
Supervisory
Committee'sOﬃce

Cooperation
Assistance

Reporting andstatement of views

Audit &
Supervisory
Committee

Appointment
and Dismissal

Auditing

Variouscommittees

Compliance & CSR
Promotion DivisionInternal auditing

Auditing
Cooperation

Nominating &Compensation
Advisory
Committee
Consultations

Reporting

Supervision

ReportingBoard ofDirectors

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

Representative
Director

Committee of
ExecutiveOﬃcersInternal Audit
Department

Internal
auditing

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

Board of Directors

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

4

Executive Oﬃcers

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

5

Audit & Supervisory Committee

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

73

7

Nominating & Compensation Advisory Committee

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

Appointment and dismissal criteria for directors and executive oﬃcers
1

Policy on the appointment and dismissal of executives

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

Observing andguidance

Reporting

Recommendations

Appointment and Dismissal

Education, instructions, and reporting
Reporting

Divisions and Centers

Auditing of accounts

Accounting
Auditors*As of June 25, 2021

ReportingAppointment
and Dismissal

ReportingGeneral Meeting of Shareholders

Reporting3

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

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

2

Audit & Supervisory Committee's Oﬃce

2

Procedures for appointing and dismissing executives

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

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

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

TAKUMA CSR Report 2021

74

Section 02

ESG Initiatives

Governance Initiatives

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

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

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

2

Method for formulating policies for determining of compensation and other remuneration

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

3

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

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

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

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

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

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

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

196

40

45

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

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

Internal control

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

75

6
7（6）

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

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

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

TAKUMA CSR Report 2021

76

Section 02

ESG Initiatives

Governance Initiatives

Executive Proﬁles*As of June 25, 2021

Directors

President and Representative Director & Chief Executive Oﬃcer

Director & Senior Managing Executive Oﬃcer

Director (Audit & Supervisory Committee Member)

Outside Director (Audit & Supervisory Committee Member)

Hiroaki Nanjo

Tsuyohito Nishiyama

Keizo Masugi

Osamu Iwahashi

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

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

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

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

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

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

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

Director & Senior Managing Executive Oﬃcer

Director & Managing Executive Oﬃcer

Outside Director (Audit & Supervisory Committee Member)

Outside Director (Audit & Supervisory Committee Member)

Hideki Takeguchi

Koji Tanaka

Tomomi Fujita

Yoshiaki Ito

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

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

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

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

Director & Executive Oﬃcer

Director & Executive Oﬃcer

Outside Director (Audit & Supervisory Committee Member)

Kunio Hamada

Hiroshi Oishi

Tetsuya Kaneko

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

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

77

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

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

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

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

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

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

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

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

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

Executive Oﬃcers

Ryoji Tani

Norito Uchiyama

Managing Executive Oﬃcer
Executive Manager,
Construction Center

Managing Executive Oﬃcer
Executive Manager,
Engineering Center

Mitsuaki Adachi

Akira Taguchi

Managing Executive Oﬃcer
Executive Manager,
Energy Plant Div.

Managing Executive Oﬃcer
Executive Manager,
Technology Center

Hidetoshi Tomita

Norio Maeda

Executive Oﬃcer
Executive Manager,
Environmental Plant Div.

Executive Oﬃcer
Executive Manager,
Project Center

Keiji Nakamura

Yasushi Enomoto

Executive Oﬃcer
Deputy Executive Manager,
Construction Center

Executive Oﬃcer
Executive Manager,
Compliance & CSR Promotion Div.

Kiyoshi Shibata
Executive Oﬃcer
Deputy Executive Manager,
Engineering Center

TAKUMA CSR Report 2021

78

Section 02

ESG Initiatives

Governance Initiatives

Messages from Outside Directors

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

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

Osamu Iwahashi

Yoshiaki Ito

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

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

Tomomi Fujita

Tetsuya Kaneko

Outside Director (Audit & Supervisory Committee Member)

Outside Director (Audit & Supervisory Committee Member)

79

Outside Director (Audit & Supervisory Committee Member)

Outside Director (Audit & Supervisory Committee Member)

TAKUMA CSR Report 2021

80

Section 02

ESG Initiatives

Governance Initiatives

Strengthening risk management

Fair business practices

Risk management structure

Compliance measures

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

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

Risk Management Policy[Basic purpose of risk management]

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

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

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

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

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

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

October 28, 2020

Lecture theme

Promoting ESG management

Lecturer

KPMG AZSA Sustainability Co., Ltd.

4

Number of participating departments:

45
4,453

Internal reporting system

Compliance & CSR promotion structure81

Number of sessions per year:

Total number of attendees:

Ensuring compliance

Board of Directors

President

Committee of Executive Oﬃcers

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

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

Takuma Group

Secretariat (CSR Department)

Coordinating Committee for Compliance & CSR Promotion

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

Date

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

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

CSR lecture for executives

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

Internal reporting process

Persons seeking consultation or making reports
Response

Consultation
or report

Compliance &CSR Promotion
Division

Audit &
Supervisory
Committee

Law
oﬃce

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

Cooperation

Internal investigation departments

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

TAKUMA CSR Report 2021

82

Section 03

Corporate
Information

83

Financial Data

85

Stock Information

87

Company Outline

89
TAKUMA CSR Report 2021

84

Section 03

1

Financial Data

Value of orders received

2(Millions of yen)

Corporate Information

Order backlog(Millions of yen)

300,000

600,000

Trend in principal management indicators and other ﬁnancial data
200,000

Fiscal year

113 th112 th114 th115 th116 th191,026

117

th

117th

（Millions of yen） （Millions of yen） （Millions of yen） （Millions of yen） （Millions of yen） （Millions of yen）

188,563

177,116 179,829

330,939

148,830（Thousands of
U.S. dollars）

End of ﬁscal year

March 2016

March 2017

March 2018

March 2019

March 2020

March 2021

March 2021

Value of orders received¥ 99,919¥ 191,026¥ 177,116¥ 179,829¥ 148,830¥ 188,563$ 1,703,224

Order backlog¥ 139,425¥ 214,142¥ 273,060¥ 330,939¥ 345,315¥ 387,152$ 3,497,000

99,919100,000

0

2015

Net sales¥ 113,088¥ 116,309¥ 118,199¥ 121,951¥ 134,454¥ 146,727

Operating income

¥

9,189

¥ 10,974¥ 10,030¥ 11,604

¥

9,600

¥

10,474$

94,601

Ordinary proﬁt

¥

9,646

¥ 11,606¥ 10,670¥ 12,334¥ 10,301¥

11,029$99,618Proﬁt attributable toowners of parent

¥

7,817

¥

¥

¥

¥

¥

7,529

$

68,009Comprehensive income

¥

7,149

¥

9,937

7,847

¥ 10,177

¥

8,854
7,325

¥

7,445
5,881

¥

8,345

214,142200,000

2016

2017

2018

2019

345,315

273,060

139,425

0

2020

Fiscal year

8,551

387,152

400,000

2015

2016

2017

2018

2019

2020

Fiscal year

$ 1,325,326$

3

Net sales

4(Millions of yen)

(Millions of yen)

200,000

20,00075,376

Capital investment

¥

1,089

¥

342

¥

505

¥

638

¥

1,564

¥

2,420

$

21,861

Depreciation

¥

840

¥

850

¥

789

¥

797

¥

917

¥

1,036

$

9,358

R&D expenditures

¥

743

¥

972

¥

928

¥

960

¥

1,154

¥

1,047

$

9,457

Ordinary proﬁt

113,088 116,309

118,199 121,951

134,454

146,727
11,606

100,000

9,646

10,000

0

2015

2016

2017

2018

2019

2020

0

2015

2016

12,334
10,6702017

10,301

20182019

11,0292020

Net assets¥ 58,809¥ 67,727¥ 76,726¥ 83,088¥ 85,040¥

Total assets¥ 132,614¥ 140,201¥ 151,489¥ 155,989¥ 163,498¥ 177,742$ 1,605,471

Net assets per share(JPY or USD)

¥ 708.18¥ 815.77¥ 924.25¥ 1,000.34¥ 1,043.15¥ 1,109.87

$

10.03

Net income per share(JPY or USD)

¥

94.55

¥ 103.43¥

94.93¥ 107.10

¥

90.36

¥

92.73

$

0.84

Cash dividends(JPY or USD)

¥

11.00

¥

¥

16.00

¥

¥

31.00

¥

36.00

$

0.33

Domestic Environment andEnergy Business

160,591

120,771

11,475377,143

Overseas Environment andEnergy Business

883

1,189

(141)

427

Package Boiler Business

17,524

16,932641

4,521

Equipment and Systems Business

10,166

8,271

877

5,348

189,165

147,163

12,852

387,441

(601)

(436)

(2,378)(288)

188,563

146,727

10,474

387,152

90,555$

817,950

Fiscal year

Fiscal year

Trend by segment (FY2020)(Millions of yen)

13.00

22.00

Diluted net income pershare(JPY or USD)

―

―

―

―

―

―

―

Capital adequacy ratio(%)

44.1

48.1

50.4

53.0

51.8

50.7

50.7

Return on equity(%)

14.1

13.6

10.9

11.1

8.9

8.6

8.6

Price-to-earnings ratio

10.7

10.5

12.3

12.3

13.3

25.8

25.8

Segment

Sub-total

Cash ﬂows fromoperating activities

¥

6,728

¥

9,590

¥

5,141

¥ 10,817¥ (11,733)¥ (1,680)$(15,183)

Cash ﬂows frominvesting activities

¥

(445)

¥

143

¥

(328)

¥ (1,382)

¥

(202)

¥ (2,053)$(18,550)

Cash ﬂows fromﬁnancing activities¥ (2,900)¥ (1,787)¥ (1,670)¥ (9,120)¥ (4,350)

¥

1,903

$

17,193End-of-year balance of
cash and cash equivalents¥ 48,335¥ 57,132¥ 60,283¥ 61,027¥ 44,753¥

42,957$

388,023

Number of employees

3,366

3,447

3,609

3,619

3,816

Adjustment

3,925

Total

Value of orders
received

Net sales

Operating income

Order backlog

3,925

Note: 1. U.S. dollar amounts are shown solely for the convenience of readers and are translated at the rate of ¥110.71 to U.S.$1.00, the exchange rate prevailing at March 31, 2021.
2. Ordinary income is a measure of accounting proﬁt that equals operating income plus other income minus other expenses, except for extraordinary items under Japanese
GAAP.

85

TAKUMA CSR Report 2021

86

Section 03

Corporate Information

Major shareholders (top 10) (as of March 31, 2021)

Stock Information
Shareholder

Number of shares

Basic share information (as of March 31, 2021)
The Master Trust Bank of Japan, Ltd. (Trust Account)

8,445,000

10.4

Custody Bank of Japan, Ltd. (Trust Account)

5,919,000

7.3

4,022,000

5.0

Nippon Life Insurance Company

3,593,000

4.4

HIKARI TSUSHIN, INC.

3,091,000

3.8

JP MORGAN CHASE BANK 380072

2,120,000

2.6

JP MORGAN CHASE BANK 385632

1,796,000

2.2

TAKUMA CO., LTD. Kyoueikai

1,785,000

2.2

If it is not possible to publish electronic notices due to an accident orother unforeseen circumstance, public notices will be publishedin the Nihon Keizai Shimbun.

Sumitomo Mitsui Banking Corporation

1,621,000

2.0Tokyo Stock Exchange (stock code: 6013)

CEP UK-THREADNEEDLE INVESTMENT

1,520,000

1.9

Business year

April 1 to March 31

Annual General Meeting of Shareholders

June

Record date

Shareholding
ratio (%)

Mizuho Trust & Banking Co., Ltd.

Voting rights at the Annual General Meeting of Shareholders: March 31(Retirement Beneﬁts Trust, Mizuho Bank, Ltd. Account)

Distribution of surplus:

Custody Bank of Japan, Ltd. (Re-entrustment)

Year-end dividend: March 31
Interim dividend: September 30

Shareholder registry andspecial account administrator

Mizuho Trust & Banking Co., Ltd.
Stock Transfer Agency Department, Mizuho Trust & Banking Co., Ltd.
2-8-4 Izumi, Suginami-ku, Tokyo 168-8507

Contact information

Toll-free (within Japan) : 0120-288-324
Electronic notices (published on the company's website(https://www.takuma.co.jp/english/)
Method of public notice

Listed stock exchange

FUNDS ICVC-JAPAN FUND
Share unit

100

Total number of authorized shares

321,840,000

Total number of issued shares

83,000,000

Number of shareholders

6,335

Notes 1. As of March 31, 2021, Takuma held 1,780,000 shares of treasury stock. Those shares were excluded when calculating the shareholding ratio for major shareholders as listed above.
2. Shareholding ratio ﬁgures do not include treasury stock (1,780,000 shares).

Share price
（Yen）

3,000

Shareholder distribution (as of March 31, 2021)■Distribution byshareholder type■Individuals, others
6,985,000 shares

8.4%

2,500

■Treasury stock
1,780,000 shares

2,000

2.2 %
1,500

■Corporations in Japan
15,435,000 shares

18.6 %■Financial institutions andstock brokerages
35,123,000 shares

42.3%

1,000

500

■Foreign individuals
23,674,000 shares

28.5%

87

0
113th

114th

115th

116th

117th

TAKUMA CSR Report 2021

88

Section 03

The Takuma Group Network (as of June 25, 2021)

Company Outline

Name

Head oﬃce location

See Takuma's website for details.

Group companies overseas

Takuma's business oﬃces

Company Outline
TAKUMA CO., LTD.
2-2-33 Kinrakuji-cho, Amagasaki, Hyogo 660-0806, Japan
TEL +81-6-6483-2609 / FAX +81-6-6483-2751 (operator)❶Head Oﬃce (Amagasaki, Hyogo)⓰Anan High Trust Co., Ltd.

❶Taiden Environtech Co., Ltd.

❷Osaka Oﬃce (Osaka)⓱Takuma Energy Co., Ltd.

❷Siam Takuma Co., Ltd.

❸Tokyo Branch (Minato-ku, Tokyo)⓲Kurume High Trust Co., Ltd.

❹Hokkaido Branch (Sapporo, Hokkaido)⓳Hokutan High Trust Co., Ltd.

❺Tohoku Branch (Sendai, Miyagi)⓴Suwako High Trust Co., Ltd.

❻Chubu Branch (Nagoya, Aichi)

Imabari High Trust Co., Ltd.

❼Kyushu Branch (Fukuoka)

Energy Mate Co., Ltd.

❽Okinawa Branch (Ginowan, Okinawa)

Representative Director

Hiroaki Nanjo, President and CEO

Established

June 10, 1938

CapitalJPY 13,367,457,968 (as of March 31, 2021)

Main businesses

The design, construction and superintendence of a wide variety of boilers, plant machinery,pollution prevention plants, environmental equipment plants, and heating andcooling equipment and feed-water / drainage sanitation equipment and facilities
The design, construction and superintendence of civil, architecture and other works

Corporate Information❾

Kashihara High Trust Co., Ltd. ❹❸❹❾Harima Factory (Takasago, Hyogo)

Techno Links Inc.

❿Taipei Branch (Taipei, Taiwan)

Tochigi High Trust Co., Ltd.
Ecos Yonezawa Co., Ltd.

Group companies in Japan❶Nippon Thermoener Co., Ltd.

⓮

❷Takuma Technos Co., Ltd.
❸Hokkaido Sanitary Maintenance Co., Ltd.
❹Takuma Technos Hokkaido Co., Ltd.

❺

❺Sunplant Co., Ltd.

❽

❻Takuma Engineering Co., Ltd.
❼Takuma System Control Co., Ltd.

Number of employees(non-consolidated)

894 (as of March 31, 2021)

Number of employees(consolidated)

3,925 (as of March 31, 2021)⓴❽Dan-Takuma Technologies Inc.
❾Kyoritsu Setsubi Co., Ltd.
❿Kankyo Sol-Tech Co., Ltd.
⓫Takuma Plant Co., Ltd.

❻❼⓲⓬Nagaizumi High Trust Co., Ltd.

Permits and registrations⓭Fujisawa High Trust Co., Ltd.
⓮Iwate-Kenpoku Clean Co., Ltd.
⓯Hitachinaka-Tokai High Trust Co., Ltd.

Head Oﬃce, branch oﬃces, and other business oﬃces⓳

Construction license (Minister of Land, Infrastructure, Transport and Tourism license, Special 2-6129) / Construction
consultant registration (Minister of Land, Infrastructure, Transport and Tourism registration, Construction 01-10202) /First-class architect oﬃce registration (01A02903) / ISO 9001 quality management system certiﬁcation❿❶

Harima Factory
ISO 9001 quality management system certiﬁcation / ISO 14001
environmental management systems certiﬁcation / Manufacture ofthermal equipment for power generation (Ministry of Economy, Tradeand Industry) / Permission to manufacture boilers and pressure
vessels, permission to manufacture cranes (Ministry of Health,Labour and Welfare) / Manufacture of speciﬁc high-pressure gas
facilities (Ministry of Economy, Trade and Industry)

TakumaCSR Report 2020
Questionnaire
Survey Results
Survey period:
July 2020 to June 2021
Number of respondents:
1137

89

I basicallyunderstood.
57%

I could not understand.
0%

I understood.
42%

❷

❷❸ ❺

❶❻❼⓫⓱

ISO 9001

Q1 Did you understand the activities of our company?

I could notunderstandvery well.
1%

⓯

❾❿

JQA-1952
ISO 9001 certiﬁcation
Head Oﬃce, Osaka Oﬃce,
Tokyo Branch, Chubu
Branch, Kyushu Branch,
Hokkaido Branch andHarima Factory❽ ❶❷ISO 14001

JQA-EM0313
ISO 14001
certiﬁcation
Harima Factory⓬⓰

Q2 What is your level of satisfaction
regarding this Report?
▌Volume of information

Somewhat insuﬃcient
1%
Entirely
insuﬃcient0%

Too much3%
Somewhatexcessive
21%

Satisﬁed75%⓭

Q3 Which items were you interested in?
(Select up to three, top ﬁve responses.)▌Design▌Quality of information▌Readability

Poor 0%、Very bad 0%

Unsatisfactory 0%

Diﬃcult toread 0%
Average
21%

Average
13%

Average16%
Mostlysatisﬁed
28%

Satisﬁed
56%

Mostlysatisﬁed
36%

Somewhat
unsatisfactory1%

Satisﬁed
50%

Mostlysatisﬁed
35%

Somewhatdiﬃcult
to read2%
Satisﬁed
42%

Message from Top Management 54%
Introduction to Group40%
Company Businesses
Takuma Group 12th Medium-Term
38%
Management Plan̶An Overview
The Environment 21%
CSR Activities for the Future 19%
0

10

20

30

40

50

60

TAKUMA CSR Report 202190

2-2-33 Kinrakuji-cho, Amagasaki, Hyogo, 660-0806, Japan
Website: https://www.takuma.co.jp/english/

This publication features an environmentally friendly designthat is made possible by the following initiatives and programs:■PrintingPrinted using waterlessprinting , which does not
generate hazardous waste.

■PaperPrinted using environmentallyfriendly ink.

Printed on FSC™-certiﬁedpaper (made from trees from
responsibly managed forests).

Printed on paper made with woodfrom forest thinning. Morino
Chonai-Kai (Forest Neighborhood
Association)- Supporting soundforest management.