INTEGRATED REPORT

2020

Securities code: 9042

Profile

Group Management Philosophy
MissionWhat we try to achieve

By delivering "Safety and Comfort" and"Dreams and Excitement," we create satisfaction
among our customers and contribute to society.
ValuesWhat is important to us■ Customers First■ Sincerity

Everything we do is for the customer.
That's where it all starts.

Gain customers' confidence byalways being sincere.

■ Foresight & Creativity■ Respect for People

With our pioneer spirit and flexible
thinking, we create a new value.

Everyone is absolutely
invaluable to the Group.

Principles

How to act to uphold our values and fulfil our mission
1. We treasure encounters with people, and do our best in the position of a customer.
2. We abide by the laws and regulations, and act with a clear awareness of our social
responsibilities.
3. We take pride and responsibility in our work, and carry it out promptly.
4. We are not concerned with what is just before us, but think from medium- andlong-term perspectives.
5. We are not satisfied with present conditions, but fix our eyes on the future and act.
6. We have caring feelings and respect each other.
7. We communicate in a lively way and create a workplace with a positive atmosphere.
8. We cooperate with one another for the prosperity of the Group.

Editorial Policy
This integrated report, in addition to a review of fiscal 2020, also
describes the management policies and ESG-related initiatives ofHankyu Hanshin Holdings, Inc. It is intended to aid all those who read it,
beginning with our shareholders and investors, in gaining a deep
understanding of our Company.
Definition of the areas served by the Hankyu and Hanshin lines:
Below are lists of areas with Hankyu Corporation and Hanshin Electric
Railway stations (including tier 2 railway operators).
Osaka Prefecture: Osaka City (Fukushima, Konohana, Nishi, Naniwa,
Nishi-Yodogawa, Higashi-Yodogawa, Yodogawa, Kita,
and Chuo, out of a total of 24 wards); and Toyonaka,
Ikeda, Suita, Takatsuki, Ibaraki, Minoh, and Settsu
cities and Shimamoto town
Hyogo Prefecture: Kobe City (Higashi-Nada, Nada, Hyogo, Nagata, andChuo, out of a total of 9 wards); and Amagasaki,
Nishinomiya, Ashiya, Itami, Takarazuka and
Kawanishi cities
Kyoto Prefecture: Kyoto City (Nakagyo, Shimogyo, Ukyo, and Nishikyo,
out of a total of 11 wards); and Muko andNagaokakyo cities and Oyamazaki town

1

Hankyu Hanshin Holdings Integrated Report 2020

Period under Review

This integrated report is based on the fiscal year 2020 (April 2019‒March 2020),
however it also includes information pertaining to activities before and after thisperiod.

Forward-Looking Statements

The reader is advised that this integrated report contains forward-looking
statements regarding the future plans, strategies, and earnings performance ofHankyu Hanshin Holdings, Inc., which are not statements of historical fact but
constitute estimates or projections based on facts known to the Company's
management as of September 2020. Actual results may be influenced by various
business risks and uncertainties, and differ substantially from such statements.

About the Compilation of this Integrated Report and the Auditing
Company Used
The financial section of this integrated report includes a digest of information
including consolidated financial statements in the Company's Securities Reportfor the 182nd period, audited by KPMG AZSA LLC and presented in a somewhat
modified format. We have presented this information in such a way as to ensurethat there is no discrepancy with the data presented in the annual securities
report. However, the integrated report itself has not been audited by KPMG
AZSA LLC.

Contents
chapter

ProfilechapterGroup Management Philosophy

3

Business Overview

5Service Area

7

Financial Highlights / Non-Financial Highlights

02

Messages fromthe Top Management

9

Message from the Chairman

11

Message from the President

chapter

03

Creating Real Value:
Our Story

Growth Trajectory

17

Creating Real Value: Our Story

Special Discussion

The Aspiration and Passion Behindthe Hankyu Hanshin Holdings Group
Sustainability Declaration

43

Sustainability Declaration

47

Special Discussion: Ms. Mari Yoshitaka and56

G Priority Issue 6 Robust governance

Chairman Kazuo Sumi
63
65

Carefully Nurtured Strengths
21

Value Creation Process23

Summary of Long-Term Management Vision
and Medium-Term Management Plan

25

Project Progress

27

COVID-19: Its Impact and Our Response

04

P47

Directors and Audit &Supervisory Committee Members

15

chapter

ESG Initiatives

Special Feature1

chapter

05

Profile01

Business Strategies

S Priority Issue 1 Safe, reliable infrastructure

69

Priority Issue 2

Thriving communities

71

Priority Issue 3Life designs for tomorrow

73

Priority Issue 4

Empowering individuals

Priority Issue 5

Environmental protection

76E

chapter

06

Financial Section
and Corporate Data

79

Consolidated Six-Year Summary

80

Consolidated Financial Review

84

Business Risks

86

Consolidated Balance Sheets

88

Consolidated Statements of Income /29

Urban Transportation

31

Real Estate

33Entertainment

89

Consolidated Statements of Changes in Net Assets

35

Information and Communication Technology

91

Consolidated Statements of Cash Flows37

Travel92

Notes to the Consolidated Financial Statements

39

International Transportation

117

Major Group Companies

41

Hotels118

Company Overview and Investor Information

Reference Guidelines
This report references theInternational Integrated
Reporting Council'sInternational Integrated
Reporting Framework andthe Ministry of Economy,
Trade and Industry's
Guidance for Collaborative
Value Creation. It also
references the Global
Reporting Initiative's GRI
Standards for its ESG
information.

Consolidated Statements of Comprehensive Income

Role of Each of Our Publications
Publication

Contents

Integrated Report(this report)

Particulars as per the Contents page.

Group Guide

We compile an annual Group Guide to aid in understanding of the Group outline. This Group Guide includes
a message from management, a list of Group companies, and an outline of the scope of Group businesses.

Securities Report

Based upon Article 24, Paragraph 1 stipulated in the Financial Instruments and Exchange Act, this report isrequired to be submitted to the Kanto Local Finance Bureau. Please consult this report for detailed financial
information.

Corporate
Governance Report

This report is in accordance with Japan's Corporate Governance Code and is required to be submitted to theTokyo Stock Exchange. Please consult this report for information on our Corporate Governance stance andsystems.

Sustainability
Data Book

This data book contains detailed information regarding our Group's ESG initiatives. Please consult this data
book for particulars about our ESG strategy.

Safety Report

In observance of Article 19, Paragraph 4 of the Railway Business Act, this report is aimed at promoting a broad
understanding of our efforts toward preserving transportation safety. It systematically presents information about
safety on Hankyu Corporation and Hanshin Electric Railway.

Hankyu Hanshin Holdings Integrated Report 20202

Profile

Business Overview
Nature of Business
Railway operations

Urban
Transportation

These operations form a network in the Kansai area that
centers on the railway lines of Hankyu Corporation andHanshin Electric Railway. Hankyu Corporation's railway
lines link Osaka (Umeda) with Kobe, Takarazuka, andKyoto. Hanshin Electric Railway is an operator with railway
lines that directly link Kobe with Osaka's major northernand southern terminals, which are Osaka-Umeda andOsaka-Namba, respectively. The operating kilometers ofHankyu Corporation and Hanshin Electric Railway are
143.6 km* and 48.9 km,* respectively.

Automobile business(bus, taxi)

This business operates bus andtaxi services, which coordinate
with railway services to increase
convenience in line-side areas

Retailing businessThis business manages and operates
shops mainly inside railway stations
on the Hankyu and Hanshin lines.

*Including tier 2 railway operators

Real EstateEntertainment

Information andCommunication
Technology

TravelInternational
Transportation

Hotels3

Hankyu Hanshin Holdings Integrated Report 2020

Leasing business

Real estate sales and other businessSports businessStage businessInformation and communication
technology businessinternet services, and fixed telephone services;and the safety/education business, which
operates ProgLab robot programming classes forchildren, and Mimamorume, a child safety
service which monitors children's journeys toand from school.

Travel businessinternet and other media, individual tours withitineraries that can be created freely, group
tours that we propose for study or as
educational tours visiting enterprises orschools, counter sales at shops, tours for theinbound international visitors and arrangementsfor overseas business trips.

International transportation
business

By bringing together air freight, sea freight,
land freight, warehousing/logistics, andcustoms clearance services, the businessprovides a comprehensive, one-stop logistics
solution that can respond to diverse customer
needs. As global businesses become moreadvanced, the international transportation
business provides the ideal solution.

Hotels businessIn addition to the hotels mentioned on theleft, the business manages The Ritz-Carlton
Osaka, based on an alliance with the
Ritz-Carlton chain of international luxury
hotels.

This business owns numerous
office buildings and facilities,
mainly in Osaka-Umeda andthe lineside areas of the Hankyu
and Hanshin lines. In recent
years, the business has been
actively pursuing developmentof real estate in the Tokyo
metropolitan area.

This business markets condominiums, residential land lots,
and detached houses, mainly in the lineside areas of the
Hankyu and Hanshin lines and the Tokyo metropolitan area.
In recent years the business has entered the ASEAN region.
The business is engaged in property management, building
maintenance, and other building operation and management
services as well as real estate fund management, including
private placement funds and J-REIT businesses.

This business manages the Hanshin Tigers
professional baseball team, which has ahistory of more than 80 years, as well as the
team's home ground and high-school baseballmecca Hanshin Koshien Stadium and related
businesses. The business also operates amusic business (Billboard Live).

This business is in charge of the information
services business, which offers a range ofIT-based services such as system development;
the broadcasting and communications business,
which provides multi-channel broadcasts,

This business plans, markets, arranges, andsupports travel for Japanese people in Japanand overseas and for inbound tourists. The
business provides various travel services
which include: media sales to sell packaged
tours through advertisements in newspaper,

As a global forwarder, this business responds
to diverse distribution needs from customers
all over the world through its five-region
management system comprising Japan, theAmericas, EMEA,*4 East Asia, and ASEAN.
Domestic bases: 52 / Overseas bases: 134(As of September 1, 2020)

This business operates a wide range of hotelformats, from "city hotels" through to businesshotels mainly comprising guest rooms forovernight stays.
Directly managed hotels: 21
Franchised hotels: 28
Total hotels: 49 (with 12,470 guest rooms)(As of September 1, 2020)

This business manages the performances of
the Takarazuka Revue̶an organization which
has more than a century of history̶sells
related products, and manages and operates
related businesses engaged in video andmusic distribution. Further, the business
operates Umeda Arts Theater and promotes
stage productions.

Core Companies

Fiscal 2020 Results*2

Revenues
fromoperations

227.2 billion（YoY −4.8 %）¥ 40.1 billion（YoY −7.8 %）¥ 816.2 billion（YoY +2.0 %）¥Percentage of
Revenues fromOperations*3

Percentage ofOperating
Income*3

Percentageof Assets−¥4.7 billion

OperatingincomeHanshin Electric Railway

Segment
assets236.0 billion（YoY −0.5 %）Operating¥ 41.5 billion（YoY −15.7 %）incomeSegment¥ 1,178.2 billion（YoY +2.9 %）assets
Revenues
fromoperations*1

ProfileHankyu Corporation

Hankyu Hanshin Properties Corp.

Impact of COVID-19 −¥5.2 billion

Percentages by Segment (%)

28.1

¥

40.7

34.3

−¥4.4 billion

Revenues
fromoperations
OperatingincomeHanshin Electric Railway

Segment
assets

Revenues
fromoperations

Hanshin Electric Railway

OperatingincomeSegment
assets

Revenues
fromoperations
OperatingincomeHankyu Travel International

Segment
assets

Revenues
fromoperations
OperatingincomeHankyu Hanshin Express

Segment
assets

Revenues
fromoperations
OperatingincomeHankyu Hanshin Hotels

74.0 billion（YoY −0.7 %）¥ 11.7 billion（YoY −13.0 %）¥ 107.6 billion（YoY +1.3 %）¥−¥3.0 billion

Hankyu Corporation

Segment
assets

58.6 billion（YoY +9.4 %）¥ 5.6 billion（YoY +6.0 %）¥ 55.7 billion（YoY +4.0 %）

29.2

¥

−¥4.9 billion

33.8 billion（YoY −5.0 %）¥ 0.2 billion（YoY −86.8 %）¥ 47.3 billion（YoY −48.4 %）¥−¥3.1 billion

76.2 billion（YoY −15.3 %）¥ 0.2 billion（YoY −92.9 %）¥ 48.4 billion（YoY −1.0 %）¥−¥5.2 billion

60.3 billion（YoY −7.2 %）‑ ¥ 3.1 billion¥ 88.0 billion（YoY +4.7 %）¥−¥3.3 billion

9.2

42.1

49.5

11.9

4.5

7.2
4.2
9.4

7.5
5.3

5.7
0.2
0.2
2.4
−3.2

2.3
2.0
2.0
3.7
1.6

*1 As for our Real Estate Business, Hankyu Corporation andHanshin Electric Railway collaborate with Hankyu
Hanshin Properties to promote urban development ofreal estate owned by Hankyu Corporation and Hanshin
Electric Railway for rent and development incooperation with transportation networks, local
governing bodies and others in Umeda and theirline-side areas.
*2 Financial results for the Entertainment Business and theInformation and Communication Technology Businesses
for fiscal 2019 are based on reportable segment
information following the segment classification change.
*3 Figures for percentage of revenues from operations andoperating income are calculated based on the simple
aggregate amount (including intersegment transactions)of each segment.
*4 Europe, the Middle East, and Africa

Hankyu Hanshin Holdings Integrated Report 20204

Profile

Service Area

Expanding the service area from Kansai, centering around Umeda
and its line-side areas to the Tokyo metropolitan area and to Asia
HankyuCorporation

Kobe Line46.9 km143.6 km

Kyoto Line

65.4 km28.5 km

Takarazuka Line

(Takarazuka Line, Minoh Line)(Kobe Line, Imazu Line, Itami Line, Koyo Line)

Kobe Rapid
2.8 kmTransit Railway Line

(Kyoto Line, Senri Line, Arashiyama Line)

Nissei-chuo

HanshinElectric Railway

Myokenguchi

43.9 km

Hanshin Line

(Hanshin Main Line, Hanshin Namba Line, Hanshin Mukogawa Line)

48.9 km

Osaka
Prefecture

Nose Electric
Railway

Kobe Rapid
5.0 kmTransit Railway Line

*See page 30 for the annual number of passengers carried.

HankyuMinoh Line
Minoh

Kawanishi-noseguchi

Hyogo
Prefecture

Kita-senri

Osaka
International
Airport(Itami Airport)

Takarazuka

Hankyu Imazu Line

HankyuItami Line

HankyuKoyo Line

Itami

HankyuTakarazuka
Line

Koyoen

Kob

e El

Esaka

Hankyu Kobe Line

ectr

ic R

ShukugawaTsukaguchi
Nishinomiya-kitaguchi

ailw

ay
Imazu

Kobe Rapid Transit
Railway

Imazu
Koshien
Mukogawa

Hanshin Koshien Stadium

Kobesannomiya

Motomachi

Line

Osaka Bay

Survey of Most Desirable Towns to Live in(Kansai region)
Location

2 Shukugawa(Kita-ku, Osaka)

Location

Location

Kobe-Sannomiya/Sannomiya (Kobe, Hyogo Pref.)15 Tsukaguchi (Amagasaki, Hyogo Pref.)9Tennoji(Tennoji-ku, Osaka)

16 Sumiyoshi(Kobe, Hyogo Pref.)

10 Ashiya(Ashiya, Hyogo Pref.)17 Kobe(Kobe, Hyogo Pref.)4 Okamoto(Kobe, Hyogo Pref.)11 Takatsuki/Takatsuki-shi (Takatsuki, Osaka Pref.)18 Hommachi(Chuo-ku, Osaka)

5 Mikage(Kobe, Hyogo Pref.)12 Esaka

18 Fukushima(Fukushima-ku, Osaka)(Ashiya, Hyogo Pref.)13 Yodoyabashi

6 Ashiyagawa
7 Senri-Chuo
Population（%） 107.0
106.0(Toyonaka, Osaka Pref.)104.0(Suita, Osaka Pref.)

14 Takarazuka(Chuo-ku, Osaka)

Population trends(1991 = 100)

20 Nakatsu

KansaiOf the top 20 locations, all except
three (9th-ranked Tennoji Station,
13th-ranked Yodoyabashi Stationand 18th-ranked Hommachi Station)
are line-side of Group stations(Kita-ku, Osaka)

Kansai International
Airport102.0

The largest airport inwestern Japan, andthe Kansai area's
gateway to the world

101.0
100.0
99.0
98.0
97.0

Umeda

(Takarazuka, Hyogo Pref.)Kansai103.0

Osaka-Umeda

Source: Chiiki Keizai Soran (Local Economy Directory), published by
Toyo Keizai, as of January 1, 2020
Hankyu andHanshin line-side area

105.0

5

Ranking Station

8(Nishinomiya, Hyogo Pref.)3 Osaka-Umeda/Osaka

Tenjimbashisuji
6-chome

Osaka-Namba

Source: Investigation conducted by MAJOR 7 (Sumitomo Realty &Development and seven other companies) (September 30, 2020)

Ranking Station

1 Nishinomiya-kitaguchi (Nishinomiya, Hyogo Pref.)Juso

Hanshin Namba Line

Kobe Airport

Ranking Station

HanshinHanshin
Main Line

Nishidai

Awaji

ShinOsaka

Daimotsu

Amagasaki

Mukogawadanchi-Mae Mukogawa
Kobe-Sannomiya

Shinkaichi

91

19

95

19

00

20

10

05

20

20

15

20

20

20

Kansai International
AirportHankyu Hanshin Holdings Integrated Report 2020

HankyuSenri
Line

Kita-Osaka Kyuko

Takarazuka Grand Theater

Senri-Chuo
Ishibashi
handai-mae

NEPAL NEPAL
Kathmandu
Kathmandu
N

N

Arashiyama
Arashiyama

Asia
Asia

Kyoto-kawaramachi
Kyoto-kawaramachi

KatsuraKatsuraHankyu Hankyu
Arashiyama
Line
Arashiyama
Line

The Philippines
The Philippines

Thailand Thailand

Kyoto
Kyoto
Prefecture
Prefecture
Hankyu Hankyu
Kyoto Line
Kyoto Line

ProfileVietnam Vietnam

Malaysia Malaysia
SingaporeSingapore

Keyin therealandestateand leasing
Key areasin areas
the real
estateleasingbusinesses
in themetropolitan
Tokyo metropolitan
areabusinesses
in the Tokyo
area

IndonesiaIndonesia

Shinjuku-ku
Shinjuku-ku
Chiyoda-ku
Chiyoda-ku
Shibuya-ku Chuo-ku Chuo-ku
Shibuya-ku
Minato-kuMinato-ku

Overseas
estatesales business
Overseas realestatereal
sales
business
Overseas
estateleasing business
Overseas realestatereal
leasingbusiness

Japan
Japan

Directlyhotels
managed hotels
Directly managed
hotelsFranchised Franchised
hotelsUmeda

Approx.Approx.
Total
unitoverseas
sales overseas
30,500Total unit
sales
30,500those ofpartners)
business partners)(As of September(including (including
those of business(As of September
1, 2020) 1, 2020)

Total Units
ProjectsProjects
Total Units

Tokyo

Tokyo
Tokyo area
Tokyo area
9 hotels 9 hotels
5 hotels 5 hotels

Umeda

Kyoto/Osaka/
Kyoto/Osaka/
Kobe areasKobe areas
11 hotels11 hotels
2 hotels 2 hotels

VietnamVietnam

55 Approx.
Approx.
11,020 11,020

ThailandThailand

14

14 Approx.
Approx.
10,880 10,880

The Philippines
The Philippines

5

5
Approx.
Approx.
4,750 4,750

Indonesia
Indonesia

33Approx.
Approx.
3,000 3,000

MalaysiaMalaysia

11
Approx.
850
Approx.
850

Hankyu Corporation
Hankyu Corporation
Head Office Building
Head Office Building
Applause Tower
Applause Tower
Hotel HankyuHotel Hankyu
KitanoInternationalInternational
HankyuBldg.

a Sta.

Nishi
Kita
KitaNishi
Hankyu Hankyu NU chayamachi
Hankyu Hankyu
NU PLUSchayamachi PLUS
Bldg. Bldg.Bldg. Bldg.
South Bldg. South Bldg.
NU chayamachi
NU chayamachi
南館Hotel Hankyu
南館Hotel Hankyu
Hankyu Osaka- Hankyu OsakaRESPIRE OSAKARESPIRE OSAKA
Umeda Sta.
Umeda Sta.
Hotel new Hotel new
Hankyu Osaka
Hankyu Osakaa Sta.

● Umekita● Umekita
Phase II Phase II
Development
Development
Project ProjectNorth Bldg. North Bldg.Kitano
HankyuBldg.
GRAND
FRONT OSAKAGRAND FRONTOSAKA

eda Sta.

Osaka NikkoOsaka
Bldg. Nikko Bldg.
Osaka

Metro

DIAMOR OSAKADIAMOR OSAKA
Umeda
1-1 Project JR● Umeda●1-1
ProjectJR
Kit (UndergroundKit (Undergroundfacility)
Umeda OS Bldg.
Umeda OS Bldg.
ash facility)
ash
Osaka Umeda
Osaka Umeda
inc
inc
hi S
hi S
ta.
ta.
TwinSouth
Towers South
Twin Towers
Umeda
Main Store)(Hanshin (Hanshin
Umeda Main
Store)
Osaka

Umeda
Umeda

Metro
Higashi-Uma Sta.

-Umed
Higashi

The Osaka
Ritz-Carlton Osaka
The Ritz-CarltonO
Nis saka
hi-U Mme etroda
Sta.

O
Nis saka
hi-U Mme etro
da
Sta
.

Osaka

Osaka

Metro

Metro

Umed

Umed

HankyuHankyu Sanban
Gai Sanban Gai
Shopping Center
Shopping Center
Umeda Center
Umeda
HankyuTerminal
Bldg. Center
Hankyu Terminal
Bldg.
Bldg.
Bldg.
JR Osaka Station
JR Osaka Station
HankyuHankyuHEP FIVE
HEPGrandFIVE
Grand
HigashiBldg. Higashi
Bldg.
HankyuBldg.Hankyu Bldg.
Umeda
NAVIO
Umeda
HEP
NAVIO HEP
Hanshin
Sta. Hankyu Bldg.
Hanshin Osaka-umeda
Sta. Osaka-umeda
Hankyu Bldg.
HERBIS ENT HERBIS ENT
Umeda Main Store)(Hankyu Umeda(Hankyu
Main Store)
HERBIS OSAKAHERBIS OSAKA

Our investment
properties
Our investment
properties
Hankyu Hanshin Holdings Integrated Report 20206

Profile

Financial Highlights
Key Financial Indicators (Graphs)
Revenues from operations(¥ billion)
1,000
800

746.8

736.8

Operating income andoperating income margin

Impact of COVID-19‒¥22.0 billion

791.4

760.3

(¥ billion)
120

762.7

110.3

80

600
400

104.1

Impact of COVID-19‒¥15.4 billion
（%）
105.2

21

114.9
14.5

14.8

14.1

95.2
14

12.5

13.8

7

40

200
0

0

0
2016

2017

2018

2019

2020

(FY)

2016
Operating income

2017

2018

2019

2020

(FY)

Operating income margin (right axis)

EBITDANet income attributable to owners of the parent and ROE(¥ billion)200(¥ billion)
80

150

166.5

159.3

171.4

160.8

154.1

100

40

50

20

71.3

70.0

60

10.3

（%）
12
66.4

65.5

8.2

7.6

6

6.1

3
0

0

0
2016

2017

2018

2019

2020

2016

(FY)

2017

2018

2019

Net income attributable to owners of the parent

（%）
6
2.28

2

4.6

2.35
4.3

2.47

2.40
4.4

500

3.6

0

0

Total assets

2018

2019

916.6

4

4.5

2

2017

(¥ billion)
1,000

2.49

1

2016

2020

ROA (right axis)

899.5

5.4

5.1

1.3

1.1

1.0

1.0

2016

2017

D/E ratio (right axis)

-50

‑78.8

-100

30.8

‑84.8

135.8

126.0

20
15

9.9

5.9
5

1.0

0

2020

(FY)

‑88.4

2018

Net cash provided by operating activities

20195‑128.5
2020

10.0

9.1

8.7

40
4.3 (Upper limit)
30

30

25

25

9.8

30

8.8

8.8

9.9

9.9

2016

2017

2018

2019

30

20

12.2

10

2020

(FY)

0
(FY)

Net cash used in investing activities

Free cash flow

（%）
50

10

‑5.4

-150
2017

123.1

47.5

‑116.2
20162019(Times)10Interest-bearing debt/EBITDA ratio (right axis)

Returns to shareholders

0

2018

903.5

Interest-bearing debt(¥ billion)
25

115.6

877.1

5.6

Cash flows

46.0

(FY)

ROE (right axis)

5.5(¥ billion)
150

124.8

866.8

0

(FY)

*ROA = Ordinary income/Average total assets at beginning and end of the period

100

2020

Interest-bearing debt, D/E ratio, and interest-bearing debt/EBITDA ratio

Total assets and ROA(¥ trillion)
3

50

9

54.9

9.4

0

Acquired treasury stock

Total annual dividend

Total return ratio (right axis)
Note: On the effective date of August 1, 2016, stock shares were consolidated on a
five-to-one basis. Annual dividends per share of or before 2015 are values thatfactor in the consolidation of shares.

7

Hankyu Hanshin Holdings Integrated Report 2020

Non-Financial Highlights
Environmental Factors

Social Factors

Percentage of women in management positions and women among new hires

CO2 emissions volumes and energy consumption on crude
oil-conversion basis（t-CO2）800,000
600,000

634,645

613,617

302,008

597,100

303,317516,399

296,828

288,747

600,000
434,292
282,651

200,000

400,0002017

Urban transportation

2018

Other

2020

Travel

40
30

6

0

0

4.5

4.0

4
2

4.5

20
10
0

(FY)

Entertainment

Real estate

Information and communication technology
Hotels

2019

2018

2019

(FY)

2020

Percentage of women in management positions

International transportation

Percentage of women among new hires (right axis)

Energy consumption on crude oil-conversion basis (right axis)

In fiscal 2020, CO2 emissions were down 16% year on year, to 434,292 t-CO2.
Furthermore, energy consumption on a crude oil conversion basis decreased
gradually as a result of efforts by the Group companies to reduce energy
consumption. These efforts include the introduction of LED lighting in railway
stations, commercial facilities, hotels and other facilities as well as theintroduction of an increased number of new rolling stock with better energy
efficiency than the existing models.

Hankyu Hanshin Holdings, Inc. and its six core companies are actively pursuing fairworking environments where employees are able to fulfill their roles to the bestof their abilities regardless of gender, through the active continued hiring of
female employees. In fiscal 2020, the percentage of women in management
positions was 4.5%, and females made up 47.8% of new hires.

Capital investment in railway operations

Social contribution activities: Hankyu Hanshin Dreams
and Communities of the Future Project(¥ billion)
25(Activities)
120

20
15
10
5
0

13.0
0.6
4.4

12.7

2017

1.4
5.8

3.7

Hankyu Hanshin Hankyu Hanshin

2016

13.1

0.9

Hankyu Hanshin

Safety-related capital investment

4.7

4.3

4.7

3.3

2.8

（%）
50

47.8

45.3

44.0

8

200,000

0
2016(Target: Hankyu Hanshin Holdings, Inc. and its six core companies)

（%）
10

2018

14.1

2.3

14.4

4.5
Hankyu Hanshin

2019

80

40

0.7

4.8
Hankyu Hanshin

2020(Groups)
180
94

91

81

111

97

102

94

92

129

139

120

60

0
(FY)

Other capital investment

Note: The total length of lines operated is 143.6 km for Hankyu Corporation and 48.9 km
for Hanshin Electric Railway.

As a railway operator, the Group provides a form of public infrastructure. We
therefore make giving priority to the safety of our customers a fundamental policyof management, and conduct ongoing safety-related capital investments in ourrailway operations accordingly. In fiscal 2020, such investments totaled ¥14.4
billion at Hankyu Corporation and ¥4.8 billion at Hanshin Electric Railway.
These investments were primarily used for the construction of new trains andrenovation of existing ones, as well as track elevation, seismic reinforcement ofelevated tracks, and constructions to further improve our stations.

Governance Factors

0
2016

2017

2018

2019

2020

(FY)

Number of social contribution activities conducted by the Group companies
Number of collaborating civic groups (right axis)
In accordance with a basic policy of creating towns and cities that people will
truly want to live in, the Group companies are engaged in roughly 100 social
contribution activities every year to realize the policy. As a partner to make better
communities, the Group companies also support civic groups in their railway
line-side areas, in terms of financing and advertisement, and make joint efforts
with the civic groups. A survey conducted in fiscal 2020 targeting line-side cities
and towns found the more that customers recognize our projects and SDGs
trains (p. 55), the more they have a positive image of our Group and a desire tolive in our line-side areas.

Percentage of outside directors

Rate of attendance of outside officers at meetings of the Board of
Directors and the Board of Company Auditors

（%）
60

（%）
100
45.5

40

20

Profile400,000（kl）
800,000

97.2
90.0

100.0

100.0

100.0

97.2

96.0

100.0

83.3

80.0

85.0

60

33.3
22.2

80

96.7

22.2

97.0
96.7
92.9

40

14.3

20
0

0
2016

2017

2018

2019

2020

(As of the conclusion of the General Meetingof Shareholders for each year)

Note: As a result of approval at the General Meeting of Shareholders held in June 2020,
the Company became a company with an audit and supervisory committee.

In order to strengthen its supervision and oversight and improve the quality of its
decision making, the Company has appointed 11 directors, of which 5 are
independent directors (including 2 females), bringing the percentage of outside
directors to 45.5%.

2016

2017

2018

Outside directors, Board of Directors' meetings

2019

2020

(FY)

Outside Auditors, Board of Directors' meetings

Outside Auditors, the Board of Company Auditors
Note: Until fiscal 2020, the Board of Company Auditors were held as a company with Board of Company Auditors.

With the approval obtained at the Ordinary General Meeting of Shareholders held in June 2020, Hankyu
Hanshin Holdings became a company with an audit and supervisory committee. The office of the Board of
Directors assists outside directors and the office of the Audit & Supervisory Committee assists outside
directors who are Audit & Supervisory Committee members; in particular, the office of the Audit & Supervisory
Committee is staffed with exclusive staff who provide information and liaise with relevant in-house
departments. Moreover, the Corporate Governance Committee, mainly provides information about the group'sbusinesses, finance, and organization, and the office of the Board of Directors sends out materials relating tomotions to be tabled at board meetings, in principle around seven days before the meeting date.
Hankyu Hanshin Holdings Integrated Report 20208

Messages from the Top Management

Message from the Chairman

Kazuo Sumi
Chairman and Representative Director,
Group Chief Executive Officer

We will strive to enhance our corporate value over the
medium to long term, and contribute to the realizationof a sustainable society.
Allow me first to convey my sincere condolences for those who have passed away due to COVID-19, and express my sympathy tothose who have contracted the virus. I would also like to express my heartfelt gratitude to all those working to prevent the spread of
COVID-19, including professionals working on the front line of medical care.

The Group Will Continue to Push Forward as
One to Enhance Corporate Value

Vision for 2025. As a concrete action plan to fulfill this LongTerm Management Vision, we announced a Medium-Term
Management Plan extending over the period from fiscal 2019
to 2022, and to date we have steadily implemented measures

The Hankyu Hanshin Holdings Group's aim is to achieve

9

based on the Plan.

sustainable growth in a society that is undergoing and will

However, since the fourth quarter of fiscal 2020, many of ourcontinue to undergo change. In 2017, we announced thebusinesses, such as our Urban Transportation business, were

Hankyu Hanshin Holdings Group Long-Term Management

impacted significantly by COVID-19. Consequently, during theHankyu Hanshin Holdings Integrated Report 2020

current term we have been working hard to prevent the virus
from spreading to any Group worksite, and continue or restart
our business activities as we move toward business recovery.

We Will Continue to Enhance Our Corporate
Governance

COVID-19 is forcing extremely rapid evolution in personal
In line with the aforementioned ESG efforts, the Company will

Going forward, these social changes will also impact the Group's

undertake to further bolster its robust corporate governance.

existing business models. We will anticipate these changes as

To this end, we became a company with an Audit & Supervisory

we continue our efforts to achieve medium- to long-term growthCommittee in June 2020, and reduced the number of company

and enhance corporate value.

officers by three, to a total of 11, five of whom are independent

Messages from the Top Management

and business lifestyles, and this is impacting society as a whole.

directors, including two women. This increased the proportionof independent officers on our board. Our independent directors

In Line with Our Sustainability Declaration, We
Will Further Accelerate the Group's ESG Efforts

play leading roles in finance, the academy, and legal circles, andthe extensive expertise they bring will encourage more active
discussion on the Board of Directors and in other settings. This
will enhance the transparency of our management and further

Over its history, which spans more than a century since its

strengthen the supervision and oversight function.

founding, the Company has used its railway operations as abase to extend into a wide range of businesses, from residential
and commercial facility development to many enterprises
offering compelling entertainment, such as the Hanshin Tigers
baseball team and the Takarazuka Revue. Through thesebusinesses, we have contributed to the creation of desirable
urban environments and offered new, desirable lifestyles. As

We Will Contribute to the Further
Development of the Kansai Area, and Work
to Realize a Society that Promotes the Growthand Dreams of the Next Generation

our Group mission, we seek to realize our Group Management
Philosophy by delivering "Safety and Comfort" and "Dreams andExcitement," to create satisfaction among our customers andcontribute to society. With our eyes on the future, we will strive
to achieve sustainable growth, and work diligently with respect
to the ESG (Environmental, Social, and Governance) goals thatare a prerequisite for that growth.
In today's society, we face various challenges such as climatechange, enhancing levels of safety and security, responding todiversifying standards of value and the accelerating pace oftechnological development. Achievement of the Sustainable
Development Goals (SDGs) set forth by the United Nations
by the target year 2030 will require private enterprise to playa progressively expanding role, and the public is focusing
increasing attention on corporate efforts in this direction.
Consequently, in May 2020, we issued the Hankyu Hanshin
Holdings Group Sustainability Declaration. Going forward,
based on this declaration, we will accelerate the Group's ESGrelated efforts, reinforce relationships of trust with stakeholders,
including customers and local communities, and work toaddress social challenges through our business activities. We
are confident that these efforts will enhance our corporate value
as a group over the medium to long term and help realize asustainable society.

The next world exposition, Expo 2025 Osaka, Kansai, is slated
to be held in the Kansai area, where many of the Group'sbusinesses are located. The theme of the expo is "Designing
Future Society for Our Lives," with the aim of contributing
to achievement of the UN's SDGs. In addition, collaboration
between industry and universities in the field of medicine isunder way, and creation of new industries and neighborhoods
that are comfortable to live in is in progress.
At the same time, the Group is currently pushing forwardwith large-scale projects in the Osaka-Umeda area, the Group's
strategic base, which will add significant attractiveness to thearea. They include the Umeda 1-1 Project and the Umekita
Phase II Development Project. These efforts will enhance the
Osaka-Umeda area's potential, promote sustainable growth for
the Group, and synergize with a wide range of other efforts in
the Kansai region, contributing to its further overall development.
COVID-19 has made projections extremely difficult. Nevertheless,the Group will act as one to address social challenges independently,
overcome this difficult situation, and contribute to the realizationof a society where everyone can experience abundance and joy,
and where the next generation can grow as they pursue their
dreams.

Hankyu Hanshin Holdings Integrated Report 202010

Messages from the Top Management

Message from the President

Takehiro Sugiyama
President and Representative Director

The Hankyu Hanshin Holdings Group will realize
sustainable growth as it responds to the new era

Fiscal 2020 Results

growth and adjustments to ensure a continuing healthy balance
sheet.

To realize the Hankyu Hanshin Holdings Group Long-Term

However, a range of factors, principally the impact ofManagement Vision for 2025, we formulated a Medium-Term

COVID-19, had a significant influence during the fourth quarter.

Management Plan for the first four years (fiscal 2019–2022),

As shown in the chart on the next page, fiscal 2020 revenue

during which time we have been promoting measures in linefrom operations, operating income, ordinary income, and net

with our Long-Term Management Vision.

income attributable to owners of the parent, were all lower

As a result, the Group's results were largely in line with the11compared to the previous term.

Plan. When we announced our results for the third quarter of

The Hankyu Hanshin Holdings Group regards the total returnfiscal 2020, we anticipated that operating income would reachratio as a metric of shareholder return. Our basic policy is tothe plan goal of ¥107 billion. We also made investments for

set this ratio at 30%, and endeavor to pay dividends reliably

Hankyu Hanshin Holdings Integrated Report 2020and acquire treasury shares. As planned, the full-year dividend

term. A maximum of ¥4.3 billion was allocated for acquisition of

payout for fiscal 2020 was set at ¥50 per share, an increase

treasury shares.

of ¥10, with ¥25 paid at mid-year and ¥25 at the end of the

FY2020 results

FY2019 results

YoY¥762.7 billion¥791.4 billion–¥28.8 billion–3.6％

Operating income¥95.2 billion¥114.9 billion–¥19.8 billion–17.2％

Ordinary income¥88.8 billion¥110.5 billion–¥21.7 billion–19.7％Net income attributable to ownersof the parent¥54.9 billion¥65.5 billion–¥10.6 billion–16.2％

Fiscal 2021 Outlook and Social and Economic
Recovery Scenario
As we enter fiscal 2021, the Group's operating environment
will see a continuing impact from COVID-19 on many of
its businesses, and first quarter results are expected to besignificantly below the corresponding term a year earlier.
The outlook for fiscal 2021 as a whole is likely to depend
significantly on the duration and extent of influence of COVID-19
during this fiscal year. To be more specific, most of the Group's

Messages from the Top Management

Revenues from operations

Phase 1
During phase 1, movement within Japan will gradually resume
over short distances close to home, while social distancing willease progressively. Group businesses that are relatively closely
related to everyday activities—Urban Transportation, Real
Estate, Entertainment and so on—will be the first to recover.
Once movement within distances close to home becomes
established, travel over longer distances will gradually begin,and we believe that our Travel and Hotels businesses will, atleast to an extent, begin to recover as well.

businesses will be greatly affected by recovery from voluntary
travel curtailment and the degree of social distancing as well as
recovery in the global movement of people (including inboundvisitors). It is currently very difficult to forecast the direction ourbusiness will take, and to calculate the impact of COVID-19 inany reasonable way. As such, our outlook for the full fiscal year
must remain pending.
In calculating our dividend payout for fiscal 2021, we will

Phase 2Phase 2 will involve movement of people, not only within Japan,
but all over the world. During this phase, we will see inboundvisitors to Japan and Japanese traveling abroad for tourism.
People's movements will become globalized, and results for
Travel and Hotels businesses will recover correspondingly.

maintain our policy of stable dividend payment (as we believethat the effects of the state of emergency in effect during April
and May 2020 will not require us to modify this policy). As such,the full-year dividend payout for fiscal 2021 will be ¥50 per
share, equal to that in fiscal 2020.
As stated, our immediate challenge is the same faced by
the world as a whole: the COVID-19 pandemic. However, we
believe that the progressive recovery of social and economic
activities with a significant effect on the Group will take place inthree major phases.

Phase 3In phase 3, domestic and international economic activity will
recover to a significant degree, and the influence of COVID-19
will have largely abated. However, due to the outbreak of
the virus, the expansion of e-commerce, remote work, andother progressive changes in lifestyles and business styles
have emerged, and we believe that even if the influence of
COVID-19 abates, social and economic activity will certainly not
return to what it was prior to the outbreak of the coronavirus.
Consequently, phase 3 will call for responses to new social andeconomic activity.

Hankyu Hanshin Holdings Integrated Report 202012

Messages from the Top Management

The foregoing represents the Group's view of how

Umeda Hankyu Building and GRAND FRONT OSAKA, thesocial and economic activity is likely to recover. As of the

supply of office space with advanced functions has increased

end of September 2020, we believe that Japan has fully

substantially, and Umeda has gained additional stature as anentered into phase 1, but that a certain amount of time

office district.

will be required before phase 2 can begin. Based on that

Now the Group, as noted, is pushing forward strongly with

outlook, we expect that our results for fiscal 2021 will be

the Umeda 1-1 Project, which can be viewed as a symbol ofcorrespondingly impacted. As such, the Group is striving

Hankyu and Hanshin management integration. The project is

assiduously to reduce costs and minimize nonessential

set for overall completion in Spring 2022, and will mark theinvestment, so as to promote recovery in both profit andlaunch of Osaka Umeda Twin Towers South. In conjunction

cash flow.

with the Umeda Hankyu Building, which will be renamed
Osaka Umeda Twin Towers North, we are confident these
tower buildings will, as an Osaka landmark, contribute toenhancing the overall value of the Osaka-Umeda area.

The Basic Direction of the Long-Term
Management Vision Will Not Change

Furthermore, at the Umekita Phase II Development Project,targeted for advance opening in 2024, we are working tocreate a neighborhood that will lead Japan and Asia. We
plan to introduce internationally competitive, advanced

The Group's Long-Term Management Vision for 2025 was

urban functions and core functions in line with the project's

formulated to achieve sustainable growth, even amid

concept of fusing greenery and innovation, and in particular,

ongoing changes in society. As noted, lifestyles and businessto enhance the area's international competitiveness, we

styles are changing progressively. The Long-Term Vision inare considering numerous measures to enable wide-

fact anticipates that these changes will take place inevitably,

ranging activity by businesspersons, including non-Japanese.

and in that sense, the direction the Group must take isSpecifically, in addition to MICE facilities, we will establish

fundamentally unchanged.

innovation and other facilities to encourage the creation of

However, we believe that because of COVID-19, thesechanges will accelerate. Going forward, we will monitor

new industries. We will also construct new hotels in three
categories to meet the demand for accommodations.

changing social conditions and trends closely to update

In these ways, we will continue our efforts to enrich

the content and other aspects of specific measures to be

Osaka-Umeda's attractiveness and further enhance its

implemented under the Long-Term Vision, and we believeinternational competitiveness, so that more people will want

we must promote efforts to realize the Vision even more

to visit this area of Osaka.

rapidly than previously.
With respect to minimizing nonessential investment, evenwith the impact of the pandemic, there will be no change to
the Group's aim of sustainable medium- to long-term growth.
Large projects now in progress, such as the Umeda 1-1
Project and the reconstruction of the Kobe Hankyu Building,will move forward steadily and as planned. Moreover, if
attractive opportunities, such as mergers and acquisitions orreal estate deals, arise due to prevailing market conditions,
we will of course consider them carefully, continuing ourpolicy of emphasizing growth investments in a forwardlooking manner.

Toward a New Era: Discerning the Changing
Needs of Society and Customers
In closing, I would like to touch on some of our efforts
toward the coming era.
To some extent, the progressive changes now taking placein lifestyles and business styles are being driven by new"contactless" needs as a result of the spread of COVID-19.
At the same time, progress in digital technology is driving
expanding demand for online services, and we believe thatoffering such services will become increasingly important.

Making Osaka-Umeda an InternationallyCompetitive Neighborhood

Until now, the Group has demonstrated its competitivenessin offering products and services to customers in a wide
range of in-person settings, including transportation; shoppingand dining in shopping centers and other locations; leisure13

The Osaka-Umeda area is the Group's strategic base andservices such as baseball games, staged entertainment, andhas flourished as a center of commercial culture in Osaka

travel; hotel accommodations and banquets, and more.

for centuries. Until recently there was relatively little office

Of course, honing these strengths and the value that canspace in the area, but with the Group's development of the

only be derived from in-person presence will continue toHankyu Hanshin Holdings Integrated Report 2020

be important, but going forward, it is also essential that weOver more than a century since we entered the railway

more actively offer web-based products and services thatbusiness, the Group has maintained a flexible view that looks

meet customer needs.

to the future and is not bound by precedent. Based on thisIn response, the Group has embarked on offering a wideview, we have offered products and services that meet therange of web-based services to meet customer needs, suchneeds of society and our customers, and numerous times,

as paid live streaming of Takarazuka Review performances,

we have overcome the challenges of wrenching change.
Today, as we face another such challenge, we will

experience the pleasures of travel from the comfort of home.

persevere in deploying products and services that are

In the future, in-person and remote presence will coexist

appropriate for the new era, and by doing so, contribute toin society than ever before. To maintain and strengthen therealizing continued sustainable growth for the entire Hankyu

competitiveness of each of the Group's businesses in thisHanshin Holdings Group. We thank you for your continuous

environment, we will seek to continually monitor and identify

support.

Messages from the Top Management

condominium tours, and content that enables customers to

evolving customer needs, so that we can offer appropriate
product content and services in both the in-person andonline society.

Artist's impression of completed Umekita Phase II Development ProjectNote: Proposed as of May 2018, subject to change

Hankyu Hanshin Holdings Integrated Report 202014

Creating Real Value: Our Story

Growth Trajectory
Total ﬂoor space: Approx. 278,000 m2(Incl. Gate Bldg. and annex)
Building details: 4 ﬂoors above ground(partial 5F)

Growth Post Integration

Total ﬂoor space: Approx. 254,000 m2(Oﬃce space [incl. Sky Lobby, etc.]: 103,000 m2)
Building details: 41 ﬂoors above ground; 2 ﬂoors
below ground (Oﬃce space: 25 ﬂoors [17F‒41F])

Nov. 2008

May 2010

Opening of Hankyu Nishinomiya Gardens

Opening of Umeda Hankyu Building Oﬃce Tower

Hankyu Hanshin Holdings 2006

Nov. 2007

Sep. 2009

Opening of Umeda Hankyu Building(Hankyu Department Store Umeda
Main Store, Phase I Building)Opening of remm
Hibiya(First in a series ofremm-branded hotels)Mar. 2009

Growth Pre Integration

1910

Start of sales of Ikeda
Muromachi Residential
Land Plots

1913

1924 Completion of Takarazuka Grand Theater

Hankyu 1907

Formation of Takarazuka Girls Revue(currently Takarazuka Revue Company)

1921
1910

1907

Establishment of the Minoh‒Arima
Electric Railway Company(currently Hankyu Corporation) by
Ichizo Kobayashi

Hanshin 1899

1899

Establishment of Settsu
Electric Railway(currently Hanshin
Electric Railway)

Opening of
Takarazuka Line
(Umeda‒Takarazuka)
and Minoh Line
(Ishibashi‒Minoh)

1920

Hankyu Hanshin Holdings Integrated Report 2020of Umeda Hankyu Building (Beginning
1929 Openingof operations of Hankyu Department Store,

Opening of
Kita-Osaka Electric
Railway(Juso‒Toyotsu)

Opening of Kobe
Line (Umeda‒Kobe)
and Itami Line
(Tsukaguchi‒Itami)

Asia s ﬁrst railway terminal department store)

1926

Opening of
Takarazuka
Hotel

1924

1905

Beginning ofoperations
linking Kobe
(Sannomiya) andouter Osaka(Deiribashi)Completion of the renovations ofHanshin Koshien Stadium

Total ﬂoor space: Approx. 38,500 m2(Seating area: 22,600 m2; Field:
13,000 m2; Other: 2,900 m2)
Capacity: 47,466

Operating kilometers: 10.1 km(Amagasaki‒Osaka-Namba)
Nishikujo to Osaka-Namba: 3.8 km

15Mar. 2010

Beginning of operations of Hanshin Namba Line(between Nishikujo‒Osaka-Namba)

Opening of Dempo Line(currently Hanshin Namba
Line)(Daimotsu‒Chidoribashi)

Opening of Dai-ichi Hotel(currently Dai-ichi Hotel Tokyo)

1939

Beginning of operations ofMain Line Osaka-ekimae
underground extension(Relocation of Umeda
Station)1941

Completion of Umeda Hanshin
Building Phase I construction(Renamed Dai Hanshin Building
in 1961, and the whole building
completed in March 1963)

1927 Launch of land and buildings sales business

1909

Completion of 30 rental houses infront of Nishinomiya Station (Launch ofland and buildings leasing business)

1938

1924

Opening of Koshien Stadium(Later renamed Hanshin Koshien
Stadium)

1935

Establishment of Osaka Baseball Club
(Osaka Tigers, currently Hanshin Tigers)

Urban Transportation
Real EstateEntertainment

Information and Communication Technology

Sep. 2012

TravelCompletion of Umeda Hankyu Building(Full opening of Umeda Main Store of Hankyu
Department Store in November 2012)

International Transportation
HotelsApr. 2016

Commencement of S-POINT* service

Mar. 2016

Opening of a logistics center inIndonesia as a joint project of theReal Estate and the International
Transportation businesses*A loyalty points system operated intandem with H2O Retailing Group for
customers in the Kansai area

Total ﬂoor space: Approx. 254,000 m2(Department store: 151,000 m2 [incl.
concourse])
Building details: 41 ﬂoors above
ground; 2 ﬂoors below ground(Department store: 15 ﬂoors [B2F‒13F])

May 2017

Announcement of the Hankyu Hanshin
Holdings Group's Long-Term Management
Vision for 2025

Creating Real Value: Our Story

Apr. 2018
Apr. 2013

Opening of GRAND FRONT OSAKA

Completion of Umeda 1-1 Project Phase I (Building
Name: Osaka Umeda Twin Towers South)(June 2018: Partial opening of Hanshin Department
Store [Hanshin Umeda Main Store])

2014

Takarazuka Revue marks 100th anniversary
since its ﬁrst performance in 1914

Total ﬂoor space: Approx. 260,000 m2(Phase I: 76,000 m2)
Building details: 38 ﬂoors above ground;
3 ﬂoors below ground (Phase I: 13 ﬂoors
above ground; 3 ﬂoors below ground)©Takarazuka Revue Company

1969

Opening of Hankyu Sanbangai

1964 Opening of Hotel New Hankyu Osakaagency of Hankyu Corporation
1948 Airline
launched in Japan's ﬁrst agency agreementwith Pan American Airways

Express International (currently
1960 Hankyu
Hankyu Travel International) wasestablished independently of Hankyu
Corporation

merger with Hankyu Travel
1962 Absorption-type
International (predominantly involved in thedomestic travel business)

Opening of new Hankyu Umeda Station as one of
the largest private railway terminals in Japan

1973 Changing of company name to Hankyu Corporation

1948

Airline agency department of Hanshin
Electric Railway launched

1967 Opening of Hotel Hanshin

Oct. 2006
Establishment of Hankyu Hanshin Holdings, Inc.

1962

Completion of New
Hankyu Building

Hankyu Hanshin Holdings Integrated Report 202016

Creating Real Value: Our Story

Carefully
NurturedStrengths

1907

Pioneering the Railway Industry with a
Unique Business Model
Hankyu Corporation began as the Minoh-Arima Electric
Railway Company, founded in 1907 by Ichizo
Kobayashi (1873-1957). The inaugural train ran
between Umeda and Takarazuka on the Takarazuka
Line, which opened in 1910. But Ichizo Kobayashi had a

Osaka Umeda Twin Towers South (scheduled for completion in spring 2022)
This project entails rebuilding two Hankyu-Hanshin buildings into a single complex tounderscore the integration of the two companies.

radical idea: his company would not simply run trains; itwould also develop
residential neighborhoods
along the routes. This
proved to be amasterstroke andgenerated considerable

Hankyu Hanshin
Holdings:

momentum. Thus, fromout-of-the-box thinking a
new business model wasborn, and it influenced
private sector railway
operators and otherbusiness proprietors far andwide.

Ichizo Kobayashi upon the foundingof the railway business

1899

Japan's First High-Speed, Broad Gauge,
Intercity Electric Railway, Inspired by theLatest Overseas Insights
In 1899, some eight years prior to Hankyu's
inauguration, the Settsu Electric Railway (which would
later be renamed Hanshin Electric Railway) wasestablished with Shuzo Toyama (1842-1916) as its
inaugural president. In 1905, after lengthy preparations,the company began the first intercity electric railway
service, running between Sannomiya in Kobe andDeiribashi in Osaka.

In October 2006, after having served the corridor between
Corporation and Hanshin Electric Railway integrated theirof the latest expertise frombusinesses, combining their strengths in a common strategic

overseas, bestrode the age

quest for sustained growth and progress. Joining forces as

as a pioneer of intercity

Hankyu Hanshin Holdings enabled the groups to pool theirelectric railway, and its

know-how, talent, and other assets in a cohesive team effort

constantly growing̶andacross various business domains, such as the Urban

ever swifter̶fleet thronged

Transportation and Real Estate Businesses, thus enhancing

with an increasing number

17

2006

Harnessing Synergies to Create
New Values
Osaka and Kobe faithfully for close to a century, Hankyu

Hanshin, an eager adopterof passengers.

Focusedon Progresscompetitive ability throughout their portfolio and boosting
Shuzo Toyama, Hanshin Electric
Railway's first president

Hankyu Hanshin Holdings Integrated Report 2020

corporate value.

Sharing Value Assets along Routes
Raises Potential for Business Expansion

incorporate six core companies̶now including Hankyu Hanshin

Hankyu Corporation's development of residential neighborhoods

Transportation, Real Estate, Entertainment, Information andalong its routes, and its attraction and creation of tourist andCommunication Technology, Travel, International Transportation,

cultural facilities, in addition to its mainstay railway business hasand Hotels.

Express and Hankyu Hanshin Properties̶and approximately 100
group companies that span seven core businesses: Urbangrown the local resident population and ridership. Moreover, theToday, our operations are propelled by three "strengths" wecompany's urban development efforts, chiefly in the Umeda

have nurtured carefully since the very origins of our businesses:

precinct, has created a natural flow of people into the area.

high potential of areas served by our stations; community building

Meanwhile, Hanshin Electric Railway has been the bedrock of theability; and ownership of content with strong brand value.

local transportation infrastructure for more than a century, hasHigh potential of areas
served by our stations

worked tirelessly to develop its routes, centered in Umeda, and01

has invested in its leisure business, headlined by the iconic Hanshin
Tigers baseball team.
By merging, Hankyu and Hanshin seek to harness the ample
synergies inherent in their various operations in an ongoing quest
to further enhance corporate value.

Carefully nurtured
strengths
Community
building ability

02

The merger resulted in the creation of the Hankyu Hanshin HoldingsGroup, with Hankyu Corporation, Hanshin Electric Railway, Hankyu
Travel International, and Hankyu Hotel Management (since

Our communitybuilding expertise
helps increase value.

renamed Hankyu Hanshin Hotels) as its four core companies.

03

We have a varietyof popular,
attractive content.

Offer new value

Today, the Hankyu Hanshin Holdings Group has grown to01

Ownership of content
with strong brand value

Creating Real Value: Our Story

The Three Strengths that Underpin
Our Seven Core Businesses

Our communities arehubs for the movementof people and goods.

Our communities arehubs for the movementof people and goods.

Shaping Routes Centered on Osaka Umeda
In the early days of Hankyu Corporation and Hanshin Electric Railway, the population
explosion that followed the rapid industrialization of the early 1900s caused adeterioration of the residential environment that subsequently led to increased demand
for more comfortable living conditions.

Leading the Kansai
Region with

High-Potential
Areas Served
by Our Stations

Before the inauguration of his railway, Ichizo Kobayashi, founder of Hankyu
Corporation, walked along the planned route between Ikeda and Umeda. Seeing theidyllic landscape, Kobayashi thought it would make the ideal residential neighborhood.
With images in his mind of the cramped housing environment of Osaka City causedby the population increase of the time,
he alit on the concept of managing
residential land alongside his railway
routes

as

a

means

of

boosting

transportation demand. This is the origin
of

the

model

that

underpinstheprivately-owned railway business: build
new residential neighborhoods in thesuburbs and provide a railway to carry
residents to and from home.
Meanwhile, Hanshin Electric Railway
published("Try

Living in the Suburbs") in 1908 to promote
the benefits of neighborhoods along
Hanshin's routes. The company's focus
on the communities along its routes

A Hankyu train crosses the Inagawa Bridge (circa 1910)

remains a core part of its stance today.

Hankyu Hanshin Holdings Integrated Report 202018

Creating Real Value: Our Story

Expanding Routes throughout the Greater
Kyoto-Osaka-Kobe Region
Hankyu Corporation sought to expand its network to areas beyond Minoh andTakarazuka. In 1920, it launched the Kobe Line between Umeda and Kobe, andthe Itami Line between Tsukaguchi and Itami. In 1931, the old Shin Keihan Line
opened, connecting Osaka and Kyoto and further expanding the rail network.
Hanshin Electric Railway, too, opened a new line in 1924: the Dempo Linebetween Daimotsu and Dempo. In the 1930s, tunneling enabled Hanshin toboost its network, such as by extending its lines from Osaka to central Kobe.
Today, that network expansion continues. In 2009, the Hanshin Namba Line
opened, thus completing a network spanning Kobe, Osaka, and Nara. Elsewhere,
the Hankyu Hanshin Holdings Group is working to further enhance our network,
for instance by extending the Kita-Osaka Kyuko Railway and building the
Naniwasuji Connection Line.
A special train commemorates 10 years of the Hanshin Namba Line in 201902

Our communitybuilding expertise
helps increase value.

Creating New
Value with Our
Community

Building
Ability

Predicting Demand and Delivering Value
In developing residential neighborhoods and leisure facilities along railway routes to drive
demand for train transportation, Ichizo Kobayashi laid the foundation for the privately-owned
railway business model. Prior to the inauguration of his railways, he bought some 825,000
square meters of land along the routes. In 1910, the Ikeda Muromachi Residential Land Plots
were the company's first residential sales; they offered a high-grade living environment for
the time, including paved, tree-lined roads and street lighting, and suggested the latest
lifestyles amid the natural landscape of thesuburbs. Home sales were offered on credit̶arevolutionary idea at the time in Japan̶and aforerunnertodevelopments

today's
includedhomeloans.

suburbanOtherleisurefacilities such as the Takarazuka Girls' Revue,
later to become the Takarazuka Revue Company,
and the completion of Takarazuka Grand
Theater, as well as Hankyu Department Store. In
this way, the company pursued a policy ofcommunity building along its routes.

First phase of the original Umeda Hankyu Building(completed in 1929)

Providing New Value by Developing Thriving Local
Communities
Hankyu's and Hanshin's community building ability was proven in a variety of forms along
their routes. Koshien Stadium (later Hanshin Koshien Stadium) opened in 1924, the Takarazuka
Hotel opened in 1926, and Hankyu Nishinomiya Stadium, home of the Hankyu Braves, opened
in 1937. Beginning in the 1960s, development of facilities progressed, mainly in Umeda,
including the New Hankyu Building, the Dai Hanshin Building, Hotel new Hankyu Osaka, andHotel Hanshin. In 1966 began the comprehensive development of the Umeda stations, themain feature of which was the relocation and expansion of Hankyu Umeda Station. Under
the new station was Hankyu Sanbangai, which was followed by the development of numerous
office buildings and commercial facilities, including building complexes with direct access tothe station such as the Hankyu Terminal Building and Hankyu Grand Building. Other
developments continued up to the 2000s, including the Chayamachi area and Nishi-Umeda
area.
Umeda Hankyu Building

19

Hankyu Hanshin Holdings Integrated Report 2020

Leveraging Community-Building Know-How for Further Growth
Community-building initiatives have progressed and deepened even further
since the two groups' integration, including the opening of Hankyu Nishinomiya
Gardens, the renovation of Hanshin Koshien Stadium, the completion of the
Umeda Hankyu Building, and the opening of GRAND FRONT OSAKA.
As illustrated by the development of Osaka Umeda Twin Towers South(Umeda 1-1 Project), Phase I of which is already complete, and the Osaka
Station North District (Umekita) Phase II Development, we will continue toutilize our community-building abilities to provide new value in a broad scale,including our routes, which are centered on the Osaka Umeda area, and theTokyo metropolitan area, and link this to the group's growth.
PILOT Hankyu Hanshin
Green Building

Hankyu Nishinomiya Gardens

Winning Many Fans through Unique Cultures andEntertainment
Creating Real Value: Our Story03

We have a variety of
popular, attractive
content.

Entertainment that provides people with healthy and cultured living environments plays
an important role in the Hankyu Hanshin Holdings Group's creation of value.
The Takarazuka Revue began as a 20-girl choral

Fulfilling Dreams
and Offering
Excitement throughOur Content

troupe putting on an operatic performance in atheater made by converting an indoor swimming
pool. The company, whose motto is "Modesty,
fairness, and grace," reached its centenary in
2014, and continues to be loved throughout
Japan and around the world.
The Hanshin Tigers were established in 1935
as the Osaka Baseball Club (Osaka Tigers). Since

Debut performance of Dom-Brako by
Takarazuka Girls' Revuethen, over a long, 85-year history, the club and its
home ground, Hanshin Koshien Stadium, havebeen supported by a broad range of fans.
An Osaka Tigers
posterUtilizing Content and Brand Strength to Develop
Diverse Businesses
The Hankyu Hanshin Holdings Group's Travel and International Transportation Businesses
began when Hankyu Corporation established a Pan American Airways agency in 1948. In
1960, airline agency operations were spun off from Hankyu Corporation into a newcompany, Hankyu Express International. This later became Hankyu Travel International,
which handles the group's Travel Business today. The company later merged with Hanshin
Travel Service, which was spun off from Hanshin Electric Railway when Hankyu and Hanshin
integrated, and today focuses its efforts on creating a variety of travel solutions to meet
diverse needs. Its core offering is Trapics tours, which celebrated 30 years in 2019.
Meanwhile,

HankyuHanshin

Express,which

handlesthegroup's

International

Transportation Business, was formed by the merger of Hankyu Express, which inherited
the international transportation operations of Hankyu Travel International, with Hanshin
Air Cargo. These companies provide high-quality services and optimized logistics on a
global scale.
In addition, the Hankyu Hanshin Holdings Group has been involved in systems
development and the cable TV business since the early days of IT in the 1980s, and havedeveloped while responding to the changes of the times. Since fiscal 2020, our informationand communication technology business has sought to help the group grow by investing
Top: Hanshin Koshien Stadium
Bottom: Takarazuka Revue (©Takarazuka Revue Company)

its efforts into the information services business, broadcasting and communications
business, and safety and education business.

Hankyu Hanshin Holdings Integrated Report 202020

Creating Real Value: Our Story

Value Creation Process of Hankyu Hanshin Holdings
At the Hankyu Hanshin Holdings Group, we hold a diverse range of management resources, which we deploy in order to further our
strategy of value creation so as to provide value to stakeholders.

Social Challenges and Changes
in External Environments
Increasingly serious
climate change(harmony with theenvironment)
Low birthrate, aging society,declining population(declining resident
population and working
population in communities
along our routes)
Faster ICT innovation
Changes in lifestyles
and business styles(movement, consumer
behavior, lifestylebases, etc.)

Risks
Impact of extreme
weather on business
Impact of infectious
diseases on our businessmodel
Impact of lifestyle changes
on our business model
Tight labor market, decline
in customer numbers

Increased interest insafety and security

Expanded demand for
new services generated
by lifestyle and businessstyle changes andtechnical innovation

Requirements forstronger governance

Expanded business
opportunities throughout
Japan and around theworld generated byincreasingly multicultural
symbiotic societies

Management ResourcesHigh potential of areas served by our stations, Community building ability
Manufactured capital: Steadfast foundation of railway routes anddevelopment capabilities
Urban Transportation
Operating kilometers: Hankyu Corporation 143.6km*
Hanshin Electric Railway 48.9km*
Real Estate
Leasable area: Approx. 1,930,000 m2 (as of the end of FY2020)
Information and Communication Technology
Number of households subscribing to cable TV: 648,000
HotelsTotal number of guestrooms: 12,470 (as of Sep. 1, 2020)

Medium-Term
Management Plan
(From FY2019 to FY2022)

p23

Opportunities
Expanded demand for
low carbon, circulartransport, services withsafety and security

Requirements fordiversity-conscious
management, better
employment practices,
health management

Urban Transportation
p29

Increasingly multicultural
symbiotic societies(expansion of inboundtourism demand)

Decay of infrastructure

Value Creation Strategy ofReal EstateEntertainment

p31

p33

Information andCommunication
Technology
p35Strategy 1

Umeda andline-side areas+
Stock businesses
Strategy 2

Tokyo metropolitan area
and overseas markets+
Stock businesses
Strategy 3

Travelp37

International
Transportation p39
HotelsStrengthen
competitivenessof flow business
Strategy 4Group-wide
initiatives andnew business fields

p41

Ownership of content with strong brand value
Social and relationship capital: Services based on trust and brand strength
Real Estate
Number of condominium units sold in Japan: 1,516
Entertainment
Total attendance at Hanshin Tigers home games (2019 season): 3,091,000
Annual total attendance at Takarazuka Revue: 3,200,000 (2019)
TravelTotal travel billings ¥335.6 billion
International Transportation
Number of domestic bases: 52 (as of Sep. 1, 2020)
Number of overseas bases: 134 (as of Sep. 1, 2020)
Human capital: Diverse workforce with the courage to try new things
Consolidated group workforce: 22,800 (as of the end of FY2020)
Financial capital: Stable financial foundation
D/E ratio: 1.0
Bond rating: AA‒ (JCR)
Interest-bearing debt/EBITDA: 5.9
A+ (R&I)
NB: Figures are for FY2020 unless otherwise noted.
*Includes Tier 2 railway operators' lines.

21

Hankyu Hanshin Holdings Integrated Report 2020

Sustainability
Declaration
p43

Group Management
Philosophy
p1

Three core elements underlie our
pursuit of sustainable growth

Our value to societyImprovement of Social Issues

Hankyu Hanshin Holdings

Hankyu Hanshin HoldingsGroup Long-Term
Management Vision for
2025
p23

Strategy 2Strategy 3
Strengthen
competitiveness bythoroughly pursuing
brand optimization anddifferentiation.

Enhance social value

Construct a stablerevenue base in theTokyo metropolitan
area and overseas
markets.

Customers
Communities

Employees

Contributing to asustainable society

Shareholders

Creating Real Value: Our Story

Make our railway theabsolute best among
the Kansai networks.

Sustainably
enhance
corporate
value

Enhance daily life
(customer) value

Strategy 1

Values Provided to Stakeholders

Partners

Strategy 4(1) General principles (sustainability vision)(2) Priority issues (materiality matrix) andthe policies for each one(3) Project themes, non-financial KPIs

Enhance economic value

Make greater use of theGroup's collective
strength and develop
new business fields.

Create a future groundedin "Safety and Comfort,"
and a future colored by"Dreams and Excitement."
We commit ourselves to working
toward a sustainable future, one thatoffers a fulfilling, joyful life to all andinspires the next generation to
dream with hope.

Hankyu Hanshin Holdings Integrated Report 202022

Creating Real Value: Our Story

Summary of Long-Term Management Vision andMedium-Term Management Plan
Hankyu Hanshin Holdings Group Long-Term Management Vision for 2025

SloganEnhancing line-side areas
and expanding ﬁelds

Sustainably enhance corporate value

Strategy❶

Stock businesses(Umeda and line-side areas)

Make our railway the absolute
best among the Kansai networks.

Strategy❹

Strategy❷

Stock businesses(Tokyo metropolitan area
and overseas markets)

Construct a stable revenue basein the Tokyo metropolitan area
and overseas markets.

Strategy❸

Flow businesses

Strengthen competitivenessby thoroughly pursuing brand
optimization and diﬀerentiation.

Group-wide initiatives and new business ﬁelds

Make greater use of the Group' s collective strength and develop new business ﬁelds.

Summary of Long-Term Management Vision
In 2017, to promote our growth as a corporate Group even as

even in or around 2040, by which time our environment will besociety evolves toward the future, we established the Hankyu

affected significantly by changing population dynamics.

Hanshin Holdings Group Long-Term Management Vision for

By achieving such aims, we will maintain our top-level2025. The Vision encompasses four strategies under the slogan,

position among the major private railway companies, with all"Enhancing line-side areas and expanding fields," on the basis

metrics indicating profitability and financial soundness.

of two key business areas and models (stock businesses*1 andWe believe that COVID-19 will result in a significant

flow businesses*2). We will endeavor to enhance sustainableacceleration of the social change presumed in our Long-Term

corporate value through these strategies.

Management Vision, so we will pursue initiatives based on ourSpecifically, we will promote the implementation of the four

various strategies with a greater sense of urgency.

strategies of the Vision to become a corporate group capableof maintaining minimum operating income of ¥100 billion,*1 Businesses that own or use stock such as property and other fixed assets (including the railway business, real estate leasing business, broadcast andcommunications business, and Hotels Business)*2 Businesses that, instead of owning large-scale stock, use business know-how, human resources, brand assets, and other intangible assets (including thereal estate sales business, sports business, stage business, information services business, travel business, international transportation business and otherbusinesses)

23

Hankyu Hanshin Holdings Integrated Report 2020

Medium-Term Management Plan for Fulfillment of Long-Term Management Vision
Basic Way of Thinking about the Medium-Term Management Plan
In 2018, we established the Medium-Term Management

strategies and distribute funds accordingly, while placing

Plan, covering the term from fiscal 2019 to fiscal 2022, as ourparticular emphasis on our ratio of interest-bearing debt toconcrete action plan to fulfill our Long-Term Management

EBITDA, to maintain a sound financial structure.

Vision.

As COVID-19 has made it difficult to predict the impact of the

In this plan, we are promoting measures in line with the four

upcoming economic situation on our management fiscal 2022,

strategies of the Long-Term Management Vision. Financially,

we will revise our Medium-Term Management Plan as necessary

we will focus on growth investments in line with the four key

in light of our progress in achieving the plan's targets.

Creating Real Value: Our Story■ Four strategies in Medium-Term Management Plan (Based on Long-Term Management Vision)

Strategy ❶Further strengthen stock businesses in Umeda andline-side areas

Enhancing the value of the Umeda area; Activating the main line-side areas; Improving thetraﬃc networks (infrastructures) with new railway lines; Satisfying the demand frominbound tourists.

Strategy ❷Accumulate stock in the Tokyo metropolitan area andoverseas markets

Accumulating stocks in the center of the Tokyo metropolitan area; Opening a new hotelin the Tokyo metropolitan area; Studying acquisition of overseas stocks (real properties).

Strategy ❸Strengthen competitiveness of ﬂow businesses

Expanding the scale of the condominium businesses including those overseas; Growing
the information services business; Increasing income from the travel business; Increasing
the volume of cargoes handled by the international transportation business.

Strategy ❹Make greater use of the Group's collective strength andventure into new business ﬁelds

Hankyu Hanshin Holdings Integrated Report 202024

Creating Real Value: Our Story

Project Progress

Total completion inspring 2022

Umeda 1-1 Project (Building Name: Osaka Umeda Twin Towers South)
We have carried out the comprehensive reconstruction of
the Dai Hanshin Building and the Shin Hankyu Building since
October 2014. The first phase building was completed in April
2018, and the Hanshin Department Store (Hanshin Umeda Main
Store) was partially opened in June.
In June 2019, we began the second phase of the new
construction work, with the full opening of the department store
zone scheduled for autumn of 2021. In spring 2022, we expect
to open up the office zone with rental floor space of approx.
3,500 m2 (11F–38F), as well as the conference zone, which
will comprise one large and one small hall. We will continuereconstruction work and improvement of nearby public facilities
in an integrated manner, seeking to create comfortable, highquality areas that will enhance international competitiveness.
Specifically, we will upgrade city functions, enhance disaster

Artist's impression of completed building

preparedness, create new public spaces, and form attractive■ Project summary

townscapes.

Location

1-1 Umeda, Kita-ku, OsakaSize

38 floors above ground and 3 below ground

Site area

Approx. 12,200 m2*

Purpose

Department store, offices, halls, etc.

Total floor
space

Approx. 260,000 m2

Construction
completion

Spring 2022

*Includes road between Dai Hanshin Building and New Hankyu Building.

Osaka Station North District (Umekita) Phase II Development Plan

Initial opening aroundsummer 2024

A joint venture of nine developers (including Hankyu Corporation; led
by Mitsubishi Estate Co., Ltd.) formed a consortium with six design andoperating companies (including Hankyu Hanshin Properties) to submit
an application to develop the Osaka Station North District (Umekita)
Phase II Development area. As a result, the consortium was selected by
the Urban Renaissance Agency to lead development of the area.
In line with the project's concept of fusing greenery and innovation,and utilizing our track record in the GRAND FRONT OSAKA
development project, we will work to ensure the Umekita area is aleading example of urban development in Kansai and across Asia. (Initial
opening scheduled for summer 2024; complete opening in fiscal 2028)■ Project summary

Private-sector Zone Specifications
Zone

North zone

South zone

Site area

Approx. 15,720 m2

Approx. 30,430 m2

Total floor space

Approx. 154,200 m2

Approx. 413,000 m2

Main purposesCore function,* hotel, residence, etc.

MICE facilities, offices, hotels, commercial
facilities, residences, etc.

*We will establish platform facilities conducive to life design innovation (approx. 10,000 m2) andinnovation facilities (approx. 20,000 m2: MICE facilities, co-working space, SOHOs, etc.), andcollaborate with Knowledge Capital, the intellectual creation hub of GRAND FRONT OSAKA andother such functions to pursue the creation of life design innovation.

Urban Open Space Specifications

Artist's impression of completed building
NB: T his illustration is an image drawing made at the time of
the initial proposal (May 2018) and is subject to change.

25

Hankyu Hanshin Holdings Integrated Report 2020

Site area

45,000 m2

Total facility floor space

12,500 m2

Main purposes

Museum, experiential learning facilities, roofed open spaces, restaurants, shops, etc.

NB: Specifications for private-sector zones are those finalized under the town plan (April 2020);
specifications for urban open spaces are those included in the initial proposal (May 2018).

Reconstruction of Kobe Hankyu East Bldg. and renewal of West Bldg.

Completion inspring 2021

This plan is for the establishment, in an integrated way, of astation that provides improved transfer to the Kobe Municipal
Subway (Seishin-Yamate and Hokushin lines) and creates public
space. The new building, which is scheduled for completionin spring 2021, will contain a hotel, offices, and commercial
facilities, and the hotel will be a "remm plus" hotel mainlycomprising guest rooms for overnight stays operated by Hankyu
Hanshin Hotels, thus meeting the demand of visitors to Kobe.

■ Project summary
4-chome Kanocho, Chuo-ku, Kobe
(Direct access to Hankyu Kobe-sannomiya Station)

Site area

Approx. 7,100 m2

Total floor space

Approx. 33,300 m2

Size

East wing: 29 floors above ground and 3 below groundWest wing: 1 floor under railway station (some sections with 2
floors above ground/basement level)

PurposeHotel (scheduled as the second "remm plus" brand hotel),offices, commercial facilities, station facilities

Construction
completion

Spring 2021

Creating Real Value: Our Story

Location

Artist's impression ofcompleted building

New lines planned by Hankyu Corporation

projects*1 in order to reinforce the connection
between the line-side areas including Umeda
and the gateways of Kansai consisting of Kansai

To Takarazuka

Osaka International
Airport(Itami Airport)

Sanyo Shinkansen

International Airport and Osaka International
Airport (Itami Airport) as air gateways and ShinOsaka Station which is planned to serve as astation on the Linear Chuo Shinkansen Line. By
improving these new lines, we will reinforce
the railway networks and aim at creating the

Kobe-Sannomiya

Hankyu Kobe Line
Hans

hin M

Port Liner

TokaidoLinear Chuo Shinkansen Shinkansen
Hokuriku Shinkansen

Juso

Hankyu Kyoto Line

Kyoto-kawaramachi

ain L

ine

Osaka-Umeda
NaniwasujiLine( planned)*2*1 Naniwasuji Connection Line: The line to connect Juso Station with
Osaka Station to be newly constructedin the Osaka Station North District(Umekita) Phase II Development Area.
Shin-Osaka Connection Line: The line to connect Juso Station with
Shin-Osaka Station.
O s a k a A i r p o r t L i n e : The line to diverge from the Takarazuka
Line and be connected to Osaka
International Airport.
*2 License acquired on July 10, 2019; Scheduled for opening in
spring 2031

Shin-Osaka

Osakaline-side areas capable of being continuously
selected by many customers in the future.

HankyuTakarazuka Line

Hankyu Corporation is studying three new line

Kobe Airport

JR
Namba

Shin-Imamiya
Nankai Line (Airport Line)

Kansai International
AirportHanshin Namba Line

Osaka-Namba
JR Osaka Loop Line

Tennoji
JR Hanwa Line

NaniwasujiConnection Line
Shin-Osaka
Connection Line
Osaka Airport Line

Hankyu Hanshin Holdings Integrated Report 202026

Creating Real Value: Our Story

COVID-19: Its Impact and Our Response
ongoing efforts to ensure customer safety, and we will continue

Impact of COVID-19 on Business Operations

to seek cost savings.

■ FY2021 1Q Results

The Group's operations—including Urban Transportation,
Entertainment, Travel, Hotels, and Real Estate—were severely
affected by COVID-19 in the first quarter of fiscal 2021.
Revenues and income both decreased in this period (see our
website for details regarding 1Q accounts).
Accordingly, the forecast for the Group's full-year financial
performance is bleak. This, however, will not compromise our(¥ billion)

FY2021 1Q

FY2020 1Q

YoY difference

Revenues fromoperations

111.3

187.2

−­­75.9−­­40.5％

Operating income−­­13.2

30.9−­­44.1−

Ordinary income−­­15.4

32.2−­­47.6−

Net income
attributable toowners of the parent−­­18.9

21.4−­­40.3−■ Segment-Specific Performance in FY2021 1Q
Urban
Transportation
Revenues fromoperations

Real EstateEntertainment

Impact of COVID-19
−24.7

−11.0

−20.1

31.5

42.3

3.5

FY2021 1Q

−12.9

12.5

Extraordinary
incomeExtraordinaryloss*

Income before
income taxes

Consolidated

9.0

−8.6

111.3

−14.9

0.1

18.8

2.1

−87.5

23.0

11.2

11.0

19.1

16.2

6.7

−9.0

187.2

−19.5

+1.2

−10.9

−0.3

−14.1

+2.3

+0.3

−75.9

−19.6

−3.4

−10.7

−7.2

7.9

−2.6

0.8

−4.9

0.01

−5.2

−0.2

−1.8

−13.2

−7.4

−5.0

−46.5

12.9

8.1

7.9

0.5

2.1

−0.2

0.3

0.2

−0.8

30.9

−20.1

−0.2

−10.5

+0.3

−7.0

+0.2

−5.5

−0.4

−1.0

−44.1

■ Impact of COVID-19 on Profits and Loss

Ordinary
incomeAdjustment

48.7

FY2020 1Q

Operatingincome

Other

−6.4

FY2021 1Q

Revenues fromoperations

Hotels60.1

Operating income

YoY difference

TravelInternational
Transportation−28.6

FY2020 1Q
YoY difference(¥ billion)
Information andCommunication
Technology(¥ billion)

Consolidated
Urban
total
Transportation

Real
EstateEntertainment

TravelHotels

−87.5

−24.7

−11.0

−20.1

−12.9

−14.9

−46.5

−19.6

−3.4

−10.7

−7.4

−5.0

−46.6

−19.6

−3.4

−10.7

−7.4

−5.1

0

0

−

0

0

−

10.1

0.6

2.2

3.1

2.2

2.6

−56.7

−20.2

−5.6

−13.8

−9.5

−7.7

*In accordance with the Audit Considerations related to COVID-19 (Part 4) issued by theJapanese Institute of Certified Public Accountants on April 22, 2020, and in response to demand
from national and local governments, if business operations are suspended or events arecancelled, the fixed costs that arise during the period of suspension and the direct costs incurredin preparing for and cancelling those events are to be listed in accounts as extraordinary losses.

■ Major Examples of Impact of COVID-19 on
Business Operations
Urban
Transportation

Stay-home trends following the government's stateof emergency declaration and the evaporation of
inbound tourism resulted in a decrease in revenues.

Real Estate

Revenues from leasing and sales of condominiums
decreased as a result of closures and reduced
operating hours at leased facilities and suspensionof domestic condominium sales.

Entertainment

The postponement of the start of the NPB baseballseason and suspension of Takarazuka Revue
performances resulted in a decrease in revenues.

TravelSuspension of international and domestic tours
resulted in a decrease in revenues.

Hotels

The evaporation of inbound tourism demand, anda drop-off in domestic travel (business and leisure)and banquet demand resulted in a decrease inrevenues.

Containing the Virus's Spread and Planning for the Post-COVID Era
Urban Transportation
Hankyu Corporation
To help stop the spread of COVID-19 and maintain an on-board
environment that lets passengers ride with peace of mind, allHankyu trains are disinfected regularly, and windows are kept
open for thorough ventilation. All train seats, straps, handrails,
and windows are treated with antiviral, antibacterial agents,
and passengers are reminded to play their part, such as bycommuting at off-peak times and observing cough etiquette.
Stations also play a major role in our efforts to maximize
passenger safety and comfort, for instance through improved
sanitary facilities including Western-style, multifunction toilets
with seat disinfectant dispensers.

27

Hankyu Hanshin Holdings Integrated Report 2020

Hanshin Electric Railway
Hanshin's broad-ranging initiatives to halt the virus's spread
include regular disinfecting of ticket machines, staircase
handrails, and other places of regular contact, as well as seethrough plastic curtains at ticket gate staff booths to prevent
transmission by airborne droplets. As with the Hankyu Railway,
all Hanshin train seats, straps, handrails, and windows aretreated with antiviral,
antibacterial agents, andpassengers are reminded
to play their part, suchas by commuting at offpeak times and observing
cough etiquette.

Real EstateContaining the Virus's Spread and Planning for the Post-COVID
Era at Commercial Facilities
In order that our customers can use our commercial facilities withconfidence in their safety, we have a range of measures in place,including stricter ventilation, cleaning, and disinfecting, as well as
monitoring the physical condition of our staff. Moreover, some of
our facilities are used for educating the greater public on COVID-19
issues, such as digital signage and color-coded external lighting of
the Umeda Hankyu Building to remind people of the current status aspart of the "Osaka Model" for action on COVID-19. To prepare for the"new era," we have adopted online tools so that, for instance, potential
condominium buyers can consult our sales staff in complete safety andcomfort.

Information and Communication
Technology
AI Tech for Easier Body Temperature Measurement
We have released a new, compact, AI-based device that combines
facial recognition and body temperature measurement functions aspart of the Mimamorume line, a core facet of our safety and education
businesses. Currently, when staff at various facilities take customers'
temperatures, they have to do so in close personal
proximity, thus causing queues to form and raising the riskof infection. The new AI-based Mimamorume device uses
thermography and AI-based facial recognition to offer acontactless way of taking body temperature that avoids thelikelihood of queuing. This is just one example of how westrive to find ways of making all areas of society safer.

Entertainment

TravelPreventing Infections at Hanshin Koshien Stadium and the
Tigers' New TV Shout-Out for Fansfrom national and local governments as well as the NBP organization.
In addition to in-stadium anti-infection measures, various otherinitiatives were put in place for ticket sales and events, services, andperformances in and around the stadium.
Hanshin Electric Railway is also working proactively to develop
fresh ways of enjoying sports in the post-COVID era. For instance,
the company is collaborating with Juwwa, a start-up web-based
community service provider, to come up with new perspectives fordelivering sport and entertainment content. One outcome of thisproject was the experimental "Hanshin Tigers Fans TV Shout-Out," achat-based function that let fans roar their support during the Tigers
vs. Giants games played without spectators in July 2020. Allowing fansto post their comments andHankyu Travel International has begun selling online tours, in which"travelers" participate via the Zoom videoconferencing system.

Creating Real Value: Our Story

Various measures have been instituted in accordance with guidelines

Hankyu Travel International's Online Tours

As people continue to stay home amid the spread of COVID-19,
online tours are a way to enjoy the thrills of travel—complete withtour conductor—from the comfort of home. These tours are a fullyinteractive form of entertainment, and participants are connected to alive feed from the tour destination, and can ask questions via the chatfunction. We look forward to developing a strong lineup of online tour
content and providing attractive new
products to meet the new needs of a
new age.

International Transportation
Keeping Goods Moving Worldwide

views via the web is a newCentered on Hankyu Hanshin Express as its focal point, our International

way of amplifying team spirit

Transportation Business comprises 52 locations in Japan and 134 aroundamong fans watching on TV.

the world. Despite the global spread of COVID-19, we arranged charter
flights for air cargo, and we are determined to perform our many roles in

Takarazuka Revue: Theater Reopening and New Initiatives
The Takarazuka Revue Company initially suspended performances tominimize opportunities for COVID-19 to spread. Since then, doors havereopened, and the company's facilities are subjected to strict antiinfection measures in accordance with national and local government
guidelines, including antiviral, antibacterial treatments throughout thetheater. Having our own theater rather than renting someone else's
gives us the flexibility to schedule shows and sell tickets as appropriate
to incorporate these safety measures. Shows may have beensuspended, but our stars remained busy, connecting with fans on social
networking services and putting on "Takarazuka at Home" limitedtime free online performances. Even now, after shows resumed, we
remain eager to find new ways for people to enjoy Takarazuka Revues,
including live viewing events at movie theaters, full broadcast of someshows via the web, andensuring distribution infrastructure is up and running, forwarding agent,customs broker, warehouser and many
more. By operating a thorough regime toprevent infections among our workforce,
we are determined to keep the flow ofgoods moving without compromisingcustomer and consumer safety.

HotelsOpening of Relocated Takarazuka Hotel Delayed
Given the circumstances surrounding the spread of COVID-19, we
decided to delay the opening of the Takarazuka Hotel in its new
location to protect the safety of guests, employees, and others. The
hotel's doors eventually opened on June 21, 2020. In order that people
can use the hotel with complete confidence in its safety, stringent anti-

Takarazuka-themed face

infection measures are in place. In keeping with the hotel's concept—

masks.

"your everlasting dream"—guests are treated to facilities and service ofsuch quality that feels like an extension of the dreamworld portrayed

Takarazuka Revue stars
connected with fans via SNS
while shows were suspended.

in Takarazuka Revue performances. As an icon of Takarazuka, we lookforward to welcoming new and familiar guests to an everlasting dream©Takarazuka Revue Company

long into the future.

Hankyu Hanshin Holdings Integrated Report 202028

Business Strategy

Urban
Transportation
Yusuke Kusu

Yoshifumi Nomura

Senior Managing Director,
Hanshin Electric Railway
Co., Ltd.

Senior Managing Director,
Hankyu Corporation

We remain focused onenhancing the value of ourrailways by providing safe,
secure, and comfortabletransportation services.

1

Basic Policies❶ Provide quality urban transportation services and otherrelated services
Develop personnel/Strengthen Group collaboration/Enhanceservices and convenience/Expand communication/Enhanceappeal of railway stations❷ Increase convenience and reliability of infrastructureand expand railway network

Develop railway stations and lines/Expand and strengthen railway
network❸ Ensure reliable transportation

Enhance security/Develop rolling stock❹ Expand feeder services and extend catchment areas ofrailway lines and stations

Advance line-side measures in the bus and taxi businesses/
Enhance bicycle parking areas at railway stations and bicycle
rental services/Collaborate with line-side area municipal
authorities, chambers of commerce and industry, and companies

2
Hankyu Series 1000 train

Revenues■ Fiscal 2020 Breakdown of revenues from operations
HotelsOther

Urban Transportation

28.1%

Consolidated
revenues fromoperations

International
Transportation¥ 762.7 billion

TravelInformation andCommunication
Technology(YoY ‒3.6%)

Real EstateEntertainment

Note: Figures for percentage of revenues from operations and operating
income are calculated based on the simple aggregate amount(including intersegment transactions) of each segment.

Revenues from operations

Operating income margin (right axis)(¥ billion)
250
200

29

Hankyu Hanshin Holdings Integrated Report 2020

237.1
17.8

17.2

236.0
17.6

238.6
18.2

227.2
17.6

25
20

150

15

100

10

50

5

0

Hanshin Series 5700 train

（%）

239.5

2016

2017

Impact of COVID-19

2018

2019

2020

0
(FY)

Revenues from operations ‒¥5.2 billion
Operating income ‒¥4.7 billion

3

Retailing Business

Fiscal 2020 Review of Operations

The Phase II area of TauT Hankyu Rakusaiguchi opened,

Revenues from operations decreased in comparison witha grade-separated facility in the space created by

the previous fiscal year, impacted by the outsourcing ofelevating the tracks of the Hankyu Kyoto line near Hankyu

convenience store and station-based store operations.

Rakusaiguchi Station.

Operating income was solid at both Hankyu and Hanshin,but ended slightly down from the previous fiscal year due tothe impact of COVID-19 in the fourth quarter.

4

Fiscal 2021 First Quarter Results
Revenues from operations and operating income both

Railway Businessdecreased significantly from the same period in the previous

At Saiin Station on the Hankyu Kyoto Line and Hanakuma

fiscal year due to the impact of COVID-19 on the railway

Station on the Kobe Rapid Transit Railway Line, construction

and automobile businesses—passenger numbers wereand relocation of ticket gates and revising the layout ofdown sharply—and the outsourcing of convenience store

facilities, and work designed to secure lines of passenger

and station-based store operations in August 2019.

movement resulted in the installation of elevators and otherequipment, thus further promoting universal design of ourstations.
A revision of timetables at Hanshin Electric Railway■ YoY comparison of railway performance results
Hankyu Corporation

was undertaken in March 2020 with the aim of improving

Other tickets

convenience and smoothing out some congestion peaks,
resulting in 8-car trains being operated over a broader timespan in the weekend timetable for rapid express services as

Fare revenues(Millions ofyen)well as an adjustment of the sections served by, and rollingcompleted between Uozaki Station and Ashiya Station forthis section.

Workers

Students

convenience, including the introduction of buses withwheelchair lifts by Hanshin Bus and Osaka Airport Transport.

Hankyu Corporation transportation revenue (tier 1 + tier 2)
Other tickets
Commuter pass
Total

+662
+660

+2.3

28,9624,494+196,516

Workers

243,854

237,542+6,311+2.7

100,750
655,129

337,778
100,235

Workers

Students

FY2020FY2019Change12,327

12,024+303

21,66522,03011,08033,993

10,790
1,233

+290

+2.7

34,054

118,559

121,012−2,452−2.0

Workers

101,243

98,310+2,932+3.0

Commuter passStudents

127,652

124,353

26,409246,21226,043+3,298245,366

+366

+1.4

+0.3

1. Revenues of less than one million yen have been rounded down; personnel totalsof less than one thousand people have been rounded down.
2. Fare revenues and passenger volumes from other tickets for Hankyu include
revenues and personnel applicable to PiTaPa zone-specified discount fares.
3. Sum of tier 1 and tier 2 railway operators for both Hankyu and Hanshin

FY201931,12629,48429,92230,391

31,29931,54932,272

32,62833,19833,45692,929+2.7+845

FY201891,141−0.2

Other tickets

FY2017

90,191+1.0−61FY201689,485+2.5+12FY201589,708%−1.7

FY2014

61,630−0.1−364

FY201360,749+0.5−806

Impact of natural disasters–¥0.1 billion

1,246

Total

+2.0

+514

655,936

Impact of COVID-19–¥0.9 billion

Commuter pass

+6,825FY201260,268−0.5−2.4

344,604

FY201160,000+0.0−508

FY201058,582+2.0−7,632

Total■ Transportation revenue

33,456

29,623−1.9

318,158

Hanshin Electric Railway

Passenger
volumes(Thousands)

34,119%−1,171

310,525

Total

universal design and offer our customers greater

Change63,059Business Strategy

We have a number of initiatives in place to implement

FY201961,887

Other tickets

Students

Fare revenues(Millions ofyen)

FY202096,007

Other tickets

Automobile Business

Impact of natural disasters–¥0.6 billion

4,496

Commuter pass

Passenger
volumes(Thousands)

both Osaka-bound and Kobe-bound trains, and Osakabound trains have begun operating on elevated tracks in

Commuter passTotal

stock used in, some express services. The ongoing elevationof tracks between Hanshin Sumiyoshi and Ashiya has been

Impact of COVID-19–¥2.2 billion

60,91092,45962,92095,19262,72095,34863,137
96,33563,05996,516（¥ million）
FY202061,887
34,11996,007107%

FY2010 transportation revenue (total) = 100%
(3.8% up on FY2015)
2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

Hanshin Electric Railway transportation revenue (tier 1 + tier 2)
Other tickets
Commuter pass
Total

FY2010FY2011FY2012FY2013

FY2014FY2015FY2016FY2017FY2018FY2019FY20209,642

10,126

10,623

10,74011,008

11,107

11,372

11,563

11,797

12,024

12,327

18,39628,03818,89929,025

19,42230,045

19,66930,41020,26031,26920,286
31,394

21,03532,407

21,13632,69921,63833,43622,03034,054

21,66533,993121%
FY2010 transportation revenue (total) = 100%
(8.3% up on FY2015)
2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

Hankyu Hanshin Holdings Integrated Report 202030

Business Strategy

Real Estate
Ryuichi Morotomi

Satoru Nishino

President andRepresentative Director,
Hankyu Hanshin
Properties Corp.

Our goal is to support attractive
urban development while
offering the choice ofan affluent lifestyle.

1

Executive Vice President andRepresentative Director,
Hankyu Hanshin
Properties Corp.

Basic Policies
Real estate leasing business❶ Enhance appeal of and revitalize Umeda area and otherareas served by our lines●●●

 onsideration and promote systematic building reconstruction inC
the Umeda area
Develop major line-side bases from a long-term perspective
Strengthen competitive ability of existing lease properties❷ Strengthen business foundation, etc., in Tokyo
metropolitan area
❸ Strengthen the distribution facility real estate

Real estate sales business and others❹ Secure stable profits in the real estate sales business andexpand scale of operations
 articipate in medium- and long-term projects (urbanP
redevelopment, building reconstruction, etc.)● E xpand business portfolio (rental condominiums for income, etc.)● Start expanding business area (extend to Nagoya area and major
regional cities)●❺E xpand and further accelerate the scale of international businesses●●

Expand the scale of residential business in ASEAN nationsA cquire non-residential assets such as commercial facilities and offices❻ Strengthen and expand non-asset business●Osaka Umeda Twin Towers South2

Expand scope of real estate funds and REIT business

Revenues■ Fiscal 2020 Breakdown of revenues from operations
HotelsOther

Urban Transportation

Consolidated
revenues fromoperations

International
Transportation¥ 762.7 billion

TravelInformation andCommunication
Technology(YoY ‒3.6%)

Real Estate

29.2%Entertainment

Note: Figures for percentage of revenues from operations and operating
income are calculated based on the simple aggregate amount(including intersegment transactions) of each segment.

Revenues from operations

Operating income margin (right axis)(¥ billion)
250
200

（%）

220.9
22.6

150

CO•MO•RE YOTSUYA

Hankyu Hanshin Holdings Integrated Report 2020

19.5

222.6

236.0

20.8

18.4

25
20

17.6

15

100

10

50

5

0

31

215.7

237.3

2016

2017

2018

2019

2020

0
(FY)

3

Marks (Fukushima-ku, Osaka), Geo Kobe Nakayamate-doriFiscal 2020 Review of Operations(Chuo-ku, Kobe), Geo Shinjuku Hyakunin-cho (Shinjuku-ku,
Tokyo), and Geo Kashiwanoha Campus (Kashiwa, Chiba).

Revenues from operations and operating income decreased

Outside Japan, we participated in residential sales

in comparison with the previous fiscal year due to a

projects in Thailand, Vietnam, the Philippines, Indonesia, andreactionary decline from the sale of commercial-use land in

Malaysia; overall we have been involved with some 30,000

the eastern area of Saito (Ibaraki, Osaka) and an increase

residences (cumulative, as of the end of fiscal 2020), a large

in costs such as taxes and depreciation/amortization in theincrease over the preceding year. We have invested in an

real estate leasing business.

Indonesian entity that owns, operates, and manages two of
the country's most prominent complexes, Plaza Indonesia

Real Estate Leasing Business

Complex and fX Sudirman, which comprise commercial

Joint projects with other companies opened:facilities, offices, and hotels. In this way, the company has• Kyobashi 2-6 Redevelopment Project (Chuo-ku, Tokyo);established a solid foothold in the leasing business overseas.

• F ukushima 5-Chome and 7-Chome Joint Development

4

Project (Fukushima-ku, Osaka);• Y o t s u y a S t a t i o n D i s t r i c t R e d e v e l o p m e n t P r o j e c t(CO•MO•RE YOTSUYA) (Shinjuku-ku, Tokyo).

Fiscal 2021 First Quarter Results
In the real estate leasing business, revenues from operations

In addition, the Hankyu Hanshin Ginza Building (Chuo-

decreased from the same period in the previous fiscal year

ku, Tokyo), the Hankyu Hanshin Holdings Group's first

due to closures and reduced operating hours by commercial

commercial facility in the Ginza area of the Tokyo

facilities in the Umeda area and elsewhere as a result of

metropolitan area, was completed. We also worked to

COVID-19. Despite this, sales of condominiums in higher

boost the competitiveness and maintain and improve theprice ranges ensured the decline in operating income fromoccupancy rate of existing commercial facilities and officethe same period in the previous fiscal year was minimal.

buildings.
As part of the Umeda 1-1 Project, our large-scale
development in the Umeda area, we are on track for projectcompletion in spring 2022, with construction of the Phase II■ Domestic condominium units soldarea beginning on schedule in June 2019. Also, the Umekita（units）

Phase II Development Project is progressing steadily

2,000

toward its advance openings, which are slated for summer
2024. Elsewhere, progress was also made on a number of

1,500

Project and West Building Renewal Project at the Kobe
Hankyu Building, which is due for completion in spring 2021

1,516
1,302
1,087

1,000

(Chuo-ku, Kobe), and the Project to construct Saito Moegi
Distribution Center (Ibaraki, Osaka).

1,159

1,114

2018

2019

Business Strategy

other projects, including the East Building Reconstruction

500

Real Estate Sales Business and Others0

In the condominium sales business, sales of a number ofproperties were made, including Geo Fukushima Noda The

2016

2017

(FY)

2020

■ Leasable area (at end of fiscal year)(unit: 1,000 m2)
2,000

Start of work on Phase Iof the Umeda 1-1 Project

Leasable area (left axis)
Leasable area in Umeda (right axis)

1,800
Completion of
Umeda Hankyu
Building Office Tower

Acquired LaLaport
Koshien (site)(unit: 1,000 m2)

1,930

Completion of Umeda Hankyu
Building Phase II Building

1,000

900

810

1,600

800

1,510
Completion of
GRAND FRONT OSAKA

1,400

640
1,200

2010

Completion of Umeda Hankyu Building
Phase I Building, start of work on Phase II

2011

2012

2013

2014

2015

700

Completion of Umeda 1-1
Project Phase I, start of workon Phase II, partial sale of stakein GRAND FRONT OSAKA

2016

2017

2018

2019

2020

(FY)

600

Hankyu Hanshin Holdings Integrated Report 202032

Business Strategy

Entertainment
Tomotsugu Ogawa

Koji Momokita

Managing Director,
Hankyu Corporation

We will continue tofulfill dreams and offer
excitement throughour content.

1

Managing Director,
Hanshin Electric
Railway Co., Ltd.

Basic Policies❶ Maximize value of the Hanshin Tigers and Koshien brands
Forge a team that contends for the championship on a regularbasis/Increase the appeal of Koshien Stadium and expand thestadium business❷ Maximize value of the Takarazuka brand

Maintain the high capacity utilization and financial performanceof the Takarazuka Revue/Expand the content business/Increaseinternational business❸ Advance growth of other entertainment businesses andthe leisure business
Expand the music business and Mt. Rokko businesses

2

Revenue■ Fiscal 2020 Breakdown of revenues from operations
HotelsHanshin Koshien Stadium

Other

Urban Transportation

Consolidated
revenues fromoperations

International
Transportation¥ 762.7 billion

TravelInformation andCommunication
Technology(YoY ‒3.6%)

Real EstateEntertainment

9.2%

Note: Figures for percentage of revenues from operations and operating
income are calculated based on the simple aggregate amount(including intersegment transactions) of each segment.

Revenues from operations

Operating income margin (right axis)(¥ billion)

（%）

150
120
90

25

112.5

115.2

13.6

13.6

121.1
14.7

18.0

74.5

60

15.8

74.0

20
15
10

30
0

5

2016

2017

Impact of COVID-19
Takarazuka Grand Theater (Entrance)

33

Hankyu Hanshin Holdings Integrated Report 2020

2018

2019

2020

0
(FY)

Revenues from operations ‒¥4.4 billion
Operating income ‒¥3.0 billion

Note: In line with the launch of the Information and Communication Technology
business, ﬁgures post-FY2019 do not include these business segments.

3

Fiscal 2020 Review of Operations

4

Fiscal 2021 First Quarter Results

In the sports business, revenue from ticket sales and from

Revenues from operations and operating income decreased

sales of food, drink, and merchandise were solid, but

sharply from the same period in the previous fiscal year due

revenues from operations ended at a similar level to theto the impact of COVID-19—e.g., in the sports business,previous fiscal year and operating income decreased from

Hanshin Tigers' games were suspended, and in the stage

the previous fiscal year due to the impact of COVID-19 inbusiness, Takarazuka Revue performances were cancelled.

the fourth quarter.
In the stage business, shows were well received andmerchandise sold well, but revenues from operations and■ Total attendance at Hanshin Tigers home games(by season)

operating income decreased from the previous fiscal year

（Thousands of people）

due to the impact of COVID-19 in the fourth quarter.

3,500
3,000

Sports Business
The Hanshin Tigers, supported by their many fans, were
through the latter stages of the season, and succeeded in

1,000

related merchandise were well received, and we pursued a

2016

0

performances "GOD OF STARS" (the final show of one of thetroupe's top stars) and "Éclair Brillant," and Flower Troupe"Charme!"

2017

2018

2019

（CY）

Takarazuka Grand Theater/
Tokyo Takarazuka Theater
Other theaters(Thousands of people)
3,500
3,000

2,700

2,800

2,900

2015

2016

2017

3,000

Live viewing

3,200

Business Strategy

performances "A Fairy Tale –The Spirit of the Blue Rose" and3,091■ Takarazuka Revue
Annual total attendance at Takarazuka Revue

Stage Business
Performances proved popular, including Star Troupe

2,899

500

variety of initiatives to make facilities even more enjoyable
for customers, including expanded food and drink menus.

2015

3,035

2,000
1,500

At Hanshin Koshien Stadium, food, drink, and player-

2,911

2,500

part of a hot contest for the upper places in the league
progressing to the Climax Series.

2,878

2,500
2,000
1,500
1,000
500
0

2018

2019

（CY）

Note: Live viewing refers to live streaming of shows at movie theaters
nationwide for paying audiences.

©Takarazuka Revue Company

Hankyu Hanshin Holdings Integrated Report 202034

Business Strategy

Information andCommunication
Technology

Takashi Mizobuchi

Managing Director,
Hanshin Electric Railway Co., Ltd.

Contributing to the developmentof society through information andcommunications technology.

1

Basic Policies❶ Grow income continuously in the information services
business by increasing income in target growth markets,
developing businesses outside the Group with a focus
on the Kanto and Chubu areas, and catering to new IT
markets❷ Achieve stable income in the broadcasting andcommunications business by expanding and improving
regionally based products and services, acquiring
customers mainly through communications services,and retaining customers through the introduction anddevelopment of lifestyle services❸ Expand our safety and education business further
in response to programming education becoming acompulsory school subject, and increasing needs forpeace of mind and safety

2

Revenue■ Fiscal 2020 Breakdown of revenues from operations
HotelsInformation andCommunication
Technology

Urban Transportation

Consolidated
revenues fromoperations

International
Transportation
TravelOther¥ 762.7 billion(YoY ‒3.6%)

7.2%

Real EstateEntertainment
Note: Figures for percentage of revenues from operations and operating
income are calculated based on the simple aggregate amount(including intersegment transactions) of each segment.

Revenues from operations

Operating income margin (right axis)（%）(¥ billion)
80
60
40

25

53.5
9.9

58.6

15

9.6

20
0

Robotics
Programming Training
at ProgLab
ロボットプログラミング教室「プログラボ」

35

Hankyu Hanshin Holdings Integrated Report 2020

20

10
5

2019

2020

0
(FY)

3

4

Fiscal 2020 Review of Operations

Fiscal 2021 First Quarter Results

In the information services business, we received large

Revenues from operations and operating income increasedorders for transport systems, and business was solid in theover the same period in the previous fiscal year due tobuilding management systems segment as well as internet

large orders for transport systems in the information

services, an area in which we have high expectations forservices business and an increase in internet service

growth.

subscribers in the broadcasting and communications

The broadcasting and communications business achieved

business.

solid growth by providing products that fulfilled customer
needs, such as expanding fiber-to-the-home (FTTH) services
for multi-dwelling residences.
In the safety and education businesses, an increase inneeds relating to safety and security drove a steady increasein subscribers to the Mimamorume school route email
notification service.
As a result of all the above, revenues from operations andoperating income increased in fiscal 2020 over the previous
fiscal year.

■ Number of households subscribing to cable TV

On-board cameras (Information services business)（1,000 households）
800

600

625

2018

2019

648

Business Strategy

604

400

200

0

2020

(FY)

Bay communications (Cable TV store)■ Mimamorume (school route email notification
service) subscribers(Thousands of people)
300

260
230
200

200

100

0

2018

2019

2020

(FY)

Mimamorume (School route email notification service)

Hankyu Hanshin Holdings Integrated Report 202036

Business Strategy

TravelSeiji Matsuda

Creating travel itineraries
that reflect
customers' desires.

Atsushi Sakai

Representative Director andChairman, Hankyu Travel
International Co., Ltd.

1

Representative Director,
President, Hankyu Travel
International Co., Ltd.

Basic Policies❶ Strengthen competitiveness of travel packages

Strengthen areas outside Europe/Strengthen specialized
products/Expand customer base among new demographics/
Revise cost structure for advertising expenses, etc.

❷ Establish a second pillar

Strengthen initiatives for non-Japanese tourists/Expand group andbusiness travel services and create stable source of revenues

2

Revenue■ Fiscal 2020 Breakdown of revenues from operations
HotelsInternational
Transportation

Other

Urban Transportation

Consolidated
revenues fromoperations

Travel4.2%¥ 762.7 billion

Information andCommunication
Technology(YoY ‒3.6%)

Real EstateEntertainment

Note: Figures for percentage of revenues from operations and operating
income are calculated based on the simple aggregate amount(including intersegment transactions) of each segment.

Revenues from operations

Operating income margin (right axis)（%）(¥ billion)
40
30

30.5

29.9

34.0
6.0

35.5

8

33.8

6

5.0

20
10
0

4

2016

2017

Impact of COVID-19

37

Hankyu Hanshin Holdings Integrated Report 2020

2

2.1

2.2

0.6
2018

2019

2020

0
(FY)

Revenues from operations ‒¥4.9 billion
Operating income ‒¥3.1 billion

3

4

Fiscal 2020 Review of Operations

Fiscal 2021 First Quarter Results

The travel segment benefitted from a longer-than-usual

The effects of COVID-19 caused the cancellation ofGolden Week holiday period, with strong numbers tointernational and domestic tours throughout the quarter,

European and domestic destinations.

resulting in large year-on-year decreases in operating

In the inbound travel segment, proactive marketing

revenue and income.

activity as part of our ongoing efforts to capture inboundtourism demand resulted in strong numbers from Europe.
In the end, however, revenues from operations andoperating income decreased from the previous fiscal year
due to the impact of COVID-19 in the fourth quarter.

■ Travel billing ranked
Total travel billings (FY2020)
Rank

Company name

Overseas travel billings (FY2020)¥ billion

Rank

Company nameDomestic travel billings (FY2020)¥ billion

Rank

Company name¥ billion

JTB

1,577.1

1

JTB

544.8

1

JTB

934.4

2

H.I.S.

494.0

2

H.I.S.

404.5

2

KNT-CT Holdings HIS

280.7

3

KNT-CT Holdings

459.2

3

Hankyu Travel International

203.3

3

Nippon Travel Agency

267.7

4

Nippon Travel Agency

424.9

4

KNT-CT Holdings

153.7

4

ANA Sales

149.9

5

Hankyu Travel International

335.6

5

Nippon Travel Agency

109.6

5

JALPAK

133.3

6

JALPAK

178.2

6

AirTrip

56.3

6

Hankyu Travel International

128.6

7

ANA Sales

173.7

7

JALPAK

44.8

7

Tobu Top Tours

86.7

8

Tobu Top Tours

122.5

8

Nissin Travel Service

41.2

8

JR TOKAI TOURS

77.6

9

AirTrip

118.5

9

M.O.TOURIST

33.2

9

Meitetsu World Travel

69.9

10

Meitetsu World Travel

87.3

10

TABIKOBO

31.2

10

AirTrip

62.2

Business Strategy

1Compiled by Hankyu Hanshin Holdings based on Japan Tourism Agency Bulletin, "Business Volume for Major Travel Agents (April 2019 to March 2020)" andfigures published by major travel companies.
Note:1. Billings are rounded down to the nearest ¥100 million.
2. The total of Hankyu Travel International Co., Ltd., Hankyu Hanshin Business Travel Co., Ltd., and Hanshin Travel International Co., Ltd.

The five product brands offered by Hankyu Travel International.

Hankyu Hanshin Holdings Integrated Report 2020

38

Business Strategy

International
Transportation
As a comprehensive distribution
enterprise, we are offering
creative value-added services tocustomers on a global basis.

Seisaku Okafuji

Kazuhiro Tanimura

Chairman & Chief Executive
Officer, Hankyu Hanshin
Express Co., Ltd

1

President & Chief Operating
Officer, Hankyu Hanshin
Express Co., Ltd.

Basic Policies❶ Reform to establish a balanced business portfolio

Strengthen air freight, sea freight, and logistics services businesses
globally❷ Develop and implement optimal measures for profit growth
Strengthen sales capabilities globally/Maximize group synergy❸ Ensure robust global governance2

Revenue■ Fiscal 2020 Breakdown of revenues from operations
HotelsInternational
Transportation

Other

Urban Transportation

Consolidated
revenues fromoperations

9.4%¥ 762.7 billion

TravelInformation andCommunication
Technology(YoY ‒3.6%)

Real EstateEntertainment

Note: Figures for percentage of revenues from operations and operating
income are calculated based on the simple aggregate amount(including intersegment transactions) of each segment.

Revenues from operations

Operating income margin (right axis)（%）(¥ billion)
100
80

76.1

71.7

83.7

10

90.0
76.2

60

6

40
20
0

39

Hankyu Hanshin Holdings Integrated Report 2020

8

3.3
2.3
2016

4

2.7

2.2
2017

2

0.3
2018

2019

2020

0
(FY)

3

expand our global network and boost the competitivenessFiscal 2020 Review of Operationsof our logistics business, for instance by opening a logistics
center in India.

Revenues from operations and operating income decreased
from the previous fiscal year amid a severe business4

environment as trade friction between the USA and China
caused a drop-off in air freight volumes mainly in Japan and

Fiscal 2021 First Quarter Results
Revenues from operations decreased from the same period

East Asia.

in the previous fiscal year due to a decline in air freight

Despite this, we are harnessing our capital andvolumes, which was caused by COVID-19, in addition to theoperational tie-up with Seino Holdings to establish a

US-China trade friction, which has been ongoing since 2018.

framework for providing logistics services that combine

Despite this, operating income increased over the previous

international transportation, logistics, and domestic

fiscal year due to an increase in trade in the logistics

transportation, as illustrated by the opening of the Narita

business and ongoing efforts—in which customers' business

Global Logistics Center near Narita International Airport

continuity is top priority—to keep the flow of goods moving.

and our collaboration with Seino's truck terminal, whichsits adjacent to the center. In addition, we have worked to■ Expansion of our global network, strengthening of our logistics business● Narita Global Logistics Center commences operations

The former Hankyu Hanshin Narita Cargo Terminal was relocated to the warehouse built by Seino Transportation* adjacent to Narita
International Airport. By cooperating with the Seino Transportation truck terminal, we have established a logistics hub that combinesinternational transportation, logistics, and domestic transportation, and allows us to offer a comprehensive range of seamless transportation
services. Since the facility's opening, we have acquired new clients and the volume of goods handled is steadily growing.
*A company of the Seino Holdings Group, which entered into a capital and operational tie-up with Hankyu Hanshin Express in 2018.

Amsterdam

Rotterdam
Brussels

LondonParis
Dusseldorf
PrahaFrankfurt

Hong Kong
Moscow

Beijing
Guangzhou

Milan

IncheonBucheonSeoul

Hai Phong

Delhi

Ahmadabad

EntebbeNairobiMombasa

Hanoi
Bangkok

Dubai
Chiang Mai
Mumbai
DanangManilaPune
YangonChennaiBangalore
Coimbatore
ButterWorthJakartaPenangKuala Lumpur

Johannesburg

Port Klang

DurbanLos Angeles
Busan

ShanghaiTaipei
Kaohsiung

Singapore

KuantanDetroitToronto
New York
BostonCincinnati

Chicago
McAllenMonterrey
Bajio

Taichung
Cebu
Laem Chabang
Binh Duong
Ho Chi Minh
Phnom Penh

Miami

Atlanta
Dallas● Local subsidiary● Branch/Office● Representative office

Mexico City

Business Strategy

Kampala

Bawal

SeattleSan Francisco

Number of locations: 52 in Japan,
134 outside Japan(as of September 1, 2020)

Sao Paulo

Pasir Gudang

Johor Bahru

Cape Town● Strengthening business development● Expansion of our Asian network,● Strengthening our business in

In April 2018, we acquired Intraspeed South
Africa (Pty) Ltd., a freight forwarder, as a
subsidiary; we also acquired Intraspeed's twocompanies in Kenya and Uganda as
subsidiaries. Today, we continue to reinforce
our operations in Africa.

In addition to new warehouses in Indonesia(2016) and Singapore (2017), we haveopened new warehouses in India, Vietnam
and Myanmar to further enhance our logistics
structure. We will continue to expand our
global network in growth markets, including
establishing new locations.

In addition to expanding our locations in
Mexico, we are increasing and expanding
our warehouses in the USA. Our policy is
to strengthen our logistics services inCentral and South America from our basein Miami.

in Africa

rollout of logistics centers

North and Central America■ Air and sea freight volumes (total handled by Japanese and overseas companies in the International Transportation Business)
Air Export Freight Weight

TEU*-Measured Overseas Export Volume(1,000 tons)(1,000 TEU)

160
140
120
100

121

117

115

128

141
115

121

160

148

140

107

120
100

80

80

60

60

40

40

20

20

0

76

79

92

98

95

103

111

113

121

0

2012 2013 2014 2015 2016 2017 2018 2019 2020 (FY)2012 2013 2014 2015 2016 2017 2018 2019 2020 (FY)*TEU :"Twenty-foot equivalent unit," a unit of cargo capacity based on the volume of a
20-foot-long container.

Hankyu Hanshin Holdings Integrated Report 2020

40

Business Strategy

HotelsKazuhide Fujimoto

Yoshihiro Nakagawa

Japan's leading hotel chain
operator.

President and Representative
Director, Hankyu Hanshin
Hotels Co., Ltd.

Chairman and Representative
Director, Hankyu Hanshin
Hotels Co., Ltd.

1

Basic Policies❶ Improve profitability of existing hotels

Maintain and enhance product value through appropriate
investment❷ Expand network by opening new hotels

Make solid progress on current plans for opening new hotels whichmainly comprise guest rooms for overnight stays❸E stablish our market leadership in the Umeda area

Clarify our long-term management policy for our most importantfoothold, the Umeda area

2

Revenue■ Fiscal 2020 Breakdown of revenues from operations
Other

Hotels

7.5%

Urban Transportation

Consolidated
revenues fromoperations

International
Transportation¥ 762.7 billion

TravelInformation andCommunication
Technology(YoY ‒3.6%)

Real EstateEntertainment

Note: Figures for percentage of revenues from operations and operating
income are calculated based on the simple aggregate amount(including intersegment transactions) of each segment.

Revenues from operations

Operating income margin (right axis)（%）(¥ billion)
80

10

68.0
60
40

65.6

4.3

2016

2017

Impact of COVID-19

41

Hankyu Hanshin Holdings Integrated Report 2020

64.9

8

60.3

6

4.8

20
0

67.2

3.3

2018

4

1.9

2019

2

2020

0
(FY)

Revenues from operations ‒¥5.2 billion
Operating income ‒¥3.3 billion

3

4

Fiscal 2020 Review of Operations

Fiscal 2021 First Quarter Results

Despite the severe business environment amid increasingly

The effects of COVID-19 caused the temporary suspension

fierce competition among hotels in the Kansai area, weof operations at some hotels and sharp declines in

added momentum to our business expansion and boosted

customer numbers in both the accommodation and foodcompetitive ability with the opening of four hotels: Hoteland beverage segments, resulting in large year-on-year

Hankyu RESPIRE (one of our new hotel brands) in Osaka

decreases in operating revenue and income.

Umeda; remm Plus (another new brand) in Ginza, Tokyo;
preceded by remm Tokyo Kyobashi in Tokyo and Hotel

Despite these challenges, we succeeded in reopening the
Takarazuka Hotel in its new location in June.

Hanshin Annex Osaka.
These openings contributed positively to earnings, but
this was offset by the impact of COVID-19 in the fourth
quarter that has decimated the hotel business in the Kansai■ Visitors to Japanregion, and our accommodation operations were sluggish

Nationwide

over that period, resulting in year-on-year decreases in(Millions of people)

operating revenue and income.

30■ Non-Japanese guests as a percentage of overnightstay guests
Tokyo metropolitan area

50
40
30

38.6

38.1
37.0

36.9

45.6

42.3

20

Kansai area

15

44.8

10

31.19

19.74

31.88

42.1

39.8

41.4

12.41

13.20

40.0
12.08

10.24

7.89

39.9

37.6

0

（ %）
60
50

24.04
42.6

40
30
20
10

5

40.6

20

2015

2016

2017

2018

2019

0
(CY)

Source:"Visitor Arrivals, Japanese Overseas Travelers Trend in Visitor Arrivals to Japanand Japanese Overseas Travelers," Japan National Tourism Organization (JNTO),"Consumption Trend Survey for Foreigners Visiting Japan," Japan Tourism Agency

10

2016

2017

2018

2019

2020

Business Strategy

0Percentage visiting Kansai area (right axis)

28.69

25

（%）

Kansai area

(FY)

■ Average daily rates (ADR) and occupancy rates of Hankyu Hanshin Hotels in the Tokyo metropolitan area and Kansai area
Tokyo metropolitan area ADR(Yen)
20,00016,00012,00093.9
90.5
17,221
14,619Kansai area ADR

94.3
90.8
16,66514,1408,000

Tokyo metropolitan area occupancy rate

95.4
88.7
15,44913,549Kansai area occupancy rate （%）
100

90.9

80.6

90.9
16,654*
13,748*79.7

16,167
12,550

4,000
0

80
60
40
20

2016

2017

2018

2019

2020

0

(FY)

*Starting in fiscal 2020, we report the earnings of overseas online travel agents on a gross basis, rather than on a net basis as before. The new method (gross basis)has been applied retroactively to the previous fiscal year.

The Takarazuka Hotel

Inside the Takarazuka Hotel lobby

Hankyu Hanshin Holdings Integrated Report 2020

42

ESG Initiatives

Hankyu Hanshin Holdings Group

Sustainability Declaration

General principles and priority issues (materiality matrix)

Under our management philosophy of creating satisfaction among our customers and contributing to society by delivering "Safety andComfort" and "Dreams and Excitement," we in the Hankyu Hanshin Holdings Group have been seeking sustainable growth and promoting
a wide variety of efforts towards ESG (Environmental, Social, and Governance), a foundation for sustainable growth.
Society is now facing various challenges, ranging from response to climate change to growing concern over safety and security,
diversifying senses of value, and further advancement of technological innovations. With regard to the UN s Sustainable Development
Goals (SDGs), which UN member countries are intended to achieve by 2030, companies are expected to play increasingly significant
roles.
Under these circumstances, the Hankyu Hanshin Holdings Group released the Sustainability Declaration in May 2020, which outlines
the Group's commitment to addressing various challenges in order to help realize a sustainable society.

Customers
Employees

Communities

Contributing to asustainable society
Shareholders

Partners

Sustainably enhance
corporate value

Daily
life value

Socialvalue

Economicvalue

The vision and strategy for the Group's
sustainable growth, and the speciﬁc plansfor implementation thereof
Three core elements underlie our pursuit ofsustainable growth:

L on

25
g-TermManagement Vision for 20
MediumnalTerm Management P

Sustainability Declaration

1. General principles

2. Priority issues (materiality matrix) and thepolicies for each one

3. Project themes, non-ﬁnancial KPIs

Our value to society
MissionBy delivering "Safety and Comfort" and"Dreams and Excitement," we create

Grou
p Managyement Philosoph■ General Principles

satisfaction among our customers andcontribute to society.

The Sustainability Declaration embodies our contribution.

Create a future grounded in "Safety and Comfort," anda future colored by "Dreams and Excitement."
For over a hundred years, we have sought to cultivate communities and enrich lives.
Leveraging this experience, we commit ourselves to addressing social and environmental
challenges and working toward a sustainable future, one that offers a fulfilling, joyful life
to all and inspires the next generation to dream with hope.

43

Hankyu Hanshin Holdings Integrated Report 2020

■ Steps to Determine Priority Issues (materiality matrix)
Step 1

Based on guidelines such as the SDGs, GRI Standards, SASB Standards and ISO 26000,

Creating a long listof social issues

organize a list of universal social issues (1), a list of social issues particularly relevant to the
Hankyu Hanshin Holdings Group (2), and create a long list (349 items) of social issues with
importance to the Group.

Step 2

Summarizing into a
short list

Make a short list (54 items) of items by removing items from the long list (349 items) that are
irrelevant to the Group and combining those that overlap.

Step 3

Based on their level of importance to the Group and to our stakeholders, rank the items in

Identiﬁcation ofpriority issues

personnel for each core business and external experts (for details, see pp. 53-54). Following

order of priority. In addition, conduct questionnaires of and interviews with the responsible
additional examination of the ﬁndings of the surveys and interviews, determine six priority
issues. The Board of Directors then approves the six priority issues.

■ Priority Issues (materiality matrix)
Universal social issues● Addressing climate● Developing sustainable● Balancing economic growth● Adapting to circular● Promoting gender equality and● Enhancing corporatechangecommunities

society

diversityand employee satisfaction● Problem solving

through partnerships

governanceSocial issues particularly relevant to the Hankyu Hanshin Holdings Group● Depopulating society● Increasing public interest in● Accepting multiple cultures along with● Aging infrastructure● Advancement of technology

safety and security● Aging population● Adapting to diverse values

ESG Initiatives● Tight labor market

an increase in the foreign population

innovation

Six priority issues (materiality matrix)

Safe, reliableinfrastructure

Thriving
communities

Life designs
for tomorrow

Empowering
individuals

Environmental
protection

RobustgovernanceHankyu Hanshin Holdings Integrated Report 2020

44

ESG Initiatives

Hankyu Hanshin Holdings Group

Sustainability Declaration

Priority issues, policies, project themes and major
non-financial KPIs

In advancing its sustainable management, the Hankyu Hanshin Holdings Group has established six important priority issues, as well as
policies, project themes and major non-financial KPIs as follows. Based on the Declaration, we will accelerate the Group's ESG projects
while working to solve social issues through our business activities with the aim of raising our sustainable business value and thereby
helping to realize a sustainable society.

Priority issues and policies

Safe, reliable infrastructure
Provide railways and other infrastructure that are safeand disaster resilient. Ensure that anyone can safely
access our facilities and services.

Thriving communities
Help build sustainable communities with rich natural andcultural heritage, making great places to live in, work in,and visit.

Life designs for tomorrow
Promote refined and inspired lifestyle solutions for abetter tomorrow.

Empowering individuals
Provide an inclusive workplace that values diversity andtaps into individual talent. Cultivate tomorrow's leaders
for society.

Environmental protection
Contribute toward a low carbon, circular economy.

Robust governance
Act honestly and in good faith, as stakeholders expect
us to do.

45

Hankyu Hanshin Holdings Integrated Report 2020

Major non-financial KPIs
● Zero culpable incidents in our railway business● Employee satisfaction: Always better than inprevious survey*1● Women in management positions: Around 10% in

FY2031● Women among new hires: Always more than 30%● Rate of CO2 emissions cuts (target for FY2031 compared to FY2014)• Cut emissions by 26％ at Hankyu Hanshin Holdings and subsidiaries'
Japanese worksites*2• Cut railway energy consumption of Hankyu's and Hanshin's railways by 40％*1 The survey is conducted biennially.
*2 The same level as the target value set by the Japanese government as a national greenhousegas reduction goal based on the Paris Agreement

Project themes

Related fields*(1) Eliminate accidents and improve safety at railways and commercial facilities(2) Promote actions to prevent/reduce accidents and respond promptly andproperly to accidents if they occur(3) Establish safe and comfortable facilities and services that satisfy the needsof a diversity of people(1) Develop a good living environment (providing good residences, creating green spaces
and public spaces, establishing cultural and educational facilities, etc.)(2) Develop and expand commercial/business areas where people communicate with each other(3) Create a line-side environment that makes it easier for women to work and raise children(4) Promote measures to extend the healthy lifespan of the elderly(5) Offer services that satisfy the needs of foreign visitors/residents(6) Enhance collaboration and partnerships with universities, research institutions,ventures, local communities, etc.
(1) Propose products/services that help realize a lifestyle in harmony with nature(2) Propose products/services that lead to revitalization and promotion of local
communities and cultures(3) Propose products/services that respond to diverse values and create comfort
and excitement(4) Propose products/services for young people who will lead the next generation(5) Create and disseminate cultures through sports and entertainments(6) Improve existing services and create new businesses by utilizing ICT innovation

SocialSocialSocial(1) Improve employee satisfaction and create a more positive workplace(2) Promote health and productivity management(3) Promote diversity(4) Respect human rights and prevent harassment

ESG Initiatives

Social(5) Cultivate tomorrow's leaders(1) Cut greenhouse gas (CO2) emissions(2) Improve energy efficiency (promote energy saving)(3) Use more renewable energy (e.g. solar)(4) Aim for more eco-friendly buildings (green buildings)

Environmental(5) Produce less waste and recycle more

(1) Promote effective and transparent corporate governance(2) Ensure compliance and prevent corruption(3) Enhance risk management, including climate change(4) Pay attention to opinions of stakeholders in doing businessGovernance*The SDG icon that is placed first is the most relevant to each priority issue.

Hankyu Hanshin Holdings Integrated Report 2020

46

ESG Initiatives

Special Discussion

Ability to Spread
the Word about Initiatives is
Vital in the VUCA Era

Our Role is to Inspirea New Generation ofCommunity Builders

Ms. Mari Yoshitaka

Kazuo Sumi

Principal Sustainability Strategist &Deputy General Manager of Corporate Planning,

Chairman and Representative Director

Mitsubishi UFJ Research and Consulting, Co., Ltd.

Group Chief Executive Officer

Part-time lecturer, Graduate School ofHankyu Hanshin Holdings, Inc.

Media and Governance, Keio University

The Aspiration and Passion Behind the Hankyu
Hanshin Holdings Group Sustainability Declaration
In May 2020, the Hankyu Hanshin Holdings Group unveiled its Sustainability Declaration. Group CEO Kazuo Sumi spoke to ESG investment
expert Mari Yoshitaka about the declaration's deep foundations, including the development of the Kansai region and the Group's long
history of social contribution, as well as its determination to help achieve sustainable business management.

How Will COVID-19 Shapethe Kansai Economy?
Sumi

Today, we face a crisis like none before in COVID-19. I

look forward to hearing your opinions on how companies

47

Hankyu Hanshin Holdings Integrated Report 2020should act in times like these, and what they should be doing interms of ESG.
Yoshitaka

Let me start by asking you your view on the outlook

for the Kansai economy in the wake of COVID-19.

I cannot recall any time in my long career—I joined

when selecting potential employers, and there is increased

Hankyu Corporation in 1973, right after Expo 1970 in Osaka—

focus on ESG-related initiatives. Investors, as you say, arewhen the Kansai economy boomed as strongly as it has theseincreasingly aware of the need to look beyond the financial

past few years. I believed that a resurgent Kansai economy

projections and consider a company's essential values, so thewould naturally alleviate the problem of over concentration of

Sustainability Declaration came at just the right time. What did

business in Tokyo, and we thought Osaka's winning the hosting

you prioritize when compiling the declaration?

rights for Expo 2025 Osaka, Kansai, Japan would add further

Sumi

momentum to the Kansai economy.

and other stakeholders. These days, there seems to be a great

YoshitakaSumi

At its core is our devotion to providing value to customers

Hosting Expo 2025 is a big deal, isn't it? My

rush of companies shifting from shareholder capitalism to

grandparents lived in Senri New Town; I was excited to havestakeholder capitalism, but taking care of all stakeholders is a

Expo 1970 nearby and went virtually every day.

long-standing tradition at the Hankyu Hanshin Holdings Group.

Sumi

Expo 1970 in Osaka was not a one-off event. It had a

And among them, I believe that our workforce is where

lasting effect, and when Senri New Town was developed, they

everything begins; a more satisfied workforce provides better

left the expo site, monuments, and green space to commemorate

quality services to customers, and more satisfied customers led

it. Similarly, community building on the Yumeshima Island site

to better financial performance and a higher share price. In thatafter Expo 2025 will be just as important. Because it is an island,way, taking care of our workforce results in better returns for

I think it is the ideal setting for a "smart city" concept. The

shareholders.

Umekita Phase II Development Project will be completed in

Yoshitaka

2024, and we dreamed of harnessing this project to boost thetheir employees, for example maintaining employment despite

Kansai economy in tandem with Yumeshima—until COVID-19

the COVID-19 economic downturn, are those that perform

came along.

better when it comes to ESG. Top management can have a

Yoshitakahighly significant effect on the broadening of investors' horizons

We all hope for a swift end to the COVID-19

It seems that companies who take good care ofcarnage.

by explaining the close relationship between financial and non-Sumifinancial KPIs.

That won't happen immediately, but we still have four

years until the Umekita Phase II Development Project iscompleted and another year after that until Expo 2025 in Osaka.
I hope and pray that COVID-19 will end before then.

Sustainability Declaration Provides
Further Momentum to ESG Efforts
Sumi

Our business has long been founded on a core platformof railway operations, and we have striven to offer services andcommunity building solutions help neighborhoods along ourroutes develop. Perhaps the defining project of our social
contribution activities is the Hankyu Hanshin Dreams andCommunities of the Future Project, through which we seek to
ESG Initiatives

protect environments and nurture younger generations. The
project has been going for more than ten years now. Morerecently, in May 2020 we unveiled the Hankyu Hanshin Sustainability
Declaration, which consolidates and adds momentum to ourongoing ESG-related activities. The declaration is a core facet ofour quest for sustainable growth across the whole group, andfits between our Management Philosophy and Long-Term
Management Vision.
Yoshitaka
reticent

In general, Japanese corporations tend to beabout

showing

off

their

initiatives,

but

your

announcement of the Sustainability Declaration was an excellent
way to communicate your values inside and outside the group.
Sumi

We, too, used to think that these kinds of things were not

worth splashing over the front pages. Now, though, there isstrong interest from investors in these issues, and that's why wedecided to collate our current and historical efforts into a single
declaration.
YoshitakaIt's affecting the job market, too. For instance, more

and more jobseekers consider things like approach to SDGs

Hankyu Hanshin Holdings Integrated Report 2020

48

ESG Initiatives

Sumi

In many countries, most railway companies receive

injectionsofpublicfunds.

Fromanoverseas

condominium, it's often the woman who has the final say, and ainvestor's

woman's perspective is absolutely vital in determining theperspective, Japan is just about the only place they can invest

balance of tenants in shopping complexes. The same goes forin a purely private railway, so I am keenly aware that proactive

the Entertainment, Travel, and Hotel businesses, too. In many

dissemination of information—including our ESG initiatives—iscases, business proceeds much smoother when we have female

vital to ensure we are prominent on investors' radars.

employees directly in charge. It might take a little longer to get

Yoshitaka

I believe that railways are more than just a mode ofmore women into management positions, but we recognize thistransportation with low environmental impact, and that theis a long-term issue that needs attention now. Indeed, we arevalue of railway businesses will be widely recognized aroundworking on it, such as by hiring more women and investing more

the world as airlines continue to struggle amid the COVID-19

effort in their development.

chaos. And if the Sustainability Declaration succeeds in drawing

Yoshitakaattention to your ESG initiatives, I think the Hankyu Hanshin

workforce for around 30 years.

Holdings Group will become the focus of much hope andSumi

expectation in the community.

for satisfaction across our whole workforce. Although we are

So you’ve been working to develop the female

We have KPIs not only for female participation but also

already ranked quite highly on a national scale, I am moreinterested to know whether we are continually improving every
year. I give detailed feedback to group management regarding

Consideration for Employees'
Health and Happiness Leads toIncreased Corporate Value
Yoshitaka

Overseas investors tend to believe that Japan islagging when it comes to female participation in the workforce
and gender balance among management-level employees.
Sumi

We opened up career-track positions to women back in

1988, not long after the government passed the Equal
Employment Opportunity Act. We have worked hard to boost
female participation in our workforce because they have such alarge role to play, particularly when it comes to the ways inwhich our services are relevant to daily life. Take our Real EstateBusiness for instance: when a family is thinking of buying aour performance in the hope that it will nudge them to improveawareness and action so that we can constantly energize ourorganization.
YoshitakaThat

information—i.e.,regarding

your

using

feedback to management as a means for driving improvement—is the kind of insight that investors in particular rate highly. It's
relatively simple for a company to release concrete information
regarding the E in ESG (Environmental) because carbon dioxide
emissions and water consumption figures are easily quantified.
But when it comes to the S (Social), quantitative targets aremuch harder. Many Japanese companies tend to make vague
efforts without a defined goal in mind, so telling the narrative of
how ESG initiatives are reflected in management practices andhow they evolve is an important way of reaching investors.
Sumi

Talking of numerical targets, we are working to institutea new one: regarding the percentage of employees who smoke.
I know from first-hand experience how important it is to maintainour health; it is the key to our ability to work well and live arewarding life. A workforce satisfaction score is no use if youremployees are prone to illness.
Yoshitaka

A company that makes employee health a coretenet of its management approach improves corporate value
through increased motivation and productivity. What's more,when top executives talk about their regard for their people andseek to build engagement, that sends a powerful message toinvestors.

How We Respond to the Many
Environmental and Social Risks
We Face in the Modern Age
Yoshitaka

The Sustainability Declaration mentions the pursuitof safe, reliable infrastructure. Do you focus on that because ofyour position as a railway company?
Sumi

Naturally. Safe, reliable infrastructure is the overriding

concern of any railway business, and it is a vital factor in oursustainable business practices. For example, one of our nonfinancial KPIs is zero culpable incidents in our railway business.

49

Hankyu Hanshin Holdings Integrated Report 2020

Yoshitaka

What are some of the specific focus areas of thoseinitiatives?
Sumi

Firstly, we base our thinking on the fact that people are

only human and are bound to make mistakes. Human error
cannot be completely eliminated, so we need safety systems
that can provide solidity in the areas of uncertainty that
inevitably arise in human operations. For instance, I served as a
train driver for a year or so when I first joined the company, andthat experience taught me that we need to do more than justexhort people to stay alert and make no mistakes. Only withback-up systems designed from objective viewpoints can we
ensure safety and protect our employees.
Yoshitaka

I feel that climate change is more than just an

environmental challenge; it is also a new risk factor that railways
must take into account. We live in an unpredictable age, so it isimportant for companies to communicate their resilience andflexibility of management. What is your thinking regarding
investment in this area?
Sumi

Providing safe and disaster-resilient infrastructure is oneof our top priorities. Take flood risk for example: As you say,
global warming is causing a huge increase in sudden, heavy,
localized rain storms but, traditionally, town planning designs

Unhindered Communication
between Workers and the Boardroom
Bolsters Governancehave not assumed such huge volumes of rainwater. It is notpossible to revamp an entire infrastructure, so we railway

Yoshitaka

operators have to make careful plans to make do as best wehear about your G (Governance).

can until the urban infrastructure catches up. Then there's theSumiimpact of COVID-19 to consider. The virus has made teleworking

ensurea permanent fixture of the employment landscape, and it's

Employees can voice their concerns directly to top management

possible that commuter numbers will not return to pre-COVID

without having to go through HR or general affairs departments.

levels. Ageing and declining populations also mean we must

Back when I was running Hankyu Corporation, I made a point oflook conservatively at passenger numbers. I believe that railway

encouraging our new recruits to use the whistle-blowing system

operators can only improve productivity to overcome theseif they ever found something they thought was wrong.

risks. For instance, we are considering introducing more varied,

Yoshitaka

When new employees can speak their minds toflexible working styles for full-time and part-time employees.

those

the

Doing so will enable us to harness more efficiently the strengths

communication that promotes good governance.

of older people and those who want to work shorter hours.

Sumi

We've discussed your group's E and S; now let's

One feature of our governance framework is how wetheateffectiveness

very

top,

of

our

that'swhistle-blowing

the

kind

of

system.

unhindered

The Dreams and Communities of the Future SDGs Trains,aswhich we've operated since May 2019, came about because a

productivity by providing pathways for older people or thosesection chief reached out directly to me with pertinent

who

information. We were the first railway operator to introduce

Yoshitakacan'tAcompany

work

canfull-time

boost

hours

to

diversity
make

as
a

well

meaningfulrollingmuch about resilience, yet identifying risks and making

message, and it was pleasing to see a bottom-up initiative comestockwrappingthat

conveyedan

SDG-conscious

projections is a good way of finding new business opportunities.

to fruition.

ESG Initiatives

contribution. Not many corporate leaders in Japan can talkThis is another topic that investors would benefit from hearing
about.

The Dreams and Communities of the Future SDGs Trains
Photo: SDGs trains that have been in operation since September 2020.

Hankyu Hanshin Holdings Integrated Report 2020

50

ESG Initiatives

Osaka Umeda: The Main Hub of the Hankyu Hanshin Holdings Group

Yoshitaka

So, those governance systems not only underpin

Yoshitaka

So, you're taking a broad view of the entire Kansai

sustainable business practices, but they also contribute to aregion.

more open company culture. Those old "siloed" corporate

Sumicultures tend to kill off new ideas and challenges before theyexample of our approach. For a century, their top stars havesee the light of day, but the SDGs Trains are a good example ofworked hard not only to provide new value, but also to nurture

how a proper grasp of the importance of ESG by management

subsequent generation of performers who can sustain theircan lead to progress.

quest. Our raison d'etre is to preserve environments and build

The Takarazuka Revue Company provides a goodcommunities along our routes, and to pass the baton tosubsequent generations who can carry on that work in the

Bringing a Century-long Perspective
to Community Building
Yoshitaka

Japanesecompanies,

perhaps

being

overlyconscientious, tend to avoid making clear statements about the
future. More so now amid the chaos of COVID-19. But from an
investor's viewpoint, those circumstances are all the morereason to want to know about companies' visions for the future,and to understand what their leaders are doing and why. Whatmessage can you offer your group's stakeholders?
Sumi

Our railway business is still the solid bedrock of ourendeavors, and our mission is to transport people safely anddevelop better communities along our routes. I remember when
Hankyu and Hanshin merged: the media worked themselves
into a frenzy of speculation about whether the erstwhile rivals
could be effective. But if you consider that what really mattersin the railway business is each station's catchment area, then
Hankyu and Hanshin were not true competitors; our real rival is
car traffic. In that sense, I look forward to Hankyu and Hanshin
working as partners to build better communities along ourroutes.

51

Hankyu Hanshin Holdings Integrated Report 2020

future.
Yoshitaka
Sumi"Passing the baton," that's a nice way to put it.

When

the

HankyuCorporation's

founder,

IchizoKobayashi, first set up his railway in Ikeda, he decided not only
to generate the electricity needed to run the trains, but also to
power the houses in local neighborhoods and the streetlights.
In that way, he sought to keep communities safe and free from
crime. Our company has always endeavored to carry on that
legacy of community building, and today we contribute not only
to local safety, but also to the furtherance of education andculture. Secure communities are not just about crime reduction
initiatives; nurturing residents' love for their neighborhood isvitally important, too. The community whose people feel asense of belonging will naturally become safer.
YoshitakaThat echoes Goal 11 of the SDGs: sustainable cities

and communities. It is a keen reminder of the proximity ofHankyu Hanshin's mission to the company's SDGs narrative.
Sumi

Another indispensable component of livable communities

is health. Kansai is the focal point of multiple private-public
initiatives in the R&D, new industry development, and social
implementation arenas, aimed at making the region a top runnerin advanced medicine and healthcare worldwide. We at the
Hankyu Hanshin Holdings Group are proud to be a part of that.

Yoshitaka

That's interesting because the medical industry is

Yoshitaka

The fine balance you've achieved in devotion to

attracting attention as a new sustainable business.

keeping your legacy alive and flexibility to respond changes is

Sumi

Given our history, as a corporate group focused firmly on

an attractive combination. I appreciate your willingness to talkthe future, we have always sought to carry on our legacy by

about your vision for the future from a broad perspective at abuilding communities along our routes with particular attention

time when the outlook is unclear. From a long-term investor's

to education, culture, and safety. COVID-19 has brought aboutperspective, it has been very reassuring. Thank you very much.

changes in lifestyles and working practices, and I believe wemust take those developments into account as we consider
how best to build and maintain communities over the long term,
and we must communicate our message as an integral player inthese neighborhoods.

Afterthoughts
The essence of corporate branding can be found in Hankyu Hanshin's
long history
I meet many corporate executives in my line of work. Mr.

regarding a company's reasons for pursuing ESG, it also

Sumi impressed me because he frequently spoke not only

speaks to the company's very raison d'etre. When speakingof his own group, but from the broader perspective of theto Mr. Sumi, I was struck by the clear sense of purpose in

Kansai economy as a whole. It was also very clear that the

everything he said. For instance, his passionate talk of

Sustainability Declaration is the backbone that upholds therailway's position in civic society and the long-termgroup's posture toward sustainability, and is a true reflection

significance of transport for members of the community areof the group's long years of hard work in community

clear indicators of purpose, not to mention valuable non-building along its routes. Seen through the lens of afinancial information. Mr. Sumi naturally draws you in to his

conversation about SDGs, the approach to governance andconversation, and talking with him was as enjoyable as itsocial contribution of a group for whom these have always

was meaningful.

been part of the corporate fabric further highlights the solid
footing that underpins them.
Purpose is a vital, and much discussed, concept when
considering ESG. In addition to its obvious significanceESG Initiatives

Ms. Mari Yoshitaka
After working in IT and a U.S. investment banking, helped establish Japan's first ecofund at the Technology and Environment Dept. of the World Bank Group's International
Finance Corporation. Master's degree from the University of Michigan School of
Natural Resources and Environment.
Joined Tokyo-Mitsubishi Securities in 2000 (now Mitsubishi UFJ Morgan Stanley
Securities) as Chief consultant for the Clean Energy Finance Division.
Has consulted for institutional investors, governmental organizations, businesses,
providing research, advice, and lectures on ESG investing and SDG business.
Currently principal sustainability strategist & deputy manager of Corporate Planning at
Mitsubishi UFJ Research & Consulting; and part-time lecturer at the Graduate Schoolof Media and Governance, Keio University.
Temporary member of the Global Environment Committee, Central Environment
Council, Ministry of the Environment.

Hankyu Hanshin Holdings Integrated Report 2020

52

ESG Initiatives

Sustainability Declaration

Comments by external experts in determining priority issues(materiality matrix)*Titles and positions are as of November 2019.

■ I hope the Group will demonstrate the importance of SDGs actions
When working to achieve SDGs, it is important to first set targets to be reached in the future andthen think about what should be done now. When targets are set and the progress toward thetargets is seen, the awareness within the Group may change and various ideas will emerge from both
inside and outside the Group. Some SDGs actions may generate collateral effects. Efforts to address
climate change, for example, may lead to ideas for new lifestyles. The Hankyu Hanshin HoldingsGroup has infrastructure for community building, as well as the urban transportation business and theentertainment business, which have a significant public impact. The SDGs-themed rail livery, solar
power generation and recycling of plastic drink containers at Hanshin Koshien Stadium andTakarazuka Revue Company's carbon offset performance have great appeal for many people. I think

Norichika Kanie

Professor, Graduate Schoolof Media and Governance,
Keio University

these are very effective means to demonstrate the importance of SDGs actions, which should be
actively employed. The next step is to set targets that are unique to the Hankyu Hanshin HoldingsGroup, balancing the Group's values and SDGs. By doing so, I believe that the actions will be moresophisticated.

■ Group-wide commitment to sustainable community building
The strength of the Hankyu Hanshin Holdings Group is its capability for sustainable community
building within the Group as it covers railway, real estate, and entertainment as its core businesses. If
the Group develops a model community adapted to climate change, it will be a community of choicefrom a global perspective, attracting foreign companies and encouraging relocation of corporatebases. Environmental actions should not be a list of individual measures but have a comprehensive

Michiyo Morisawa
Head (Japan), PRI
Director, CDP Japan

story that covers all of them. The Hankyu Hanshin Holdings Group's community building initiative, forexample, will be highly appreciated if it can be combined with the development of a carbon-neutralcommunity by 2050 declared in the government's program toward the realization of a decarbonizedsociety (announced by the Government in June 2019). I hope that the Group will make effective useof this change as a business chance. Railway, which is powered by electricity, is a business segmentin which the Group can strongly demonstrate its efforts to cut greenhouse gas emissions. I expect theGroup to take positive actions in this field, such as cooperating with electric power companies forthe spread of renewable energy.

■ Workstyle reform from a "gender equality" perspective
When women ease their burden of work to raise their children by taking long childcare leave or
working shorter hours, it will reinforce traditional roles of men and women: men for work and womenfor family. From the perspective of gender equality, both men and women should be able to balance
their working life and family life. To this end, workstyle reform of men is necessary. It is important toprevent the roles of men and women from being fixed by correcting long working hours andintroducing flexible workstyles in terms of working place and time. The Hankyu Hanshin HoldingsGroup's community building initiative can play an important role in workstyle reform. If the Group
proactively places its satellite offices and supports other companies in promoting flexible workstyles,
it will raise the value of those areas as attractive to live in or work in. Also, the Hankyu Hanshin
Dreams and Communities for the Future Project is a wonderful Group-wide project that is effective inmaking the Group employees interested in SDGs and contributes to revitalization of local
communities. Through collaborating with local governments and other companies, employees may
encounter different values, which will raise their motivation for work and promote innovation.

53

Hankyu Hanshin Holdings Integrated Report 2020

Toko Shirakawa
Journalist on declining
birthrates, author
Visiting professor at
Sagami Women's
University
Private sector member of
the Cabinet Secretariat's
Council for the Realizationof Work Style Reform■ The Hankyu Hanshin Dreams and Communities for the Future
Project is a unique, pioneering project

Today, companies are required to show not only the vision of what they hope to be but also thevision that society will aim at and how they will contribute to realizing that vision. The Hankyu
Hanshin Holdings Group, mainly in its railway and real estate businesses, creates communities. It isnecessary to first draw an image of the community to be aimed at for 2030 and then show how theGroup will contribute to building such a community. The Kansai Area has a higher percentage of
foreign residents than other areas in Japan. Therefore, community building in this area should
consider the needs of foreigners, including foreign visitors. Measures for people with disabilities, suchas promoting employment of people with disabilities and installing platform doors, should also be
further enhanced. The Hankyu Hanshin Dreams and Communities for the Future Project and othercollaborative initiatives with local communities are very unique and pioneering. We will soon enter a
new era when customers will demand systems and services in which they can play active roles. It willthen be important to collaborate with NPOs working on local issues as partners in community

Noboru Hayase
Chief Executive Officer of
Osaka Voluntary Action
CenterChairperson of JapanNPO Center
Visiting Professor, Schoolof Human Sciences,
Osaka University

building.

■ Top management should talk about sustainability
The "era of CSR" focusing on the responsibility of companies has shifted to the "era of ESG," where
improved corporate value should improve shareholder value. Now we are moving toward the "era ofsustainable finance," which encourages activities that contribute to building a sustainable society.
ESG actions will be evaluated from the perspective of future finance, and investors are paying greaterattention to non-financial information that is related to future finance. Top management is required to

Emi Onozuka
Head of StewardshipResponsibility Group,
Goldman Sachs AssetManagement Japan

talk about sustainability, namely, how they enhance their corporate resilience (to changes) byaddressing sustainability issues and how they continue or change their business models in responseto changes in society. The Board of Directors is also required to monitor whether management
resources are optimally allocated from an ESG perspective, focusing not only on short-term profits
but also on a long-term perspective. Investors evaluate companies based on both EPS (earnings per
share), indicating short-term performance, and PER (price-earnings ratio), indicating the degree of
expectation in the medium to long run. Sustainability actions are effective in improving PER, whichshould also be explained to investors.

ESG Initiatives

Artist's impression of completed Umekita Phase II Development ProjectNote: Proposed as of May 2018, subject to change
Hankyu Hanshin Holdings Integrated Report 2020

54

ESG Initiatives

Working with Industry, Government, and Communities

SDGs Train 2020

— Sending Diverse Messages Aimed at Achieving SDGs with Trains Poweredby 100% Renewable Energy —As part of the Hankyu Hanshin Holdings Group's commitment to creating
communities that people will truly want to live in, we have operated theHankyu Hanshin Dreams and Communities of the Future Project since2009. The project, which focuses chiefly on fostering better environments
and people, is one of our efforts aimed at helping meet the SDGs.
Last year, to commemorate a decade of project initiatives, we launched
the Dreams and Communities of the Future SDGs Trains. By operating these
special trains, we hope to educate people about SDGs in cooperation
with the government and the municipalities our trains serve, as well as
businesses and civic groups that are serious about SDGs. In addition, thisyear we are teaming up with the Tokyu Group for SDGs Train 2020, a
series of trains run in cooperation with national and local governments,

Hankyu Corporation

businesses, and community organizations. These trains comprise the latest
energy-efficient rolling stock of Hankyu Corporation, Hanshin Electric
Railway, and Tokyu Railways, and the energy used to run the trains issourced entirely (effectively 100%) from renewable sources.
The front and rear cars of all three companies' SDGs Trains are wrappedin original illustrations and badged with a common design. Inside, alladvertising space is occupied with posters displaying SDGs and their
explanations, as well as the Hankyu Hanshin Holdings Group's SDGrelated initiatives along with those of the government, municipalities, andcooperating businesses. We hope that the Dreams and Communities of the
Future SDGs Trains will lead more people to think about how to achieve
better communities and a better society.

Hanshin Electric Railway

We look forward to leveraging the Hankyu Hanshin
Dreams and Communities of the Future Project as avehicle for addressing local challenges, fostering new
generations of long-term supporters of the Hankyu
Hanshin Holdings Group, and improving brand value.

Advertising space is being used for SDGs messaging

The shared SDGs Train 2020 badge and interior poster used by Hankyu, Hanshin, and Tokyu.

The Hankyu Hanshin Holdings Group supports SDGs.
55

Hankyu Hanshin Holdings Integrated Report 2020

ESG Initiatives

G overnance
Priority Issue 6

Robust governance
Policies

Act honestly and in good faith, as stakeholders expect us to do.
Basic Approach
The Company aims to remain a company that customers and other stakeholders trust. To this end, the Company
is strengthening and increasing corporate governance by heightening the transparency and soundness of business
management, complying with relevant laws and regulations, and ensuring appropriate, timely disclosure.
Reflecting this basic approach, the Company has established the policies below with a view to adhering to theprinciples of our Corporate Governance Code, sustaining growth, and enhancing corporate value over the medium tolong term.
(1) We shall respect shareholders' rights and ensure equality.
(2) We shall take into consideration the interests of shareholders and other stakeholders and cooperate with themappropriately.
(3) We shall disclose corporate information appropriately and ensure transparency.
(4) We shall ensure that the Board of Directors performs its roles and duties appropriately and ensure advanced
oversight and decision making.
(5) W e shall have constructive dialog with shareholders with a view to sustaining our growth and enhancing corporate
value over the medium to long term.

■ Corporate Governance System
General Meeting of Shareholders
Appointment/Dismissal

Corporate
GovernanceCommittee
Compensation
Committee

Appointment/Dismissal

Appointment/Dismissal

Board of Directors
Audit & Supervisory
Committee

Directors

Consultation(excluding Audit &Supervisory Committee
Members)

Accounting audit
ReportDirectors

Audits, etc.

(Audit & Supervisory
Committee Members)

ReportRepresentative Director
CallGroup Management Committee
Participate

Participate(as observer)

ReportStaff of Audit &Supervisory
Committee

ESG Initiatives

Selection/Dismissal/Supervision

Call/Report on
execution situation

Accounting
Auditors (CPAs)

Group
Auditing Division

Audit

Group Companies*The Hankyu Hanshin Holdings Group takes practical steps to enact all of the principles stipulated in the Corporate Governance Code. For examples of specificaction and other items relating to corporate governance, please refer to the Corporate Governance Report in the sustainability section of the group's website.

Hankyu Hanshin Holdings Integrated Report 2020

56

ESG Initiatives
Priority Issue 6

Robust governance
Governance Structure■ Overview of Hankyu Hanshin Holdings' and theGroup's Corporate Governance Structure
Hankyu Hanshin Holdings, Inc. is a pure holding company, andthe conduct of operations is basically the responsibility ofGroup member companies. Hankyu Hanshin Holdings' principalrole is supervision and oversight of the entire Group—meaningthat these functions are separate from the conduct of Groupbusinesses.
Through this system, the Company realizes supervision andoversight and enhances the overall governance of the Group
by: retaining the authority to approve the Company's and theGroup's management policies and strategies, and the mediumterm or annual management plans of all core businesses;
requiring timely submission of progress reports by operatingcompanies; and having Group companies obtain approval from
Hankyu Hanshin Holdings before taking actions that affect theGroup's management significantly (for example, investments
above a certain threshold).
With regard to the above matters, the Board of Directors,
which includes outside directors, makes approval decisions andreceives reports. Moreover, to undertake preliminary reviews
the Company has established a Group Management Committee,
which includes representatives of the Group's core businesses.
Further, to ensure transparency in the appointment
and dismissal of the Company's directors and to facilitate
coordination with outside directors, the Group has established
the Corporate Governance Committee, which comprises
standing Audit & Supervisory Committee members, andoutside directors who are independent of the Company, andrepresentative directors. Moreover, to ensure that concretedecisions regarding the amount of director compensation(excluding that of members of the Audit & Supervisory
Committee) under the responsibility of the Board of Directors,
are made based on objective and transparent procedures,
the Company has established a Compensation Committee
comprising the chairman (or the president, in the chairman'sabsence or unavailability) and outside directors who are
independent of the Company.
In addition, as part of efforts to strengthen its overallcapabilities, the Company is strengthening the governanceof funding. Measures include centralizing funding under theCompany and distributing funds to operating companies within
the limits set out in business plans that the Company has
approved.

■ Timeline of Initiatives for More Effective and Transparent Corporate GovernanceCorporate Governance Committee established
FY2016• C harged with ensuring transparency of corporate director appointments and dismissals and facilitating
coordination with outside officers. Committee meets twice a year, and comprises the representative directors,
standing auditors (currently standing Audit & Supervisory Committee members), and outside officers.

Evaluation of the Board of Directors' effectiveness
FY2017• A survey was carried out to assess the management by the Board of Directors, including the sufficiency of its
explanations and the appropriateness of its handling of its proceedings. Starting in fiscal 2020, interviews arepreceded by questionnaires for more effective assessment.

FY2018FY2019Abolition of senior advisors system
Abolition of anti-takeover measuresCompensation Committee established• Charged with ensuring that the objectivity and transparency of procedures relating to decisions regarding board
members' remuneration, including amounts. Committee meets once a year, and comprises the chairman andoutside officers.

Review of compensation system
FY2020• Stock-based, performance-linked stock compensation system (paid into trust) introduced for the chairman
and president in order to further motivate them to enhance the Company's corporate value and businessperformance, as well as to enhance shareholder value.

Change in legal status regarding audit function (June 17)
FY2021• Became a "Company with an Audit & Supervisory Committee" as part of efforts to bolster the Board of Directors'
oversight function and enhance corporate governance.
• Upon that change, the number of company officers was reduced to 11 and the number of independent
directors was made five (including two women) in order to increase the proportion of independent officers.

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Hankyu Hanshin Holdings Integrated Report 2020

More Effective and Transparent
Corporate Governance■ Management Organization for Decision Making,Execution, and Oversight of Matters Related toCompany Management
Board of Directors and Directors

The Board of Directors enhances governance of the entire
Group and oversight of respective companies by: retaining theauthority to approve decisions regarding the Company and the

Audit & Supervisory Committee and Its Members

Of the Audit & Supervisory Committee's three members, two are
independent directors. By selecting committee members whoare independent from the Company and have a high level of
specialist expertise, the Company endeavors to further ensure
sound decision making. We provide full backup to enable the
Audit & Supervisory Committee members to perform theirgovernance and oversight functions, for example by involving
them in the Group Management Committee and other meetings
within the Group.

■ Membership of the Audit & Supervisory Committee

Group's management policies and strategies, and the mediumterm or annual management plans of all core businesses; andrequiring timely reporting by operating companies about Group
companies' significant investments.
In order to reinforce governance and oversight capabilities
and boost decision-making quality, the Board of Directors
is composed of 11 directors, five of whom are independent
directors, including two women. Moreover, the 11 directors
include all three members of the Audit & Supervisory
Committee.*1, 2
The Company's compensation system for directors (excluding
Audit & Supervisory Committee members) further motivatesthem to enhance the Company's corporate value and businessperformance, as well as to enhance shareholder value.
Compensation comprises two elements: basic monetarycompensation paid according to position and stock-based,
performance-linked stock compensation paid in trust to
individuals in the posts of chairman and president.

■ Membership of the Board of Directors, etc.
No upper limit stipulated.

Term of office stipulated inarticles of incorporation

1 year (2 years in the caseof Audit & Supervisory
Committee members)

Chairman of the board

Chairman

Number of directors

11

Appointment of outside
directors

Appointed.

Number of outside directors

5

Among outside directors,
number of independent
directors

5*1. Quorum of directors: The Company's articles of incorporation stipulatethat a quorum shall be reached with at least four directors and at least
three Audit & Supervisory Committee members.
*2. C riteria for appointment of directors: Criteria for appointment of
directors are stipulated in the Company's articles of incorporation as
follows:(1) Directors shall be appointed at shareholders' meetings into two
distinct categories: Audit & Supervisory Committee members andothers.
(2) Resolutions on the appointment of directors shall be passed witha majority of voting rights held by shareholders in attendance,
provided that those in attendance constitute no less than one thirdof all shareholders with voting rights.
(3) Resolutions on the appointment of directors shall not be conductedby cumulative vote.

Total committee members

3

Full-time committee members

1

Internal directors

1

Outside directors

2

Committee chairperson

The internal director

Directors and employees
assigned to aid the duties
of Audit & Supervisory
Committee members

Staff assigned exclusively tothis position

Corporate Governance Committee

To ensure transparency in the appointment and dismissal of
directors and coordination with outside officers, a Corporate
Governance Committee has been established, made up of
three representative directors, one full-time Audit & Supervisory
Committee member, and five independent directors.
In addition to selecting director candidates and providing
advice relating to the dismissal of directors (excluding Audit &Supervisory Committee members), the Corporate GovernanceCommittee serves as a forum to provide information in suchareas as the Group's finances to outside officers.

Compensation Committee

To ensure that concrete decisions regarding the amount ofcompensation paid to directors (excluding Audit ＆ Supervisory
Committee members), which are the responsibility of the Boardof Directors, are made based on objective and transparent

ESG Initiatives

Maximum number of
directors stipulated inarticles of incorporation

Audit & Supervisory Committee

procedures, the Company has established a Compensation
Committee comprising the chairman and five independent
directors.
The committee provides advice relating to the Company's
compensation system and its content.

Group Management Committee

The members of the Group Management Committee include
full-time directors and executive officers of the Company, andrepresentatives of each of the Group's core businesses. The
committee meets to deliberate and decide on the approval ofresolutions of the Board of Directors; the Group's management
strategies and business plans; Group companies' significant
investments; and significant Group management matters.

Hankyu Hanshin Holdings Integrated Report 2020

58

ESG Initiatives
Priority Issue 6

Robust governance■ Ensuring Effectiveness of the Board of Directors
and the Board of Company Auditors
Attendance at meetings of the Board of Directors andthe Board of Company Auditors (FY2020)

Supervisory Committee set-up in order to reinforce that
corporate governance structure and further enhance corporate
value. The shift was approved by a resolution at the 182nd
annual General Meeting of Shareholders on June 17, 2020.

■ Outside Directors
Name

Attendance at meetings ofthe Board of Directors

Noriyuki Inoue

Attended 8 of 10 meetings

Shosuke Mori

Attended all 10 meetings

Noriko Endo

Attended all 8 meetings■ Compensation of Directors
PolicyThe Company's compensation system for directors (excluding
Audit ＆ Supervisory Committee members) further motivates■ Outside Auditors
Name

Compensation System

Attendance at meetings
Attendance at meetingsof the Board of Companyof the Board of Directors
Auditors

Haruo Sakaguchi

Attended all 10
meetings

Attended all 11
meetings

Junzo Ishii

Attended 9 of 10
meetings

Attended 10 of 11
meetings

Michiari
Komiyama

Attended all 10
meetings

Attended all 11
meetings*Fiscal 2020 meetings were technically meetings of the Board of Company
Auditors as the company was categorized at that time as a Company with
Board of Company Auditors under law.

Evaluation of the Board of Directors' effectiveness

The Company conducts evaluations of the board's effectivenessat the board meeting held in April every year.
A summary of the process, items, and results of an evaluationof the effectiveness of the Board of Directors conducted in fiscal
2020 is as shown below.

1. Evaluation process

In fiscal 2020, the board's effectiveness was evaluated byconducting a questionnaire survey regarding the adequacy ofthe board's composition and operations, followed by interviews
with board members based on the questionnaire's results.

them to enhance the Company's corporate value and businessperformance, as well as to enhance shareholder value.
Compensation comprises two elements: basic monetarycompensation paid according to position and stock-based,
performance-linked stock compensation paid in trust to
individuals in the posts of chairman and president.
*The group's stock-based, performance-linked stock compensation system
includes a malus clause, under which rights to receive stock-based
compensation may be withheld from any person eligible for this system
who commits an egregious breach of duty prior to finalization of suchrights, or if any other grounds for withholding such rights arise.
*The payment of retirement benefits to directors was discontinued in April
2004 to heighten transparency of the compensation system.

Procedure

Based on the foregoing policies, to ensure that concretedecisions regarding the amount of director compensation,
which are the responsibility of the Board of Directors, are madebased on objective and transparent procedures, the Company
has established a Compensation Committee comprising thechairman (or the president, in the chairman's absence or
unavailability) and five independent directors. The Board of
Directors makes compensation decisions after consultation with
the Compensation Committee concerning the compensation
system and content of compensation.

2. Evaluation items

As a result of the questionnaire and interviews, the board's
composition and operations in fiscal 2020 were deemed to beadequate, and the evaluation concluded that the board was

Other Efforts to Strengthen Governanceeffective and generally administered appropriately.
Conversely, it was suggested that the board's deliberations on
the Medium-Term Management Plan and other matters tabled
at board meetings could be more energetic.

■ Reasons for Adoption of Current Corporate
Governance System
As described in the Overview of Hankyu Hanshin Holdings'
and the Group's Corporate Governance Structure on page57, Hankyu Hanshin Holdings, Inc. is a pure holding company,
and the conduct of operations is basically the responsibility ofGroup member companies. Hankyu Hanshin Holdings' principalrole is supervision and oversight of the entire Group—meaningthat these functions are separate from the conduct of Groupbusinesses.
In addition to this, the Company shifted to an Audit &59

Hankyu Hanshin Holdings Integrated Report 2020

Position regarding strategic shareholdings

The Company acquires shares held for strategic reasons with aview to building relationships of trust with various stakeholders
and enhancing corporate value over the medium to longterm by maintaining business relationships or strengthening
collaborations with partner companies and maintaining
relationships with regional communities.
Individual strategic shareholdings are reviewed forappropriateness each year by the Board of Directors, taking into
account economic rationales such as dividend income. Wherea given holding is deemed no longer appropriate, it is soldprogressively, with comprehensive consideration of factors suchas the Company's financial circumstances and the influence ofstock sales on market conditions.

Abolition of anti-takeover measures

After considering recent trends related to such measures andcontracts contain clauses banning involvement with antisocial
forces.

changes in the business environment, the Company has decided

We also share relevant information between Group companies,

to abolish anti-takeover measures that have already been set tomaintain high awareness of issues through employee training,

expire at the conclusion of the General Meeting of Shareholders

and participate proactively in community meetings and activities

held in June 2018.

pertaining to the elimination of organized crime and other
antisocial forces.
If an incident occurs, we take a pan-organization approach

Internal Control System■ Basic Approach to Internal Control System and
the Progress of System Development
Recognizing the importance of ensuring that the businessin response, bringing in the relevant in-house departments andteaming up with outside experts.

Corruption Prevention and Compliance

operations of the Company are conducted in an appropriatemanner, we believe it is vital to have an internal control system
for the entire Group, and to revise it when deemed necessary.
In particular, the Group has a robust structure for compliancefocused management, including a dedicated compliance office,a Compliance Manual, and compliance training, all aimed atraising awareness of compliance issues throughout the entire
Group.
As part of our whistleblower system, we have a Corporate
Ethics Consultation Desk for quickly bringing to our attention
any incident that may threaten our compliance-focusedmanagement. If a serious incident occurs, we promptly set up arisk management committee to determine how to respond.
We also have a Group Auditing Division, which has its own
dedicated staff and operates under the direct control of thepresident. This division establishes regulations and conducts
internal audits of Hankyu Hanshin Holdings and its Group
companies.
To create a structure for ensuring appropriate operations, theGroup vests auditors of each Group company with authority
not only in accounting but also in operational audits, and at thesame time provides guidance to smaller Group companies on
Board of Directors' resolutions for the creation of an internal
control system.
With regard to systems for "Evaluation and Auditing of

We at the Hankyu Hanshin Holdings Group are constantly
striving to live up to the stakeholders' expectations andbecome a good, trustworthy organization. Our strong focus oncompliance is one of the pillars underpinning our efforts in thisarea.

■ Organizational Initiatives for Better Compliance
We have established a dedicated compliance office in
the Personnel and General Affairs Division to help bolster
compliance groupwide by pursuing three main initiatives as set
forth below.
Moreover, the Board of Directors conducts periodic reviews tomonitor compliance with the Code of Conduct, mainly involving
questionnaire surveys of employees.

1. Compliance Handbook

The Compliance Handbook makes clear to all the Group's
directors and employees that violations of law or social norms,
or actions that betray customer trust, are prohibited, andprovides handy examples of likely scenarios. In this way, themanual is part of our effort to raise awareness of the importanceof compliance.

Compliance Handbook Content

Financial Instruments and Exchange Act, the Company responds

Hankyu Hanshin Holdings Group Management

appropriately by carrying out management evaluations on aconsolidated basis, in line with in-house rules.

■ Basic Approach to Eliminating Anti-social Forces
and the Progress of its Development
We have a clear policy of thorough rejection of any involvementwith organized crime groups, companies connected withorganized crime groups, sokaiya racketeers, or other "antisocial
forces" that threaten the order and safety of civic society, andfirm refusal of their unreasonable demands.
To ensure full awareness of this policy throughout the entire
Group, it is instituted in the Basic Policy on the Establishment of
the Internal Control System and clearly set forth in the Hankyu
Hanshin Holdings Group Compliance Handbook distributed to
all Group directors and employees.
In practice, we cooperate closely with lawyers, police, andother organizations, and all Hankyu Hanshin Holdings GroupESG Initiatives

Internal Controls over Financial Reports," a section of thePhilosophy
Mission, Values, and Code of Conduct
Compliance in the service of customers Compliance in the service of shareholders･ Prohibition of improper･ Customer safety firstaccounting procedures･ Sincere dealings with･ Prohibition of insider
customers
transactions･ Strict rule compliance
Compliance as a social entity･ Appropriate handling of･ Efforts to solve environmental
personal data
problems･ Appropriate disclosure･ Efforts to contribute to society･ Prudent, socially responsible･ Respect for human rights
behavior
Compliance in the workplace･ Appropriate use of social･ Creation of appropriate work
media
environments
Compliance in the service of vendors･ Distinction between public･ Sincere dealingsand private･ Appropriate handling of･ Respect for decision-making
intellectual property
procedures･ Prohibition of involvementwith anti-social forces･ Prohibition of bribes andexcessive entertainment

Hankyu Hanshin Holdings Integrated Report 2020

60

ESG Initiatives
Priority Issue 6

Robust governance■ Raising Awareness Among All Officers and Employees

2. Corporate Ethics Consultation Desk
(Internal Whistle-Blower Procedures)

The Corporate Ethics Consultation Desk comprises an in-housesection and an external section, which is staffed by outside
lawyers. It enables all Hankyu Hanshin Holdings Group officers
and employees, as well as the group's business partners, toreport—anonymously—behavior that violates (or may violate)laws or regulations, or is otherwise unethical.
Sixty-two reports were received in fiscal 2020 from throughout
the whole Group.

We seek to raise awareness among all Group officers andemployees regarding compliance issues through a variety of
training activities and communication as described below.

1. Training• New recruit training, training upon promotion•T raining upon first appointment to director or auditor position
at a Group affiliate• Collective training for Group companies' compliance officers• On-site training at Group companies■ Corporate Ethics Consultation Desk

2. Communication• Compliance-related serials in Group magazines
Audit &
Supervisory
Committee
memberAudit &
Supervisory
Committee
memberReports

Consultation
Desk

Reports• Compliance-related e-mail newsletter featuring case studies
and updates regarding laws and regulations• Compliance-related information posted on the Group intranet

Reports

President

Directs

Consultation
Desk

Investigates

Pertinent
departments,
group
companies

Reports

President

Approves/
Directs
Demand forcorrection,etc.

Reporting of investigation progress and ﬁndings

Consultation
Desk

Risk Management Structure
We have established a risk management structure to help
maintain the health of the Group's management by preventing
risks from becoming reality, and at minimizing the damage
if they do. Annual assessments are performed for all of theGroup's companies to identify potential risks relating to natural
disasters, public health incidents, accidents, legal compliance,and organizational operation, and to institute appropriate
responses to different scenarios in order to ensure business
continuity in any contingency.
To manage risk across the whole group, we have a dedicated

3. Other Initiatives

risk management office focused on broader, pan-organizational

In the case of identification of a major compliance issue duringissues, while individual departments and group companies

the course of an ethics consultation, a risk management

conduct planning and analysis regarding potential issues withincommittee is convened as soon as possible to discuss andtheir own domains. This set-up is designed to enable the correct

decide on appropriate responses.

dissemination of information if an unforeseen incident occurs.

In addition, we are setting up compliance promotion offices

If a serious risk situation materializes, a Crisis Response Team,at major Group companies and appointing "compliance leaders"

headed by the president, is formed to contain the damage

at other companies to ensure our response is on a Group-wide

spreading and minimize the fallout.
These principles and actions are prescribed in our Risk

basis.

Management Regulations, and a report on risk analyses andresponses is, in principle, tabled for the annual general meeting

Overview of Group Complianceof shareholders every July.

Hankyu Hanshin HoldingsCore companies● Information to Group
companies● Guidance and training for Group
companies● Risk management● Risk Management Committee
secretariat● Corporate Ethics Consultation
Desk(internal whistle-blower
procedures)● Internal auditing

Compliance promotion officeInternal whistle-blowing, responsible
for planning and organizing seminars
and other awareness-raising activities

Other Group companies
Complianceleaders
Liaise with compliance departmentsof higher-level companies

61

Hankyu Hanshin Holdings Integrated Report 2020

Reflecting Stakeholder Sentiment in Operations
At the Hankyu Hanshin Holdings Group, we believe thatthe views of our stakeholders—including customers, local
communities, shareholders, trading partners, and employees—
have an important place in our business operations.

Acting on Feedback from Customers

We value feedback from customers, which we receive in via
multiple channels, including our Listening Center and forums
for dialogue with residents' groups from communities along
our railway routes. This structure is designed so that customer
feedback is routinely shared in-house and reflected in ourbusiness.
The Hankyu Railway's incorporates its Transit Information
Center and the Listening Center into its framework for collecting

Shareholder and Investor Relations

and acting on customer feedback.

We have adopted a variety of initiatives to make shareholder

For its part, the Hanshin Electric Railway seeks to act on

meetings more rigorous and make it easier for shareholders to

feedback collected by its public relations office and at its

exercise their voting rights. These include timing meetings tovarious facilities, as well as through its website and the efforts of

avoid scheduling clashes with other companies, using online

its communications staff.

voting platforms, and improving the voting experience for
institutional investors.
Moreover, we engage with investors in a variety of ways,
including briefings—attended by the president—for analysts

Opinions, questions, and other feedback is routed to thepertinent department, which investigates and responds asappropriate, and the case is subsequently used in our quest for
ongoing improvement in our businesses.

and institutional investors regarding the mid-year and yearend results, and dedicated investor relations staff in theGroup Planning Division to respond to investors' inquiries. The

Acting on Feedback from Experts

The priority issues relating to sustainable business practices

feedback we get from investors is shared in-house and reflected

set forth in the Materiality Matrix (see page 45) reflect thein business management.

diverse views provided by a broad variety of experts, including

Respecting Stakeholders' Positions

professors, civic groups, and investors (see page 53).

Realizing our mission to create satisfaction among our customers
and contribute to society by delivering safety, comfort, dreams,
and excitement involves the ongoing pursuit of sustained growthunderpinned by an active commitment to ESG.
In May 2020, we launched the Hankyu Hanshin HoldingsGroup Sustainability Declaration (see page 43), a clear
indication of how we intend to contribute to more sustainable
use of resources across society. The declaration sets forth ourdetermination to ramp up ESG initiatives, to further solidify
the relationship of trust we enjoy with customers, local
communities, shareholders, trading partners, employees, andother stakeholders, and to use the Hankyu Hanshin HoldingsGroup's businesses as a vehicle for overcoming the challenges
we all face as a society.
Our social contribution activities, such as environmental andcommunity action, have benefited from the institution of a clear
ESG Initiatives

Group policy and the establishment of a dedicated department
within the Personnel and General Affairs Division, and our efforts
in this area are guided by the Sustainability Declaration.
See the Hankyu Hanshin Holdings website for details.

Hankyu Hanshin Holdings Integrated Report 2020

62

ESG Initiatives

Directors and Audit & Supervisory Committee Members
As of June 17, 2020

Directors

Kazuo Sumi

Chairman and Representative Director,
Group Chief Executive Officer
1973
2000
2002
2003
2005
2006
2014

Joined Hankyu Corporation
Director, Hankyu Corporation
Managing Director, Hankyu Corporation
President, Hankyu Corporation
President, Hankyu Holdings, Inc.
President, Hankyu Hanshin Holdings, Inc.
Chairman, Hankyu Corporation (Current
position)2017 Chairman, Group CEO, Hankyu Hanshin
Holdings, Inc. (Current position)

Takehiro Sugiyama

President and Representative Director
1982
2005
2006
2006
2007
2016
2016
2016
2016
2016
2017
2017
2018
2019

Joined Hankyu Corporation
Director, Hankyu Corporation
Director, Hankyu Holdings, Inc.
Director, Hankyu Hanshin Holdings, Inc.
Managing Director, Hankyu Corporation
Executive Vice President, Hankyu Corporation
Executive Vice President, Hankyu Hanshin Holdings, Inc.
Director, Hanshin Electric Railway Co., Ltd. (Current position)
Director, Hankyu Travel International Co., Ltd. (Current position)
Director, Hankyu Hanshin Express Co., Ltd. (Current position)
President, Hankyu Corporation (Current position)
President, Hankyu Hanshin Holdings, Inc. (Current position)
Director, Hankyu Hanshin Properties Corp. (Current position)
Director, Hankyu Hanshin Hotels Co., Ltd. (Current position)

Executive Vice President andRepresentative Director
1981
2006
2006
2008
2014

Joined Hanshin Electric Railway Co., Ltd.
Director, Hanshin Electric Railway Co., Ltd.
Director, Hankyu Hanshin Holdings, Inc.
Managing Director, Hanshin Electric Railway Co., Ltd.
Senior Managing Director, Hanshin Electric
Railway Co., Ltd.

2016 Director, Hankyu Corporation (Current position)2017 President, Hanshin Electric Railway Co., Ltd.
(Current position)2017 Executive Vice President, Hankyu Hanshin
Holdings, Inc. (Current position)2018 Director, Hankyu Hanshin Properties Corp.
(Current position)

Noriyuki Inoue

Noriko Endo

Yuki Tsuru

1957
1994
2002
2003
2005
2006

1994 Joined DIAMOND, Inc.
2013 Visiting Researcher, Policy Alternatives

2000 Attorney at law (Current position)2016 Auditor of Hitotsubashi University
2020 Director, Hankyu Hanshin Holdings, Inc.

Director (Outside director*)
Joined DAIKIN INDUSTRIES, LTD.
President, DAIKIN INDUSTRIES, LTD.
Chairman and CEO, DAIKIN INDUSTRIES, LTD.
Director, Hankyu Corporation
Director, Hankyu Holdings, Inc.
Director, Hankyu Hanshin Holdings, Inc.
(Current position)

Director (Outside director*)

Research Institute, the University of Tokyo

2015 Project Professor, Graduate School of Mediaand Governance, Keio University

2019 Director, Hankyu Hanshin Holdings, Inc.
(Current position)2014 Chairman and Chief Global Group Officer,
DAIKIN INDUSTRIES, LTD. (Current position)2020 Project professor at the Keio University

Yoshishige Shimatani

Naoya Araki

1975 Joined TOHO CO., LTD.
2011 President, TOHO CO., LTD. (Current position)2015 Director, Hankyu Hanshin Holdings, Inc.

1981
2012
2012
2017
2020

Director (Part-time)(Current position)

Global Research Institute (Current position)

Director (Part-time)

Joined Hankyu Department Store, Inc.
President, Hankyu Hanshin Department Stores, Inc.
Representative Director, H2O RETAILING CORPORATION
Director, Hankyu Hanshin Holdings, Inc. (Current position)
President and Representative Director, H2O
RETAILING CORPORATION (Current position)2020 Chairman, Hankyu Hanshin Department Stores, Inc.
(Current position)

63

Masao Shin

Hankyu Hanshin Holdings Integrated Report 2020

Director (Outside director*)(Current position)

Directors, Audit & Supervisory Committee Members

Masayoshi Ishibashi

Junzo Ishii

Director, Audit & Supervisory Committee
Member (Outside director*)

Michiari Komiyama

Director, Audit & Supervisory Committee
Member (Full-time)
1979 Joined Hanshin Electric Railway Co., Ltd.
2013 Standing auditor, Hanshin Electric Railway

1986 Professor of Faculty of Commerce, Doshisha University
1989 Professor of Faculty of Business Administration, Kobe University
1999 Professor of Faculty of Business Administration,

1971
1999
1999
2002
2003
2013
2017
2017
2020

Co., Ltd. (Current position)2013 Standing auditor, Hankyu Hanshin Holdings,
Inc.

2020 Director, Audit & Supervisory Committee
Member (Full-time), Hankyu Hanshin
Holdings, Inc. (Current position)

2008
2010
2010
2016
2020

Graduate School of Kobe University

President of the University of Marketing and Distribution Sciences
Auditor, Hankyu Hanshin Holdings, Inc.
Auditor, Hanshin Electric Railway Co., Ltd. (Current position)
Director, Distribution Science Research Center
Director, Audit & Supervisory Committee Member,
Hankyu Hanshin Holdings, Inc. (Current position)

Director, Audit & Supervisory Committee
Member (Outside director*)
Prosecutor
Prosecutor, Supreme Public Prosecutor's Office
Chief Prosecutor, Saga District Public Prosecutor's Office
Chief Prosecutor, Kobe District Public Prosecutor's OfficeNotary, Osaka Legal Affairs Bureau
Attorney at law (Current position)
Auditor, Hankyu Hanshin Holdings, Inc.
Auditor, Hankyu Corporation (Current position)
Director, Audit & Supervisory Committee Member,
Hankyu Hanshin Holdings, Inc. (Current position)*Mr. Noriyuki Inoue, Ms. Noriko Endo, Ms. Yuki Tsuru, Mr. Junzo Ishii and Mr. Michiari Komiyama satisfy the qualifications ofoutside directors as provided in Article 2, Paragraph 15 of the Companies Act.
The Company has submitted notifications to the stock exchanges on which its shares are listed, naming Mr. Inoue, Ms. Endo,
Ms. Tsuru, Mr. Ishii and Mr. Komiyama as independent officers.

Reasons for election of outside directors
NameAudit & Supervisory Independent
Committee Member
officers

Reasons for appointment

Noriko Endo

To obtain input based on her extensive expertise acquired through research into public
governance, she was appointed for her ability to provide independent input.
Further, her appointment presents no issues with regard to the Independence Criteria
established by the company in light of the Tokyo Stock Exchange's independence requirements,
and there is no risk of any conflict of interest with general shareholders.

Yuki Tsuru

Currently an attorney at law. Appointed to advise on more compliance-based management and forher ability to provide independent input.
Further, her appointment presents no issues with regard to the Independence Criteria
established by the company in light of the Tokyo Stock Exchange's independence requirements,
and there is no risk of any conflict of interest with general shareholders.

Junzo Ishii

Former Professor of Faculty of Business Administration within the Graduate School of Kobe
University and former President of the University of Marketing and Distribution Sciences.
Appointed for his ability to express useful opinions based on his high-level specialist expertise inbusiness administration and for his ability to provide independent input.
Further, his appointment presents no issues with regard to the Independence Criteria
established by the company in light of the Tokyo Stock Exchange's independence requirements,
and there is no risk of any conflict of interest with general shareholders.

Michiari
Komiyama

ESG Initiatives

Noriyuki Inoue

Representative director for many years at DAIKIN INDUSTRIES, LTD. Also served as vice-chairmanof Kansai Economic Federation. Appointed for his wealth of management experience, perspectivefrom top business circles, and ability to provide independent input.
Further, his appointment presents no issues with regard to the Independence Criteria
established by the company in light of the Tokyo Stock Exchange's independence requirements,
and there is no risk of any conflict of interest with general shareholders.

A member of the legal profession who has served in important positions, including chiefprosecutor of the Kobe District Public Prosecutor's Office, and who is currently active as an
attorney at law. Appointed because, given his experience, he is expected to provide valuable
opinions, particularly about ensuring compliance in business management.
Further, his appointment presents no issues with regard to the Independence Criteria
established by the company in light of the Tokyo Stock Exchange's independence requirements,
and there is no risk of any conflict of interest with general shareholders.

Hankyu Hanshin Holdings Integrated Report 2020

64

ESG Initiatives

S ocialPriority Issue 1

Safe, reliable infrastructure
Policies
Provide railways and other infrastructure that are safe and disaster-resilient. Ensure that anyone cansafely access our facilities and services.

Non-Financial KPIs
Zero culpable railway incidents (Hankyu Corporation, Hanshin Electric Railway, Kita-Osaka Kyuko Railway, Nose
Electric Railway)

Eliminating Railway Accidents throughGood Policy
In order to carry out their mission of providing safe
transportation services, our railway companies observe strict
safety policies, work toward safety-related targets, and endeavor
to maintain resilience and readiness to implement day-to-day
safety measures and ensure safety in emergency situations.

■ Safety Management System
Hankyu Corporation
With Safety Management Regulations in place, we use thesystem shown below to run the PDCA (plan, do, check, act)
cycle as a means of seeking ongoing improvements in our quest
for transportation safety.
PresidentGroup Safety Management
Promotion Committee

Directors*Safety reports are available on each company's website.
General Manager of Urban
Transportation Headquarters(Chief Safety Management
Officer: Director)■ Company-Specific Safety Policies
Hankyu Corporation
Safety Slogan

All in for safety, all in for customer satisfaction

Main Points of the Code of Conduct for Safe Transportation

・ Ensure safety

・ Comply with laws and regulations
・ Be aware of operational conditions, ensure equipment safety
・ Perform checks, prioritize safety above all else

Business Division Safety
Management Promotion
Committee

Deputy General Manager ofUrban Transportation
Headquarters
General manager, Urban
Transportation Planning
Dept.
(Head of Investment and
Financing Team)

General manager,
Railway Operations
Dept.
(Operation
Manager)

General manager,
Railway
Maintenance Dept.
(Chief Civil Engineering
Facilities Manager)

General manager,
Railway
Maintenance Dept.
(Chief Electrical
Facilities Manager)

General manager,
Railway
Maintenance Dept.
(Chief Rolling
Stock Manager)

Manager, Kobe LineOperations

Manager, Takarazuka LineOperations

Manager, Kyoto LineOperations

Investigative Committee to Improve
the Safety and Security of Operations

Deputy Operations
Manager(Crew Training Manager)

Deputy Operations
Manager(Crew Training Manager)

Deputy Operations
Manager(Crew Training Manager)

Investigative Committee for
Measures to Prevent Accidents

・ Respect for human life
・ Swift and accurate communication
・ Continual improvement and advancement

Hanshin Electric Railway

Hanshin Electric Railway
We seek to achieve a higher level of safety by putting our manysafety initiatives into practice through rigorous application of the
PDCA cycle and constantly seeking improvements.

Maximum Priority on Safety

President

The president, officers, and employees shall do everything
possible to ensure safety of operations, based on the

Directors

understanding that putting the highest priority on ensuring

Urban Transport
Operation Divisionsafety is the primary mission of a railway business.

Compliance with Laws and Regulations

Chief Safety
Management Officer(General Manager of Urban
Transport Operation Division)

The Company shall comply with all laws and regulations
related to safety and apply them rigorously and sincerely in its

Safety Officer(General manager, Urban
Transportation Planning Dept.)

operations.

Maintenance of Safety Management Systems

The Company shall implement constant verification procedures
to ensure that safety management systems are operating
appropriately.

65

Hankyu Hanshin Holdings Integrated Report 2020

Railway Safety
Committee

General manager,
Urban Transportation
Planning Dept.

Operation Manager
General manager,(General manager,
Electrical Dept.
Transportation Dept.)

Chief Driver Training Managers(Eastern Train Operation Director)(Western Train Operation Director)

General manager,
Rolling Stock Dept.

General manager,
Engineering Dept.

As of April 1, 2020

■ Safety on trains and at railway crossings

Project Themes (1)Eliminate accidents and improve safety atrailways and commercial facilities

Hankyu Corporation
All our trains are equipped with emergency call units that allow
on-board passengers to report emergencies to the train crew.
1000-series and 1300-series trains have larger partitions on seat

■ Platform safety
Our systems are geared for swift response if a person should
ever fall into the tracks. These include special detection matsends and vertical handrails to help prevent people from fallingand colliding when trains brake suddenly.

on track areas and emergency train stop buttons mounted on
platforms to alert train drivers and automatically engage theAutomatic Train Stop (ATS) system. At the same time, flashinglights and alarms on the platform alert train crew and station
staff to the emergency.

Hankyu Corporation
Stations with fall detection mats: 4 stations with sharply curved
platforms
Stations with emergency train stop buttons: All stations

An emergency call unit

Expanded partitions and horizontal handrails

Hanshin Electric Railway
All trains are equipped with driver's safety devices so that if
a driver becomes incapacitated while the train is moving, theemergency brake is automatically activated as soon as theswitch is released.
All level crossings accessible to road traffic are fitted withobstacle detection systems to sense when the tracks areblocked, and crossings on all our routes have emergency

An emergency
train stop button

A sign for an emergency train stop button

buttons, thus alerting oncoming trains to potential danger.

Hanshin Electric Railway
Stations with fall detection mats: 5 stations (Kuise, Mikage,
Nishikujo, Kujo, and Dome-Mae)
Stations with emergency alarm buttons: All stations■ Preventing platform falls

A cab fitted with a driver's safety device

Hankyu Corporation installed screen doors on platforms 3, 4,
and 5 of Juso Station in fiscal 2019, and is currently working
to install them at Kobe-sannomiya Station with a view to fulloperation in the spring of 2021 (partial operation will begin
in October 2020). Hanshin Electric Railway has plans to install
2022, and Osaka-Umeda Station by the end of fiscal 2024.
In addition, both Hankyu and Hanshin have protective barrierson the platform ends (where trains do not stop) to prevent
people from accidentally falling onto the tracks.

■ Fostering a Culture that Puts Safety First
Hankyu Corporation
Our train driver and conductor training facility has a Safety

ESG Initiatives

platform screen doors at Kobe-Sannomiya Station in the spring

The light signal send and receive units of alevel crossing obstacle detection system

Awareness Room, where trainees learn about—and from—past incidents. In November 2017, the room was completely
rearranged around the concept of completely eliminating
culpable accidents.

Hanshin Electric Railway
At 5:46 a.m. on January 17, 2020, we commemorated the passingof 25 years since the Great Hanshin Earthquake with a prayer at the
Ishiyagawa Marshaling Yard,
which was damaged in thedisaster. At this service, we
reaffirmed our determination
Platform screen doors at Hankyu Juso Station

Protective barriers at Hanshin
Kobe-Sannomiya Station

to pass on the lessons
gleaned from the experience
to subsequent generations,

Further protection is afforded by outer diaphragms covering theand our commitment togangway connections between cars on Hankyu and Hanshin

every railway company's

trains. The diaphragms prevent people from accidentally falling

overriding care: ensuringfrom platforms onto the tracks through the gaps between cars.

safety.

The president leads the prayer at the
memorial service

Hankyu Hanshin Holdings Integrated Report 2020

66

ESG Initiatives
Priority Issue 1

Safe, reliable infrastructure
Project Themes (2)Promote actions to prevent/reduce accidents
and respond promptly and properly to accidents
if they occur

Hanshin Electric Railway
Meteorological Information System

A meteorological information system installed in the wake of
the Great Hanshin Earthquake enables us to collate a variety
of data relating to weather along our routes, which we use to
make train operations safer in extreme weather events.

Hankyu Corporation

The weather information terminals in our Operations Center

Earthquakes

are designed to offer maximum support to staff. For instance,earthquake likely to register 4 or more on the Japanese shindo

to automatically suggest

When our earthquake early warning system forecasts anscale of seismic intensity, or if an earthquake of that scale isdetected by our seismographs, trains are automatically signaled
to stop immediately. We added four more seismographs infiscal 2020, bringing the total to seven, and have adopted anearthquake information distribution system for railways.

the y

are

pro grammed

operational

restrictions

when weather data exceeds
acceptableparameters,

and can display route maps
designed

to provide an

intuitive overview of theExtreme Wind and Rain

We endeavor to ensure safety during typhoons and severerain storms by directing trains to reduce speed or stop as
appropriate based on information obtained from the rain gauges,
wind gauges, and water meters installed along our routes, aswell as weather information from the Japan Meteorological
Agency. Since fiscal 2014, we have used meteorological data
provided by a private-sector company to be better equipped
to deal as well as possible with sudden, extremely localized

affected areas.

The feed from a camera monitoring
river levels

Earthquake Early Warning System

Complementing the meteorological information system isa system, built and launched in August 2007, to receive
earthquake early warnings distributed by the Japan
Meteorological Agency. If the earthquake early warning system
detects an earthquake likely to register 4 or more on theJapanese shindo scale of seismic intensity, or if an earthquake

rainstorms.

of that scale is detected by our seismographs, trains are

Natural Disasters of Extreme Severity: Minimizing Risks
and Responding Faster

immediately stopping or decelerating, and thereby minimizing

As part of our efforts to minimize the risks inherent innatural disasters, we undertook a program of works in eightlocations between fiscal 2018 and fiscal 2020. These included
improvements to prevent landslides, removal of block walls, andautomatically alerted, thus allowing them to avoid danger bydamage.
In October 2018, the system was upgraded to make itcompatible with "propagation of local undamped motion" (PLUM),
a new, more precise method of seismic wavefield estimation.

earthquake-proofing overbridges and stations. Risk-reduction is
also a part of our operations, and can be seen in initiatives suchas pre-emptive suspension oftrain services when typhoons
are approaching.
We are also working toachieve swifter response indisaster situations, such as
quicker evacuation of passengers
from trains stranded between
stations.

A trackside embankment isstrengthened to prevent landslides

An earthquake early warning system terminal■ Safety-Related Capital Investment over the Past Three Years
Hankyu Corporation

20
15

Hanshin Electric Railway
Safety-related capital investment
Other capital investment in railway businesses(¥ billion)

4.7

4.3

4.7

5

1.4

2.3

4

13.1

14.1

14.4

2018

2019

2020

2

0

67

8
6

10

Safety-related capital investment
Other capital investment in railway businesses(¥ billion)

5.8

4.5

0.7
4.8

0

Hankyu Hanshin Holdings Integrated Report 2020

(FY)

2018

2019

2020

(FY)

Major Earthquakes and Tsunami

To prepare—and help others prepare—for a major earthquake
and tsunami, we have posted the locations of local evacuation
points at all our stations. And if a train on the Hanshin
Namba Line ever needs to make an emergency stop on the
Shinyodogawa Bridge, evacuation of passengers will be madesmoother with ladders for alighting from the train, as wellas markers on the bridge indicating direction and remaining
distance.
The Noda Hanshin Building (i.e., the Wiste shopping
complex) has been designated a tsunami evacuation site

Project Themes (3)Establish safe and comfortable facilities and services
that satisfy the needs of a diversity of people

A station local area map

A marker on the Shinyodogawa Bridge

Natural Disasters of Extreme Severity

When a natural disaster occurs, swift resumption of services
after the all-clear is vitally important. We are reviewing oursystem for resuming services after an earthquake or similar
event. For instance, more seismographs along our routes
provides greater precision so service suspensions can beapplied in more tightly focused sections. Meanwhile, expanding
level crossing safety inspection training to include technical staff
enables us to dispatch inspectors more efficiently and thereby
speed up the resumption of services.
Elsewhere, we have an official Twitter account dedicatedto train operating status information that allows us to provide
up-to-date information if, for example, trains are delayed. And
in March 2019, we introduced a system for automated onboard announcements in multiple languages—including someemergency situation announcements—beginning with the
Hanshin Namba Line.

■ Improved Disaster-Resilience of Commercial Facilities
Umeda Bo-sai Scrum

Better Accessibility to Stations and Commercial Facilities

Hankyu Corporation and Hanshin Electric Railway both have
improvement programs in place to ensure people of different
needs and abilities can use stations and trains comfortably. We
aim to establish our stations as local hubs for the movementof people, to which end stations are being upgraded foruniversal accessibility based on the Act on Promotion of SmoothTransportation, etc. of Elderly Persons, Disabled Persons, etc.
and the policies of local governments along our routes.
The Hankyu Hanshin HoldingsGroup was an early adopter ofuniversal design. Hankyu Itami
Station, for instance, which wasdestroyed in the Great Hanshin
Earthquake of 1995, wasrebuilt with facilities that wereconsidered groundbreaking
then, including audio guidance
for blind people.

A new elevator installed in Hankyu Hanakuma
Station as part of its universal design upgrade*For details on Hankyu's and Hanshin's initiatives regarding accessibility, see
their respective websites for their Plan on Initiatives for Improved Mobility
compiled under the Basic Act for Persons with Disabilities.

Umeda Bo-sai Scrum is the disaster preparedness unit ofCorporation, Hanshin Electric Railway,
JR West, and GRAND FRONT OSAKA
TMO.
The "scrum" seeks to foster teamwork
between people, businesses, andareas—such as by disseminating
information through digital signage
and holding disaster training seminars
for Umeda-area office workers—inorder to encourage people to help
each other in times of strife.

ESG Initiatives

the Umeda Area Management Alliance comprising Hankyu

Staff and Crew Qualify as Service Care-Fitters

Hankyu Corporation is enhancing not only its facilities but
also its intangible features regarding accessibility. It offers abroad array of training and encourages staff to develop theirknowledge and skills pertaining to caring for people withdifferent needs by qualifying as Service Care-Fitters.
Hanshin Electric Railway, too, has made Service Care-Fitter
qualified railway staff a focal part of its efforts to improvecustomer satisfaction since 2013, and now, all station staff andtrain crew have obtained Service Care-Fitter qualifications. We
will continue to strive for ever-higher levels of customer comfort.

Women-Only Train Cars
Tsunami Preparedness: Commercial Facilities as
Designated Evacuation Sites

We have entered into an agreement with Osaka City to allow
some of our commercial facilities to be designated as temporary
evacuation sites in a tsunami or flood situation.

We have designated women-only train cars to enable female
passengers to travel in comfort and security.
Hankyu Corporation：Kyoto Line, Takarazuka Line, Kobe Line
Hanshin Electric Railway：M ain Line limited express train between
Mikage and Osaka-Umeda stations

Hankyu Hanshin Holdings Integrated Report 2020

68

ESG Initiatives

S ocialPriority Issue 2

Thriving communities
Policies
Help build sustainable communities with rich natural and cultural heritage, making great places tolive in, work in, and visit.
Project Themes (1)Develop a good living environment (providing good
residences, creating green spaces and public spaces,
establishing cultural and educational facilities, etc.)

Holdings Group has been a core player in the project since
its beginning, with significant land holdings. Saito has many
noteworthy features that make it a place to live in safety
and comfort: a learning environment typified by a combined
elementary and junior high school noted for its small class sizes;
an exclusive patrol service for added security; and high-grade

Community Building Near Nishinomiya-kitaguchi Station

disaster preparations.

kitaguchi Station in 2008. The nearby learning facilities (Konan

ensured an attractive environment, including broad footpaths,

Hankyu Nishinomiya Gardens opened adjacent to NishinomiyaUniversity, the Kwansei Gakuin University Law School, etc.) andthe Hyogo Performing Arts Center adds cultural and academic
enrichment to the area.
Nishinomiya-kitaguchi has ranked top in the Most Desirable
Neighborhood in Kansai survey* for five years in a row.
*T he Most Desirable Neighborhood survey is a questionnaire ofprospective condominium buyers conducted by the "Major 7": Sumitomo
Realty & Development, Daikyo, Tokyu Land, Tokyo Tatemono, Nomura
Real Estate Development, Mitsui Fudosan Residential, and Mitsubishi
Estate Residence.

Another advantage of Saito is that solid town planning has
ample greenspace and parks, and underground cables (nooverhead power lines). Indeed, Saito has been recognized for
its environmentally considerate design on multiple occasions,
including selection as a "model neighborhood design for
countering global warming and 'heat island' effect" as part of thegovernment's Urban Renewal Project for 2005.

Offering Better Quality Lifestyle Solutions throughGeofit+Geofit+ is a residential planning and development project
designed to better equip Geo-brand condominiums to fit thecycle of life, such as by reflecting customers' views in ourofferings. To that end, Geofit+ is based around four main

Townscape of Saito, designed to maintain an attractive viewconcepts: Stage, in which fixtures and fittings are designedwith progress through different life stages in mind; Days, which
focuses on living comfort; Eco, for better consideration of thenatural environment; and Sonae, for disaster preparation andresilience.

Project Themes (2)Develop and expand commercial/business areas
where people communicate with each other

The Geofit+ Stage initiative for condominiums developed
jointly by Hankyu Hanshin Properties and Sena Development ofThailand won the Gold Award in the Housing and Architecture
category of the International Association for Universal Design's
2019 International Design Awards.
Our expertise in creating high quality living environments,
demonstrated here by the Geofit+
system of incorporating local
people's views to offer residencesthat meet real needs wererecognized.

Designing Offices Conducive to Communication andInteraction

We endeavor to provide people working at offices owned or
operated by the Hankyu Hanshin Holdings Group in the Umeda
area more opportunities to interact beyond their own companies'
borders through Hankyu Hanshin Workers' Service, with initiatives
such as a variety of events, and even an SNS app, TSUNAGU for
Hankyu Hanshin workers.
When its construction
is completed, Osaka
Umeda Twin Towers
South will feature

Saito: A Shining Example of Our Ever-Evolving Community
Building Prowess
Saito (International Culture Park) is a private-public partnership

new town construction project on the hills straddling Ibaraki
and Minoh cities in Osaka Prefecture. The Hankyu Hanshin

69

Hankyu Hanshin Holdings Integrated Report 2020

WELLCO, a floor
dedicated to the office
worker wellness.
An event for interaction among office workers

Project Themes (3)Project Themes (5)Create a line-side environment that makes it
easier for women to work and raise children

Offer services that satisfy the needs of foreign
visitors/residents

Helping Women Fulfil Their Potential

Hanshin Electric Railway is serious about helping women

Multilingual Information Display, Free Wi-Fi, and Other
Services Aimed at the Foreign Community

who live along its routes fulfil their potential. The company

The companies of our Urban Transportation Business are working

has initiated a project for that purpose, which includes theto improve service quality for non-Japanese people, including

Cheer*full Cafe website. The site presents interviews withmultilingual signs and other information at stations and facilities.

fabulous women living and working along Hanshin routes,

Elsewhere, both Hankyu and Hanshin use portable devices

articles about interesting

to translate when assisting customers in other languages. All

local finds, and a park guide

Hankyu stations have portable devices with translation software,that allows searches withwhile Hanshin uses app-based translation services in its devices,parameters for playgroundwhich are available at 11 stations.

equipment and station

To help tourists stay connected, not only do we offer Hankyu

names. Hanshin also holds

Hanshin Welcome Wi-Fi, a public network, along Hankyu andfamily-friendly events to

Hanshin routes, but we also work in partnership with otherproviders to ensure the utmost convenience.

promote interaction andcommunication.

The Cheer*full Parent-and-Child Café
event for families

Project Themes (4)Promote measures to extend the healthy lifespanof the elderly
The Hankyu Hanshin
Welcome Wi-Fi logo

A healthy body and healthy mind make for a happier life

Ikiiki Life Hankyu Hanshin operates Hanshin Ikiiki Day Service,an adult day care center specializing in half-day physicalrehabilitation services for the

A station staff member uses a portable device
to assist a customer in another language.

elderly. Supported and guided
by trained staff, customers use

Project Themes (6)exercise machines to maintain andEnhance collaboration and partnerships with
universities, research institutions, ventures,
local communities, etc.

build up their strength to manage
the different physical movementsof day-to-day life. In this way, we
seek to enable seniors to leadactive, rewarding lives in the

Support for Start-Ups

communities they know and love.

Disseminating information through Well TOKK and
Hankyu Hanshin Wellness Plus
Since April 2016, we have published Well TOKK, a quarterly
magazine full of health-related information for residents ofcommunities along Hankyu and Hanshin routes and, of course,
other passengers. Well TOKK is available for free at all Hankyu
stations and major Hanshin Stations.
We also operate Wellness Plus, a website throughThe Hankyu Hanshin Holdings Group is a steadfast supporter of

ESG Initiatives

A customer does physicalrehabilitation exercises

new business ventures. One example is GVH#5, a membershipbased facility we established in 2014, offering 24-hour access to
office and meeting space just two minutes' walk from Hankyu
Osaka-umeda Station.
Since 2019, we have organized Startupbootcamp Scale
Osaka, the local edition of Startupbootcamp, one of Europe's
largest acceleration program, as part of a conglomerate of seven
Japanese companies including Hankyu Corporation (represented
in this program by Hankyu Hanshin Properties).

which we provide handy information—in partnership withlocal governments, medical
institutions, universities, andbusinesses along our routes—
to help people build andmaintain their health.

Well TOKK magazine

Participants in Startupbootcamp Scale Osaka

Hankyu Hanshin Holdings Integrated Report 2020

70

ESG Initiatives

S ocialPriority Issue 3Life designs for tomorrow
Policies
Promote refined and inspired lifestyle solutions for a better tomorrow.

Project Themes (1)Propose products/services that help realize alifestyle in harmony with nature

Eco-Friendly Toilets to Protect World Heritage Sites andOther Tourist Destinations

As part of its quest to protect world natural and cultural
heritage sites and other tourist destinations, Hankyu Travel
International has donated eco-friendly toilets, which use special

Green Tourism and Volunteer Tours

microorganisms inside sawdust to biodegrade waste, fortours, in which employees travel to picturesque destinations and(some donations madeSince 2011, Hankyu Travel International has organized volunteer
help clean up the local area and protect the local environment.
These tours were opened to the public in 2018, and have alreadyproved very popular among participants.
Past tours include: Clean-up at Mt. Fuji (Shizuoka Pref., since2015); clean-up at Miho no Matsubara pine grove (Shizuoka Pref.,2019); clean-up at Amanohashidate (Kyoto Pref., 2011 and since2018); clean-up at Ryozenji Temple, first stop on the 88-temple
pilgrimage route of Shikoku Island (Tokushima Pref., 2019); cleanup along the Minami Aso Railway (Kumamoto Pref., since 2017)

installation in six locations
jointly with others).
Eco-friendly toilet sites:
Yakushima Island, Kumano
Kodo Pilgrimage Route,
Shiretoko Peninsula, Rebun
Island, Ogasawara Islands,
Kushiro Marshland

A block of eco-friendly toilets

Project Themes (2)Propose products/services that lead to revitalizationand promotion of local communities and cultures
Planning Tours Together with Local Governments

Clean-up tour
participants at Mt. Fuji

local governments to uncover new tourism assets and parlay
them into products and destinations that help invigorate local

Geo Condominiums Become Even More Environmentally
Consideratecommunities. For instance, in addition to an existing partnershiphave featured laminated low-emissivity ("low-E") glass, LED lights,

into a deal with Tsuruoka City, Yamagata, in July 2019 toSince 2011, Hankyu Hanshin Properties' Geo condominiums
facilities for harvesting and selling excess electricity from electricvehicles, solar power generation, and Ene-Farm home electricity
generation fuel cell systems. Geo complexes also have usedcooking oil collection sites so that residents can donate theirold (vegetable-based) cooking oil for recycling into bio-diesel
to power Hankyu buses—anand the Nemuro area in Hokkaido, the company also enteredincorporate local agriculture into tourism initiatives to support
the development of a thriving local community.
Elsewhere, we participate in private-public-academic projects todevelop local communities
throughtourism a topic

for university fieldwork,
invigorate

local

communities by promoting

Design Award in fiscal

long-term residence, and2013. We will continue

endeavor to develop new

to make improvements

tourist attractions.

to the quality and theenvironmental credentials
of Geo condominiums.

agreement with the Nagashima town council in Kagoshima

help

initiative that won a Good

A bus running on bio-diesel

Getting a Feel for the Great Outdoors at Mt. Rokko

71

Hankyu Travel International works in close cooperation with

University students undertake fieldwork
aimed at developing local communities

Rediscovering Delights along Hankyu Routes throughWalking Tours

Hankyu Walking Tours are popular events for people to discover

The cool climate atop Mt. Rokko, some 850 meters above sea

or rediscover the delights of areas along Hankyu routes. The

level, makes Rokkosan Country House and other leisure facilities

tours are held in conjunction with local associations andthe ideal place for outdoor activities like strawberry picking involunteer tour guides. Since April 2020, a special walking app

the summer.

has offered customers a new enjoyable way of participating.

Hankyu Hanshin Holdings Integrated Report 2020

Project Themes (3)Tigers Academy

Propose products/services that respond to diverse
values and create comfort and excitement

a form of good, healthy entertainment inspiring not just joy

The Hanshin Tigers endeavor to use professional baseball as
but also an emotional connection. The Tigers Academy wasestablished in 2018, incorporating a baseball school and a"Stay-and-donate" accommodation plans

dance school for children up

include a contribution to a facility that supports children in need.

school age. The academy

Hankyu Hanshin Hotels offers "Stay-and-donate" plans that
One example of our multiple plans is

to and including elementaryseeks to promote baseballby showing kids just how

the Child Chemo House Support Plan,

wonderful baseball and sport inwhich includes a donation to a facility

general can be.

supporting children with cancer. In
2019, 902 rooms were reserved using

A child at baseball school

this plan at 11 of our directly-owned
hotels.

Our hotels offer "Stay-anddonate" accommodation plans

Project Themes (6)Improve existing services and create new
businesses by utilizing ICT innovation

Project Themes (4)Propose products/services for young people
who will lead the next generation
Robotics Programming Training at ProgLab

Starting in fiscal 2021, programming is now a compulsory
subject in Japan's elementary school education. ITC educators
ProgLab offer an original curriculum of robotics programming
at locations nationwide, as well as classes at elementary andjunior high schools. By teaching SDG-conscious programming
aimed at solving society's various challenges—e.g., how to makerobots to clean up marine trash—ProgLab seeks to arm today's
kids with the skills they need toMimamorume: Hankyu Hanshin's Safety Tracking Service
Mimamorume harness the strengths of ICT for better protection.
Applications include a school safety tracking system, where IC
chips are inserted into pupils' schoolbags and sensors mounted
on school gates enable tracking of their comings and goings
via a phone app. Units last for at least six years—no battery
recharging or fiddly operations are required. As of March
2020, some 1,300 schools and pre-schools have adopted
Mimamorume.
A questionnaire of Mimamorumeusers revealed that 94.6% felt
assured by the system, whilesome guardians commented thatbuild their own better future.

receiving emails confirming theirchild's arrival at and departure fromschool was not only reassuring but
also nurtured parent-child bonds.
A ProgLab class in progress

A Mimamorume IC chip inserted
into a schoolbag

Customer Feedback

Project Themes (5)ESG Initiatives

Create and disseminate cultures throughsports and entertainments

Hankyu Tops Prominent Japanese CS Survey 11 Years in a
Row; Takarazuka and Hankyu Travel International Place 2nd

In the fiscal 2020 edition of the Japanese Customer Satisfaction

Takarazuka Revue, the Theatrical Culture Evangelists

Index* (JCSI; run by the Japan Productivity Center), Hankyu

In addition to regular year-round performances at Takarazuka

Corporation was rated top in the suburban railway category.

Grand Theater and Tokyo Takarazuka Theater, the Takarazuka

Indeed, Hankyu has placed first in this category in all 11 years

Revue Company also tours the nation, holding stage performances

the JCSI has been conducted. Elsewhere, the Takarazuka

and cinema-based live viewings in around 20 cities every year. The

Revue Company placed second in the overall corporate andcompany also undertakes overseas tours on occasion.

brand category and Hankyu Travel International second in theSpecially prominent are the company's exclusive performances

travel category. These results indicate that the Hankyu Hanshin

and events for 150 schools and other youth audiences, which

Holdings Group's various businesses continue to earn the

result in an annual youth audience of around 30,000. Taking

support of their customers.

the Takarazuka Revue to thepeople creates opportunities
for audiences of diverse ages
in many different regions andcountries to encounter andenjoy performing arts.

Photo provided by: Toho Cinemas Shinjuku*T he JCSI is one of Japan's largest customer satisfaction surveys.
Conducted by the JPC's SPRING (service productivity & innovation forgrowth), the JCSI collects responses from more than 130,000 users
and applies statistical methods to evaluate companies and brands. The
fiscal 2020 index gauged 458 companies and brands in 38 industries on
six criteria—customer expectations, perceived quality, perceived value,customer satisfaction, intention to recommend, and loyalty—which were
measured across six surveys held throughout the year.

A live viewing at a movie theater

Hankyu Hanshin Holdings Integrated Report 2020

72

ESG Initiatives

S ocialPriority Issue 4

Empowering individuals
Policies
Provide an inclusive workplace that values diversity and taps into individual talent. Cultivate
tomorrow's leaders for society.

Non-Financial KPIs
Employee satisfaction: Always better than previous survey* (applies to Hankyu Hanshin Holdings, Hankyu
Corporation, Hanshin Electric Railway, Hankyu Hanshin Properties)
Women in management positions: Around 10% in fiscal 2030 (applies to Hankyu Hanshin Holdings and six core group companies)
Women among new hires: Always more than 30% (applies to Hankyu Hanshin Holdings and six core group companies)*The survey is conducted biennially.

Project Themes (1)Project Themes (2)Improve employee satisfaction and create amore positive workplace

Promote health and productivity management

Conduct employee satisfaction surveys

Putting the Declaration on Employee Health Management
into Practiceregular employee satisfaction surveys as a means of obtaining

dedication to improving health awareness among our workforce

honest feedback from employees on how they see their jobs,

and making our workplaces more rewarding. Based on theworkplaces, bosses, the company, etc., and what their priorities

declaration, Hankyu Corporation and the group's other coreare. The surveys provide useful information when considering

companies have assigned directors to be in charge of efforts in thisinitiatives for improving our working environments and making

area, with regular activity reports to be made to top management.

Hankyu Hanshin Holdings and other group companies hold

Our Declaration on Employee Health Management expresses ourour workplaces more worker-friendly.
The group's Sustainability Declaration, unveiled in May 2020,
also incorporates employee satisfaction survey KPIs for Hankyu
Hanshin Holdings and other core companies,* and we aredetermined to work hard toward ongoing improvements in thisarea.
*The combined overall score achieved by Hankyu Hanshin Holdings, Hankyu
Corporation, Hanshin Electric Railway, and Hankyu Hanshin Properties on
the fiscal 2020 employee satisfaction survey was 3.72 out of five.

How Hankyu Corporation Uses Employee Satisfaction
Surveys
Hankyu Corporation has held employee satisfaction surveys

since 2007. It uses the results to inform its workplace
improvement policies and gauge the effectiveness of its HR
systems.
Following a survey, theresults—sorted by division andaccompanied by a message fromdivisional heads—are distributed
to all employees, and a meetingwith company management isheld for each division to reportits findings so that the company
may improve organizational
operations in ways designed toboost employee satisfaction.

The Hankyu Hanshin Holdings Group's Declaration
on Employee Health Management
The Hankyu Hanshin Holdings Group believes that the mental andphysical wellbeing of employees and their families remains thesource of happiness and the cornerstone of the Group's prosperous
future. In addition, in order to provide our customers with safety andcomfort as well as dreams and excitement, it is paramount that we
enable everyone to fully demonstrate their diverse personalities andabilities in good health.
To achieve this goal, we will maintain high awareness of our own
well-being and work with our colleagues in the workplace and theirfamilies to promote good health.
The Hankyu Hanshin Holdings Group declares that it will actively
support the well-being of each individual and strive to create aworkplace environment in which all can live and work in good healthand with motivation. The Group will pursue these initiatives under
the slogan "Hankyu Hanshin Wellness Challenge."
Takehiro Sugiyama
President and Representative Director
Officer in charge of Health Management
Hankyu Hanshin Holdings, Inc.
April 2018

The Hankyu Hanshin Wellness Challenge

We at the Hankyu Hanshin Holdings Group have a variety of initiatives
in place to improve health across our entire workforce. These include
encouraging participation in We Walk events, mental health counselling
facilities at both Hankyu Corporation and Hanshin Electric Railway,
free participation in online clinics aimed at helping smokers quit, andencouraging employees to undergo cancer screenings.
For the time being, our attention is focused on countering the
spread of COVID-19 to ensure smooth continuity of business.

73

Hankyu Hanshin Holdings Integrated Report 2020

Certified "Health & Productivity Management Outstanding
Organization"

Employment Opportunities for People with Disabilities

In March 2020, Hankyu Corporation, Hankyu Hanshin Properties,

the purpose of providing opportunities for people with disabilities

Hankyu Travel International, and Itec Hankyu Hanshin were

to work within our group, providing services such as cleaning, officeselected for the Ministry of Economy, Trade, and Industry's

massage, and intragroup correspondence deliveries. This initiative

Certified Health & Productivity Management Outstanding

was recognized by the Osaka prefectural government, which

Organizations Recognition Program for 2020,* and Hanshin

awarded us the Highly Commended Prize in its Heartful Corporate

Electric Railway received the "White 500," while five other group

Challenge in September 2019.

Assist Hankyu Hanshin is a special subsidiary established in 2005 forSimilarly, the Fuwafuwa Room is an in-house facility at Hankyu

companies were certified in the program's SME category.
*Under the program, the ministry,
together with the Nippon Kenko
Kaigi, recognizes outstanding
enterprises engaging in efforts toadvance health and productivity
management.

Project Themes (3)Hanshin headquarters that offers vocational support to people withdisabilities who use support
institutions. Between fiscal
2014 and fis c al 2020,
Fuwafuwa Room offered
work experience to 63
people, 18 of whom went

Promote diversity

on to employment at groupcompanies.

Empowering Women in the Workplace

At the Heartful Corporate Challenge
prizegiving ceremony

Hankyu Hanshin Holdings and the six core group companies
have established action plans based on the Act on Promotionof Women's Participation and Advancement in the Workplace,and continue to be proactive hirers of women. In addition, we
strive to maintain a working environment where all employees—

Project Themes (4)Respect human rights and prevent harassment

regardless of gender—can seek to fulfil their potential. To thisend, we offer varied career experience and implement policies tohelp maintain a balance between work and home life.
These initiatives earned Hankyu Hanshin Holdings its first entry
into the MSCI Japan Empowering Women (WIN) Select Index
in July 2020. The WIN index uses data relating to a company's
hiring and promotion of women as well as disclosed information
regarding diversity initiatives to highlight Japan's leading
companies in terms of gender diversity.

Balancing Work and Family Care Commitments

We have a range of options to help employees maintain theirworking careers in balance with family commitments and othermajor events in life.
• Expanded support programs: Work-from-home, an optional"pool" of unused annual paid leave days, and subsidies for
those using babysitters, etc.
updates about what's going on in the workplace, "back onboard" seminars, etc.
• H andbooks for leave-takers andtheir managers*T he support initiatives described above arethose of Hankyu Hanshin Holdings; other groupcompanies have their own systems in place inaccordance with the scale of their operations.

At the Hankyu Hanshin Holdings Group, we work hard toensure across-the-board respect for human rights. To ensure
all employees understand our stance, we have compiled awritten Basic Philosophy on Respect for Human Rights andBasic Policy on Respect for Human Rights.

The Hankyu Hanshin Holdings Group Basic
Philosophy on Respect for Human Rights
We will contribute to the establishment of a fair and abundantsociety in which all people's human rights are respected and inwhich no person is discriminated against because of their birth,
nationality, beliefs, gender, race, age, or disability.
Today, respecting the human rights of customers, trading partners,
shareholders, local communities, employees, and all other people is avital part of every company's social responsibilities.
To that end, we are determined to develop a better instinct forhuman rights by maintaining a deep knowledge and understanding of
human rights and the surrounding issues.
We recognize that human rights are closely relevant to us all, andendeavor to make sensitivity to human rights a core part of our thoughts
and our actions.

ESG Initiatives• E xpanded support for those on childcare leave: regular

Basic Philosophy and Policy on Respect for Human Rights

See the Basic Policy on Respect for Human Rights(Japanese only) at https://www.hankyu-hanshin.

■W orkforce Composition of Hankyu Hanshin Holdings and theco.jp/sustainability/materiality/human/rights/

Six Core Companies (as of March 31, 2020)
Employees*1
TotalManagement employees*1

MaleFemaleFemaleMale

FemaleTotal

Female8,226

2,204 10,430 21.1%

1,563

73

1,636

4.5%

New recruits*2 (FY2020)
Male

Preventing Harassment through Human Rights Training

All Hankyu Hanshin Holdings management-level employees
and top executives of our group companies undergo humanrights training once a year. Moreover, ongoing reinforcement is

Avg. term of service*1

provided in the form of various human rights training sessions for

FemaleTotal

FemaleMale

Female

Total

Difference

newly appointed officers and managers, new recruits, and newly

345(88) 316(91)

661

47.8%

20.4

10.2

18.1

10.2

promoted employees at group companies in order to instill the*1 Includes those on secondment elsewhere; excludes those seconded to us.
*2 N ewly graduated and mid-career hires in fiscal 2020. Parentheses
denote employees hired mid-career.

importance of respect for human rights and prevent harassment.

Hankyu Hanshin Holdings Integrated Report 2020

74

ESG Initiatives
Priority Issue 4

Empowering individuals
Project Themes (5)a variety of real work during their summer vacation. We have

Cultivate tomorrow's leaders
As part of the Hankyu Hanshin Dreams and Communities for
the Future Project, we provide career education programsfor elementary school children. The following two programs

hosted around 17,000 children across 389 programs so far.

Hankyu Hanshin Dreams and Communities Exciting
Work Program

Hankyu Corporation management staff conduct classes at local

received the Minister's Award (Grand Prix) at the 8th Career

elementary schools about Hankyu founder Ichizo Kobayashi's

Education Awards held by the Ministry of Economy, Trade, andcommunity building initiatives and the wide-ranging work that

Industry in fiscal 2018.

goes into supporting communities as a means of fostering love

Hankyu Hanshin Dreams and Communities Challenge
Troop
With railways , hotel s , theTakarazuka Revue Company, andHanshin Koshien Stadium among
many others, our businesses,of community and dreams
for the future. To date,
we have brought theseopportunities to think
about future occupations
to around 17,000 children
at 197 schools.

facilities, and workforce are theChildren participate eagerly in an in-school
programideal framework for elementary
Kids participate in the Hotel Patissier
Programschool students to experience

Hankyu Hanshin Holdings Group Social Contribution Activity

Hankyu Hanshin Dreams and Communities of
the Future ProjectAs part of the Hankyu Hanshin Holdings Group's commitment to creating communities that people will
truly want to live in, we have operated the Hankyu Hanshin Dreams and Communities of the Future
Project since 2009. The project, which focuses chiefly on fostering better environments and people,
is one of our efforts aimed at helping meet the SDGs as outlined in the Sustainability Declaration weunveiled in May 2020.

Basic Policy

We intend to promote the creation of towns and cities along
our line-side areas that people will truly want to live in.

Priority Areas

Our links to the future: Environment-Friendly Development andHuman Capital Development

1. Environment-Friendly Development

As a Group with strong local roots, we are committed tosustainable community building with environment-friendly
developments that provide local residents with security, peaceof mind, and cultural enrichment.
Themes of specific initiatives
1. Creating a safe, comfortable, and environmentally aware local
community
2. Contributing to the preservation of biodiversity and the naturalenvironment
3. Promoting sustainable lifestyles
4. Preserving, utilizing, and developing local history and cultural
resources
5. Prevention of global warming
6. Contributing to the emergence of a society committed torecycling and waste reduction

2. Human Capital Development

We are creating opportunities for the healthy development of
ambitious children, upon whose shoulders the task of building
the communities of the future rests.
Themes of specific initiatives
1. Enabling children to experience and learn about nature andecology
2. Fostering mental enrichment in children through cultural andartistic activities

75

Hankyu Hanshin Holdings Integrated Report 2020

3. Supporting the healthy development of children throughsports
4. Enabling children to gain a deeper understanding of society
and their communities
5. Cultivating in children a sense of compassion andacknowledgement of diversity
6. Instilling in children the wisdom of their parents andgrandparents
7. Supporting children with disabilities, children orphaned bytraffic accidents or disasters, children in single-parent families,
and children confined to social welfare facilities

Group Social Contribution Initiatives in Fiscal 2020

Collaboration with Group companies
We promote the initiatives of our Group companies throughpublic relations, sponsorships, and additional contributions. In
fiscal 2020, 102 initiatives were certified (94 in fiscal 2019). Of
these, the Hankyu Hanshin Dreams and Communities Challenge
Troop was particularly successful, attracting a best-ever 2,707
kids.
Collaboration with local community
We subsidize citizen's groups in the Hankyu Hanshin service
area through donations raised by our employees and additional
contributions from the company via the Hankyu Hanshin
Dreams and Communities of the Future Fund. In fiscal 2020, 15
institutions (including five ongoing projects from previous
years) submitting applications received a total of ¥9.5 million.
(Cumulative total: 139 institutions, ¥79.79 million)
Collaboration with Group employees
We encourage current and past employees to engage incommunity activities voluntarily by assigning points via theSocial Contribution Point System. In fiscal 2020, some 2,733
people (up 255 from the previous year) across 70 companies
received points.

ESG Initiatives

E nvironmental
Priority Issue 5

Environmental protection
Policies
Contribute toward a low-carbon, circular economy.

Non-Financial KPIs
Rate of CO2 emissions cuts (target for FY2031 compared to FY2014)
26% (Hankyu Hanshin Holdings' and subsidiaries' Japanese worksites)
40% (relating to energy consumption in the rail operations of Hankyu Corporation and Hanshin Electric Railway)

Basic Environmental Philosophy

Basic Environmental Policies

Mindful that global environmental preservation is a task

1. W e will monitor the environmental impact of our

facing all mankind, the Hankyu Hanshin Holdings Group
works for a sustainable society through environmental
activities aimed at handing down a sounder global andhuman environment to the next generation.

business activities and take action to reduce it.
2. We will accurately understand environmental laws andregulations and other social requirements and comply
with them.
3. We will strive to raise employees’awareness so thatevery employee will be able to act in an environmentally
sustainable manner.

Project Themes (1)Project Themes (2)Cut greenhouse gas (CO2) emissions

Improve energy efficiency (promote energy saving)

Changes in CO2 Emissions (see page 8)

Upgrading to Energy-Efficient Rolling Stockand endeavor to reduce CO 2 emissions. In fiscal 2020, CO 2

point is the operation of transportation services. Seeking to reduce

emissions were down 16% year on year, to 434,292 t-CO 2.

energy consumption, we are gradually upgrading our rolling stock

Furthermore, energy consumption on a crude oil conversion

to energy-efficient models with, for instance, regenerative braking

basis decreased as a result of efforts by the Group companies

systems that use the resistance of braking motion to drive a motor

to reduce energy consumption. These efforts include theand generate electricity for use in powering other trains.

We promote energy-efficiency initiatives throughout the group

In our Urban Transportation Business, the biggest energy consumption

Another example is Hankyu Corporation's use of aluminum

facilities, hotels and other facilities as well as the introduction

railway cars, which are approximately ten percent lighter thanof an increased number of new rolling stock with better energy

conventional steel models and therefore use less energy andefficiency.

put less burden on brakes when decelerating. Similarly, Hanshin

The graph below shows a breakdown of CO2 emissions acrossElectric Railway is reducing its environmental impact by using

the whole group.

stainless steel structures and doing away with external painting.

■ Fiscal 2020 Group-wide Segment-Specific CO2 Emissions

energy, last longer, and create less waste.

Urban transportation

65.3%

Real estate

18.8%Entertainment
Information andCommunication Technology
TravelInternationaltransportation
HotelsOthers

2.7%
0.4%
0.4%
0.5%
10.9%
1.0%

*Figures pertain to 78 Hankyu Hanshin Holdings subsidiaries in Japan;
some businesses, for which it is difficult to calculate energy consumption,
are excluded. Segments used herein are those in effect in fiscal 2020.

ESG Initiatives

introduction of LED lighting in railway stations, commercial

We are also gradually installing LED lights, which use lessUpgrading to Energy-Efficient Rolling Stock(as of March 31, 2020)
Hankyu Corporation Total rolling stock: 1,299 cars
● Cars with regenerative braking: 885 (68%)● Aluminum-body cars: 788 (61%)● Cars with LED lights: 620 (48%)
Hanshin Electric Railway Total rolling stock: 366 cars
● Cars with regenerative braking: 326 (89%)● Stainless steel cars: 154 (42%)● Cars with LED lights: 212 (58%)
Energy Savings
Reduction in railway business energy consumption in FY2020
compared with FY2014
Hankyu Corporation 8.6％, Hanshin Electric Railway 7.6％
Hankyu Hanshin Holdings Integrated Report 2020

76

ESG Initiatives
Priority Issue 5

Environmental Protection
Upgrading to LED Lighting

Green Energy and Offset Credits

We are gradually upgrading to LED lights at our group companies'

Since fiscal 2012, when we at Hankyu Hanshin Holdings hold ourfacilities. LED lights can increasingly be found at Hankyu andGeneral Meeting of Shrareholders, the energy used at the venue

Hanshin stations, marshaling yards, tunnels, level crossings, andis offset under the Ministry of the Environment's J-VER schemeother railway facilities, as well as Takarazuka Grand Theater,using offset credits generated by reforestation projects in Hyogo

Tokyo Takarazuka Theater, and our commercial facilities, hotels,

Prefecture.

and distribution hubs.

In addition, Hankyu Corporation has teamed up with Osaka
Gas since fiscal 2015 to hold special "carbon offset performances"of the Takarazuka Revue. All CO2 emitted during the run is offset
under the government's J-Credit scheme for offsetting greenhousegas emissions.

Project Themes (4)1300-series Hankyu
train cars are lit with
LED lights

Aim for more eco-friendly buildings (green buildings)
DBJ Green Building Certification
To underpin our quest for more eco-friendly buildings, we haveacquired the Development Bank of Japan's DBJ Green Building
certification* for our Umeda 1-1 Project, Hankyu Nishinomiya
Gardens, and HEP FIVE, and are looking to obtain certification for
more of our buildings.

Inside Takarazuka Grand Theater

Hankyu Sanbangai shopping arcade

Umeda 1-1 Project
Certified as 5-star DBJ
Green Buildings that meet
Japan's highest standards
for environmental andsocial consideration.
Award recipients: Hanshin
Electric Railway, Hankyu
Corporation

Hankyu Hanshin Express Gets ISO 14001 Certification
Since 2006, Hankyu Hanshin Express has had ISO 14001
certification, which certifies that a company maintains certain
criteria regarding environmental management practices. Two of
the company's registered business sites, Hankyu Hanshin Osaka
Cargo Terminal and Narita Cargo Center, have a number of
initiatives in place to help reduce their environmental impact,
includingregularlecturesonenvironmental

conservation

attended by all staff, automated real-time monitoring of electricity
consumption, and separation of paper from other waste forrecycling.

*T his system rates real estate based on
its consideration for the environment andsociety, thus helping to connect businessowners, financial institutions, and investors.
Buildings are rated not only on theirenvironmental credentials, but on theirability to meet the broad social needs of avariety of stakeholders.

Project Themes (3)Use more renewable energy (e.g. solar)

Umeda Hankyu Bldg., Gets Top "S" CASBEE Osaka
Ranking

Install Solar Power Generation Facilities to Reduce CO2Emissions
We are endeavoring to reduce CO2 emissions by installing solar
power generation facilities at premises groupwide, including
HankyuSettsu-shi

Station,Hanshin

Oishi

Station,HankyuNishinomiya Gardens, HEP FIVE, and Hanshin Koshien Stadium.

The

Umeda

HankyuBuilding

isdesigned for energy efficiency, withfeatures such as sensor-based lighting
systems that automatically adjust
output, the latest high-efficiency airconditioning heat source devices,
as well as inverter-based control
systems for air conditioning, pumps,
and elevators.
In 2007, the building received
the

top

S

rank

under

Osaka'sComprehensive Assessment System
for

Built

(CASBEE).
HEP FIVE

77

Hanshin Koshien Stadium

Hankyu Hanshin Holdings Integrated Report 2020

Environment

Efficiency

Umeda Hankyu BuildingOther Environmentally Considerate Buildings

Umbrella Sharing Schemecounter the heat island effect, as well as LED lighting to help cut

with Kobe City and Nature Innovation Group Co., Ltd. to

CO2 emissions. The air conditioning at the HERBIS OSAKA andintroduce an umbrella sharing scheme. From this June, under

HERBIS ENT buildings feature one of Japan's largest (at the timethe iKasa scheme, customers can takeof installation) single-building ice thermal storage systems, which

an umbrella from any of the dedicatedprovides for efficient night-time energy use.

iKasa stands in 49 locations at 39

NU chayamachi PLUS has "green walls" and rooftop greenery to

In February 2020, Hanshin Electric Railway inked an agreement

Hanshin stations for just 70 yen aday, and return it to whichever iKasa
stand is handy. Not only is this system

Project Themes (5)Produce less waste and recycle more

extremely convenient for customers, it
helps reduce umbrella waste.

Shared umbrellas at Hanshin
Naruo MukogawajoshidaiMae Station

Recycling Hanshin Koshien Stadium's Plastic Drink
Containers

Collecting Plastic Bottle Caps

We work with TEIJIN FRONTIER CO., LTD. to recycle the plastic

encourage all their employees to engage in a simple act ofdrink containers used to serve beer atcharity: collecting plastic bottle caps. The caps are periodicallyHanshin Koshien Stadium. The recycled

sold to recyclers and the companies donate the proceeds to thecontainers are made into beer cup

Japan Committee, Vaccines for the World's Children.

Hankyu Travel International and Hankyu Hanshin Express

holders and a variety of other popularnovelty items. We collected 4.9 tons

Other Environmental Initiativesof used drink containers in fiscal 2020,
which became 11,000 cup holders.

Conservation and Effective Use of Water Resources
A beer cup recycling bin

Recycling Food Waste

We strive to reduce food waste and use resources more
efficiently by repurposing food waste. For instance, scraps fromthe Dai-Ichi Hotel Tokyo are composted, while those from the
Hotel New Hankyu Osaka are used as feed on a pig farm.

Hankyu Hanshin Hotels encourages guests staying multiple
nights to use the same sheets and towels instead of having them
replaced every day. This reduces the volume of wastewater,and some of the money saved on laundry is donated toenvironmental action groups.
Meanwhile, Hankyu Nishiyama-tennozan Station and Hanshin
Koshien Stadium are equipped with tanks to store rainwater,which is subsequently used in toilets and to water grass, and weare working to install water-efficient toilets in our other stations

No More Plastic Straws

From the end of 2019, Hankyu Hanshin Hotels has ceased using

and facilities.

plastic straws in the restaurants and banquet halls of its directlyoperated hotels, and has replaced them with straws made froma resin derived from corn andother plant matter.

Rokko Alpine Botanical Garden is devoted to raising awareness

Plant-based plastics, likeof the importance of preserving nature. The garden has around

paper, generate little energy

ESG Initiatives

1,500 varieties of alpine and cold-region plants from aroundupon incineration, and emit no

the world, as well as plants native to Rokko and endangered

combustion gases containing

species, all of which are cultivated in near-natural conditions.

hazardous substances.

The garden has been

Bendy straws are available fora member of the Japanease of use by small children andelderly people.

Protecting Biodiversity at the Rokko Alpine Botanical
GardenStraw made from plant-derived
plastic

Association of Botanical
Gardens since its inception
in 1947, and served asa l o c al ou tp o s t f or the

Use of Recycled Materials

Uniforms worn by staff at our urban transportation companies
are made from recycled material such as plastic bottles, andpassengers waiting for trains at our
stations can sit on environmentally-preservation of biodiversity.

We work hard to protect the Hepatica
nobilis var. pubescens variety ofliverwort, an endangered species.

Protecting Japan's Best "Satoyama" Forest

considerate "eco-benches" made of

The satoyama community forest and agricultural landscaperecycled wood.

in the Kurokawa district of Kawanishi City, Hyogo, has been
An "eco-bench"

described as Japan's best. The Nose Electric Railway, which
serves this area, and to this end, Nose employees volunteer to
do maintenance work every year between January and March,and contribute to PR activities.

Hankyu Hanshin Holdings Integrated Report 202078

Financial Section and Corporate Data

Consolidated Six-Year Summary
2015

20166

2017

20188

2019

20209

2020
$ 6,996,789

Result of Operations (Millions of yen and thousands of U.S. dollars) :1

Revenues from operations¥ 685,906¥ 746,792¥ 736,763¥ 760,252¥ 791,427¥ 762,650

Operating income

94,026110,293

104,058

105,211

114,937

95,170873,119

EBITDA2

150,100

166,500

159,300

160,800

171,400

154,100

1,413,761

Ordinary income

85,590104,479

100,607

103,774

110,543

88,795

814,633

Income before income taxes

77,62096,087

100,805

101,41088,56286,746

795,835

Net income attributable to owners of the parent

54,201

69,971

71,302

66,36165,47654,859503,294

Comprehensive income

71,034

63,842

79,28873,991

66,56544,292406,349

Capital expenditure

68,11566,63986,21286,404

114,368

81,090743,945

Depreciation and amortisation

53,14353,70152,80053,27654,17256,542518,734¥ 123,086$ 1,129,229

Cash Flows (Millions of yen and thousands of U.S. dollars):
Cash flows from operating activities¥ 131,881¥ 124,838¥ 115,633¥ 135,821¥ 126,035

Cash flows from investing activities(52,529)(78,843)(84,845)(88,351)(116,160)

Cash flows from financing activities(81,746)(47,278)(30,595)(43,242)(11,171)

964

8,844

Increase (decrease) in cash andcash equivalents(1,125)(1,978)

(480)

4,588

(1,848)（4,454）（40,862）

Cash and cash equivalents at end of year

23,49722,363

22,53027,501

27,58923,526

215,835（128,498）（1,178,881）

Financial Position (Millions of yen and thousands of U.S. dollars):
Total assets¥2,279,638¥2,282,180¥2,349,831¥2,404,926¥2,466,223¥2,489,081$22,835,606

Total net assets

679,482

724,237

804,659

866,512915,381

937,672

8,602,495

Interest-bearing debt

955,828

916,570

899,523

866,758

877,055

903,480

8,288,807

Per Share Data (Yen and U.S. dollars):
Basic

42.98

¥ 277.88¥ 285.11¥ 267.91¥ 266.86

42.95

277.67284.86267.81266.86——

Net assets

525.562,815.96

3,150.67

3,391.35

3,615.52

3,738.56

34.299Dividend

6.00

35.00

35.00

40.00

40.00

50.00

0.46

Operating income margin (%)

13.7

14.8

14.1

13.8

14.5

12.5

—

ROA (%)3

3.7

4.6

4.3

4.4

4.5

3.6

—

ROE (%)4

8.6

10.3

9.4

8.2

7.6

6.1

—

Interest-bearing debt/EBITDA (Times)

6.4

5.5

5.6

5.4

5.1

5.9

—

Equity ratio (%)

29.1

31.0

33.5

34.8

35.9

36.4

—

Debt/equity (D/E) ratio (Times)5

1.4

1.3

1.1

1.0

1.0

1.0

—

1,271,406

254,281254,281254,281254,281254,281—

21,037

21,607

21,86022,152

22,65422,800—Net income attributable toowners of the parent¥

Diluted¥

225.69$

2.07

Ratios:Others:Number of outstanding shares (Thousands)
Number of employees

1.	The U.S. dollar amounts have been translated, for convenience only, at ¥109 = US$1, the prevailing exchange rate on the Tokyo Foreign Exchange Market as of March 31,
2020.

2.	EBITDA = operating income + depreciation expenses + amortisation of goodwill
EBITDA figures are rounded to the nearest ¥100 million.

3.	ROA = ordinary income / total assets (average of period-start and period-end totals)

4.	ROE = net income attributable to owners of the parent / equity (average of period-start and period-end totals)
5.	D/E ratio = interest-bearing debt / equity

6.	Regarding transactions related to such items as the export of mixed cargo of the International Transportation Business, the Company has changed the recognition ofrevenues from operations from net presentation to gross presentation as of fiscal 2017. As a result of this change, the amount of revenues from operations for fiscal 2016is the amount after retrospective application (gross presentation).

Further, the Company consolidated shares at the ratio of 5 shares to 1 share with an effective date of August 1, 2016. Net income per share, diluted net income

attributable to owners of the parent per share, net assets per share, dividend per share, and number of outstanding shares have been calculated based on the assumptionthat the said reverse stock split was executed on April 1, 2015.

7.	The Company (since fiscal 2020) and our subsidiary Hankyu Hanshin Properties Corp. (since fiscal 2019), as well as Hankyu Corporation and Hanshin Electric Railway

Co., Ltd. (both since fiscal 2018), have operated the Board Incentive Plan Trust, and the shares of the Company held by such trust are recorded as treasury shares in the
consolidated financial statements.

Therefore, when net assets per share and net income per share vesting in the shareholders of the Parent Company and net income per share vesting in them after dilution
are calculated, the number of such shares is included in the treasury shares to be deducted.

8.	The partially amended“Tax Effect Accounting”standards (ASBJ Guidance No. 28, February 16, 2018) have been applied since the start of fiscal 2019, and theconsolidated financial indicators and similar of fiscal 2018 are those after retrospective application of the relevant accounting standards.

9. As there are no potential shares with a dilutive effect, net income attributable to owners of the parent per diluted share for fiscal 2020 has been omitted.

79

Hankyu Hanshin Holdings Integrated Report 2020

Consolidated Financial Review
Ordinary income decreased to ¥88,795 million, a decrease

Analysis of Operating Results for Fiscal 2020of ¥21,748 million (19.7%) from the previous fiscal year, due to(Year ended March 31, 2020)

a decrease in income from investments accounted for with theequity method, and other factors as well as the abovementioned
decrease in income.

The revenues from operations were ¥762,650 million, a decreaseof ¥28,776 million (3.6%) from the previous consolidated fiscal

Extraordinary income/loss improved by ¥19,932 million as

year due both to repercussions of the sale of land for commercial

earnings metrics returned to normal from an impairment loss

facilities in the eastern section of Saito International Culture Park

recorded from an agreement to transfer railway assets recognized(Ibaraki, Osaka Prefecture) in the Real Estate Business, and thein the previous consolidated fiscal year related to Hokushin Kyuko

influence of COVID-19 in the 4th quarter, which has affectedElectric Railway.
Net income attributable to owners of the parent was ¥54,859

several businesses.

million, reflecting a decline of ¥10,616 million (16.2%) from the

As a result, operating income was ¥95,170 million, a decreaseprevious consolidated fiscal year.

of ¥19,767 million (17.2%) from the previous consolidated fiscal
year.
Notably, due to the effects of COVID-19, revenues fromoperations decreased ¥22,000 million and operating income¥15,400 million.

Analysis of operating income(¥ million)

114,937

FY2019−28,776

Decrease in revenues from operations
Decrease in operating expenses and costs of sales＋9,686

Decrease in personnel expenses＋2,576

Increase in expenses−3,005

Increase in taxes−202

Decrease in depreciation and amortization＋138

Increase in amortization of goodwill−185

95,170

FY2020YoY diﬀerence −19,767* Included in cost of revenues from operations, retirement beneﬁt expenses increased −1,420.

Segment Information
The following table shows business performance for each core business segment. For more on these results, see the respective pages
referenced at the bottom of the columns in the table below.
(Millions of yen)
Urban
Transportation

FY2020FY2019YoY difference

Effects of COVID-19: −5,200

Entertainment

Travel−4,400Hotels−5,200−22,000

33,76676,18660,28042,486 （45,887） 762,650

35,52889,99064,92343,417−4,900227,176

236,046

74,02058,576

238,562

237,276

74,51853,533（11,385） （1,229）

International
Transportation（498） ＋5,042（1,762） （13,804） （4,643）

Other

Adjustment（930）

Consolidated（46,322） 791,427+434（28,776）

Operatingincome−4,700

FY202040,056

41,51011,695

5,598

232

170

（3,142）

2,381（3,332）FY201943,45549,25013,439

5,279

1,764

2,392

1,214

2,333

（4,191） 114,937

YoY difference
Reference page

−3,000（3,399） （7,740） （1,744）
P.29

P.31

P.33

−3,100+318
P.35−3,300（1,531） （2,221） （4,356）
P.37

P.39

P.41

Financial Section and Corporate Data

Revenues fromoperations

Real Estate

Information andCommunication
Technology−15,400

+47

+859

—

—

95,170（19,767）—

From the consolidated fiscal year under review, the six previous reportable segments (Urban Transportation; Real Estate; Entertainment and Communications; Travel;

International Transportation; and Hotels) have been changed to seven: Urban Transportation; Real Estate; Entertainment; Information and Communication Technology; Travel;
International Transportation; and Hotels.

This change aims, among other things, to further increase the competitiveness of our communications and media business, which was previously included in theEntertainment and Communications segment. In addition to the name change, our information and communications business has been split off as the independent Information
and Communication Technology segment, while the previous Entertainment and Communications segment has been renamed as the Entertainment segment.
Segment information for the previous consolidated fiscal year is based on these new reportable segment boundaries.

Hankyu Hanshin Holdings Integrated Report 2020

80

Financial Section and Corporate Data

Review of Financial Position

Total liabilities were ¥1,551,409 million, an increase of¥567 million from the end of the previous consolidated fiscal
year, because of factors such as an increase in interest-bearing
debt, accounts payable, and long-term deferred contribution for

1. Assets, Liabilities and Net Assets

construction, despite decreases in advances received and trade

Total assets at the end of the consolidated fiscal year underpayables, etc.

review were ¥2,489,081 million, an increase of ¥22,858 million

Total net assets were ¥937,672 million, an increase offrom the end of the previous consolidated fiscal year, because¥22,291 million from the end of the previous consolidated fiscal

of factors such as an increase in property and equipment, long-year, because of an increase in retained earnings, etc.

term loans, and investment securities, despite decreases in trade

As a result, the equity ratio was 36.4%, and the ROE wasreceivables, etc.

6.1%.

AssetsLiabilities and net assets(¥ billion)(¥ billion)
Total assets¥2,466.2 billion
343.7
35.7

Total assets¥2,489.1 billion
Noncurrent assets+62.8
Main cause:
Increase inproperty andequipment andlong-term loans

1,783.8

Total liabilities
and net assets¥2,466.2 billion

377.8
36.6

915.4

1,811.8
1,146.6

303.0

Current assets−40.0
Main cause:
Decreases intrade receivables

FY2019Current assets
Intangible assets

81

Property and equipment
Investments and other assets

Hankyu Hanshin Holdings Integrated Report 2020

263.0
FY2020404.3

Total liabilities
and net assets¥2,489.1 billion
Net assets+22.3
Main cause:
Increase inretained earnings
Long-term liabilities+10.2
Main cause:
Increase inlong-term deferred
contribution
for construction
Current liabilities‒9.7
Main cause:
Decreases inadvances received

FY2019Current liabilities

Long-term liabilities

937.7

1,156.8

394.6
FY2020Net assets

2. Cash Flows(2) Cash Flows from Investing Activities

Total cash and cash equivalents at the end of the consolidated

Net cash used in investing activities was ¥128,498 million,

fiscal year were ¥23,526 million, a decrease of ¥4,063 million

an increase of 10.6% year-on-year, because of purchases offrom the end of the previous consolidated fiscal year.

noncurrent assets of ¥96,028 million, purchases of investment
securities of ¥27,660, receipt of contributions for construction of(1) Cash Flows from Operating Activities¥19,631 million, etc.

Net cash provided by operating activities was ¥123,086 million,a decrease of 2.3% year-on-year, because of income before(3) Cash Flows from Financing Activities

income taxes of ¥86,746 million, depreciation and amortization

Net cash from financing activities was ¥964 million, because of aof ¥56,542 million, paid corporation and other taxes of ¥15,295

net increase in borrowings of ¥15,003 million, the issue of bonds

million, etc.

of ¥29,766 million, the redemption of bonds of ¥20,000 million,
purchases of treasury stock of ¥9,960 million, dividends paid of¥11,020 million, etc.

Cash ﬂows(¥ billion)

Cash ﬂows frominvesting activities−128.5

Cash ﬂows fromoperating activities＋123.1

Cash ﬂows fromﬁnancing activities＋1.0+56.5 −15.3
−4.9

−96.0

+86.7

+29.8 −20.0−27.7+19.6 −24.4

27.6

0
02

ar
ch

31

,2

th
er
O

pa
id
en
ds

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23.5

Financial Section and Corporate Data

D

m

ta
xe
s
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am
or
tis

9
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In

−11.0
−2.8

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−10.0

+15.0

3. Fund Procurement

The outstanding balance of interest-bearing debt at the end of
the consolidated fiscal year was ¥903,480 million, an increaseof ¥26,424 million over the end of the previous consolidated
fiscal year, as expenditure of funds for investments in facilities
and equipment such as the Umeda 1-1 Project and acquisition

goodwill) etc.
The ratio of interest-bearing debt/EBITDA, which is thebenchmark the Company uses for assessing the soundness of its
financial position, stood at 5.9 times at the end of the fiscal year
compared with 5.1 times at the end of the previous fiscal year.

of investment securities exceeded receipt of funds from EBITDA(operating income + depreciation expenses + amortization ofHankyu Hanshin Holdings Integrated Report 202082

Financial Section and Corporate Data

Consolidated Capital Expenditure andDepreciation and Amortization
The amount of capital expenditures (including those forintangible assets) in the consolidated fiscal year under review
was ¥81,090 million, recording a decrease of ¥33,278 million(29.1%) from the previous consolidated fiscal year.
The following is a breakdown for each business segment.

(Millions of yen)(%)

FY2020YoY

Urban Transportation

32,928−2.6

Real Estate

32,212−48.4

Entertainment

4,161

57.8

Information and Communication Technology

4,865

−8.3

Travel

1,244

49.7

International Transportation

1,111

63.9

Hotels

4,814

145.5

Other

198

−86.4

Adjustment

−446

—

Consolidated

81,090−29.1

Urban Transportation

Travelon safety and service improvement, building of new rollingsystems for online reservations.

The railway business carried out capital investment with a focus

In the Travel Business, Hankyu Travel International invested in IT

stock, improvement of existing rolling stock, etc.

Real Estate

International Transportation

In the International Transportation Business, Hankyu Hanshin

The Real Estate Business invested in the Takarazuka Hotel

Express invested in the opening of the Narita Global Logistics

Relocation Project, the East Building Reconstruction Project andCenter.

West Building Renewal Project at the Kobe Hankyu Building, andthe Umeda 1-1 Project.

Entertainment

HotelsIn the Hotels Business, Hankyu Hanshin Hotels invested in the
opening of new hotels, including Hotel Hankyu RESPIRE Osaka.

The Entertainment Business opened a new venue at Billboard
Yokohama and carried out facility improvements, etc., at the
Hanshin Koshien Stadium as well as the Takarazuka Grand
Theater and the Tokyo Takarazuka Theater.

Depreciation and amortization in the consolidated fiscal
year under review was ¥56,542 million, recording an increase ofInformation and Communication Technology

In the Information and Communication Technology Business,
Bay Communications Inc. carried out work to extend its mainlines and add service lines, among other improvements.

83

Hankyu Hanshin Holdings Integrated Report 2020

¥2,370 million (4.4%) over the previous consolidated fiscal year.

Business Risks
The various categories of risk to which the business performance, stock price, financial position, and other aspects of operationsof the Hankyu Hanshin Holdings Group are subject are detailed below. Nevertheless, these dangers do not encompass all risks
attendant on Group activities and there are risks other than those stated below which are difficult to foresee.
Information about future events that appears in this annual report was determined by the Group to be current as of March 31,
2020.

Risk from Epidemics

Interest-Bearing Debt

in various ways restricted as they go about their daily affairs, it may

end of March 2020, on a consolidated basis, was ¥903,480 million.

If an infectious disease becomes widespread and people’s lives are

The balance of interest-bearing debt held by the Group as of thematerially affect the businesses of the Company. Specifically, effects

Depending on future rises in interest rates, changes in financial

may arise in the Urban Transportation Business through factors

markets, or downgrades of the Group’s credit ratings by ratingsuch as declining volumes of passengers on railways and otheragencies, etc., the Group’s interest expenses may increase, andtransportation; in the Real Estate Business through the temporary

raising additional funds on desirable terms may become difficult,closure of leased facilities and the shortening of business hours; inincluding funds needed to refinance interest-bearing debt reaching

the Entertainment Business through the cancellation of professional

maturity.

baseball games and performances of Takarazuka revues; in the

The Group will continue to diversify its funding and secure

Travel Business through increased suspensions and cancellations

its liquidity, take steps to avoid interest rate risk through fixed-of overseas and domestic tours; and in the Hotel Business throughrate finance, and strive to maintain the soundness of the Group’sfalling demand from inbound tourism owing to travel bans as wellfinancial position by focusing on the ratio of interest-bearing debt to

as cancellations of domestic travel and business trips, and other

EBITDA as a management indicator.

adverse effects. At present, in the wake of the widening spread of
COVID-19, the Group is impacted by effects as described above.
Depending on the duration and degree of these impacts, theGroup’
s business performance and financial position may fluctuatesignificantly.

Decline in the Market Value of Assets Held by Membersof the Hankyu Hanshin Holdings GroupIn the case of a substantial decline in the market value of inventory

In these circumstances, the Group will firstly work on recovery

assets, property and equipment and intangible assets, investment

measures surrounding earnings and cash flow. Also, lifestyles andsecurities, and other assets, the recording of impairment losses orbusiness styles are changing due to the impact of COVID-19. Mindfulvaluation losses, etc., would likely have a negative impact on thethat changes of this kind in society may affect the Group’s existing

business performance and financial position of the Hankyu Hanshin

business model, the Group will work to mitigate risk and promote

Holdings Group.

the steady enhancement of corporate value by continuing with theimplementation of its“Hankyu Hanshin Holdings Group Long-Term
Management Vision for 2025.”

Declining Birth Rate

In the Group’s mainstay Kyoto-Osaka-Kobe area, demographic

Legal Riskchanges accompanying the declining birth rate and other factors
are expected to lower demand for railway, bus, taxi services andIn accordance with the stipulations of Article 3 of the Railway

other types of passenger transportation and to lower demand in

Business Law, the Group must obtain separate permissions from theother business areas. In addition, securing personnel is likely to

Ministry of Land, Infrastructure, Transport and Tourism (MLIT) for

become difficult as an imbalance between supply and demandeach category of railway operations on each route that it intends todevelops in the labor market. Such contingencies could affectoperate. Moreover, under Article 16 of the Law, a railway operator

the business performance and financial position, etc., of themust obtain the Ministry’s approval for the passenger fares it intends

Group.

to set and on each occasion when it wishes to change the fares.

In addition to efforts to increase the resident populationin areas along the railway lines operated by the Group and toGroup’
s railway business. Notably, no fixed periods are prescribed

increase the influx of visitors to these areas by capturing thefor these permissions and approvals by the Minister of Land,demand posed by foreign tourists, etc., the Group overall will

Infrastructure, Transport and Tourism.

promote efforts to improve productivity by introducing advanced

In addition to the railway business, other businesses in which

Financial Section and Corporate Data

Therefore, these regulations may limit the activities of thetechnologies.

the Group engages are also subject to various laws and regulations.
If these are tightened, the cost of regulatory compliance may
increase, while failure to comply with regulations may limit theGroup’s activities and affect the Group’s business performance andfinancial status, etc.

Natural Disasters

Ope rating as it doe s across an e xtreme ly wide r ang eof businesses in its Urban Transportation, Real Estate,

The Group is working to minimize any such effects byEntertainment, Information and Communication Technology,

investigating and ascertaining in advance information regarding

Travel, International Transportation, and Hotels segments,changes in existing regulations and the establishment of new

the Group has a correspondingly large assortment of facilities

regulations and their respective impact.

necessary for the conduct of business. In the event ofearthquakes, typhoons or other climate change-related natural
disasters, large-scale accidents, or acts of terrorism, the business

Hankyu Hanshin Holdings Integrated Report 202084

Financial Section and Corporate Data

performance and financial position of the Group could be
adversely affected by damage to these facilities, its customers,
and/or limitations placed on its business operations.

Management of Personal Information

The Group manages databases containing customer data andother personal information in each of its businesses. Therefore,

The Group is investing in the maintenance/renewal ofin order to strengthen its risk management, the Group hasexisting facilities, conducting seismic reinforcement work, andestablished internal regulations such as fundamental policies

working to develop systems with a priority on safety, especiallyfor the management of personal information and conducts

at group companies engaged in the railway business and otherrelevant training sessions for employees. However, if information

public transportation.

is leaked due to an unexpected incident, etc., claims fordamages and loss of public credibility may affect the business

International Operations

The Group’s Real Estate, Travel, International Transportationand other businesses are also active overseas, and are therefore
subject to various risk factors in each country, ranging fromdrastic changes in political and economic conditions, toincidence of conflict, dispute, or terrorism, and the outbreakof infectious diseases. The Group is working to address theserisks based on risk analyses supported by the advice of lawyers,
consultants, and other experts. However, in the case of an
unexpected development, business performance and thefinancial condition of the Group may be affected.

85

Hankyu Hanshin Holdings Integrated Report 2020

performance and financial condition of the Group.

Consolidated Balance Sheets
As of March 31, 2019 and 2020

Millions of yen

Thousands of U.S. dollars

2019

2020

2020

AssetsCurrent assets:
Cash and deposits¥28,856¥

25,023$229,569

Trade receivables

93,15468,366627,211Land and buildings for sale

119,918

121,813

1,117,550

Finished products and merchandise

2,568

2,596

23,817Work in progress

3,864

4,061

37,257

Materials and supplies

4,762

4,862

44,606

Other

50,09536,476334,642

Allowance for doubtful receivables

（254）

（216）

（1,982）302,963

262,984

2,412,697

Buildings and structures–net (Note 5.3)

572,410574,4815,270,468

Machinery, equipment and vehicles–net (Note 5.3)

65,672

66,263607,917

Land (Notes 5.3 and 5.5)

955,012950,100

8,716,514

Construction in progress

171,336

198,838

1,824,202

Total current assets

Noncurrent assets:
Property and equipment:

19,35822,076

202,532

1,783,789

1,811,760

16,621,651

Goodwill

16,214

14,223

130,486

Other (Notes 5.2 and 5.3)

19,52022,327

204,835

Total intangible assets

35,73436,550335,321291,771

302,951

2,779,367

Deferred tax assets

6,965

6,956

63,817

Net defined benefit asset

14,595

13,636125,101

Other (Note 5.3)

30,61054,436499,413

Other–net (Note 5.3)
Total property and equipment (Notes 5.1 and 5.2)
Intangible assets:

Investments and other assets:
Investment securities (Notes 5.3 and 5.4)

Allowance for doubtful receivables
Total investments and other assets
Total noncurrent assets
Total assets

（208）

（195）

（1,789）343,735

377,786

3,465,927

2,163,259

2,226,097

20,422,908

2,466,223

2,489,081

22,835,606
Financial Section and Corporate Data

Hankyu Hanshin Holdings Integrated Report 202086

Financial Section and Corporate Data

Millions of yen

2019

Thousands of U.S. dollars

2020

2020

Liabilities:
Current liabilities:
Trade payables¥

48,054¥

29,508$

270,716

Accrued expenses

21,38016,727

153,459

Short-term borrowings (Note 5.3)

137,036

158,406

1,453,266

Current portion of bonds

20,00025,000229,358

Lease obligations

1,567

2,404

22,055

Income taxes payable

4,576

13,683

125,532

Provision for bonuses

4,345

3,986

36,569Other (Note 5.3)

167,324

144,917

1,329,514

Total current liabilities

404,286

394,634

3,620,495

Long-term debt (Note 5.3)

621,375

615,058

5,642,734

Bonds

92,00097,000889,908

Lease obligations

5,076

5,609

51,459Long-term liabilities:

183,167

181,590

1,665,963

Deferred tax liabilities related to land revaluation (Note 5.5)

5,152

5,146

47,211

Net defined benefit liability

62,20963,020578,165

Deferred tax liabilities

Long-term deferred contribution for construction

63,37574,657684,927

Other

114,198

114,690

1,052,202

1,146,555

1,156,774

10,612,606

1,550,842

1,551,409

14,233,110

Common stock

99,474

99,474

912,606

Capital surplus

146,591

146,598

1,344,936

Retained earnings

641,731

685,087

6,285,202

Less treasury stock, at cost

（34,400）（44,224）（405,725）

Total shareholders’equity

853,397

886,935

8,137,018

Valuation difference on available-for-sale securities

24,144

13,792

126,532

Deferred gains or losses on hedges（325）

Total long-term liabilities
Total liabilities
Net assets:
Shareholders’equity:

Accumulated other comprehensive income:（257）

Revaluation reserve for land (Note 5.5)

5,523

5,511

50,560Foreign currency translation adjustments

（163）

（427）

（3,917）

Cumulative adjustments related to retirement benefit plans

2,287

（136）

（1,248）

Total accumulated other comprehensive income

31,46518,711

171,661

Non-controlling interests (Note 5.5)

30,51732,025

293,807

Total net assets

915,381

937,672

8,602,495

2,466,223

2,489,081

22,835,606

Total liabilities and net assets

87

（28）

Hankyu Hanshin Holdings Integrated Report 2020

Consolidated Statements of Income
Years ended March 31, 2019 and 2020

Millions of yen

Thousands of U.S. dollars

2019

Revenues from operations

¥

2020

791,427¥2020

762,650$ 6,996,789

640,441

5,875,606

667,480

6,123,670

Costs of revenues from operations:Operating expenses and cost of sales of transportation

650,127

Selling, general and administrative expenses (Note 6.1)

26,361

Total costs of revenues from operations (Note 6.2)

676,489

Operating income

27,039248,064

95,170114,937

873,119

Non-operating income:Interest income

123

Dividend income

1,372

Equity in income of affiliates

4,962

Miscellaneous income

2,918

Total non-operating income

9,377

149

1,367

1,399

12,835

2,393

21,954

3,389

31,092

7,331

67,257

Non-operating expenses:
Interest expenses

9,615

Loss on retirement of noncurrent assets

1,756

Miscellaneous expenses

2,399

Total non-operating expenses

13,771

Ordinary income

9,267

85,018

1,487

13,642

2,951

27,073

13,706

125,743

4,643

42,596

1,090

10,0004,636

42,532

1,356

12,44088,795110,543814,633

Extraordinary income:Gain on contributions for construction

3,657

Income on sales of noncurrent assets

2,758

Other
Total extraordinary income

304

806

2,789

6,038

7,221

55,394Extraordinary loss:
Loss on reduction of noncurrent assets

4,042

Impairment loss (Note 6.3)

19,262

Loss on valuation of investment securities

361

399

Other

5,497

Total extraordinary loss

29,202

Income before income taxes

88,562

Income taxes – current

19,104

Income taxes – deferred

1,420

Total income taxes

20,525

Net income

68,036

Net income attributable to non-controlling interests

2,560

Net income attributable to owners of the parent

65,476

3,312

1,732

15,8908,086

74,18386,746

795,835

28,235

259,037

1,599

14,67029,834

273,706

56,911

522,119

2,051

18,81754,859503,294

Consolidated Statements of Comprehensive Income
Years ended March 31, 2019 and 2020

Millions of yen

Net income¥ 68,036

Other comprehensive income:
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges

Foreign currency translation adjustments

Remeasurements of defined benefit plans
Share of other comprehensive income of associates accounted
for using equity method
Total other comprehensive income (Note 7)

Comprehensive income

Comprehensive income attributable to:
Owners of the parent

Non-controlling interests（2,635）158（670）

Thousands of U.S. dollars

2020

¥

2020

56,911$522,119（5,122）（46,991）

（45）

（413）

314

2,881

2,945

（2,401）（22,028）（1,268）（5,364）（49,211）（1,471）（12,618）（115,761）

42,242

387,541

66,56564,2872,277

44,292

2,049

Financial Section and Corporate Data

2019406,349

18,798

Hankyu Hanshin Holdings Integrated Report 202088

Financial Section and Corporate Data

Consolidated Statements of Changes in Net Assets
Years ended March 31, 2019 and 2020

Millions of yen
Shareholders’equity
Commonstock

CapitalsurplusRetainedearnings

Less treasury
stock, at cost

Total
shareholders’equityBalance as of March 31, 2018
Changes of items during the period:
Dividends from surplus
Net income attributable to owners of the parent
Reversal of revaluation reserve for land
Purchase of treasury stock
Disposal of treasury stock
Change in treasury stock of parent arising fromtransactions with non-controlling interest shareholders
Change in scope of consolidation
Changes in equity in affiliates accounted
for by equity-method treasury stock
Net changes of items other than shareholders’equity
Total changes of items during the period¥99,474¥146,053¥583,482¥（24,247）¥804,764（10,199）
45（9,896）65,4762（10,199）
45

Balance as of March 31, 2019
Changes of items during the period:
Dividends from surplus
Net income attributable to owners of the parent
Reversal of revaluation reserve for land
Purchase of treasury stock
Disposal of treasury stock
Change in treasury stock of parent arising fromtransactions with non-controlling interest shareholders
Change in scope of consolidation
Changes in equity in affiliates accounted
for by equity-method treasury stock
Net changes of items other than shareholders’equity
Total changes of items during the period
Balance as of March 31, 2020

99,474（9,896）65,476
2
0
537

537
2,666

2,666
0

—

537

146,591

58,248641,731（11,020）54,859
11

（0）

（0）

（10,153）

0
48,633（34,400）

853,397（9,960）136（11,020）54,85911（9,960）
136

（0）
6

（0）
（495）

（489）
0

—
99,474

6
146,598

43,355685,087（9,824）（44,224）

0
33,538886,935

Millions of yen
Accumulated other comprehensive income
Valuationdifference on Deferred gains oravailable-for-sale losses on hedges
securities

Balance as of March 31, 2018
Changes of items during the period:
Dividends from surplus
Net income attributable to owners of the parent
Reversal of revaluation reserve for land
Purchase of treasury stock
Disposal of treasury stock
Change in treasury stock of parent arising fromtransactions with non-controlling interest shareholders
Change in scope of consolidation
Changes in equity in affiliates accounted
for by equity-method treasury stock
Net changes of items other than shareholders’equity
Total changes of items during the period
Balance as of March 31, 2019
Changes of items during the period:
Dividends from surplus
Net income attributable to owners of the parent
Reversal of revaluation reserve for land
Purchase of treasury stock
Disposal of treasury stock
Change in treasury stock of parent arising fromtransactions with non-controlling interest shareholders
Change in scope of consolidation
Changes in equity in affiliates accounted
for by equity-method treasury stock
Net changes of items other than shareholders’equity
Total changes of items during the period
Balance as of March 31, 202089

Hankyu Hanshin Holdings Integrated Report 2020

¥27,146¥（494）

Revaluation
reserve for land

¥5,575

Cumulative
Foreign currency
adjustments relatedtranslation
to retirement
adjustments
benefit plans

¥607

¥125

Total
accumulated
othercomprehensive
income¥32,961

Non-controllinginterests

Total net assets¥28,786¥866,512（9,896）65,4762（10,199）
45
537
2,666
0

（3,001）（3,001）
24,144

168
168
（325）

（52）
（52）
5,523

（771）
（771）
（163）

2,161
2,161
2,287

（1,496）（1,496）
31,465

1,731
1,731
30,517

235
48,868915,381（11,020）54,85911（9,960）
136
（0）
（489）
0

（10,351）（10,351）
13,792

296
296
（28）

（11）
（11）
5,511

（263）
（263）
（427）

（2,423）（2,423）（136）（12,754）（12,754）
18,711

1,507
1,507
32,025（11,246）
22,291
937,672

Thousands of U.S. dollars
Shareholders’equity

Balance as of March 31, 2019

Total
shareholders’equityCommonstock

CapitalsurplusRetainedearnings

Less treasury
stock, at cost$912,606$1,344,872$5,887,440$（315,596） $7,829,330

Changes of items during the period:
Dividends from surplus
Net income attributable to owners of the parent
Reversal of revaluation reserve for land

（101,101）（101,101）

503,294503,294

101

Purchase of treasury stock
Disposal of treasury stock（0）

Change in treasury stock of parent arising fromtransactions with non-controlling interest shareholders

（0）

101
（91,376）（91,376）

1,248

1,248

（0）

Change in scope of consolidation

55

Changes in equity in affiliates accounted
for by equity-method treasury stock（0）（4,541）（4,486）00

Net changes of items other than shareholders’equity
Total changes of items during the period
Balance as of March 31, 2020—

55

397,752（90,128）

307,688912,606

1,344,936

6,285,202（405,725）

8,137,018

Thousands of U.S. dollars
Accumulated other comprehensive income
Valuationdifference on Deferred gains oravailable-for-sale losses on hedges
securities

Balance as of March 31, 2019

$221,505$（2,982）

Revaluation
reserve for land

$50,670

Cumulative
Foreign currency
adjustments relatedtranslation
to retirement
adjustments
benefit plans$（1,495）$20,982

Total
accumulated
othercomprehensive
income$288,670

Non-controllinginterests

Total net assets$279,972$8,397,991

Changes of items during the period:（101,101）

Dividends from surplus
Net income attributable to owners of the parent

503,294
101

Reversal of revaluation reserve for land
Purchase of treasury stock（91,376）

Disposal of treasury stock

1,248

Change in treasury stock of parent arising fromtransactions with non-controlling interest shareholders（0）Change in scope of consolidation

Changes in equity in affiliates accounted
for by equity-method treasury stock

Net changes of items other than shareholders’equity（4,486）
0（94,963）

2,716

（101）

（2,413）（22,229）（117,009）

13,826（103,174）

Total changes of items during the period（94,963）

2,716

（101）

（2,413）（22,229）（117,009）

13,826

204,505

Balance as of March 31, 2020

126,532（257）

50,560（3,917）（1,248）

171,661

293,8078,602,495

Financial Section and Corporate Data

Hankyu Hanshin Holdings Integrated Report 2020

90

Financial Section and Corporate Data

Consolidated Statements of Cash Flows
Years ended March 31, 2019 and 2020

Millions of yen

2019

Thousands of U.S. dollars

2020

2020

Cash flows from operating activities:
Income before income taxes¥88,562¥

86,746$

795,835

Depreciation and amortisation

54,17256,542518,734

Impairment loss

19,262361

3,312

Amortisation of goodwill
Equity in (income) losses of affiliates
Increase (decrease) in net defined benefit liability
Increase (decrease) in allowance for doubtful receivables
Interest and dividend income

2,240

2,426

22,257（4,962）（3,389）（31,092）

464（1,813）（16,633）

9

（49）

（450）

（1,496）（1,548）（14,202）

Interest expenses

9,615

9,267

85,018Loss on reduction of noncurrent assets

4,042

4,636

42,532

Loss on retirement of noncurrent assets

1,756

1,487

13,642(Income) losses on sales of noncurrent assets（2,746）（214）（1,963）Gain on contributions for construction（3,657）（4,643）（42,596）

399

1,356

12,440（718）

25,035

229,679（4,003）

2,803

25,716

Loss (gain) on valuation of investment securities
Decrease (increase) in trade receivables
Decrease (increase) in inventories
Increase (decrease) in trade payables

1,094（17,884）（164,073）

Other（2,364）（17,718）（162,550）

Subtotal

161,672

143,400

1,315,596

4,533

4,362

40,018Interest and dividends received
Interest paid

（9,627）（9,381）（86,064）

Income taxes (paid) refunded（30,542）（15,295）（140,321）

Net cash provided by operating activities

126,035

123,086

1,129,229（137,809）（96,028）（880,991）

Cash flows from investing activities:
Purchases of noncurrent assets
Proceeds from sales of noncurrent assets
Purchases of investment securities

16,310（11,744）

Receipt of contributions for construction

18,252

Expenditure for long-term loans receivable

（430）

Other
Net cash used in investing activities

884（27,660）

8,110（253,761）

19,631

180,101（23,767）（218,046）（739）（1,557）（14,284）（116,160）（128,498）（1,178,881）

1,949

21,039193,018

Cash flows from financing activities:
Net increase (decrease) in short-term borrowings
Proceeds from long-term debt

30,45028,330259,908

Repayment of long-term debt

（41,278）（34,365）（315,275）

19,866

29,766

273,083

Proceeds from new bonds issued
Redemption of bonds（20,000）（183,486）

Purchases of treasury stock（10,199）（9,960）（91,376）

Dividends paid

（9,896）（11,020）（101,101）

（378）

（526）

（4,826）

Other（1,684）（2,298）（21,083）

Net cash used in financing activities（11,171）

964

8,844

Dividends paid to non-controlling shareholders ofconsolidated subsidiaries

Effect of exchange rate changes on cash and cash equivalents

91

―

（551）

（7）

（64）

Increase (decrease) in cash and cash equivalents（1,848）（4,454）（40,862）

Cash and cash equivalents at beginning of year

27,501

27,589253,110

Increase in cash and cash equivalents from newly
consolidated subsidiary

1,935

391

3,587

Cash and cash equivalents at end of year

27,58923,526

215,835

Hankyu Hanshin Holdings Integrated Report 2020

Notes to the Consolidated Financial Statements
1. Framework for Preparing Consolidated Financial Statements 
1.1

Method of preparation for consolidated financial statements

1.3

Special measures to ensure the appropriateness of
consolidated financial statements and other reports

The Company’s consolidated financial statements were prepared inaccordance with the “Regulations Concerning Terminology, Forms, and

The Company makes special efforts to ensure the appropriateness of

Preparation Methods of Consolidated Financial Statements” (Finance Ministry

its consolidated financial statements and other reports. In addition to

Ordinance No. 28 of 1976).

subscribing to related publications, it has joined the Financial AccountingStandards Foundation and participates in seminars and other events held by

1.2

Audit verification

the Foundation, audit firms and other relevant organisations to establish a

The Company’s consolidated financial statements for the fiscal year ended

system for understanding the accounting standards in detail and responding

March 31, 2020 (April 1, 2019 to March 31, 2020) were audited by KPMG

suitably to changes made to them. The Company also compiles and provides

AZSA LLC, as per Article 193-2 (1) of Japan’s Financial Instruments andcommon manuals for preparing the consolidated financial information on

Exchange Act.

a Groupwide basis, and arranges training courses for accounting staff ataffiliates.

1.4

Translation into U.S. dollars

The U.S. dollar amounts have been translated, for convenience only, at ¥109
= US$1, the prevailing exchange rate on the Tokyo Foreign Exchange Market
as of March 31, 2020.

2. Basis of Preparation of Consolidated Financial Statements 
2.1

Scope of consolidation

2.3

Items related to fiscal year-ends, etc., for consolidated
subsidiaries

2.1.1 Number and names of consolidated subsidiaries
Number of consolidated subsidiaries—93.

The account closing date for Hankyu Hanshin Express (USA) Inc., Hankyu

Names of primary consolidated subsidiaries are listed on page 117.

Hanshin Express (Deutschland) GmbH and 20 other consolidated subsidiaries

Further, as from the fiscal year ended March 31, 2020, PT. Hankyu

is December 31. The consolidated financial statements have been prepared

Hanshin Logistics Indonesia and one other company have been included inusing the financial statements based on the closing date of each company,

the scope of consolidation due to their increased significance.

and major transactions conducted between the individual closing dates andAlso, the following companies have been excluded from the scopeof consolidation; Hankyu Denen Bus Co. Ltd. due to extinguishment in athe consolidated closing date have been adjusted for as necessary for the
consolidation.

merger, Hankyu Hanshin Restaurants Co. Ltd. and one other company due toliquidation.

2.4

Accounting policies

2.4.1

Valuation standards and method for major assets

2.1.2 Names of major nonconsolidated subsidiaries

I.

Hankyu Mediax Co., Ltd.

Available-for-sale securities:

Nonconsolidated subsidiaries have been excluded from the scope ofa.

Securities
Available-for-sale securities with fair market values:

consolidation because the total amounts of their entire assets, sales, net

The market value method is applied based on the market price, etc., at

income or loss (amount equivalent to equity interests), retained earnings

the fiscal year-end. (Related valuation differences are directly included(amount equivalent to equity interests) and other figures are limited, and theunder net assets and the cost of securities sold is determined by theeffect on the consolidated financial statements as a whole is negligible.

moving average method.)b. Available-for-sale securities without fair market values:

2.2

Items related to application of equity-method accounting

The moving average cost method is applied.
For investments in limited liability investment partnerships and similar

2.2.1 Number and names of affiliates for which equity method is applied
Number of affiliates for which equity method is applied—11.

investments, however, the Company’s share of assets held by such

Names of primary companies are listed on page 117.

partnerships is recorded.

method is not appliedII.

Financial Section and Corporate Data

2.2.2 Names of nonconsolidated subsidiaries and affiliates for which equity

Derivatives

The market value method is applied.

The nonconsolidated subsidiaries (Hankyu Mediax Co., Ltd., etc.) and affiliates(OS Co., Ltd., etc.) to which the equity method does not apply use the costIII. Inventories

method rather than the equity method because the total amounts of theira.

net income or loss (amount equivalent to equity interests), retained earnings(amount equivalent to equity interests) and other figures are limited, and theeffect on the consolidated financial statements as a whole is negligible.

Land and buildings for sale:
The identified cost method is applied. (Balance sheet values arecalculated by writing down book values based on decreased profitability.)b. Other inventories:
The moving average cost method is applied. (Balance sheet values arecalculated by writing down book values based on decreased profitability.)

Hankyu Hanshin Holdings Integrated Report 202092

Financial Section and Corporate Data
Notes to the Consolidated Financial Statements

2.4.2

Depreciation methods for major depreciable assets

2.4.6

Significant hedge accounting methods

I.

Property and equipment (excluding leased assets)

I.

a.

Replacement assets of railway operations:Deferred hedge accounting is applied.
Exceptional accounting applies to interest rate swaps that satisfy the

Replacement method (mainly the declining-balance method) is applied.
b. Other property and equipment:

Method of hedge accounting

requirements for exceptional accounting for interest rate swaps.

While property and equipment (excluding leased assets) are depreciated

Designation accounting applies to foreign currency-denominatedfor the most part using the declining balance method, there is also somereceivables and payables that have forward exchange contracts and which

use of the straight-line method.

satisfy the requirements for designation accounting.

However, regarding the abovementioned “Replacement assets ofrailway operations” and “Other property and equipment,” depreciation ofII.

buildings acquired on or after April 1, 1998 (excluding facilities attached

Main hedging instruments and hedged items are as follows:

Hedging instruments and hedged items

to buildings) and depreciation of facilities and structures that are

a. Hedging instruments: Forward exchange contracts, currency swap

attached to buildings and which were acquired on or after April 1, 2016

contracts, currency option contracts

are calculated using the straight-line method.

Hedged items: Foreign currency receivables and payables and future
foreign currency transactions

II.

Intangible assets (excluding leased assets)b. Hedging instruments: Interest rate swap contracts, interest rate option

Intangible assets (excluding leased assets) are amortised using the straight-

contracts

line method.

Hedged items: Loans payable and bonds

Internal-use software is amortised by the straight-line method over its
useful life (mainly 5 years).

III. Hedging policy
The Group is exposed to the risk of foreign exchange and interest rate

III. Lease assets

fluctuations and uses derivatives as a means of hedging these risks.

Lease assets are depreciated using the straight-line method with the leaseterm as the useful life and the residual value as zero.

IV. Method for evaluating the effectiveness of hedges
Other than when the effectiveness of hedges is obvious, hedge effectiveness

2.4.3
I.

Accounting standards for significant transactions

is evaluated semiannually using the comparison and analysis method.

Allowance for doubtful receivables

Allowance for doubtful receivables is provided based on the ratio of past

V. Other risk management methods concerning hedge accounting

loan loss experience for general accounts and individually estimatedInternal rules regarding the segregation of duties, maximum transaction

uncollectible amounts for certain individual accounts.

amounts, etc., have been established for the use of derivative transactions
based on which derivative transactions are used. The implementation andII.

Provision for bonuses

management of derivative transactions are carried out by the accounting

The Company recognises as provision for bonuses the amount expected todepartment with the approval of the decision makers in each Group

be paid to employees as bonuses for the fiscal year.

company. An internal control system has been developed to ensure that thecontract signing and termination comply with the internal rules.

2.4.4

Accounting methods for retirement benefits

In calculating the amount of retirement benefit obligations, the benefit formula2.4.7

method is used to distribute the estimated amount of retirement benefit into

Goodwill is amortised, in general, in equal amounts over five years. The

the period up to March 31, 2020.

goodwill resulting from the management integration with Hanshin Electric

Past service cost is recorded in expenses using the straight-line method
over a certain number of years (mainly 10 years), which is within the average

Method and period of amortisation of goodwill

Railway Co., Ltd. in the fiscal year ended March 31, 2007 is being amortisedin equal amounts over 20 years.

remaining years of service of the employees at the time when these costs are
incurred.

Scope of cash included in consolidated statements of cash flows

In preparing the consolidated statements of cash flows, cash on hand, readily

year using the straight-line method over a certain number of years (mainly

available deposits and short-term highly liquid investments without material

10 years), which is within the average remaining years of service of therisk of changing their value and with maturities not exceeding three months

employees at the time when these costs are incurred.

at the time of purchase are considered to be cash and cash equivalents.

2.4.5

Basis for converting significant assets and liabilities in foreign
currencies into Japanese yen

The assets and liabilities of overseas subsidiaries are converted into yen
based on the spot exchange rate on the balance sheet date, and income
and expenses of overseas subsidiaries are converted into yen based on the
average exchange rate during the relevant period. Differences in conversion
are included in foreign currency translation adjustments and non-controllinginterests in the net assets section.

93

2.4.8

Actuarial differences are recorded in expenses from the following

Hankyu Hanshin Holdings Integrated Report 2020

Notes to the Consolidated Financial Statements

2.4.9
I.

Other significant matters for preparing consolidated financial

III. Adoption of consolidated tax payment system

statements

A consolidated tax payment system has been adopted.

Accounting for contributions for construction in railway operations

The Company accepts contributions for construction from local governments
and other organisations that cover a portion of construction expenses arisingIV.	Application of tax effect accounting for the transition from a consolidated
tax payment system to a group taxation systemfrom the construction of continuous grade separations in railway operations.

With regard to paragraph 3 of “Practical Solution on the Treatment of Tax

When construction is completed, noncurrent assets acquired as a result of

Effect Accounting for the Transition from the Consolidated Taxation System toaccepting these contributions for construction are recognised at acquisition

the Group Tax Sharing System” (PITF No.39, March 31, 2020), the Company

cost after deducting the amounts equivalent to the said contributions forand its domestic consolidated subsidiaries did not follow paragraph 44 of

construction.

“Implementation Guidance on Tax Effect Accounting” (ASBJ Guidance No. 28,

In the consolidated statements of income, gain on contributions for

February 16, 2018), but applied provisions of pre-amended tax laws whenconstruction is recognised in extraordinary income, and the acquisition

calculating the amounts of deferred tax assets and liabilities that relate tocost of noncurrent assets, after deducting the amounts equivalent to thetransitioning to a group taxation system and related amendments of tax laws

contributions for construction, is recognised in extraordinary loss as loss on

for transitioning to a single tax payment system.

reduction of noncurrent assets.
II.

Accounting for consumption tax

Accounting for consumption tax is based on the tax exclusion method.

3. Standards and Guidance Not Yet Adopted (Accounting Standard for Revenue Recognition)
The following standard and guidance were issued but not yet adopted.
•	“Accounting Standard for Revenue Recognition” (ASBJ Statement No. 29,
March 31, 2020)•	“Implementation Guidance on Accounting Standard for Revenue
Recognition” (ASBJ Guidance No. 30, March 31, 2020)•	“Implementation Guidance on Disclosures about Fair Value of Financial
Instruments” (ASBJ Guidance No. 19, March 31, 2020)•	“Accounting Standard for Measurement of Inventories” (ASBJ Statement
No. 9, July 4, 2019)•	“Accounting Standard for Financial Instruments” (ASBJ Statement No. 10,
July 4, 2019)•	“Implementation Guidance on Accounting Standard for Fair Value
Measurement” (ASBJ Guidance No. 31, July 4, 2019)•	“Implementation Guidance on Disclosures about Fair Value of Financial
Instruments” (ASBJ Guidance No. 19, March 31, 2020)(1) Outline(1) Outline

The International Accounting Standard Board (“IASB”) and the Financial

Given that the International Accounting Standards Board (IASB) and the

Accounting Standard Board (“FASB”) jointly developed comprehensive

Financial Accounting Standards Board (FASB) set out almost identical detailed

accounting standard for revenue recognition and the Revenue from Contracts

guidance for the measurement of fair value (respectively IFRS No. 13 “Fairwith Customers was issued in May 2014 (IFRS No. 15 by IASB, and Topic 606

Value Measurement” under International Financial Reporting Standards (IFRS)

by FASB).

and Accounting Standards Codification Topic 820 “Fair Value Measurement”

IFRS No. 15 was applied for annual reporting periods beginning onunder US-GAAP), the ASBJ released the “Accounting Standard Fair Valueor after January 2018, Topic 606 was also applied from annual reporting

Measurement” etc., in an effort to establish consistency between Japan’s

periods beginning December 15, 2017. Based on such a situation, the ASBJ

accounting standards and international accounting standards centering on

developed the comprehensive accounting standard for revenue recognition/

guidance and disclosure of the fair value of financial instruments.

the implementation guidance and issued them together.

On the ASBJ’s basic policy for development of accounting standard
for fair value measurement, in order to enhance the comparability ofrevenue recognition, the basic principles of IFRS No. 15 were incorporated

financial statements between domestic and foreign companies the standard

into the ASBJ Statement No. 29 as starting points, the Statement was set out,

essentially adopted the entire provisions of IFRS No. 13. Moreover, withfrom the viewpoint of comparability among financial statements which is one

consideration for the accounting practice in Japan to date, to the extent

of merits for consistency with IFRS No. 15. If there are any items which shouldthat the comparability of financial statements is not materially impaired,be considered in current practices in Japan, alternative treatments would bealternative accounting treatments are provided for select items.

Financial Section and Corporate Data

On the ASBJ’s basic policy for development of accounting standard for

added to the extent of not losing the comparability.
(2) Effective date(2) Effective date

Effective from the beginning of the fiscal year ended March 31, 2022.

Effective from the beginning of the fiscal year ended March 31, 2022.
(3) Effects of the application of the standards(3) Effects of the application of the standards

The Company and its consolidated domestic subsidiaries are currently

The Company and its consolidated domestic subsidiaries are currently

in the process of determining the effects of these new standards on thein the process of determining the effects of these new standards on the

consolidated financial statements.

consolidated financial statements.
(Accounting Standard for Disclosure of Accounting Estimates)(Accounting Standard for Fair Value Measurement)•	“Accounting Standard for Fair Value Measurement” (ASBJ Statement No.

•	“Accounting Standard for Disclosure of Accounting Estimates” (ASBJ
Statement No. 31, March 31, 2020)

30, July 4, 2019)

Hankyu Hanshin Holdings Integrated Report 202094

Financial Section and Corporate Data
Notes to the Consolidated Financial Statements(1) Outline
The International Accounting Standards (IAS) released in 2003 by the(1) Outline

International Accounting Standards Board (IASB) require in No. 1 paragraph

The ASBJ, having been requested to consider improvements to the125, “Presentation of financial statements” (hereinafter referred to as “IAS

information to be provided in the notes to financial statements, implemented1”) the disclosure of “Factors causing estimation uncertainty.” Since thisnecessary amendments to the “Principles and procedures of accounting

disclosure is regarded as highly valuable for financial statement users, upontreatments to be adopted in cases where the stipulations of the relevant

requests also for Japan’s accounting standards to include this disclosure

accounting standards, etc., are not clear,” and released the result as therequirement in the notes to financial statements, the ASBJ developed and“Accounting Standard for Accounting Policy Disclosures, Accounting Changes

released the “Accounting Standard for Disclosure of Accounting Estimates.”and Error Corrections.”

On the ASBJ’s basic policy for development of accounting standard

Note that in taking steps to enhance the information to be provided infor disclosure of accounting estimates, rather than expanding the scope

the notes to financial statements under the “Principles and procedures ofof individual notes, the ASBJ defined ground rules (disclosure objectives)

accounting treatments to be adopted in cases where the stipulations of thewith specific disclosure contents left to the judgment of the reporting

relevant accounting standards, etc., are not clear” the standard takes overentity in accordance with the disclosure objectives, thus referencing in thethe provisions of the Notes on Business Accounting Standards (Note 1-2) todevelopment of this standard the provisions of IAS 1, paragraph 125.

avoid upsetting current established practice in cases where the provisions ofrelated accounting standards are clear.

(2) Effective date
Effective from the end of the fiscal year ended March 31, 2021.

(2) Effective date
Effective from the end of the fiscal year ended March 31, 2021.

(Accounting Standard for Accounting Policy Disclosures, Accounting Changes
and Error Corrections)•	“Accounting Standard for Accounting Policy Disclosures, Accounting
Changes and Error Corrections” (ASBJ Statement No. 24, March 31,
2020)

4. Additional Information (Performance-based stock compensation plan for directors, etc., of the（2）Shares in the Company remaining under the trust

Company)

Shares in the Company remaining under the trust were listed as treasury（1）Outline of transaction

stock in the net assets section on a book value basis for trust (excluding

To further enhance motivation to improve corporate value and business

ancillary expenses). The book value of, and the number of shares of theperformance, and to provide an incentive regarding improving shareholder

treasury stock at the end of the fiscal year ended March 31, 2019 were 1,519

value, the Company has introduced a stock compensation system (hereinafter

million yen and 377,008 shares, and at the year ended March 31, 2020, arereferred to as the “System”) for directors of the Company in a position of

1,479 million yen and 367,308 shares respectively.

chairman or president.
Moreover, Hankyu Corporation, Hanshin Electric Railway Co. Ltd., and95(Effects of the new coronavirus pandemic on accounting estimates)

Hankyu-Hanshin Real Estate Co. Ltd. have adopted the System for full-time

The effects of the new coronavirus pandemic are difficult to accurately

directors and corporate officers, excluding outside directors and nonresidents

predict both with regard to duration and extent. The fiscal year endingof Japan and employees of other companies on loan to Hankyu-Hanshin RealMarch 2021 to date has been subject to severe restrictions, such as

Estate Co. Ltd.

the government’s declaration of an emergency and requests from local

The System uses an officer compensation BIP (Board Incentive Plan)

governments to the general public to refrain from going out. The Company

trust, under which shares in the company will be provided to, and money

therefore prepares its accounting estimates including the recoverability ofequivalent to exchange value of shares in the company will be paid to,deferred tax assets, etc., on the premise that these effects will continue for a

directors and others based on performance and position.

certain period of time.

Hankyu Hanshin Holdings Integrated Report 2020

Notes to the Consolidated Financial Statements

5. Consolidated Balance Sheets 
5.1

Accumulated depreciation of property and equipment
Millions of yen

5.3

5.2

from the acquisition cost of noncurrent assets

Thousands of U.S. dollars

2019

2020

2020

¥ 1,150,595¥  1,177,475$  10,802,523

Accumulated contributions for construction directly deducted

Millions of yen

Thousands of U.S. dollars

2019

2020

2020

¥ 445,997¥  449,278$  4,121,817

Pledged assets and secured liabilities

The following table shows the assets pledged as collateral. Amounts in parentheses () indicate those related to a railway foundation.

Millions of yen

Thousands of U.S. dollars
2020

2019

2020

Property and equipment:¥ 200,392¥ (200,392)¥  201,238¥  (201,238)$  1,846,220

Machinery, equipment and vehicles

Buildings and structures

50,614(50,614)50,423(50,423)

462,596$  （1,846,220）（462,596）

Land

242,100(242,100)

241,625(241,625)

2,216,743（2,216,743）

Other

3,018

(3,018)2,898(2,898)26,587（26,587）

118

(118)

179

(179)

1,642

（1,642）Intangible assets:
Other
Investments and other assets:
Investment securities

438

(—)

292

(—)

2,679

(—)

Other

176

(—)

372

(—)

3,413

(—)

Total

496,859(496,244)

497,029(496,364)

4,559,899（4,553,798）

In addition to the above, the Company pledged investment securities (fiscal year ended March 31, 2019: 800 million yen, fiscal year ended March 31, 2020:
800 million yen) as collateral for loans of third parties.
The following table shows the secured liabilities. Amounts in parentheses () indicate those related to a railway foundation.
Millions of yen

Thousands of U.S. dollars
2020

2019

2020

Current liabilities:
Short-term borrowings

¥

9,446

Other

¥

(9,446)¥      9,784¥      (9,784)$     89,761$     （89,761）

(—)

120

(—)

1,101

(—)

90

Long-term liabilities:
Long-term debt

113,477(113,477)

114,522(114,522)

1,050,661（1,050,661）

Total

123,014(122,923)

124,427(124,307)

1,141,532（1,140,431）

5.4

The following table shows the securities of nonconsolidated subsidiaries and affiliates.
Millions of yen

Investment securities

Thousands of
U.S. dollars

2019

2020

2020

¥ 239,486¥  257,644$  2,363,706

Financial Section and Corporate Data

Hankyu Hanshin Holdings Integrated Report 202096

Financial Section and Corporate Data
Notes to the Consolidated Financial Statements

5.5

Two consolidated subsidiaries and an equity-method affiliate

5.6

revaluated land for business use based on the Law Concerning

The Company and its subsidiaries provide a liability guarantee for loans ofRevaluations of Land (Law No. 34, promulgated on March 31,

the companies, etc., listed below.

1998) and the Law to Partially Modify the Law Concerning
Revaluations of Land (Law No. 19, promulgated on March 31,
2001). Of the valuation differences identified as a result of this,the consolidated subsidiaries recorded the amount corresponding
to the taxes on the valuation difference in the liability section
as “Deferred tax liabilities related to land revaluation” andthe amount attributable to minority shareholders as “noncontrolling interests.” The amount remaining after subtracting
these was recorded in the net assets section as “Revaluation

Contingent liabilities

Fiscal year ended March 31, 2019
Millions of yen
Nishi-Osaka Railway Co., Ltd.

¥ 18,204

Borrowers on loans for purchase of landand buildings

12,724

Overseas subsidiaries

3,426

Other (five companies)

289

Total

34,644

reserve for land.” The equity-method affiliate recorded theamount corresponding to its equity in the valuation difference

Fiscal year ended March 31, 2020

(after subtracting taxes) in the net assets section as “Revaluation
reserve for land.”•	Revaluation methodNishi-Osaka Railway Co., Ltd.

Millions of yen

Thousands of
U.S. dollars¥  17,266$  158,404

Borrowers on loans for purchase of landand buildings

6,013

55,165the Enforcement Ordinance for the Law Concerning Land Revaluation

Overseas subsidiaries

5,473

50,211(Ordinance No. 119, promulgated on March 31, 1998).

Other (four companies)

259

2,376

29,013

266,174

The revaluation amounts were determined based on the revaluatedvalue of noncurrent assets provided for in Article 2, Paragraph 3 ofTotal

•	Date of revaluation: March 31, 2002
Millions of yen
2020

2019
Difference between themarket value as of March
31, 2020 of the lands forwhich reevaluation wasmade and the book valueof after reevaluation

Thousands of
U.S. dollars

In addition to the above, overseas subsidiaries submitted letters of awareness

2020

yen, fiscal year ended March 31, 2020: 4,677 million yen) in connection withfor management guidance (fiscal year ended March 31, 2019: 1,957 million
the fund procurement of affiliates.

¥ (6,137)¥  (6,215)$  (57,018)

6. Consolidated Statements of Income 
6.1

The breakdown of selling, general and administrative expenses
is shown below

Expenses

97

The retirement benefit expenses and the main expense items
and monetary amounts within the amounts of allowance andThousands of
U.S. dollars

Millions of yen
Personnel expenses

6.2

2019

2020

2020

¥ 14,752¥  12,175$  111,697

provision included in the costs of revenues from operations areshown below.
Millions of yen

7,686

10,691

98,083

Taxes

746

948

8,697

Retirement benefit expenses

Depreciation andamortisation

934

796

7,303

Provision for bonuses

Amortisation of goodwill

2,240

2,426

22,257

Total

26,361

27,039248,064

Hankyu Hanshin Holdings Integrated Report 2020

Thousands of
U.S. dollars

2019

2020

2020

¥ 7,797¥  6,377$  58,505

4,546

4,171

38,266

Notes to the Consolidated Financial Statements

6.3

Loss on impairment

Fiscal year ended March 31, 2019
Our Group recorded loss on impairment on the following asset groups.
Millions of yen
Use
Railway Operational Assets (1 item) (Note 1)

Type

RegionAmountBuildings and Structures, etc.

Hyogo

¥ 19,163

Retailing Business Assets, etc. (20 items) (Note 2) Buildings and Structures, etc.

Osaka, etc.

99

(Method of asset grouping)
Our Group includes each business or property as group assets for account management purposes.
Note:
1.	In order to reduce train fares, the Kobe City Government approached our subsidiary Hankyu Corporation and proposed the commencement of discussions regarding theunification of operation of the Hokushin Kyuko Electric Railway (Shin-Kobe Station–Tanigami Station) under the Kobe City Transportation Bureau. Hankyu Corporation cameto the conclusion that such efforts would contribute to the stimulation of the Kobe Sannomiya area, a key business location for our Group, and entered into the discussion.
As a result, it was decided that the Group would aim to transfer railway assets related to the Hokushin Kyuko Electric Railway to the Kobe City Transportation Bureau in
the first half of fiscal 2021. A basic agreement was concluded on March 29, 2019. As a result, under extraordinary loss we recorded as loss on impairment (19,163 millionyen), the decline in value from book value of the railway operational assets to the amount recoverable.
2.	Under extraordinary loss we recorded as loss on impairment (99 million yen), the decline in value from book value to the amount recoverable for noncurrent assets forwhich it was decided that operations would be closed or dismantled.
(Breakdown of loss on impairment)
Millions of yen
Buildings and Structures¥ 15,954

Land, etc.

3,308

Total

19,262(Method of calculation of the recoverable value)
We determined the recoverable value from the net liquidation value.
We used a value determined by the expected liquidation value or residual value with regard to net liquidation value.

Fiscal year ended March 31, 2020
Omitted as the significance was negligible.

Financial Section and Corporate Data

Hankyu Hanshin Holdings Integrated Report 202098

Financial Section and Corporate Data
Notes to the Consolidated Financial Statements

7. Consolidated Statements of Comprehensive Income Reclassification adjustments and tax effects related to other comprehensive income
Millions of yen

Thousands of U.S. dollars

2019

2020

2020

¥ (4,193)¥ (8,550)

365

1,268

11,633(3,827)(7,282)(66,807)

Valuation difference on available-for-sale securities:
Increase (decrease) during the year
Reclassification adjustments
Subtotal, before tax(78,440)Tax (expense) or benefit

1,192

2,159

19,807

Valuation difference on available-for-sale securities(2,635)(5,122)(46,991)

Deferred gains or losses on hedges:
Increase (decrease) during the year
Reclassification adjustments

240

328

3,009

—

151

1,385

Subtotal, before tax

240

480

4,404

Tax (expense) or benefit

(82)

(165)

(1,514)

Deferred gains or losses on hedges

158

314

2,881

(670)

(45)

(413)

—

0

0

(670)

(45)

(413)

Foreign currency translation adjustments:
Increase (decrease) during the year
Reclassification adjustments
Subtotal, before tax
Tax (expense) or benefit

—

—

—

(670)

(45)

(413)

3,919

（2,769）(25,404)

594

（819）

(7,514)

Subtotal, before tax

4,513（3,588）(32,917)

Tax (expense) or benefit(1,568)1,186

10,881Remeasurements of defined benefit plans

2,945（2,401）(22,028)(1,294)(5,375)(49,312)

26

11

101

(1,268)(5,364)(49,211)(1,471)(12,618)(115,761)

Foreign currency translation adjustments
Remeasurements of defined benefit plans:
Increase (decrease) during the year
Reclassification adjustments

Share of other comprehensive income of associates accounted for using
equity method:
Increase (decrease) during the year
Reclassification adjustments
Share of other comprehensive income of associates accounted forusing equity method
Total other comprehensive income

8. Consolidated Statements of Changes in Net Assets 
Fiscal year ended March 31, 2019

8.1

Matters concerning types and total number of outstanding shares, and types and number of outstanding treasury stock(Thousands of shares)
Number of shares as of April 1, 2018

Increase in number of shares

Decrease in number of shares

Number of shares as of March 31, 2019

254,281——254,281254,281——254,281

7,262

2,290

11

9,541

7,262

2,290

11

9,541

Number of shares issued:
Common stock
Total
Treasury stock, at cost:
Common stock (Notes 1, 2 and 3)
Total
Notes:
1.	The number of treasury stock at the end of the fiscal year ended March 31, 2019 includes 377,008 shares in the Company owned by the officer’s compensation BIP
trust.
(Overview of reasons for fluctuations)
2.	The increase of 2,290 thousand shares of treasury stock of common stock consists of: 2,244 thousand shares acquired upon the resolution of the Board of
Directors’ meeting, 30 thousand shares acquired by the officer’s compensation BIP trust, and 16 thousand shares created by the purchase of odd-lot shares.
3.	The decrease of 11 thousand shares treasury stock of common stock consists of: 10 thousand shares delivered by the officer's compensation BIP trust, 0
thousand shares due to the sale of odd-lot shares and 0 thousand shares due to change in equity ratio against affiliates to which the equity method is applicable.

99

Hankyu Hanshin Holdings Integrated Report 2020

Notes to the Consolidated Financial Statements

8.2

Items concerning stock acquisition right

There is no relevant item.

8.3

Items related to dividends

Fiscal year ended March 31, 2019
8.3.1

Dividends paid
Dividends paid

Dividend per share(Millions of yen)

(Yen)

(Resolution)

Type of shares

June 13, 2018
Annual General Meetingof Shareholders

Common stock¥ 4,970

November 1, 2018
Board of Directors

Common stock

4,925

Record date

Effective date

¥ 20

March 31, 2018

June 14, 201820

September 30, 2018

December 3, 2018

Note:
1.	For the upper figure (the portion approved by a resolution at the annual General Meeting of Shareholders on June 13, 2018), the total amount of dividend
includes 7 million yen of dividend for the shares in the Company owned by the officer’s compensation BIP trust.
2. 	For the lower figure (the portion approved by a resolution of the Board of Directors on November 1, 2018), the total amount of dividend includes 7 million yenof dividend for the shares in the Company owned by the officer’s compensation BIP trust.

8.3.2

Dividends whose effective date falls in the fiscal year following the fiscal year of the record date
(Resolution)

Type ofsharesJune 13, 2019
Annual General Meetingof Shareholders

Commonstock

Dividends paid
(Millions of yen)
¥ 4,925

Source ofdividends

Dividend per share(Yen)

Retainedearnings¥ 20

Record date

Effective date

March 31, 2019

June 14, 2019

Note: The total amount of dividend includes 7 million yen of dividend for the shares in the Company owned by the officer’s compensation BIP trust.

Fiscal year ended March 31, 2020

8.4

Matters concerning types and total number of outstanding shares, and types and number of outstanding treasury stock(Thousands of shares)
Number of shares as of April 1, 2019

Increase in number of shares

Decrease in number of shares

Number of shares as of March 31, 2020

254,281——254,281254,281——254,281

9,541

2,529

34

12,036

9,541

2,529

34

12,036

Number of shares issued:
Common stock
Total
Treasury stock, at cost:
Common stock (Notes 1, 2 and 3)
Total
Notes:
1.	The number of treasury stock at the end of the fiscal year ended March 31, 2020 includes 367,308 shares in the Company owned by the officer’s compensation BIP
trust.
(Overview of reasons for fluctuations)
2.	The increase of 2,529 thousand shares treasury stock of common stock consists of: 2,489 thousand shares acquired upon the resolution of the Board of Directors’
meeting, 23 thousand shares acquired by the officer’s compensation BIP trust, and 16 thousand shares created by the purchase of odd-lot shares.

Financial Section and Corporate Data

3.	The decrease of 34 thousand shares treasury stock of common stock consists of: 33 thousand shares delivered by the officer's compensation BIP trust, 0 thousand
shares due to the sale of odd-lot shares, and 0 thousand shares due to change in equity ratio against affiliates to which the equity method is applicable.

8.5

Items concerning stock acquisition right

There is no relevant item.

Hankyu Hanshin Holdings Integrated Report 2020

100

Financial Section and Corporate Data
Notes to the Consolidated Financial Statements

8.6

Items related to dividends

Fiscal year ended March 31, 2020
8.6.1

Dividends paid
(Resolution)

Type of shares

June 13, 2019
Annual General Meetingof Shareholders
November 1, 2019
Board of Directors

Dividends paid

Dividend per share

Record date

Effective date

$ 0.18March 31, 2019

June 14, 2019

0.23

September 30, 2019

December 2, 2019

(Millions of yen)(Thousands of
U.S. dollars)(Yen)(U.S. dollars)Common stock¥ 4,925$ 45,183¥ 20

Common stock

6,094

55,90825

Note:
1.	For the upper figure (the portion approved by a resolution at the annual General Meeting of Shareholders on June 13, 2019), the total amount of dividend
includes 7 million yen of dividend for the shares in the Company owned by the officer’s compensation BIP trust.
2. 	For the lower figure (the portion approved by a resolution of the Board of Directors on November 1, 2019), the total amount of dividend includes 9 million yenof dividend for the shares in the Company owned by the officer’s compensation BIP trust.

8.6.2

Dividends whose effective date falls in the fiscal year following the fiscal year of the record date
Dividends paid

(Resolution)

Type ofsharesJune 17, 2020
Annual General Meetingof Shareholders

Commonstock(Millions of yen)(Thousands of
U.S. dollars)¥ 6,094$ 55,908

Source ofdividends
Retainedearnings

Dividend per share(Yen)(U.S. dollars)¥ 25$ 0.23

Record date

Effective date

March 31, 2020

June 18, 2020

Note: The total amount of dividend includes 9 million yen of dividend for the shares in the Company owned by the officer’s compensation BIP trust.

9. Consolidated Statements of Cash Flows 
Relationship between cash and cash equivalents at fiscal year-end and amounts shown on consolidated balance sheets
Thousands of
U.S. dollars

Millions of yen
Cash and deposits in the consolidated balance sheets

2019

2020

2020

¥ 28,856¥   25,023$ 229,569(1,444)(1,497)(13,734)

177

—

—

27,58923,526

215,835

Deposits with maturities over 3 months
Securities
Cash and cash equivalents in the cash flow statements

10. Lease Transactions <As lessee><As lessor>

Future lease payments for non-cancellable leases in connection with

Future lease receivables for non-cancellable leases in connection with

operating lease transactions

operating lease transactions
Millions of yen

101

Thousands of
U.S. dollars

Millions of yen

2019

2020

2020

Due within one year

¥ 5,187¥   7,583$   69,569

Due within one year

Due after one year

22,68363,913586,358

Total

27,87071,496655,927

Hankyu Hanshin Holdings Integrated Report 2020

Thousands of
U.S. dollars

2019

2020

2020

2,436

¥    2,721$   24,963

Due after one year

22,74020,350186,697

Total

25,177

23,071

211,661¥

Notes to the Consolidated Financial Statements

11. Financial Instruments 
11.1 Matters regarding financial instruments

is exposed to interest rate fluctuation risk (market risk), which is limited by fixing

11.1.1 Policy on financial instrumentsinterest rates through interest rate swap transactions. In addition, liquidity risk—

It is the Group’s policy to limit the investment of its funds to short-term deposits

the risk that payment will not be made by the due date—is limited by the timely

which are highly secure, and the Group raises funds mainly through loans frompreparation of financing plans and proper fund management. Also, surplus funds offinancial institutions, bonds and commercial paper. Derivative transactions are

the Group companies are concentrated and used effectively through centralisation

used to avoid risk, as discussed later, and it is our policy to refrain from speculativeof Group funds by using a cash management system. The immediate raising of funds

transactions.

from financial institutions became possible through the establishment of backup
financing such as commitment lines. In addition, the Company maintained a properbalance between direct financing and indirect financing and diversifies the raising of

11.1.2 Details of the financial instruments used, the risk involved and the risk

funds by using multiple financial institutions, thus securing liquidity.

management system
Trade receivables, namely note receivables and trade account receivables, are exposed

Regarding the use of derivative transactions, internal regulations prescribe theto the credit risk of customers. The Group limits its exposure to this credit risk by

division of duties and transaction limits. Forward exchange contracts are used

controlling due dates and balances by customer and by making periodical checks ofto hedge exchange rate fluctuation risk involved in a portion of foreign currency-

the credit conditions of major customers pursuant to the internal regulations of each

denominated assets and liabilities. The purpose of interest rate swap transactions

company.

is to hedge the interest rate fluctuation risk of certain loans. These derivative

Investment securities consist mainly of stocks and bonds and are exposed totransactions involve credit risk because if the other party to a transaction defaults

market price fluctuation risk. However, fair values and the financial condition of theunder the terms of contract or becomes bankrupt then the benefit that would haveissuers are checked periodically, and the risk management system is confirmed.

been obtained in the future if the transaction had continued will not be received.

Almost all trade payables, namely note payables and trade account payables, have

However, credit risk is limited by carrying out transactions only with financial

a payment date that falls within one year. Some assets and liabilities denominated ininstitutions with high credit ratings.

foreign currencies are exposed to exchange rate fluctuation risk (market risk), which isMore information regarding the means and objectives of hedging, hedging

limited through forward exchange contracts.

policy and the method of evaluating the effectiveness of hedges related to hedge

Short-term borrowings and commercial paper are used mainly to raise short-accounting for derivative transactions is described in Note 2.4, “Accounting

term funds for working capital, and long-term debt and bonds are used mainly to raise

policies,” and Note 2.4.6, “Significant hedge accounting methods,” outlined in Notethe long-term funds necessary for capital investment plans. Some floating-rate debt

2, “Basis of Preparation of Consolidated Financial Statements.”

11.2 Matters regarding fair values of financial instruments
Book value recorded in the consolidated balance sheet, fair value and differences between them are as shown below.
Millions of yen

Thousands of U.S. dollars
2020

2019

2020

Book value

Fair value

DifferenceBook value

Fair value

DifferenceBook value

Fair value

Difference(1) Cash and deposits¥ 28,856¥ 28,856¥—¥   25,023¥   25,023¥         —$   229,569$    229,569$         —(2) Trade receivables

93,154

93,154—68,36668,366—627,211627,211—(3) Investment securities

42,402

42,402—

33,64733,647(0)308,688308,688(0)—AssetsLiabilities(4) Trade payables

48,05448,054—29,50829,508—

270,716

270,716(5) Short-term borrowings (*1)

102,670

102,670—

123,710

123,710—

1,134,954

1,134,954—(6) Bonds (*2)

112,000

115,136

3,136

122,000

123,633

1,633

1,119,266

1,134,248

14,982(7) Long-term debt (*1)

655,740

676,259

20,518649,755

665,220

15,464

5,961,055

6,102,936

141,872

(514)

(514)

—

(205)

(205)

—

(1,881)(1,881)—(8) Derivative transactions (*3)(*1) Current portion of long-term debt is included in (7) Long-term debt.
(*2) Current portion of bonds is included.
(*3) The net receivables/liabilities incurred as a result of derivative transactions are shown in net figures, net liabilities are shown in parenthesis.

Financial Section and Corporate Data

Notes:
1. Method for calculating the fair values of financial instruments and matters regarding securities and derivative transactions(1) Cash and deposits and (2) Trade receivablesThe fair values of these are almost equal to their book values because they will be settled within a short period of time. As a result, their fair values are based on
their book values.
(3) Investment securities
The fair values of investment securities are based on prices quoted by stock exchanges, and the fair values of bonds are based on prices quoted by stock
exchanges or prices presented by trading financial institutions. Securities categorised by the purpose for which they are held are described in Note 13, “Securities.”(4) Trade payables, (5) Short-term borrowings
The fair values of these are almost equal to their book values because they will be settled within a short period of time. As a result, their fair values are based on
their book values.
(6) Bonds
The fair values of bonds are based on market prices.
(7) Long-term debt
The fair value of fixed-rate long-term debt is based on a method of calculation whereby the total principal and interest is discounted at an interest rate that isassumed for the introduction of similar new debt. The fair value of floating-rate long-term debt is based on the book value because the fair value of floating-ratelong-term debt reflects market interest rates within a short period of time and closely approximates the book values.
(8) Derivative transactionsPlease see Note 13, “Derivatives.”

Hankyu Hanshin Holdings Integrated Report 2020102

Financial Section and Corporate Data
Notes to the Consolidated Financial Statements

2. The book value of financial instruments whose fair value is extremely difficult to ascertain
Thousands of
U.S. dollars

Millions of yen
2019

2020

2020

¥ 6,327¥  6,523$  59,844

3,555

5,136

47,119Classification
Non-listed equity securities and bonds
Investments in limited liability investment partnerships and similar investments

It is extremely difficult to ascertain the fair value of these financial instruments because market prices are not available and future cash flows cannot be estimated.
As a result, they are not included in (3) Investment securities.

3. The securities of nonconsolidated subsidiaries and affiliated companies are not included in (3) Investment securities.
4. Supplementary explanation regarding fair value of financial instruments
The fair value of financial instruments is based on market price. If market prices are not available, the fair value of financial instruments is reasonably calculated.
Certain assumptions are used to calculate the value. As a result, if different assumptions are used, the values may differ. For derivative contracts, the amount of thecontract which is indicated in Note 13, “Derivatives” does not indicate the market risk involved in derivative transactions themselves.
5. Redemption and repayment schedule of monetary claims and investment securities with maturities
Fiscal year ended March 31, 2019
Millions of yen
Due after one
Due within one
year through five
year
years
¥

—

Due after five
years throughten years¥—

Due after ten
years

Cash and deposits¥ 28,856

Trade receivables

93,154

—

—

¥

—
—

141

261

34

300

122,152

261

34

300

Investment securities:
Available-for-sale securities with maturities(government bonds, etc.)
Total

Fiscal year ended March 31, 2020
Millions of yen
Due after one
Due within one
year through five
year
years

Thousands of U.S. dollars

Due after five
years throughten years

Due after ten
years

Due after one
Due within one
year through five
year
years

Due after five
years throughten years

Due after ten
years

Cash and deposits¥   25,023¥     —

¥     —

¥     —

$ 229,569$       —

$      —

$      —

Trade receivables

68,366———627,211———

Investment securities:
Available-for-sale securities with maturities(government bonds, etc.)
Total

59

223

10

300

541

2,046

92

2,752

93,449

223

10

300

857,330

2,046

92

2,752

6. Amount of planned redemption and repayment of bonds and long-term debt after the consolidated closing dateFiscal year ended March 31, 2019
Millions of yen
Due after one
Due within one
year through five
year
years
Bonds
Long-term debt
Total

Due after five
years throughten years

Due after ten
years¥ 20,000¥ 52,000¥ 10,000¥ 30,000

34,365222,245

275,383

123,745

54,365274,245285,383

153,745

Fiscal year ended March 31, 2020
Millions of yen
Due after one
Due within one
year through five
year
years
Bonds
Long-term debt
Total

103

Hankyu Hanshin Holdings Integrated Report 2020

Thousands of U.S. dollars

Due after five
years throughten years

Due after ten
years

Due after one
Due within one
year through five
year
years

Due after five
years throughten years

Due after ten
years$   366,972¥ 25,000¥   27,000¥   30,000¥   40,000$  229,358$   247,706$   275,229

34,696

264,556

249,770

100,732

318,3122,427,119

2,291,468

924,147

59,696

291,556

279,770

140,732

547,6702,674,826

2,566,697

1,291,119

Notes to the Consolidated Financial Statements

12. Securities 
12.1 Available-for-sale securities
Millions of yen

Classification
Securities withbook value
exceedingacquisition cost

(1) Equity securities

2020

2020

Book value

Acquisition
cost

DifferenceBook value

Acquisition
cost

DifferenceBook value

Acquisition
cost

Difference¥ 38,684¥ 24,122¥ 14,562¥  26,407¥  18,373¥  8,034$  242,266$  168,560$  73,706(2) Bonds

Securities withbook value
not exceedingacquisition costThousands of U.S. dollars

2019

438

428

9

292

287

5

2,679

2,633

46

Subtotal

39,122

24,55014,571

26,69918,6608,039

244,945

171,19373,752Equity securities

3,280

3,582

(302)

6,937

7,985

(1,048)63,64273,257（9,615）

Subtotal

3,280

3,582

(302)

6,937

7,985

(1,048)63,64273,257（9,615）42,402

28,133

14,26933,637

26,646

6,990

308,596244,459

64,128

Total

Notes: Unlisted equity securities and others (fiscal year ended March 31, 2019: 9,883 million yen, fiscal year ended March 31, 2020: 11,659 million yen) are notincluded in the above table because it is extremely difficult to determine their market value as there are no market price therefor and future cash flows
cannot be reasonably estimated.

12.2 Securities for which impairment loss has been recorded
Fiscal year ended March 31, 2019
Omitted as the significance was negligible.
Fiscal year ended March 31, 2020
Impairment loss of 1,356 million yen recorded for investment securities (shares in available-for-sale securities).

13. Derivatives 
13.1 Derivative transactions for which hedge accounting has not been applied
Currency
Fiscal year ended March 31, 2019
Millions of yen

Classification
TypeTransactions
Currency swap contracts:
other than market
Receive yen, pay US dollartransactions
Total

Contract
amountPortion of contract
amount exceeding
one year

Fair value(Note)

Valuation
gain/loss

598

598

(49)

(49)

598

598

(49)

(49)

Fiscal year ended March 31, 2020
Millions of yen

Classification

Thousands of U.S. dollars

Contract
amountPortion ofcontract
amountexceeding
one year

Fair value(Note)

Valuation
gain/loss

Contract
amountPortion ofcontract
amountexceeding
one year

Fair value(Note)

Valuation
gain/loss¥    598¥   —¥  (53)¥  (53)$  5,486$   —$  (486)$  (486)

Type
Currency swap contracts:
Receive yen, pay US dollar
Forward exchange contracts:Transactions
other than market
transactions

Euro

10,245

—

（128）

（128）

93,991—(1,174)(1,174)

US dollar

4,124

—

66

66

37,835

—

606

606

Swiss franc

1,052

—

28

28

9,651

—

257

257

Canadian dollar

891

—

（52）

（52）

8,174

—

(477)

(477)

Singapore dollar

448

—

（14）

（14）

4,110

—

(128)

(128)

Australian dollar

344

—

（38）

（38）

3,156

—

(349)

(349)

New Zealand dollar

79

—

（5）

（5）

725

—

(46)

(46)

South African rand

46

—

（6）

（6）

422

—

(55)

(55)

17,831

—

(204)

(204)

163,587—(1,872)(1,872)

Total

Financial Section and Corporate Data

Buy contract

Notes:
1. Fair value calculation
Fair value is based mainly on prices quoted from counterparty financial institutions.
2. Regarding the above currency swap contracts, in nonconsolidated financial statements hedge accounting is applied for monetary payables and receivables related
to transactions between consolidated subsidiaries. In consolidated financial statements, however, hedge accounting is not applied because the said hedged items
are eliminated.

Hankyu Hanshin Holdings Integrated Report 2020104

Financial Section and Corporate Data
Notes to the Consolidated Financial Statements

13.2 Derivative transactions for which hedge accounting has been applied
13.2.1 Currency
Fiscal year ended March 31, 2019

Millions of yen

Classification

Portion of contract
amount exceeding
one year

Main hedged
items

Type

Contract
amountFair value(Note)

Forward exchange contracts
Sell contract

Trade receivables

Japanese yen¥

US dollar
PrimarymethodPound sterling
Buy contract

8

¥

—

¥

0

5

—

0

1

—

0
13

Trade payables

Japanese yen803—

US dollar

17

—

(0)

Singapore dollar

0

—

(0)

Euro

0

—

(0)

Forward exchange contracts
Buy contractEuroDesignationof forward
exchange
contracts,
etc.

Trade payables(forecast transactions)

13,311—(400)

US dollar

6,910

—

(29)

Canadian dollar

1,096

—

(31)

Swiss franc

1,000

—

(11)

Australian dollar

617

—

(10)

Singapore dollar

427

—

2

New Zealand dollar

102

—

1

South African rand

10

—

0

143

—

US dollar

1,329

—

Euro

1,283

—

Australian dollar

112—

Singapore dollar

100—

Hong Kong dollar

59—

New Zealand dollar

58—

Thai baht

50—

Pound sterling

13—

Canadian dollar

10—South African rand

4

—

1

—

27,487—

Forward exchange contracts
Sell contract

Trade receivables

US dollar
Buy contract

Trade payables

Swiss franc
Total

105

Hankyu Hanshin Holdings Integrated Report 2020

(Note 2)(465)

Notes to the Consolidated Financial Statements

Fiscal year ended March 31, 2020

Millions of yen

Classification

Contract
amountPortion of contract
amount exceeding
one year

Fair value(Note)

Contract
amountPortion of contract
amount exceeding
one year

Fair value(Note)¥       16¥      —

¥       0$      147

$      —

$      0

500

—

(3)

4,587

—

（28）

Type

Main hedged
items

Thousands of U.S. dollars

Forward exchange contracts
PrimarymethodSell contract

Trade receivables

US dollar
Buy contract

Trade payables

Japanese yen
Forward exchange contracts
Trade payables

Buy contract(forecast transactions)

US dollar
Indian rupee

1,295

—

3

11,881

—

28

34

—

(1)

312

—

(9)

148

—

1,358

—

Forward exchange contracts
Trade receivables

Sell contract
US dollar
Buy contractDesignationof forward
exchange
contracts,
etc.

Trade payables

US dollar

1,064

—

9,761

—

Euro

568

—

5,211

—

Hong Kong dollar

164

—

1,505

—

Thai baht

67—

Australian dollar

36

New Zealand dollar
Singapore dollar

615

—

—

330

—

29

—

266

—

24

—

220

—

Pound sterling

21

—

193

—

Canadian dollar

12

—

110

—

South African rand

7

—

64

—

Swiss franc

2

—

18

—

3,994

—

36,642—

Total(Note 2)(0)(Note 2)

(0)

Note:
1. Fair value is based mainly on prices quoted from counterparty financial institutions.
2. Designation of forward exchange contracts, etc., are treated together with trade receivables and trade payables that are subject to hedging; therefore, theirmarket values are recorded together with those of trade receivables and trade payables.

13.2.2 Interest rate
Fiscal year ended March 31, 2019
Millions of yen
ClassificationExceptional
accounting ofinterest rate
swaps

Type
Interest rate swap contracts:
Pay fixed rate/
Receive floating rate

Main hedged
itemsLong-term debt

Total

Contract
amountPortion of contract
amount exceeding
one year

Fair value(Note)¥ 167,551¥ 159,801¥ (10,329)

167,551

159,801(10,329)

Contract
amountPortion of contract
amount exceeding
one year

Fair value(Note)

Contract
amountPortion of contract
amount exceeding
one year

Fair value(Note)¥   151,897¥   147,300¥   (8,914)$  1,393,550$  1,351,376$  (81,780)

151,897

147,300(8,914)$  1,393,550$  1,351,376$  (81,780)

Fiscal year ended March 31, 2020

TypeInterest rate swap contracts:
Pay fixed rate/
Receive floating rate
Total

Main hedged
itemsLong-term debt

Thousands of U.S. dollars

Financial Section and Corporate DataClassificationExceptional
accounting ofinterest rateswaps

Millions of yen

Note: Fair value is based mainly on prices quoted from counterparty financial institutions.

Hankyu Hanshin Holdings Integrated Report 2020106

Financial Section and Corporate Data
Notes to the Consolidated Financial Statements

14. Retirement Benefits 
14.1 Overview of retirement benefit plans
The Company and some consolidated subsidiaries provide a defined benefit plan (defined benefit pension plan and lump-sum payment plan) or a defined
contribution plan. Hankyu Corporation has set up the retirement benefit trust.
In addition, some consolidated subsidiaries subscribe to the employees’ pension funds plan in the multi-employer plan. Among them, the Company has used
the same accounting treatment as it used for defined contribution plans when the amount of plan assets corresponding to contributions by the Company cannot be
rationally calculated.

14.2 Defined benefit plan

14.2.4 The breakdown of retirement benefit expenses

14.2.1 Table of movement in retirement benefit obligations
Millions of yen
2020

2019
Balance at beginningof the year

¥ 133,3602020¥  133,751$ 1,227,073

Service cost

8,020

7,933

72,780Interest cost

297

254

2,330

Actuarial loss (gain)

(418)

53

486

(6,613)(9,562)（87,725）

(877)

—

―

—

(443)

（4,064）

(18)

36

330

133,751

132,022

1,211,211

Retirement benefits paid
Past service cost
Decrease resulting fromthe end of the retirement
benefit plan system
Other
Balance at end of the year

Note: Amounts in the table above include the retirement benefit obligationsof consolidated subsidiaries using simplified methods.

2019

2020

2020

¥ 81,767¥   86,137$  790,248

Expected returnon plan assets

1,131

1,087

9,972

Actuarial loss (gain)

2,622（2,715）（24,908）

Contribution paidby the employer

4,173

4,001

36,706Retirement benefits paid

(3,470)(5,145)（47,202）

Decrease resulting fromthe end of the retirement
benefit plan system

—

(737)

（6,761）

(88)

10

92

86,137

82,638758,147

Balance at end of the year2020

¥ 8,020¥  7,933

Interest cost

297

254

2,330

(1,131)(1,087)(9,972)

732

(680)

(6,239)

(138)

(138)

(1,266)

58

49

450

Retirement benefit expenses

7,838

6,329

58,064

Loss resulting from the endof the retirement benefit
plan system

―

293

2,688

7,838

6,623

60,761Expected return on plan
assetsAmortisation of actuarial
differencesAmortisation of past service
cost
Other

Total

2020
72,780Notes:
1. Amounts in the table above include the retirement benefit expenses of
consolidated subsidiaries using simplified methods.

Thousands of
U.S. dollars

Millions of yen

Other

2019
Service cost

2. In addition to the retirement benefit expenses shown above, the Company

14.2.2 Table of movement in plan assets

Balance at beginningof the year

Thousands of
U.S. dollars

Millions of yen

Thousands of
U.S. dollars

Note: Amounts in the table above include the plan assets of consolidated
subsidiaries using simplified methods.

made extra retirement payments of 0 million yen in the fiscal year ended
March 31, 2019, which was recorded as operating expenses. In thefiscal year ended March 31, 2020 the Company made extra retirement
payments of 30 million yen, which were recorded as operating expenses
and extraordinary loss.
3. Loss resulting from the end of the retirement benefit plan system isincluded in the “Other” section in extraordinary loss.
14.2.5	Remeasurements of defined benefit plans
The breakdown of items related to remeasurements of defined benefit
plans (prior to the deduction of the tax effect) is as follows:
Thousands of
U.S. dollars

Millions of yen
2019

2020

2020

¥ 739

¥   
（138）

$   
（1,266）

Actuarial differences

3,774（3,450）（31,651）

Total

4,513

（3,588）（32,917）

Past service cost

14.2.3 Table of reconciliation between the balance of retirement benefit
obligations and of plan assets, and the liabilities for retirement benefit
and assets for retirement benefit recorded in the consolidated

14.2.6 Cumulative adjustments of retirement benefit plans
The breakdown of items related to cumulative adjustments ofbalance sheet, as of the end of fiscal year
Millions of yen
Funded retirement benefit
obligations
Plan assets

2019

2020

2020

¥ 72,458¥  70,521$  646,982(86,137)(82,638)（758,147）(13,678)(12,116)（111,156）Unfunded retirement benefit
obligations

61,292

61,500564,220Total net defined benefit
liability and asset

47,61449,383453,055

Net defined benefit liability

62,20963,020578,165

Net defined benefit asset(14,595)(13,636)（125,101）Total net defined benefit
liability and asset

47,61449,383453,055

Note: Amounts in the table above include the retirement benefit obligations

107

and plan assets of consolidated subsidiaries using simplified methods.
Hankyu Hanshin Holdings Integrated Report 2020

retirement benefit plans (prior to the deduction of the tax effect) is as

Thousands of
U.S. dollars

follows:
Thousands of
U.S. dollars

Millions of yen
Unrecognized past service
costUnrecognized actuarial
differences
Total

2019

2020

2020

¥ (1,042)¥   (903)$   (8,284)(3,534)

(84)

(771)

(4,576)(987)(9,055)

Note: The above relates to consolidated subsidiaries. In addition to theabove items, the remeasurements of defined benefit plans include
unrecognized items (the amount corresponding to equity) of equitymethod affiliates.

Notes to the Consolidated Financial Statements

14.2.7 Items relating to plan assets

14.2.8 Items relating to actuarial assumptions(I) Breakdown of major plan assets

Major actuarial assumptions

Ratio of the major types of assets to total assets are as follows:
2019

2020

Bonds

34%

37%

Equity securities

34

31

Cash and deposits

22General accounts of life insurance

27

28

Other

3

2

Total

100

100

Note: The retirement benefits trust established for the Company’s pension
plan constituted 12% of total plan assets in the previous fiscal year and
12% of total plan assets in the current fiscal year.

2019

2020

Discount rate

Mainly 0.0%

Mainly 0.0%

Long-term expected rate of return onplan assets

Mainly 2.0%

Mainly 2.0%

Expected rate of salary increase

Mainly 2.0%

Mainly 2.0%

14.3 Defined contribution plan
The amount of the required contribution for the consolidated subsidiaries’
defined contribution plan (including employees’ pension funds plan in themulti-employer plan to which the same accounting method is applied as forthe defined contribution plan) was 49 million yen in the fiscal year ended(II) Method of determining the long-term expected rate of return on plan

March 31, 2019 and 43 million yen in the fiscal year ended March 31, 2020.

assetsCurrent and target asset allocations and historical and expected returns
on various categories of plan assets have been considered in determining
the long-term expected rate of return on plan assets.

15. Deferred Tax 
15.1 Significant components of the Company’s deferred tax assets and liabilities
Thousands of U.S.
dollars

Millions of yen
2019

2020

2020

Deferred tax assets:
Gain on donation by related companies for tax purposes.

¥ 55,122¥   55,122$  505,706

Net defined benefit liability

15,326

15,891

145,789

Loss on impairment of fixed assets

12,985

12,784

117,284

Temporary difference related to investments in subsidiaries

11,021

11,021

101,110

Loss on revaluation of real estate for sale

9,271

9,162

84,055

Tax loss carryforwards (Note 1)

8,349

5,736

52,624

Loss on adjustment of transferred profit and loss

5,844

5,614

51,505

Unrealized profit from assets

5,118

5,302

48,642

Provision for bonuses

1,809

1,648

15,119836

1,519

13,936Enterprise taxes and business office taxes
Losses on revaluation of investment securities
Other
Subtotal of deferred tax assets

728

579

5,312

9,053

9,215

84,541

135,468

133,598

1,225,670

Valuation allowance from tax loss carryforwards (Note 1)(2,872)(2,546)（23,358）

Valuation allowance from the total of future deductible temporary
differences(77,312)(77,364)（709,761）

Subtotal of valuation allowance(80,185)(79,910)（733,119）Less amounts offset against deferred tax liabilities(48,317)(46,731)（428,725）

6,965

6,956

63,817

Total deferred tax assets

Financial Section and Corporate Data

Deferred tax liabilities:
Gain on reversal of difference from land revaluation (Note 2)(130,553)(130,478)（1,197,046）

Revaluation of assets on consolidation(78,653)(78,321)（718,541）

Net unrealized holding gains on securities(14,760)(12,217)（112,083）

Reserve for reduction of noncurrent assets(3.508)(3,449)（31,642）Gain on valuation of properties of business reorganization(1,769)(1,745)（16,009）

Other
Subtotal of deferred tax liabilities
Less amounts offset against deferred tax assets(2,239)(2,110)（19,358）(231,485)(228,322)（2,094,697）

48,317

46,731

428,725Total deferred tax liabilities(183,167)(181,590)（1,665,963）

Net deferred tax liabilities(176,201)(174,634)（1,602,147）

Hankyu Hanshin Holdings Integrated Report 2020108

Financial Section and Corporate Data
Notes to the Consolidated Financial Statements

Note:
1. The expiration of tax loss carryforwards, the related valuation allowance and the resulting net deferred tax assets

Fiscal year ended March 31, 2019
Millions of yen
Within one year

Over one year
to two years

Over two years
to three years

Over three years
to four years

Over four years
to five years

Total

¥ 800

¥ 631

¥ 876

¥ 5,41381¥ 545¥ 8,349

Valuation allowance

(795)

(575)

(867)

(179)

(67)

(386)

(2,872)

Deferred tax assets

4

55

9

5,233

14

158

5,476*2

Tax loss carryforwards (*1)¥

Over five years*1. Tax loss carryforwards were calculated based on the statutory tax rate.
*2. Of the total tax loss carryforwards of 8,349 million yen, 5,476 million yen were deferred tax assets. This 5,476 million yen of deferred tax assets comprised
mainly 4,854 million yen of deferred tax assets of Hankyu Corporation, which is a member of the consolidated tax group to which the Company is theconsolidated parent corporation. The deferred tax assets were made when for tax purposes a valuation loss on properties for sale was recorded at Hankyu
Corporation in the fiscal year ended March 31, 2014. Of the deferred tax assets, the losses carried for tax purposes have been determined to be recoverablefrom taxable income we expect in the future.
Fiscal year ended March 31, 2020
Millions of yen
Within one year

Over one year
to two years

Over two years
to three years

Over three years
to four years

Over four years
to five years

Over five years

Total¥  449¥  853¥  3,026¥    88¥    79¥  1,237¥  5,736

Valuation allowance

(443)

(848)

(181)

(77)

(45)

(950)

(2,546)

Deferred tax assets

5

5

2,845

11

34

287

3,189*2

Tax loss carryforwards (*1)

Thousands of U.S. dollars
Within one year

Over one year
to two years

Over two years
to three years

Over three years
to four years

Over four years
to five years

Over five years

Total$  4,119$  7,826$  27,761$  807$    725$  11,349$  52,624

Valuation allowance(4,064)(7,780)(1,661)

(706)

(413)

(8,716)(23,358)

Deferred tax assets

46

46

26,101

101

312

2,633

29,257*²

Tax loss carryforwards (*1)

*1. Tax loss carryforwards were calculated based on the statutory tax rate.
*2. Of the total tax loss carryforwards of 5,736 million yen, 3,189 million yen were deferred tax assets. This 3,189 million yen of deferred tax assets comprised
mainly 2,520 million yen of deferred tax assets of Hankyu Corporation, which is a member of the consolidated tax group to which the Company is theconsolidated parent corporation. The deferred tax assets were made when for tax purposes a valuation loss on properties for sale was recorded at Hankyu
Corporation in the fiscal year ended March 31, 2014. Of the deferred tax assets, the losses carried for tax purposes have been determined to be recoverablefrom taxable income we expect in the future.
Note:
2. T
 he Company reversed “Surplus from land revaluation” when, as a result of a (physical) absorption-type corporate split on April 1, 2005, it handed over all of its
land to Hankyu Corporation (which changed its name from Hankyu Corporation Spin-Off Preparation Inc. to Hankyu Corporation on the same day). As a result,“Deferred tax liabilities related to land revaluation” has been recorded as “Deferred tax liabilities” starting from the fiscal year ended March 31, 2006.

15.2	Reconciliation of the significant differences between the statutory tax rate and the effective tax rate reflected in the accompanying consolidated
statements of income
2019

2020

30.6%

30.6%

Elimination of dividends received fromconsolidated subsidiary companies etc.

17.9

19.7

Difference of tax rates from Parent Company

2.4

2.2

Amortisation of goodwill

0.8

0.9

Per capita portion of inhabitant tax

0.5

0.4

Nondeductible expenses

0.4

0.4

Valuation allowance

2.0

0.4

Nontaxable income(17.8)(19.3)(12.2)

—

(1.7)

(1.2)

Statutory tax rate
(Adjustment)

Temporary difference related to investments in
subsidiaries
Profit or loss from investments with equity
method affiliates
Other
Effective tax rate

109

Hankyu Hanshin Holdings Integrated Report 2020

0.3

0.2

23.2

34.4

Notes to the Consolidated Financial Statements

16. Asset Retirement Obligations 
Omitted as the significance was negligible.

17. Rental Property 
Some consolidated subsidiaries own rental property, such as office buildings

Notes:

for lease and commercial facilities for lease in the Kita Ward of Osaka and1. Book value is acquisition cost less accumulated depreciation.

other areas. Rental profit and loss related to such rental property in the fiscal

2. F or increase/decrease during the fiscal year ended March 31, 2019, the main

year ended March 31, 2019 was 32,434 million yen (major rental revenues are

increase was acquisitions of real estate of 42,062 million yen, and the mainrecorded in revenues from operations and major rental expenses are recorded

decreases were sales of real estate of 13,437 million yen and depreciationin costs of revenues from operations). Income on sales of noncurrent assets wasof 12,450 million yen. For increase/decrease during the fiscal year ended

2,289 million yen (recorded as extraordinary profit). Rental profit and loss related

March 31, 2020, the main increases were the completion of buildings in

to such rental property in the fiscal year ended March 31, 2020 was 32,663

development of 13,940 million yen and acquisitions of real estate of 6,235

million yen (major rental revenues are recorded in revenues from operations andmajor rental expenses are recorded in costs of revenues from operations).
Book value recorded in the consolidated balance sheet, increase/decreaseduring the fiscal year and market value for such rental property are as follows:

Millions of yen

Thousands of
U.S. dollars

2019

2020

2020

¥ 623,463¥ 639,657$ 5,868,413

Increase/decrease (Note 2)

16,193

6,265

57,477

Balance at end of the year

639,657

645,922

5,925,890

894,928

914,359

8,388,615

Book value (Note 1):Balance at beginningof the year

Fair value at endof the year (Note 3)

million yen, and the main decrease was depreciation of 12,838 million yen.
3. F air value as of the end of the fiscal year is the appraisal value according toan outside real estate appraiser based on Japanese Real Estate Appraisal
Standards in the case of key properties and the fair value based on indicatorssuch as the assessed value of noncurrent assets and road tax rating in thecase of other properties.
4. Properties under development are not included in the above table because
it is difficult to determine the market value under development. Furthermore,
properties under development recorded in the consolidated balance sheet for
the fiscal year ended March 31, 2019 and for the fiscal year ended March 31,
2020 were 156,605 million yen and 156,001 million yen, respectively.

18. Segment Information 
18.1 Segment information
18.1.1 Summary of reportable segments
The Group’s reportable segments, which make financial information for units of the Group available, are regularly reviewed by the Board of Directors to determine theallocation of management resources and evaluate business results.
The Group, centering on six core companies of Hankyu Corporation, Hanshin Electric Railway Co., Ltd., Hankyu Hanshin Properties Corp., Hankyu Travel International
Co., Ltd., Hankyu Hanshin Express Co., Ltd. and Hankyu Hanshin Hotels Co., Ltd., is running a business centering around the seven business areas of urban transportation,
real estate, entertainment, information and communication technology, travel, international transportation, and hotels, under the leadership of the Company in charge ofmanagement of the Group.
The nature of business in each reportable segment is as follows:
Urban Transportation: Railway operations, automobile, retailing and advertising businesses
Real Estate: Rental real estate, real estate sales and other businesses
Entertainment: Sports-related businesses and stage events
Information and Communication Technology: Information and communication technology business

Financial Section and Corporate Data

Travel: Travel services
International Transportation: International cargo services
Hotels: Hotel ownership and management business

Hankyu Hanshin Holdings Integrated Report 2020110

Financial Section and Corporate Data
Notes to the Consolidated Financial Statements

18.1.2 Method used to calculate revenues from operations, income (or loss), assets and other items for each reportable segment
The accounting treatment for each reportable business segment is based on the methods described in the “Basis of Preparation of Consolidated Financial Statements,”
including Internal transactions (lease transactions of lands and buildings, etc.) that are calculated through management accounting at companies with businesses covering
multiple segments.
Income (or loss) for each reportable segment refers to a figure based on operating income (or loss).
Intersegment revenues from operations and transfers are mainly based on similar data as those of general conditions for transaction.
18.1.3 Information regarding totals for revenues from operations, income (loss), assets and other items by reportable segment
Fiscal year ended March 31, 2019
Millions of yen
Reportable segment
Urban
Transportation

Real
EstateEntertainment

Information andCommunication
Technology¥¥

International
Transportation

TravelOther(Note 1)

HotelsAmounts
appearing in
Adjustment the consolidated(Note 2)
financialstatements(Note 3)

Revenues from operations:¥ 233,622¥ 219,828

II. Intersegment

4,939

17,447

1,334

8,901

9

66

1,216

12,784(46,700)—

Total

238,562

237,276

74,51853,53335,52889,99064,92343,417(46,322)

791,427

I. Customers

73,183

44,632¥35,518¥89,924¥63,707¥30,632¥377¥ 791,427

Segment income (loss)

43,45549,25013,439

5,279

1,764

2,392

1,214

2,333

(4,191)

114,937

Segment assets

800,209

1,144,513

106,258

53,53791,60348,92584,071

37,52099,582

2,466,223

27,354

16,640

3,684

3,414

653

619

2,140

360

(696)

54,172

33,79162,448

2,637

5,307

831

678

1,961

1,452

5,259

114,368

Other items:
Depreciation andamortisationIncrease in property andequipment and intangible assets

Notes
1. The "Other" segment refers to a business segment not included in reportable segments, and includes construction business, etc.
2. The main item in the adjusted amount of the segment income or loss for the fiscal year was amortisation of goodwill of (2,238) million yen (amortisation of
goodwill mainly having originated from management integration with Hanshin Electric Railway Co., Ltd. in fiscal 2007).
In addition to the balance of unamortised goodwill of 16,174 million yen (amortisation of goodwill mainly having originated from management integration
with Hanshin Electric Railway Co., Ltd. in fiscal 2007), the adjusted amount for segment assets includes, surplus working capital (cash and deposits), long-term
investment funds (investment securities), unallocated assets such as lands, and intersegment eliminations, at the Company, Hankyu Corporation and Hanshin
Electric Railway Co., Ltd.
3. Segment profit and loss is adjusted with operating income in the consolidated statement of income.
Fiscal year ended March 31, 2020
Millions of yen
Reportable segment
Urban
Transportation

Real
EstateEntertainment

Information andCommunication
Technology

TravelInternational
Transportation

Hotels

Other(Note 1)

Amounts appearing
Adjustment in the consolidated(Note 2) financial statements(Note 3)¥

Revenues from operations:¥ 222,478¥ 216,805¥ 72,593¥ 49,904¥ 33,762¥ 76,104¥ 59,136¥ 31,472

II. Intersegment

4,698

19,241

1,427

8,671

3

81

1,143

11,014(46,281)—

Total

227,176

236,046

74,02058,57633,76676,18660,28042,486(45,887)

762,650

I. Customers

393¥ 762,650

Segment income (loss)

40,056

41,51011,695

5,598

232

170

（3,142）

2,381(3,332)

95,170

Segment assets

816,195

1,178,160

107,608

55,65847,28648,42988,03038,040109,672

2,489,081

27,621

17,150

3,751

3,752

761

1,310

2,503

381

(691)

56,542

32,92832,212

4,161

4,865

1,244

1,111

4,814

198

(446)

81,090

Other items:
Depreciation andamortisationIncrease in property andequipment and intangible assets

Thousands of U.S. dollars
Reportable segment
Urban
Transportation

Real
EstateEntertainment

Information andCommunication
Technology$$

TravelInternational
Transportation

309,743$

Other(Note 1)

HotelsAmounts appearing
Adjustment in the consolidated(Note 2) financial statements(Note 3)

Revenues from operations:$ 2,041,083$ 1,989,037

II. Intersegment

43,101

176,523

13,092

79,55028

743

10,486

101,046（424,596）

—

Total

2,084,183

2,165,560

679,083

537,394309,780

698,954553,028

389,780（420,982）

6,996,789

I. Customers

Segment income (loss)
Segment assets

665,991

457,835$

698,202$542,532$

288,734$

3,606$ 6,996,789

367,486

380,826

107,294

51,358

2,128

1,560

（28,826）

21,844（30,569）

873,119

7,488,028

10,808,807

987,229

510,624

433,817444,303807,615

348,991

1,006,165

22,835,606

253,404

157,339

34,41334,422

6,982

12,01822,963

3,495（6,339）518,734

302,092

295,523

38,174

44,633

11,413

10,19344,165

1,817（4,092）743,945

Other items:
Depreciation andamortisationIncrease in property andequipment and intangible assets

111

Hankyu Hanshin Holdings Integrated Report 2020

Notes to the Consolidated Financial Statements

Notes
1. The "Other" segment refers to a business segment not included in reportable segments, and includes construction business, etc.
2. The main item in the adjusted amount of the segment income or loss for the fiscal year was amortisation of goodwill of (2,238) million yen (amortisation of
goodwill mainly having originated from management integration with Hanshin Electric Railway Co., Ltd. in fiscal 2007).
In addition to the balance of unamortised goodwill of 13,987 million yen (amortisation of goodwill mainly having originated from management integration
with Hanshin Electric Railway Co., Ltd. in fiscal 2007), the adjusted amount for segment assets includes, surplus working capital (cash and deposits), long-term
investment funds (investment securities), unallocated assets such as lands, and intersegment eliminations, at the Company, Hankyu Corporation and Hanshin
Electric Railway Co., Ltd.
3. Segment profit and loss is adjusted with operating income in the consolidated statement of income.
18.1.4 Changes to reportable segments, etc.
From the fiscal year ended March 31, 2020 the six reportable segments (Urban Transportation, Real Estate, Entertainment and Communications, Travel,
International Transportation and Hotels) have been reorganized into the following seven segments: Urban Transportation, Real Estate, Entertainment, Information
and Communication Technology, Travel, International Transportation, and Hotels.
This reorganization will allow us to further strengthen our competitiveness in communications and media, which included the Entertainment and Communication
business segment. Information and Communication Technology is not merely a name change, but a new independent segment, while the segment previously
covered by Entertainment and Communication has been reorganized as the Entertainment business segment.
The segment information given here for the fiscal year ended March 31, 2019 corresponds to the post-reorganization segments.

18.2

Related information

Fiscal years ended March 31, 2019 and 2020
18.2.1 Information by product and service
Information about product and service categories is the same as that described in Note 18.1.3, “Information regarding totals for revenues from operations, income(loss), assets and other items by reportable segment.”
18.2.2 Information by region
I.

Revenues from operations

Since over 90% of revenues from operations in the consolidated statements of income are revenues from external customers in Japan, a breakdown by region isomitted.
II.

Property and equipment

Since over 90% of the total value of property and equipment in the consolidated balance sheets relates to property and equipment in Japan, a breakdown by
region is omitted.
18.2.3 Information about important customers
No single external customer accounts for more than 10% of the revenues from operations reported in the consolidated statements of income.

18.3 Information regarding impairment loss on noncurrent assets for each reported segment
Fiscal year ended March 31, 2019
Millions of yen
Reportable segment
Urban
Transportation
Loss on impairment

Real
Estate¥ 19,227¥ —Entertainment

Information andCommunication
Technology

¥ —

¥ —

Travel¥ —International
Transportation¥ 15

Hotels¥ 20

OtherAmounts appearing
Adjustment in the consolidated
financial statements

¥ —

¥ —

¥ 19,262

Fiscal year ended March 31, 2020
Omitted as the significance was negligible.

Financial Section and Corporate Data

18.4 Information regarding amortisation of goodwill and the balance of unamortised goodwill by reportable segment
Omitted as the significance was negligible.

18.5 Information regarding gains from negative goodwill by reportable segment
Omitted as the significance was negligible.

Hankyu Hanshin Holdings Integrated Report 2020112

Financial Section and Corporate Data
Notes to the Consolidated Financial Statements

19. Related-Party Transactions 
19.1 Related-party transactions
19.1.1 Transactions between the company submitting the consolidated financial statements and related parties
No items
19.1.2 Transactions between consolidated subsidiaries of the company submitting the consolidated financial statements and related parties
19.1.2.1 Non-consolidated subsidiary or related company of the company that submitted the financial statements.
Fiscal year ended March 31, 2019

Type

Subsidiaryof Related
Company

Name ofCompany, etc.

Address

Amount ofcapital (Millionsof yen)Business¥ 200

Department
store business

Hankyu Hanshin
Kita-ku, Osaka
Department
City
Stores, Inc.

Votinginterest

Relationshipwith related
party

Details oftransaction

None

Lease of realestateacceptanceofdeposits

Transaction
amounts

Balance asof March 31,
2019

Item

(Millionsof yen)¥ 3,294(Millionsof yen)Deposit¥27,099

Fiscal year ended March 31, 2020

Type

Name ofCompany,
etc.

Subsidiaryof Related
Company

HankyuHanshin
Department
Stores, Inc.

Address

Amountof capital(Millions of yen)

Business

Votinginterest

Transaction
amounts
Relationship
Details ofwith relatedtransaction
party(Millions (Thousands of
U.S. dollars)of yen)Kita-ku,
Osaka City

¥ 200

Department
store
business

None

Lease of realestateacceptanceofdeposits—

Balance as of March
31, 2020

Item—

Deposit(Millionsof yen)(Thousands of
U.S. dollars)¥27,099$248,615

Notes:
1. The transaction amount and the balance as of the end of the fiscal year do not include any consumption tax.
2. The terms and conditions for transaction and policies for determining terms and conditions for transaction
Terms and conditions for deposits are determined in the same way as general transactions.
19.1.2.2 Directors and principal shareholders (only individual shareholders) of the company submitting the consolidated financial statements
Fiscal year ended March 31, 2019
Type

Name ofrelated party

Address

Amount ofcapital(Millions of yen)

Business

Votinginterest

Relationshipwith related
party

Details oftransaction

Audit &Supervisory
Board
MemberHaruo
Sakaguchi—¥ —Auditorof theCompany

Directly
0.0%

Lease of realestateLease ofreal estateBusiness

Votinginterest

Relationshipwith related
party

Details oftransaction

Transaction
amounts(Millions of yen)
¥ 53

Item

Balance as ofMarch 31, 2019
(Millions of yen)

Deposit¥ 40

Fiscal year ended March 31, 2020
Amount of capital

Name ofrelatedparty

AddressAudit &Supervisory
Board
MemberHaruo
Sakaguchi—

Directorof Major
Subsidiary

TomiyukiMatsudaType(Millions (Thousands of
U.S. dollars)of yen)

—

¥  —

—

Item
(Millions (Thousands of
U.S. dollars)of yen)$  —

Auditorof theCompany

Directly
0.0%

Lease of realestateLease ofreal estate¥  53$  486—

Director
at Hankyu
Hanshin
Properties
Corp.

Directly
0.0%

Contract forrenovation
work

Renovation
work

10

92

Notes
1. The transaction amount and the balance as of the end of the fiscal year do not include any consumption tax.
2. Terms and conditions for transaction, and policies for determining terms and conditions for transaction
Terms and conditions for lease and for sales are determined by referencing to similar transaction cases in the neighboring area.
Renovation work is decided rationally, based on negotiations that consider real market value.

19.2 Notes about parent company and major affiliated companies
No items

113

Hankyu Hanshin Holdings Integrated Report 2020

Balance as ofMarch 31, 2020

Transaction
amounts(Millions (Thousands ofof yen) U.S. dollars)

Deposit—¥  40 $  367——

Notes to the Consolidated Financial Statements

20. Per Share Information 
Net assets per share, net income per share and diluted net income per share for the fiscal year, and the basis for their respective calculations are as shown below.
(1) Net assets per share (Yen / U.S. dollars)

2019

2020

¥ 3,615.52¥  3,738.56

2020$        34.30(Basis for the calculation)
Total net assets (Millions of yen / Thousands of U.S. dollars)¥ 915,381¥  937,672$ 8,602,495

Amount to be deducted from total net assets(Millions of yen / Thousands of U.S. dollars)¥

30,517¥    32,025$    293,807(Of the amount, non-controlling interests)¥ [30,517]¥   [32,025]$   [293,807]

Net assets at the end of the fiscal year related to common shares(Millions of yen / Thousands of U.S. dollars)¥ 884,863¥  905,647$ 8,308,688

Common shares issued (Thousands of shares)

254,281254,281

Treasury stock shares (Thousands of shares)

8,381

10,877Common shares held by consolidated subsidiaries and equity-method affiliates(Thousands of shares)

1,159

1,159

Common shares used to calculate net assets per share (Thousands of shares)

244,740

242,245¥ 266.86¥   225.69$       2.07

¥ 65,476¥  54,859$ 503,294

¥ —

¥  —

$  —

¥ 65,476¥  54,859$ 503,294

245,353

243,077¥ 266.86¥  —(2) Net income per share (Yen / U.S. dollars)(Basis for the calculation)Net income attributable to owners of the parent(Millions of yen / Thousands of U.S. dollars)Amount not belonging to common stockholders(Millions of yen / Thousands of U.S. dollars)Net income attributable to owners of the parent related to common shares(Millions of yen / Thousands of U.S. dollars)
Average number of common shares during term (Thousands of shares)(3) Net income per share—diluted (Yen / U.S. dollars)$  —(Basis for the calculation)Adjustment to net income attributable to owners of the parent(Millions of yen / Thousands of U.S. dollars)

¥ (0)

¥  —

$  —

(Equity in income of affiliates)¥ [(0)]¥  [—]$ [—]Increase in number of common shares (Thousands of shares)——Summary of potential shares that were not included in the calculation of diluted
income per share because their effect was not dilutive

—

—

—

Notes:
1. In calculating net assets per share, the number of the shares in the Company owned by the officer’s compensation BIP trust are included in that of treasury stock
shares to be excluded from the total number of outstanding shares at the end of the fiscal year. Furthermore, in calculating net income per share and diluted
net income per share for the current fiscal year, the number of the shares in the Company owned by the officer’s compensation BIP trust are included in that oftreasury stock shares to be excluded in calculating the average number of the shares during the current fiscal year. The number of such treasury stock sharesdeducted in calculating net assets per share and diluted net income per share for the fiscal year ended March 31, 2019 was 377,008, and for the fiscal year
ended March 31, 2020 is 367,308, and the average number of treasury stock shares deducted in calculating net income per share and diluted net income pershare for the fiscal year ended March 31, 2019, was 375,143, and for the fiscal year ended March 31, 2020, is 371,785.
2. As there are no dilutive shares with a dilutive effect, diluted net income per share for the fiscal year ended March 31, 2020 has been omitted.

21. Subsequent Events 
21.1 Acquisition of treasury stock
Pursuant to Article 156 of the Companies Act of Japan as applied mutatis mutandis under Article 165, paragraph 3 of the same act, a meeting of the Board of
Directors convened on May 14, 2020 decided the following items in relation to the acquisition of treasury stock.

Financial Section and Corporate Data

21.1.1 Reason for acquisition of treasury stock
To enhance shareholder returns and enhance capital efficiency
21.1.2 Details of items related to acquisition(1) Type of shares acquired: Shares of common stock of the Company(2)	Total number of shares available for acquisition: 1,500,000 shares (upper limit)
(0.62% of total number of outstanding shares (excluding treasury stock))(3) Total amount of acquisition: 4,300,000,000 yen (upper limit)(4) Period of acquisition: From May 20, 2020 to March 31, 2021

Hankyu Hanshin Holdings Integrated Report 2020114

Financial Section and Corporate Data
Notes to the Consolidated Financial Statements

22. Consolidated Supplementary Statements 
22.1 Corporate bond statements

Issue date

Balance asof April 1,
2019

Balance asof March 31,
2020

Thousands of
U.S. dollars
Balance asof March 31,
2020

Oct 23, 2009

¥10,000¥          —Sep 22, 2010

15,00015,000(15,000)

Sep 22, 2010

7,000

Mar 17, 2011

Millions of yen
Company

Name

Hankyu Hanshin Holdings, Inc.
Hankyu Hanshin Holdings, Inc.
Hankyu Hanshin Holdings, Inc.
Hankyu Hanshin Holdings, Inc.
Hankyu Hanshin Holdings, Inc.
Hankyu Hanshin Holdings, Inc.
Hankyu Hanshin Holdings, Inc.
Hankyu Hanshin Holdings, Inc.
Hankyu Hanshin Holdings, Inc.
Hankyu Hanshin Holdings, Inc.
Hankyu Hanshin Holdings, Inc.
Hankyu Hanshin Holdings, Inc.
Hankyu Hanshin Holdings, Inc.
Hankyu Hanshin Holdings, Inc.

Series 38 unsecured
corporate bonds
Series 40 unsecured
corporate bonds
Series 41 unsecured
corporate bonds
Series 42 unsecured
corporate bonds
Series 45 unsecured
corporate bonds
Series 46 unsecured
corporate bonds
Series 47 unsecured
corporate bonds
Series 48 unsecured
corporate bonds
Series 49 unsecured
corporate bonds
Series 50 unsecured
corporate bonds
Series 51 unsecured
corporate bonds
Series 52 unsecured
corporate bonds
Series 53 unsecured
corporate bonds
Series 54 unsecured
corporate bonds

TotalInterest rate

Security

Redemption date$           —

1.87%

None

Oct 23, 2019

137,615(137,615)

1.43

None

Sep 18, 2020

7,000

64,2201.72

None

Sep 22, 2022

10,00010,000(10,000)

91,743(91,743)

1.54

None

Mar 17, 2021

Mar 14, 2013

10,000

—

—

0.589

None

Mar 13, 2020

Oct 25, 2013

10,00010,00091,743

0.819

None

Oct 25, 2023

Jul 18, 2014

10,00010,00091,743

1.202

None

Jul 18, 2029

Dec 15, 2016

10,00010,00091,743

0.120

None

Dec 15, 2021

Dec 15, 2016

10,00010,00091,743

0.817

None

Dec 15, 2036

Sep 13, 2018

10,00010,00091,743

0.345

None

Sep 13, 2028

Sep 13, 2018

10,00010,00091,743

0.789

None

Sep 13, 2038

Nov 21, 2019—10,00091,743

0.215

None

Nov 21, 2029

Nov 21, 2019—10,00091,743

0.878

None

Nov 19, 2049

Feb 27, 2020—

10,00091,743

0.486

None

Feb 27, 2040

112,000

122,000(25,000)

1,119,266(229,358)

—

—

—

—

—

Notes:
1. The figures in parenthesis for the balance as of March 31, 2020 are the amount payable within one year of the total outstanding, and are listed as current
liabilities under the consolidated balance sheet.
2. The amount of bonds scheduled to be redeemed within five years subsequent to March 31, 2020 are as follows.

Millions of yen

Thousands of
U.S. dollars¥ 25,000$  229,358

Due within one year
Due after one year through two years

10,00091,743Due after two years through three years

7,000

64,220Due after three years through four years

10,00091,743——Due after four years through five years

22.2 Statements of loans payable

Balance as ofApril 1, 2019

Balance as ofMarch 31, 2020

Thousands of
U.S. dollars
Balance as ofMarch 31, 2020

¥ 102,670¥  123,710$  1,134,954

34,36534,696318,312

Millions of yen
Item
Short-term borrowings
Current portion of long-term debt
Current portion of lease obligations

Average interest

Repayment deadline rate

0.416%

—

1.349

—

1,567

2,404

22,055—Long-term debt (excluding current portion)

621,375

615,058

5,642,734

0.832

2021 – 2040—

Lease obligations (excluding current portion)

5,076

5,609

51,459—2021 – 2028

Other interest-bearing debt

—

—

—

—

—

Total

765,055

781,480

7,169,541——

Notes:
1. The balances refer to those after the elimination of transactions between
companies in the consolidation group.
2. “Average interest rate” of loans payable refers to the weighted averageinterest rate for outstanding loans as of the end of the fiscal year ended
March 31, 2020.
3. For lease obligations, “average interest rate” is not shown because theCompany mainly uses the method that includes the amount of interest
in total lease obligations and that spreads the total amount of interest
equally over each fiscal year of the lease period.
4. Repayment schedule of long-term debts and lease obligations (excluding
those scheduled to be repaid within one year) within five years subsequent
to March 31, 2020 are as follows.

115

Hankyu Hanshin Holdings Integrated Report 2020

Millions of yen

Thousands of
U.S. dollars

Due after one year through two years¥  44,971$  412,578

Due after two years through three years

53,877494,284

Due after three years through four years

90,036

826,018

Due after four years through five years

75,670694,220

Millions of yen

Thousands of
U.S. dollars

Due after one year through two years¥  2,051$  18,817

Due after two years through three years

1,573

14,431

Due after three years through four years

1,160

10,642

Due after four years through five years

618

5,670

Long-term debt

Lease obligations

Notes to the Consolidated Financial Statements

22.3 Schedule of asset retirement obligations
Omitted as the significance was negligible.

23. Others Quarterly financial information in fiscal year ended March 31, 2020
1st Quarter

2nd Quarter

3rd Quarter

4th Quarter¥ 187,161¥ 410,733¥ 583,678¥ 762,650

Income before income taxes (Millions of yen)

32,202

71,95089,88586,746

Net income attributable to owners of the parent (Millions of yen)

21,39547,63058,96854,859Net income per share for quarter (of the fiscal year ended March 31, 2020) (yen)87.50

195.38242.34225.69Cumulative period
Revenues from operations (Millions of yen)

1st Quarter

2nd Quarter

3rd Quarter

4th Quarter$ 1,717,073$ 3,768,193$ 5,354,844$ 6,996,789

Income before income taxes (Thousands of U.S. dollars)

295,431660,092

824,633

795,835

Net income attributable to owners of the parent (Thousands of U.S. dollars)

196,284

436,972

540,991

503,294

0.80

1.79

2.22

2.07

1st Quarter

2nd Quarter

3rd Quarter

4th Quarter¥ 87.50¥ 107.92¥ 46.80¥ (16.96)

1st Quarter

2nd Quarter

3rd Quarter

4th Quarter$ 0.80$ 0.99$ 0.43$ (0.16)

Cumulative period
Revenues from operations (Thousands of U.S. dollars)

Net income per share for quarter (of the fiscal year ended March 31, 2020) (U.S. dollars)
Accounting period
Net income(loss) per share for quarter of the fiscal year (Yen)
Accounting period
Net income(loss) per share for quarter of the fiscal year (U.S. dollars)

Financial Section and Corporate Data

Hankyu Hanshin Holdings Integrated Report 2020

116

Financial Section and Corporate Data

Major Group Companies■ Consolidated Subsidiaries (As of September 30, 2020)■ Urban Transportation■ Entertainment

Name of company

Railway operations

Hankyu Corporation

Name of company

SportsHanshin Electric Railway Co., Ltd.

Hanshin Tigers Baseball Club, Ltd.

Nose Electric Railway Co., Ltd.
Kita-Osaka Kyuko Railway Co., Ltd.
Automobile

Takarazuka Creative Arts Co., Ltd.
Umeda Arts Theater Co., Ltd.

Hanshin Taxi Co., Ltd.
Hankyu Corporation
Eki Retail Service Hankyu Hanshin Co., Ltd.
Hankyu Style Labels Co., Ltd.
Alna Sharyo Co., Ltd.
Hankyu Sekkei Consultant
Hanshin Station Net Co., Ltd.

■ Real Estate
Real estate leasing

Real estate sales andother business

Hankyu Corporation

Hankyu Bus Co., Ltd.
Hankyu Taxi Inc.

Other

Hanshin Contents Link Corporation
Stage

Kobe Rapid Transit Railway Co., Ltd.
Hanshin Bus Co., Ltd.

Retailing

Hanshin Electric Railway Co., Ltd.

Name of company■ Information and Communication Technology
Name of company

Information andCommunication
Technology■ Travel
Travel agency

Itec Hankyu Hanshin Co., Ltd.
Bay Communications Inc.

Name of company

Hankyu Travel International Co., Ltd.
Hankyu Travel Support Co., Ltd.

■ International Transportation

Name of company

Hankyu Corporation

International

Hankyu Hanshin Express Co., Ltd.

Hanshin Electric Railway Co., Ltd.

transportation

Hankyu Hanshin Logipartners Co., Ltd.

Hankyu Hanshin Properties Corp.

HHE (USA) Inc.

Hankyu Corporation

HHE (Deutschland) GmbHHanshin Electric Railway Co., Ltd.

HHE (HK) Limited

Hankyu Hanshin Properties Corp.

HHE Southeast Asia Pte. Ltd.

Hankyu Hanshin Building Management Co., Ltd.

HHE: Hankyu Hanshin Express

Hankyu Hanshin High Security Service Co., Ltd.
Hankyu Hanshin Clean Service Co., Ltd.
Hankyu Hanshin REIT Asset Management, Inc.
Hankyu Hanshin Housing Support Ltd.

■ Hotels
Hotel management

Name of company

Hankyu Hanshin Hotels Co., Ltd.
Hanshin Hotel Systems Co., Ltd.
Arima View Hotel Co., Ltd.

■ Other
Construction

Name of company

Hanshin Kensetsu Co., Ltd.
Chuo Densetsu Co., Ltd.

Advertisinghankyu hanshin marketing solutions Inc.

Outsourcing services
for personnel andaccounting services

Hankyu Hanshin Business
Associate Co., Ltd.

Credit and point card Hankyu Hanshin Card Co., Ltd.
Group finance■ Equity-Method Affiliates (As of September 30, 2020)
Main business

Name of company

Department store

H2O RETAILING CORPORATION(Securities code: 8242)

Railway operations

Nishi-Osaka Railway Co., Ltd.
Kobe Electric Railway Co., Ltd.
(Securities code: 9046)

Motion picturebusiness
Real estate leasing
Commercial
broadcasting

117

TOHO CO., LTD. (Securities code: 9602)
TOKYO RAKUTENCHI CO., LTD.
(Securities code: 8842)
Kansai Television Co., Ltd.

Hankyu Hanshin Holdings Integrated Report 2020

Hankyu Hanshin Financial Support Co., Ltd.

Company Overview and Investor Information
Hankyu Hanshin Holdings, Inc. (As of March 31, 2020)
Head OfficePaid-in Capital¥99,474 million

1-16-1, Shibata, Kita-ku, Osaka 530-0012, Japan

Fiscal Year-End

March 31

Number of Employees

22,800 (consolidated)

Authorised Shares

640,000,000

Issued Shares

254,281,385

Phone: +81-6-6373-5001(IR Office, Corporate Communication Dept., Group Planning Div.)
Fax: +81-6-6373-5042
Tokyo Office (Personnel and General Affairs Div.)

Number of Shareholders 76,471

17F Toho Hibiya Bldg. 1-2-2, Yurakucho, Chiyoda-ku,
Tokyo 100-0006, Japan
Phone: +81-3-3503-1568
Fax: +81-3-3508-0249

Unit of Trading

100 shares

Stock Exchange Listing

Tokyo

Transfer Agent

Mitsubishi UFJ Trust and Banking Corporation

Ownership Breakdown

Principal Shareholders
Number of shares(Thousands)

Percentage(%)

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

15,230

6.25

Japan Trustee Services Bank, Ltd. (Trust account)

12,130

4.98

Nippon Life Insurance Company(Standing Proxy: The Master Trust Bank of Japan, Ltd.)

5,224

2.14

Japan Trustee Services Bank, Ltd. (Trust account 5)

5,142

2.11

H2O RETAILING CORPORATION

4,207

1.73

STATE STREET BANK WEST CLIENT–TREATY 505234 (Standing Proxy:
Mizuho Bank, Ltd. Settlement & Clearing Services Division)

3,985

1.63

Name

Japan Trustee Services Bank, Ltd. (Trust account 7)

3,911

1.60

JP MORGAN CHASE BANK 385151 Mizuho Bank, Ltd.
Settlement & Clearing Services Division)

3,836

1.57

Sumitomo Mitsui Banking Corporation

3,581

1.47

GOVERNMENT OF NORWAY

3,172

1.30

National government and local
public organizations

0.00%

Financial
institutions

28.20%

Individuals
and others

41.96%

Securities
companies

0.71%

Other
corporations

Foreigncorporations
and individuals

8.52%

20.61%

Stock Price and Annual Trading Volume (Tokyo Stock Exchange)

Stock price (¥)

5,000

Stock Price

Trading volume(Thousand shares)

Trading volume (right axis)

200,000
160,000

3,000

120,000

2,000

80,0001,000

40,000

0

Financial Section and Corporate Data

4,000

0

2012

2013

2014

2015

2016

2017

2018

2019

2020 (FY)

Notes:
1. The stock prices are as of March 31, of each year. The trading volumes are for years ended March 31.
2. The data takes into account the reverse stock split and the change of trading unit conducted with an effective date of August 1, 2016.

Hankyu Hanshin Holdings Integrated Report 2020

118

Hankyu Hanshin Holdings, Inc.
1-16-1, Shibata, Kita-ku, Osaka 530-0012, Japan
Phone: +81-6-6373-5001 Fax: +81-6-6373-5042
https://www.hankyu-hanshin.co.jp/en/

Hankyu Hanshin Toho Group

Printed in Japan