Integrated
ReportIntegrated Report 2023

Integrated Report 2023

Making steady progress as an integrated
infrastructure service company
2-10-2, Fujimi, Chiyoda-ku, Tokyo 102-0071 Japan

Brand Slogan

Contents

Challenge the status quo

This integrated report describes our perpetual value creation process and the value we offer to communities and society. The related
descriptions are contained in the top message and other chapters. The following provides a list of key words related to each chapter.

INFRONEER supports the infrastructure that underpins people’s everyday lives. Infrastructure is something familiar to all of us, but
its significance is often difficult to grasp as we take it for granted while it operates safely and reliably. However, in the event of a disaster, infrastructure can suffer severe damage and impact extensive areas of our lives. This is the business we are engaged in.

Business model

●

●

●

ESG strategy

Initiatives to addresssocial issues

KPIs and results

●

●

●

P. 15

Chapter 3

Business Models

P. 21

Three Business Models That are Challenging the Future of Our Infrastructure P. 21
INFRONEER’s Competitive Advantages P. 24 Stakeholder Dialogue P. 25
Materiality and KPIs P. 27 Six Business Foundations to Support Growth P. 31
Chapter 4

●

●

P. 33

Message from Chief Financial Officer P. 33
Overview and Progress of INFRONEER Vision 2030 P. 37
Management Roundtable among Three Business Companies P. 39
INFRONEER’s Growth Driver P. 43
Chapter 5

Sustainability

Governance P. 45●

Chapter 6●●

Growth Strategy

Environment P. 49

P. 45
Society P. 53

Corporate Data

P. 57

Financial Statements P. 57 Financial and Non-financial Highlights P. 58
11-Year Financial Summary P. 59 11-Year Non-financial Summary P. 61
Company Overview and Share-related Information P. 63
Editorial Notes and Glossary P. 64●

Target period: Covers activities of the INFRONEER Group from April 1 to March 31, 2023, including some previous initiatives and recent activities.
Reference guidelines: International Integrated Reporting Council (IIRC) “International Integrated Reporting Framework,” Ministry of Economy, Trade and Industry “Value Creation
Guidance,” GRI Standards, and ISO 26000“De-construction,” the Key to Becoming an Integrated Infrastructure Service Company

Philosophy

VisionOur Vision for the Future

MissionValue
The Value We Promise

A world where there’s no limit to what canbe asked of and what can be delivered byinfrastructure services.
We challenge the status quo of existing
infrastructure businesses and deliver
the most suitable services globally with
innovative ideas.
Safety, security, and sustainability of oursociety and local communities.

By “de-construction,” we mean our commitment to going beyond the “construction” business and taking on project risks as abusiness operator while continuing with the conventional “construction” business. The term also implies the philosophical concept of “deconstruction” proposed by philosopher Jacques Derrida, which means to dismantle and rebuild the existing system.
“De-construction” is not simply about creating something, but also about covering the full scope of a project from investment
to operation and EXIT, including PPP projects and renewable energy projects.
For “construction × de-construction,” see page 21.

Related Websites
The following websites offer information about various activities of the INFRONEER Group.

Management Philosophy and Code of Conduct of each business company

INFRONEER^ (INFRONEER Caret)

Group’s common philosophical guidepost (action guidelines)
It is okay to make mistakes. Taking initiatives into uncharted territory.

RESPECT

It is okay to meet dead ends. Building trust through.

PRIDE

It is okay to be proud. Let everyone witness your skills and knowledge.

POSITIVE

There is no such thing as a worthless experience. Whatever happens,everything will be for our future.

FAIR

It is not just for us. Judging from the regional and social perspective.

INFRONEER Holdings Corporate Website
https://www.infroneer.com/en/

INFRONEER^ (INFRONEER Caret) is a sourceof new value creation and a path to care for,through the power (Caret) of the diverse
strengths of INFRONEER believers.
For details on INFRONEER Caret dissemination activities,
see page 56.

Our Business

Investor Relations

Sustainability

https://www.infroneer.com/en/company/ourbusiness.html

https://www.infroneer.com/en/ir/(in Japanese)
https://www.infroneer.com/jp/
sustainability/

MAEDA CORP.
Corporate Website

MAEDA ROAD
Corporate Website

MAEDA SEISAKUSHO
Corporate Website

https://www.maeda.co.jp/english.html

https://ssl.maedaroad.co.jp/en/

Kibe-log(President’s blog) (in Japanese)
https://www.infroneer.com/jp/

Corporate Data

PIONEER

Sustainability

Our Mission

1

Top Message

●

●

●

P. 3

Chapter 2●●

Stakeholder dialogue

Value Creation Story

Social Challenges Surrounding Japan’s Infrastructure P. 3
Value Creation Process P. 5 Value Added Considered by INFRONEER P. 8
Promoting ESG Strategies for Creating Sustainable Value P. 9
Developing Strong and Effective Governance P. 11

●

●

●

Chapter 1

Growth Strategy

Machinery

Facility management and renewal (FBS)
Comprehensive facility management andmaintenance (JM)
Manufacturing (secondary concrete
products) (Fujimi Koken), etc.

●●

Growth strategy

6

●

●

●

5

●

●

INFRONEER Vision
2030

4

Business Models

Business
category

Related businesses●

3

Top Message

Company
name

MAEDA SEISAKUSHOCO., LTD.
(MAEDA SEISAKUSHO)Road civil engineering●(human resources/DX)

INFRONEER Holdings Inc.

Civil engineering
Building construction
Infrastructure management●(Medium- to Long-term
Business Plan)

In October 2021, INFRONEER Holdings Inc. was incorporated as a joint holding company.
We are aiming to expand our business areas by promoting active M&A strategies.

MAEDA CORPORATION(MAEDA CORP.)

Value/long-term
visionSynergies of
INFRONEER Holdings

Kazunari Kibe

MAEDA ROAD
CONSTRUCTION Co., Ltd.
(MAEDA ROAD)

2

GovernanceThis integrated report presents our approaches to the future vision, hoping that many people will understand and support ourendeavors and become willing to join us in working to solve social issues.
Director, Representative Executive Officer, President, and CEO, INFRONEER Holdings Inc.

1

Risks andopportunities

We are aiming to create “a world where there’s no limit to what can be asked from and what can be delivered by infrastructureservices.” This vision for the future will not be achieved in a short period of time by a single entity, be it an individual, a business, acompany, or a local or national government.
In recent years, infrastructure has become a major social issue, with various problems regarding operation, maintenance, andrenewal as well as new construction arising, and this is beginning to affect the normal life of people. With the objective of addressing
this situation, we have shifted to the holding company structure to be able to accelerate relevant efforts by working closely withco-creation partners and making effective use of technical capabilities and know-how cultivated for over a century.

Chapter Chapter Chapter Chapter Chapter Chapter

Value Creation Story

Key Words by
Chapter

Challenge the Status Quo of Existing Infrastructure Businesses andOpen up Limitless Possibilities

Related corporate websites

https://www.maesei.co.jp/global/

2Chapter 1

Value Creation Story
Value Creation Story

Social Challenges
Surrounding Japan’s Infrastructure

Total population decline frompeak period
in 2050

Approx.

23.39 million people

Peak (2008): 128.08 million people
2050: 104.69 million people

19.8%

Worst

2nd

(37th out of 38 countries)
Self-sufficiency rate: 11.3%

Safe towns and easy livingin 2021in 2021

9.7％

7.7%

–

+

FY2021: 12.2%
FY1980: 19.9%

2021: 30.7％
2001: 21.0％

until 2048
Approx. ¥12.3 trillion

Average temperature risein 2027 compared to pre-industrial
revolution

1.5°C

+

Percentage of port quay wallsthat are 50 years old or older
Approx.

66%

by 2040

Approx.

53%

Percentage of sewer pipesthat are 50 years old or older
by 2040

Approx.

35%[Source] White Paper on Land, Infrastructure, Transport and Tourism
in Japan, 2022

What solutions are there
to the various social challenges faced by Japan?

(1 hour precipitation of 50 mm or more)

Approx.

1.8 times

in 2018883 municipalities

13.6%

8,489,000 vacant homes[Source] “Results of the National Municipal Questionnaire on ‘Food Access Problems’”by Ministry of Agriculture, Forestry and Fisheries; 2018 Housing and Land Survey by
Statistics Bureau of Japan

Shortage of workers

Diversity

Reduced number of engineersfrom the peak period

Percentage of construction
workers aged 55 and over1.59 million people

Aging rate of workers

in 2022

Peak (FY1997): 4.64 million people

in 202236%[Source] Digital Construction Hand Book by Japan Federation of Construction Contractors

CLICK!

Vacant home rate

in 2022

CLICK!

Ratio of female workers inconstruction compared to theentire industry
in 2022

Approx.

1/3Compared to 45.0% in the entire industry,
construction is 17.7%(of that, skilled workers are 2.5%)

Ratio of females in managerial
position in the constructionindustryin 2022

6.4%[Source] Digital Construction Hand Book by Japan Federation of Construction Contractors;
Survey of corporate attitudes towards promotion of women (2022) by Teikoku Databank

Corporate Databy 2040

Percentage of tunnels that are
50 years old or older

in 2013–2022 compared to
1976–1985

Municipalities that requiremeasures for people whohave trouble going shopping[Source] “Global temperatures set to reach new records in next five years” by World
Meteorological Organization; “Changes to Date in Extreme Meteorological Phenomena
Such as Heavy Rainfall and Intense Heatwaves” by Japan Meteorological Agency

Aging infrastructure
Percentage of road bridges
that are 50 years old or older

Frequency of heavy rainfall
per year

Sustainability

800 trillion

Maintenance and renewal
expenses incurred throughbreakdown maintenance

Growth Strategy

Abnormal weather[Source] Digital Construction Hand Book by the Japan Federation of Construction Contractors; “Estimated Future Maintenance and Repair Costs of Social Capital under the Jurisdictionof the Ministry of Land, Infrastructure, Transport and Tourism” by Ministry of Land, Infrastructure, Transport and Tourism; “Social Capital Stock Estimation Data” by Cabinet Office3

in FY2020

Insufficient financial resourcesin 201975%

896 municipalities

RE50-based renewable energy
usage rate in FY2030

Energy self-sufficiency amongthe 38 countries of the OECDmember countries

Current Status of Japan’s Infrastructure

Japan’s infrastructure stock

Approx.

by FY2040

Targets set by the Japanese
government in FY2020[Source] Japan’s Energy 2022 Edition “10 Questions for Understanding the Current
Energy Situation” by Agency for Natural Resources and Energy of Ministry of
Economy, Trade and Industry

Maintenance and repair work
ratio in construction investments

by 2040

Number of cities that arefeared to disappear

EnergyBusiness Models

Declining birthrate and aging
population and regional challenges[Source] Related data of the National Land Formation Plan (nationwide plan) by Ministryof Land, Infrastructure, Transport and Tourism; “Future National Land Transport Strategies
Geared to ‘The Age of Disappearing Regions,’” a theme of the Study Session for Policy
Issues held by Policy Research Institute for Land, Infrastructure, Transport and Tourism

Construction investment ratio
in gross domestic expenditures

Approx. ¥Top Message

Japan is at a crucial juncture, facing a formidable challenge in the form of multiple
critical situations that are—with increasing urgency—threatening sustainability
on both a national and local level. These situations include an unprecedented
rate of population decline; an accelerated pace of the declining birthrate andthe aging population; a heightening risk of large-scale disasters; rapidly aging
infrastructure; climate change impacts; and damage to biodiversity.
Of particular note, many rural and regional areas are suffering from ongoing
population decline and outflow, especially among young people, which is having
an immeasurable impact on people’s lives. Other problems are related to structuraltransformations that are occurring in regional communities, such as weakening
and declining public services, the decay of local industries, depopulation of
hilly and mountainous areas, and the hollowing-out of urban centers, inaddition to the deterioration of land previously hailed for its beauty andrich natural environment. These issues in combination pose the risk ofcreating a vicious cycle of community erosion, and the problem is only
getting worse.

* Some of the data was calculated by INFRONEER based on source data.

For details of activities conductedby INFRONEER Holdings, please turn the page.

4

Chapter 1 Value Creation Story

MissionOur mission

Value Added Considered by INFRONEERWe challenge the status quo of existing infrastructure businesses and deliver the most suitable services globally with innovative ideas.
Input

Social Background P. 3

Six Business Foundations to Support Growth

P. 29

Number of employees:

Offensive and defensive financial
management

38.1%(Manufacturing capital)

Infrastructure reaching 50
years of age (aging)

Collaboration with andsupport for business
partners

Number of domestic and international bases:

314 (Total for business companies)

Business portfolio
management

Collaborating companies, alliances,
customers

InfrastructureManagement
Business

Recycling of
capitalP. 23

Reinvestments,
secondary market
creation

718 (Group total)

Treating the Earth as a valuablestakeholder

P. 30

Strengthening business foundation

MachineryBusiness

Value-creating human resources andmutual respect

Strengthening governance

Dividends for the Earth:

2% of consolidated profit

Sources of value creation

100 billion or more¥

Developing strong and effective governance P. 11

12% or more

Profit¥70 billion or more

Returns to remunerationaccording toperformance¥

30 billion or more

Social values (FY2030 targets)
Results on P. 61

Promotion of humanresources strategy P. 55

Greenhouse gases
Scopes 1 and 2

40% reduction(Net zero emissions by FY2050)

Renewable energy ratio
Scope 2

INFRONEER Vision 2030 (Medium- to Long-term Business Plan) P. 37

Building a society that is conscious ofprotecting our environment

30% or more

Operating profit

ROE

Number of companies incooperating company associations:

Materiality

Natural capital

Challenge
the status quo

1.2 trillion or more

RelatedBusinesses

RE60

Greenhouse gases
Scope 340% reduction

Number of major
accidents

0

Female employment rate

Increase from previous
fiscal year
Outside director ratio

50% or more=Σ (Total labor expenses + R&D expenses + Operating profit + Depreciation expenses)
Initiatives to improve expectations for future value creation“INF value added productivity” = INF value added amount / Total number of employees
Initiatives to increase the speed and acceleration of value creation

Distribution of added value for sustained growth
Investments in human resources
Growth investments (DX, R&D, M&A, etc.)
Permanent investments (optimal utilization of assets, etc.)
Business partners (strengthening relationships with partner companies, etc.)
Shareholders and markets (shareholder return)Reserves for the future (internal reserves)

Maximized added value cycle

INFRONEER aims to be proactive in terms of its remuneration systems, with executive remuneration designed
in such a way that the variable portion exceeds the fixed portion. For variable remuneration, single-year profit
attributable to owners of parent is set as the KPI for the annual incentive, and a non-payment provision is included
to create a link with INF value-added productivity. For medium- to long-term incentives, the value-added amountis set as a KPI. By incorporating INF added value into executive remuneration systems as an overall KPI, we aim
to incentivize efforts to improve corporate value from a medium- to long-term perspective. Going forward, we
will consider a plan to adopt non-financial indicators as KPIs for bonus payments.
Representative executive
officer and president

5

6

Other directors (excluding outside
directors) and executive officers[Fixed remuneration]

100%

60%

7

Base remuneration

16~27%

40%

INFRONEER^ (INFRONEER Caret) P. 1

(action guidelines)

In order to maximize the amountavailable for distribution, including
for growth investment and shareholder return, it is essential to firstmaximize added value, the sourceof the distributed funds.
We work on the maximization ofadded value and portfolio optimization and enhancement, with an eye
to improving ROIC, reducing capitalcosts, and expanding the market
capitalization value.

Incorporating overall KPIs into executive remuneration systems

60%

Common Group guidepost

Initiatives to improve value accumulation for the future

50~55%
50~55%

100%[Variable remuneration]
Annual incentives
Medium- to long-term incentives

Corporate Data

Collapse of a safe, secureand comfortable living
foundation(Social and relationship capital)

INFRONEER bases and regional
network that realize comprehensive
responses“Construction”
×“De-construction”
P. 21

Partnership,
financing capabilities

Net sales

Dividend payout ratio

Value added considered by INFRONEER: INF value added amount

Sustainability

Deceleration in
infrastructure maintenanceand renewal

Long-term
partnerships

Utilizing regional
networks of businesscompanies to createsynergy throughout theGroup

Road Civil
Engineering
Business

Overall KPIs

Economic values (FY2030 targets)
Results on P. 59¥

Accelerating DX strategy
P. 43

Business model tochallenge the status quo(Plan: ¥147.0 billion)

Growth Strategy

Domestic andinternational
bases

Know-how cultivated over 100 yearsof history

Know-how,
CSV thinking

Building
Construction
Business151.2 billion (FY2022 result)Business Models

Equity ratio:

Comprehensive
system×
Area expansion
P. 22

Competitive
advantage P. 24¥

The value we
promiseWell-balanced distribution

Insufficient public funds(Intellectual capital)

Strengthening value chain

INF value added amount

Civil
Engineering
Business

Added value

Increased social security
costs

Businessknow-how

Building a society that is proactively
conscious of the environment

7,421 (Group consolidated)

Holdings structure
Reduced tax revenue

Creating a safe, secure and more
comfortable society

Value

Top Message

Solving social issues through our infrastructureservices business

P. 8

A world where there's no limit to what can be asked of
and what can be delivered by infrastructure services.

Financial
capitalOutcomeOverall KPIs

Human resources who can create
value with passion

Our vision for
the future

Safety, security, and sustainability
for our society and local communities

Low economic growth

Human capital

OutputP. 31
Materiality

Declining birthrate andaging population
Decrease in working
population

Business Model

The INFRONEER Group is working to maximize added value, which it defines in the INFRONEER Vision 2030
(Medium- to Long-term Business Plan). In comparison with Discounted Cash Flow (DCF) and other valuation
methods used to determine corporate value in the market, INFRONEER’s method views corporate value ascomprising not only the market capitalization value but also the value distributed to our business base andall stakeholders. To become an integrated infrastructure service company, we believe it is essential to build aframework that encourages all our stakeholders, including society at large, the company, and our employees
and shareholders, to move toward a common goal. Such a framework must also enable various corporate activities
related to social contribution, financial performance, employee remuneration, shareholder return, and others tolink together and make progress together, rather than leaving each to advance independently.
In line with this theory, we quantify and define certain portions of corporate value as “INF value added amount” and“INF value added productivity,” which are positioned as overall KPIs and included in the list of management indicators.

VisionValue Creation Story

Value Creation Process

Shares with restricted transfers

8Chapter 1 Value Creation Story

Promoting ESG Strategies for
Creating Sustainable Value

Sustainability Policies

Sustainability Committee

Becoming an integrated infrastructure service company

Addressing ESG issues through businesses

Ensuring the safety andquality of structures andproducts

Promoting the construction
methods, etc., that
contribute to improving thefunctionality and comfortof buildings

INFRONEER’s Sustainability Committee has the objective of steering the company’ssustainable development in response to risks and opportunities as well as social
issues that may affect our corporate value over the medium to long term. Conclusions
reached by the Committee are then reflected in the Group’s management plans. The
Committee is chaired by INFRONEER Holding’s Representative Executive Officer andPresident, with other seats filled by executive officers of the company and officers
in charge of CSR and the environment at each business company. The Committee
meets semi-annually in principle and met twice in FY2022. Its activities are subject tothe supervision of the Board of Directors, which receives an activity report from theCommittee on a regular basis.

Sustainability Committee meeting

The Committee’s primary agenda is as follows:

Promoting disasterprevention and mitigation

Generation of electricity
using renewable energy
and construction andoperation of power
generation
facilities

Environment

P. 50 and 52

Promoting the construction
methods, etc., that savelabor and contributeto efficiency on theconstruction site

SocietyP. 49

Climate change
Water security
Pollution control

Biodiversity
Resource recycling
Dividends for the Earth

Other initiatives

Business activities in considerationof human rights
Co-creation with partners
Human resources strategy forvalue creation
P. 53

Human rights, labor

Communities

Health and safety

Human resources strategy

9

P. 45

Risk management

In April 2022, the company signed the United Nations Global Compact (UNGC) and was registered as a corporate participant in
the international initiative. In conjunction with this, we joined the Global Compact Network Japan, a group of Japanese UNGC
participants.
Going forward, we will expand our sustainability activities to the entire INFRONEER Group and adopt a global perspective to
respond to the requirements and expectations of various international stakeholders. At the same time, we will remain committed
to socially responsible management and building a sustainable society.

Collaboration with an external organization

Expectations for Industry-Government-Academia
Collaboration Aimed at Achieving a Sustainable Society
Kyushu University’s Urban Institute, an active promoter of joint research projects with various corporations, engages in tripartite sustainability research activities involving industry, government, andacademia and is working on developments and implementations for real-life purposes in society.
aiESG, Inc., a startup originating from Kyushu University, performs retrospective ESG evaluation
analyses of product and service supply chains in a joint research project with Harvard University,with INFRONEER’s infrastructure business included among the subjects. The major targets ofanalysis are the efficiency of infrastructure management; health and safety promotion; and economic value to local communities. We look forward to watching INFRONEER advance its ESG initiatives across the entire value chain, aiming for the sustainable development of regional communities.

Shunsuke Managi
Distinguished Professor andDirector of the Urban Institute,
Kyushu University
Lead author for the United
Nation’s Inclusive Wealth Report
Representative director ofaiESG, Inc.

Corporate Data

Transparency of taxes

Approach to ESG initiatives to build business foundations(3) Stakeholder engagement as a complementary step to the measures (1) and (2) above

Signing the UN Global Compact

Develop strong and effective governanceCompliance(2) Selection of climate change scenarios and formulation of a transition plan in line with the TCFD guidance (equipment/
development investment)

P. 54

GovernanceCorporate governance(1) Formulation and revision of sustainability- and ESG-related policies and goals

Sustainability

Build a society that is
conscious of protecting ourenvironment

Strengthening collaboration
with partner companies
Strengthening supply
capacities and improving
productivity

Growth Strategy

Improving public benefit
for local communities
Preferential procurementin the region

Promoting theconstruction methods,
etc., that reduce
environmental impact

Business Models

Expanding our
infrastructure
management business

Top Message

Safety, security, and sustainability of our society and local communities

Value

Value Creation Story

INFRONEER pursues ESG strategies to build an essential foundation for becoming an integrated infrastructure service company. We are committed to achieving safety, security, and sustainability in our society andlocal communities, which constitutes the value we promise, in pursuit of this aim. This means that ourbusiness activities are designed to be conducive to achieving sustainability and creating sustainable value.

INFRONEER envisions becoming an integrated infrastructure service company that will contribute to society by working to solve
social issues surrounding infrastructure services, grow its businesses, improve its corporate value, provide quality infrastructureservices, and improve its social value.
Society is facing a number of issues. Among them, those related to the environment (E) and society (S) are often linked together
and should indeed be addressed in unison. Recognizing this, our Group will address issues in these two areas comprehensively
within the scope of its business activities. To ensure that such activities are carried out effectively and meet the envisioned purposeof becoming an integrated infrastructure service company, we are establishing strong governance (G) based on high standards andan appropriate risk management framework. In other words, we believe our aim of becoming an integrated infrastructure service
company through business activities (meaning addressing ESG issues) will lead to achieving sustainability.

10Chapter 1 Value Creation Story

For details on governance, see page 45.

Messages from Outside Directors

Roles and Expertise Items Expected of Outside Directors
Company management / M&A

Business strategy / Industry insights

Internal control / Risk management

Human resource training / Development / Labor management

Financial / Accounting

Global / Overseas business management

IT / DX

Sales / Marketing
Engineering / R&D / Quality / Safety

Internal control

Overseas

I empathize with President Kibe’s strong commitment tobecoming a global “integrated infrastructure service company” and to changing business domains by promoting the“de-construction” business. This is why I accepted the offer
to assume the position of outside director.
I think the primary reason for my appointment is my career as a researcher in the field of corporate innovation. My
basic theory about innovation is that it should not be an end
unto itself but rather a means of generating added value.
In the case of INFRONEER, business innovations should be
pursued by promoting concessions, alliances, M&As, andother partnerships for the purpose of carrying out plans forestablishing a solid position in the highly competitive global
infrastructure business.
In Japan, the national population will continue to shrink. To
grow sustainably despite this, the company needs to consider advancing to Africa and other regions with strong growthpotential while also moving into maintenance and management. As an option for investing in human capital, the company should examine the possibility of creating systems totake on students from overseas and give them construction
and civil engineering techniques and know-how developed inJapan, with an eye to forming future partnerships for global
business expansion through networks with such students
after they return to their home countries.
I also offered advice when formulating INFRONEER Caret, a set of common values and action guidelines intended
to instill a sense of unity across the entire workforce of theGroup with an eye to future growth. I will commit to helping
the company build capabilities to offer high added value tostakeholders through promoting innovation and human resources exchange.

IT / DX

ESG

Company management

Sales

Internal control

Human resources / Labor management

I come from the manufacturing sector and have no experience in the construction business, but I have been engaged
for many years in global business management in Asia. In
Japan, I experienced hardships due to the challenging management environment. My principal role at INFRONEER isto get an overview of the business environment to identify
essential issues and offer advice based on my expertise.
In order to enter the global arena as an integrated infrastructure services provider, the company must first becomea leader in the domestic market. I will strive to provide appropriate advice on the management resources—human andotherwise—the company will need to become a market leader, with the aim of contributing to the continued improvement of corporate value. Regarding overseas expansion, it is
crucial to offer well-considered opinions about plans to enter
highly competitive overseas markets. I recognize this as myfirst and foremost role as an outside director.
My thinking in regard to the essential nature of business

Overseas

IT / DX

ESG

management goes as follows: manage business in a down-toearth manner by ensuring compliance, maintaining transparency, communicating with stakeholders, and assuming accountability while making management decisions in a timely
manner to achieve sustained growth. This holds true for allindustries and business categories.
With the objective of creating a new business model asJapan’s first integrated infrastructure service company andestablishing these types of businesses as its growth engine,the company has adopted the structure of a company witha nominating committee, marking a first in the constructionindustry, and has ambitiously built strong governance systems. I will make every possible effort to essentially advancethese robust systems and ensure they will not be reduced toa mere formality.

Corporate Data

shared among the board members. This will facilitate transparency of governance and information sharing among thedirectors. It will also provide opportunities to seek out new
business plans with a good rationale for future development,
while putting the brakes on risky plans as necessary. Identifying and supporting good plans is one of the important
responsibilities of outside directors.
Ahead of starting the voluntary application of IFRS fromthe FY2023 year-end reporting, we will create an opportunity
for directors and Audit Committee members to increase theirunderstanding of the standards. The Board of Directors has amultiplicity of urgent tasks to tackle, including enhancing cybersecurity measures for ensuring information confidentiality
and preventing data breaches. I will strive to fulfill the commitment of improved governance and increased effectivenessof the Board of Directors while supporting the implementationof growth strategies for becoming an integrated infrastructureservice company and improving corporate value.

Koichi Moriya

Chairperson of the Nominating Committee / Compensation Committee Member / Audit Committee Member

Sustainability

I had worked for a financial institution for about 30 years andengaged in the management of several corporations in Japanand other countries when I was invited to serve on the boardof INFRONEER Holdings at its establishment. I was then appointed to chair the Board of Directors and Audit Committee
meetings. One of the most important functions of the Board of
Directors of the company with a nominating committee is toperform rigorous monitoring. To this end, I believe, it is essential to upgrade internal control systems and effectively monitor the execution of duties by directors and executive officers.
For strengthening internal control systems, in order to do
more than simply apply existing rules to enable audits to be
performed in a way better suited to the company’s situation,
we have revised the scope of business companies subject to
the J-SOX audit, which provides a basis for judgment criteria.
Regarding the effective monitoring of the status of executive
officers in executing their duties, we have set up rules to allow all minutes of Board of Executive Officers meetings to be

11

ESG

Growth Strategy

Chairperson of the Board of Directors / Chairperson of the Audit Committee / Nominating Committee Member
Financial / Accounting

Overseas

Bring an Outside Perspective toSupport the Building of a SolidManagement Foundation

Keiichiro Hashimoto
Business strategy

Human resources / Labor management

ESG / Sustainability

Ensure Transparency of Governanceand Contribute to Improved
Effectiveness of the Board

Company management

Business strategy

Business Models

The chairperson for each of the Nominating Committee, Compensation Committee, and Audit Committee as well as for the Boardof Directors is elected from among outside directors. The following are comments made by the current five outside directors on
activities promoted in FY2022 with the objective of becoming Japan’s first integrated infrastructure service company and improving
corporate value. They also share their views on their roles in invigorating board meeting discussions and describe key points forthe discussion of future agenda items.

Seiichiro YonekuraNominating Committee Member / Compensation Committee Member / Audit Committee Member

Top Message

INFRONEER, which aims to become an integrated infrastructure service company, considers it essential to build
a strong governance system that emphasizes the monitoring function to supervise the execution of duties. The
company thus adopts the form of a company with a nominating committee, the majority of which consists ofoutside directors. The aim is to raise the quality of governance by incorporating external viewpoints in addition
to those of internal directors in making investment decisions and management assessment. Also, the Board of
Directors is selected to achieve a good overall balance of knowledge, experience, and abilities required to fulfill
their roles and responsibilities effectively. It is structured in a way that balances an appropriate size with diversity
in terms of gender, internationalism, career history, age, and other background factors.

Facilitate Added Value Creation
through Promoting Innovation and
Human Resources Exchange

Value Creation Story

Developing Strong and Effective Governance

12Chapter 1 Value Creation Story

Directors
Value Creation Story

Promote Diversity as a Source of
Future Competitiveness
Rie Murayama

Nominating Committee Member / Compensation Committee Member
Business strategy

Financial / Accounting

Sales

Overseas

Director/Executive Officer

Director (Outside)

Masaaki Shioiri

Director (Outside)

Koichi Moriya
Chairperson of the Nominating Committee

Director

Yasuhiko Imaizumi

Representative Executive Officer,
President and CEO

Director (Outside)

Director (Outside)

Chairperson of the Board of Directors andChairperson of the Audit Committee

Chairperson of the Compensationcommittee

Keiichiro Hashimoto

Seiichiro Yonekura

Chairman of the Company

Kazunari Kibe

Atsushi Takagi

Director (Outside)

Soji Maeda

Rie Murayama

For director profiles, visit our website at: https://www.infroneer.com/en/company/outline.html

Skill Matrix
Expected roles and expertise items
Name
Position in the company

Atsushi Takagi

Chairperson of the Compensation Committee / Nominating Committee Member / Audit Committee Member
Business strategy

Financial / Accounting

Internal control

Overseas

Soji Maeda

Chairman of the Company
Compensation Committee Member

Businessstrategy
Industry insights

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

Financial
Accounting

Sales
MarketingInternal control
Risk
management

Engineering
R&D
Quality / Safety

GlobalOverseasbusinessmanagement

IT
DX

●

●

ESG
Sustainability

Kazunari Kibe

Director
Representative Executive Officer, President and CEO
Nominating Committee Member
Compensation Committee Member

●

●

●

●

●

●

Yasuhiko Imaizumi

Director
Nominating Committee Member
Compensation Committee Member

Growth Strategy

Make Use of Analytical Expertise toContribute to Increasing Market
Capitalization

Human resource
training
Development
Labor
management

Company
management
M&A

Business Models

in slower personnel recruitment activities and undermine thecompany’s international competitiveness. I will continue toadvocate for the importance of diversity as a component ofefforts to support the implementation of growth strategies.
I’d like to see the company become the first choice of
stakeholders. To this end, it is essential to prepare a powerful
equity story to facilitate stakeholder communication andconvey the company’s comprehensive capabilities, its primary
competitive advantage. I will endeavor to support management by contributing my perspective as a former analyst andexercise my capabilities developed over many years spentengaging in capital markets to facilitate the transformation of
the company.

Top Message

I have worked for foreign securities firms and built a career
as an analyst in the field of construction and residential realestate. I have also drawn on this experience to serve as an
outside director of a number of companies. I received an invitation to become an outside director of the company fromPresident Kibe when MAEDA CORP. was making a takeoverbid for MAEDA ROAD CONSTRUCTION CO., Ltd. I was deeply
impressed by the company’s ambitious approach to “de-construction” and therefore decided to accept the offer.
For the company to achieve its aim of becoming Japan’s
first integrated infrastructure service company, one of themost urgent issues to address is diversity. In the past year,
I worked on launching a diversity network across businesscompanies, and participated in formulating the Diversity, Equity & Inclusion Policy, a tool to foster a culture of embracing
diversity throughout the Group. Lack of diversity may result●

Masaaki Shioiri

Keiichiro Hashimoto

Outside Director
Chairperson of the Board of Directors
Chairperson of the Audit Committee
Nominating Committee Member

●

●

●

Seiichiro Yonekura

Outside Director
Nominating Committee Member
Compensation Committee Member
Audit Committee Member

●

●

●

●

●

●

Koichi Moriya

Outside Director
Chairperson of the Nominating Committee
Compensation Committee Member
Audit Committee Member

●

●

●

Rie Murayama

Outside Director
Nominating Committee Member
Compensation Committee Member

●

●

●

●

●

●

Atsushi Takagi

Outside Director
Chairperson of the Compensation committee
Nominating Committee Member
Audit Committee Member

●

●

●

●

Corporate Data

13

to share price performance—saying it is a matter for market
participants rather than a matter for business operators—andfocus only on business operations. Businesses should instead
consider taking a proactive approach to stock price data,
studying it for the purpose of increasing their performance.
I believe such attitudes will give employees, customers, andsuppliers alike more confidence in the company.
The company’s slogan of “challenge the status quo” represents its commitment to challenge the existing infrastructurebusiness model. I will fulfill my role in supporting the company
to advance toward becoming Japan’s first integrated infrastructure service company by offering rigorous evaluations
and recommendations regarding not only business management but also governance, remuneration, and nomination of
successors. To do this, I will draw on my experience related tothe construction industry without being a slave to convention,
and will obtain insights from capital markets as a representative of minority shareholders.

Sustainability

I worked as an analyst at several securities firms, observing
the construction industry for over 20 years from the early
1990s. Back then, it was considered that MAEDA CORP.
suffered from a low market valuation (PBR and PER) and its
shares had low liquidity (share price x volume traded). Thisissue is likely to be effectively addressed by the transition toa holding company system. The shift will help the company
improve its corporate value in the way that President Kibe
expects, namely, by bringing it a higher valuation, resulting in
an increased market capitalization.
Having moved to the holding company system, the company is more able to promote the Group’s overall businessstrategies from a medium- to long-term perspective. Under
the new corporate system, the three business companies arecapitalizing on their long-established strengths to develop
the concession business, a growth segment, and increasing
equity spread by promoting the “de-construction” business. It
is important to break away from the conventional attitude ofmany Japanese business managers, who pay scant attention

Director
Executive Officer
Nominating Committee Member

Note: The above list does not represent the complete expertise of each officer.

14Chapter 2 Top Message

Chapter 2

Top Message

Top Message
Business Models
Growth Strategy

The infrastructure*1 that underpins our daily lives and the foundations of society isfacing issues that could jeopardize safety and comfort in many locales. Society canno longer function simply by continuing to build and maintain infrastructure as in
the past, so the idea of infrastructure itself stands at a crossroads.
Recognizing such issues, MAEDA CORPORATION (MAEDA CORP.), MAEDA ROAD
CONSTRUCTION Co., Ltd., and MAEDA SEISAKUSHO CO., LTD., in October 2021
established a joint holding company—INFRONEER Holdings Inc.—to support andtake up the challenge of infrastructure services*2. Approaches that go beyond
preconceived notions will be needed to address the major issue of how to maintainand sustain the infrastructure on which our social foundations rest, and one
approach to achieving this is “de-construction.”
To become the integrated infrastructure service company we aspire to be, wewill change our own mindset and work styles and continue to grow as a company
while constantly transforming ourselves.

Value Creation Story

Continuing to Be a Reformer in the
Infrastructure Business andTaking On the Challenge of Building a
Sustainable Society as an Integrated
Infrastructure Service Company

Sustainability

Kazunari Kibe

Joined MAEDA CORPORATION in 1986; served as a Managing
Officer in 2014; served as a Director and General Manager ofthe Management Innovation Division from 2016; in October
2021, became the Director, Representative Executive Officer,
President, and CEO of INFRONEER Holdings.

15

Corporate Data

Director, Representative Executive Officer,
President, and CEO
INFRONEER Holdings Inc.

16

Chapter 2 Top Message

https://www.infroneer.com/pdf/en/company/topblog/kibelog_en_vol9.pdf

For example, it means that the INFRONEER Group will
not only be involved in construction contracting but alsoacquire the rights to operate social infrastructure, suchas airports and water supply and sewage systems, andtoll roads, and handle the entire infrastructure life cycle,
including construction, operation, maintenance, andmanagement.
The infrastructure business involves business risks andsometimes large investments but, by leveraging theengineering capabilities*4 and financial expertise wehave cultivated, we can minimize risks and generatelarge returns.
This is where I envision the future of the INFRONEERGroup. It is not just about changing the way we do business itself. It entails changing the way we think and work
as a company.
As the “construction” business requires us to build tothe specifications demanded by the client, there is notmuch room for exercising our own imagination. If we aregoing to pursue “de-construction” and take risks in ourbusiness, we need to switch to a “de-construction”
mindset that lets us properly communicate our opinions
to the client from the standpoint of a business partner,
and work together to build robust infrastructure.
I believe that we will consequently be able to realize thevision of the INFRONEER Group as an integrated infrastructure service company.
For more details on our business model, see page 21.

To achieve our envisioned organization, we have formulated key measures for each strategy with productivity reforms, establishing a newrevenue base, and strengthening and improving our corporate culture as the three pillars of our strategy.

Required elements

Three strategic pillars

Profitability

Growth Strategy

Three Strategic Pillars and Important Measures

Envisioned organization

Business Models

We in the infrastructure business have always asked
ourselves what genuine value we can provide to society,and one of the conclusions we have reached is the ideaof “de - construction.” MAEDA CORP. has made“de-construction” a pillar of its management strategy
for the past 10 years.
“Construction” is a type of contract arrangement inwhich a contractor promises to complete a project andis paid by the commissioning entity for the outcome of
the work. In the construction industry, this means thatthe client places an order for construction work, and thecontractor receiving the order—the main contractor—
brings together specialized construction companies toguarantee the completion of the construction work forthe client.
The symbolic term “de-construction” as used by the
INFRONEER Group does not mean that we do not engage
in the “construction” business; instead, it indicates that
we are not bound by, and are actively going beyond, theconventional business model of “construction.”“De-construction” also implies that the INFRONEERGroup is willing to take on the business risk of projects.

Important measures
Maximizing added value
Optimizing fixed expenses andadministrative costs● Promoting Group financial strategy●

Productivity reforms
Rationalization
Efficiency●

Sustainability

Establishing a position at home
and abroad in infrastructureservices*2● Further expanding business areas●

Strengthened
Group power

Establishing a
new revenue baseCreditworthiness
Reliability

Promptness

Strengthening andimproving corporate
culturePromoting a Group humanresources strategy● Strengthening governance●Corporate Data

Ability to respondto social changes

To bolster our internal structures in support of these
initiatives and to develop DX talents, we are also in theprocess of reforming our personnel system to ensure it
will motivate employees to take on new challenges. In
financial terms, we will continue investing in humancapital to further increase added value. We place theutmost importance on enhancing our added value as aF or details of our medium- to long-term business plan, see page 37 orvisit our IR information website at:https://www.infroneer.com/en/ir/

Thoughts and Resolve Underlying“Construction x De-construction”

Establishing a new revenue basethat is highly profitable and stable

To realize the integrated infrastructure services that the
INFRONEER Group is aiming for, we must be firmly
committed to transcending the construction industry’s
conventional wisdom and promote digital transformation (DX) to revolutionize the entire industry and evenindustries with which we have had no previous association. We must continue making a variety of efforts toraise citizens’ awareness of infrastructure as an asset forsociety as a whole.

As an integrated infrastructure service company, we
will pursue a growth strategy of both maximizing added
value throughout infrastructure lifecycles and value
chains and maintaining and expanding our own revenue
base by integrating all aspects of the infrastructure
lifecycle, encompassing planning, proposal, construction,
operation, and maintenance. In addition to growing ourown and our partner companies’ core businesses, wewill actively engage in M&A and alliances to expand ouroverall scope of business.

For details on our human resources strategy, see pages 43 and 55.

Earning the trust by all our stakeholders

Achieving Integrated
Infrastructure Services

It is also imperative to keep pace with our dramaticallychanging digital society, as exemplified by the emergenceof Chat-GPT, a generative AI that has been the focus ofmuch attention lately. In Japan, where the birthrate is
declining and the population is aging rapidly, DX is aprerequisite for companies to survive in terms ofimproving labor productivity and increasing added value.
I believe the essence of DX lies in the “X (transformation),”necessitating rule changes using digital technology.
In a concession*3 project, the public entity retains
ownership of the facility while the private operator
assumes the right to operate the facility. Data-driven
operation and maintenance management are importantin this regard as well. This approach should prove
effective for all social and public infrastructures that
INFRONEER is involved in operating, such as airports,
water supply and sewage systems, exhibition halls, andarenas.
If we can achieve “X” in operating, maintaining, andmanaging infrastructure, the benefits will spread toexisting businesses, leading to the expansion of ourbusiness domain and the creation of a new revenue base.
At the root of our various challenges is INFRONEER’s
unwavering commitment to resolving the issues faced
by Japan’s infrastructure. With the establishment of
INFRONEER Holdings, we announced our strategy forputting this commitment into practice in our INFRONEER
Vision 2030, a medium- to long-term business plan thathas three strategic pillars: productivity reforms, establishing a new revenue base, and strengthening andimproving our corporate culture. The INFRONEER Groupwill continue to do what has always been important to it
and, as a means of attaining these, we are expanding theareas we have been working on, taking on the challengesof “de-construction,” and creating added value for local
communities.

For details on capital recycling, see page 23.

17F or details on our DX strategy, see page 43.
For information on TEKKON, see page 38 or visit our website at:company by investing in human resources as much as in
R&D for future business growth.

Top Message

Our goal as an integrated infrastructure service company
is to provide comprehensive and efficient services totowns, cities, and society as a whole by expanding ourbusiness into various infrastructure sectors such as
roads, airports, and water supply and sewage systems,
and by engaging in multiple sectors through combined
endeavors by our subsidiaries, alliance companies, andbusiness partners. The infrastructure that supportssociety remains an integral part of people’s lives overextended periods of time. For example, bridges androads will continue to be used for 20 to 30 years after
they are built, thus requiring periodic inspection andmaintenance.
We no longer live in a high economic growth period
where new infrastructure is being built up continuously,
so we need to focus instead on maintaining the value ofexisting infrastructure.
We need to provide good services in the eyes of the
public whilst making our business profitable over thelong term to maintain our corporate operations.
Infrastructure is an asset belonging to the nation asa whole that supports society over the long term, andwe believe it is a good match for pension funds andother entities that invest from a long-term perspective.
To improve capital efficiency, it is necessary to undertake
capital recycling, in which owned and operated infrastructure is transferred to a pension fund and otherfinancial institutions that cannot take on construction
risk to recover the invested capital so that ultimately
we as a company can suitably enjoy profits while
increasing the capital of society as a whole.

One of the new challenges we have taken up with ourpartners is the TEKKON co-creation initiative. In 2023,
we invested a total of ¥2 billion in the Whole Earth
Foundation (headquartered in Singapore), which developed the popular-participatory TEKKON data collection
app. The establishment of a new company to provide
infrastructure management services utilizing various
infrastructure data collected by the Foundation is alsopart of our DX transformation vision for integrated infrastructure services.

Value Creation Story

What We Aim for as an Integrated
Infrastructure Service Company

18

Chapter 2 Top Message

Comparison of “Construction” and “De-construction”
Operating profit configuration(FY2022)2.0%

3.2% 5.4%
5.3%
4.2%

34.3%
21.4%

22.0%

20.0%

30.4%

9.6%

42.0%

Net sales: ¥709.6 bil.

■ Building construction:■ Civil engineering:■ Road civil engineering:¥215.5 bil.

¥152.0 bil.
¥243.7 bil.

Operating profit: ¥■ Building construction:■ Civil engineering:■ Road civil engineering:¥8.9 bil.

¥17.0 bil.

INFRONEER’s Concept of Corporate Value¥3.9 bil.

¥37.3 bil.

■ Machinery:■ Infrastructure management: ¥22.5 bil.
■ Related businesses:¥38.6 bil.

■ Infrastructure management: ¥8.1 bil.*■ Related businesses:■ Machinery:F or details of VMV, see page 1. For stock benefit trust (J-ESOP),
see page 38.

40.5 bil.

¥1.7 bil.
¥0.8 bil.

Out-of-the-box Change of Mindset

For *1 to *5, refer to the glossary on page 64.

Corporate Data

To create synergy, we are also reforming our internal
systems and our approach to allocating human resources.
To foster employees’ sense of identification and unity
with the Group as well as to motivate employees toimprove our stock price and our Group’s performance,
we hold workshops to disseminate INFRONEER’s VMV(Vision, Mission, Value) philosophy and its Group-wideroadmap (action agenda) and working to foster a corporate culture and improve engagement.
We have also introduced a stock benefit trust (J-ESOP)
as an incentive plan that provides shares to all Group
employees as well as contract employees and others
who meet certain requirements. Approximately 8,000
persons are expected to be eligible for participation inthis plan.
In addition to providing performance-linked sharesbesides current compensation, the program also grants
points for childbirth and other benefits. The purpose ofthis is to give employees a sense of participation in the
management of the company, particularly in the
management of the INFRONEER Holdings Group as awhole. We will be providing detailed explanations toemployees in the future, and we hope this program will
provide additional motivation for our employees toimprove our performance.
Additionally, we try to mix employees from the threebusiness companies as much as possible across divisions and companies to emphasize diversity when
launching new projects. The percentage of female
employees in the construction industry is still low. At

Sustainability

19F or details of dialogues with stakeholders, see page 25.

Growth Strategy

Our business performance since the establishment of
INFRONEER Holdings has been in line with or exceeded
expectations. Even in the face of significant negative
market changes, such as soaring crude oil prices and theweakening of the yen against other currencies, our business has generally proceeded as expected. For morethan a decade now, our Group has been working out
ways through our business activities to avoid gettingcaught up in price competition within the constructionindustry. We believe that our Group’s concerted efforts
to produce better infrastructure while generating
adequate profits as a company are bearing fruit. While
there is a clear divide between companies with favorable and unfavorable performance within the constructionindustry, our Group is one of the few companies that havebeen able to advance their business according to plan.
The INFRONEER Group is a group of three listedcompanies, and we were concerned when transitioning
to a holding company structure that there would be
adverse effects both vertically and horizontally on theways we conduct business and work. In general, themore a company pursues its own interests and convenience, the more likely it is to be vertically divided, while“authoritarian” companies tend to be horizontally divided. However, there was no need to worry about this.
Numerous employees have been working hard to eliminate these negative effects. Since the founding of
INFRONEER Holdings, we have been bolstering ourorganizational structure to eliminate information
inequalities throughout the Group and to enable each

In FY2022, I visited 13 offices across Japan twice to hold town meetings, engaging
with approximately 7,000 employees over a period of 26 days.

Our results for FY2022 (the fiscal year ended March 31,2023), the first full-year financial results since theestablishment of INFRONEER Holdings, show that bothsales and profits increased year on year and that net
income reached a record high (compared with MAEDA
CORP.’s consolidated profit). On the whole, all segments
performed well, and we expect further increases in sales
and profits in FY2023.
The integrated report plays a major role in carefully
explaining our management indicators, the introductionof IFRS into our financial strategy, and the concept ofreturn on invested capital (ROIC) so that our stakeholders can better understand the steps we are taking toenhance our corporate value.
I have been exchanging views with numerous investors
both in Japan and overseas through investor relations(IR) endeavors since the latter half of the 1990s. I learned
at our most recent IR meeting overseas that there wasgreat interest in our integrated report, giving me an opportunity to reaffirm the importance of disclosing information
through the integrated report and other means.
Going ahead, we intend to further augment our venues
for information disclosure and engagement, seek theopinions of investors and external stakeholders as wellas Group employees, and find the best ways of realizing
and manifesting these opinions.
We are committed to engaging more than ever withinvestors and enhancing our corporate value to help
reinforce their optimism about the future of the
INFRONEER Group. We look forward to your continued
support and encouragement.

Business Models* Operating profit ratio between “construction”
and “de-construction”
Target for FY2030: 50:50
Result of FY2022: 80:20

Generally speaking, corporate value (approximated bymarket capitalization) is the present value of the cash
flow that a company will generate in the future discounted
by the cost of capital. It is my belief that the satisfactionof all stakeholders will lead to medium- to long-term
improvements in corporate value (as measured by market
capitalization). I think that sustainability management
improves stakeholder satisfaction and contributes tohigher corporate value. With the increasing emphasis on
ESG (environment, social, and governance) factors, it isimperative to focus on the global environment, humanresources, and human rights in our business activities. As
such, we will further accelerate our investment in thesesustainable initiatives.
In terms of our governance structure, we have adopted
a “Company with Nominating Committee” system. Thisis because a sophisticated governance system thatemphasizes the monitoring function of supervising business execution is indispensable for the INFRONEERGroup, which is looking to enter a new domain as anintegrated infrastructure service company. We believethat enhancing the effectiveness of this governancesystem is the key factor to increase corporate value inthe future.
Overseas strategies also play an important part inincreasing corporate value. The adoption of International
Financial Reporting Standards (IFRS) from FY2023 isintended to ensure that accounting standards do not
become a hindrance in the pursuit of a business modelthat can be used globally in the future. IFRS-based
financial statements will enable us to compare ourselveswith other companies in the same industry around theworld. We can also expect smooth post-merger integration when merging and acquiring companies from overseas. We believe the adoption of IFRS will be highly
beneficial in realizing our vision of “A world where
there’s no limit to what can be asked from and what canbe delivered by infrastructure services*5.”

To Our Investors

Top Message* Configuration ratios are rounded to the second decimal place.

INFRONEER Holdings on a non-consolidated basis,
however, we are boosting the percentage to approximately 30%. Also, we have been promoting younger
employees. Going forward, we seek to promote suchinitiatives throughout the Group to change our corporate
culture and conventional thinking.
Our challenge is to create a business model that is
uncharted in the Japanese construction industry. It is
important to change our mindset in a way that transcends preconceived notions and goes beyond conventional ways of doing things while striking a balance
between freedom and discipline. I believe this is the firststep toward increasing our corporate value.

Value Creation Story

Sales configuration(FY2022)

employee to work with a sense of ownership and independence by, for example, live-streaming management
meetings for all employees to see and making theminutes of Board of Directors meetings available. We
have also held town meetings for executives andmid-level employees of our business companies. Rather
than simply providing one-way explanations of thedirection INFRONEER Holdings seeks to take and of
specific achievements, these meetings are intended toencourage communication and stimulate growththroughout the Group by enabling two-way exchangesof opinions. We hope these efforts will help create
further synergies.

20

Chapter 3 Business Models

Chapter 3

Business Models
Comprehensive System × Area Expansion
Alliance companies × Group companies × Cooperating companies = ∞The INFRONEER Group is focusing on three business models to solve infrastructure challenges through its
business while also maintaining business growth and aiming to achieve a world where there’s no limit to what
can be asked of and what can be delivered by infrastructure services.

Comprehensive system
Taking the entire life cycle of the infrastructure, including planning proposals, construction, operation, maintenance, management, and reinvestments,
we strive to achieve consistency, maximize the value added throughout the infrastructure life cycle and the value chain, and maintain and expand
the Company’s revenue base.

Overview of Business Models

One-stop management throughout the infrastructure life cycle of any project

Growth Strategy

Alliance companies“Construction”“De-construction”
4

3

Reinvestments andtechnical developments

For details of each business segment, visit our website at: https://www.infroneer.com/jp/company/integrated_report/segment/index.html (in Japanese)

Planning anddesignBuilding materials
and equipment
Manufacturing
Sales

ArenasWater supply
and sewerage
concession
Harbors
Publicfacilities

New construction

MaintenanceRepairManagement

RenewalInfrastructure
management

Reinvestments

Sendai International Airport

Airports
Roads

Procurement
Logistics

R-tecconsultant

MAEDA ROAD

Aichi Road Concession

MAEDA SEISAKUSHO MAEDA CORP.
FUJIMI KOKEN

FBS

Global InfrastructureManagement

Miotsukushi Industrial Water Concession
Miura Sewage Concession
TOYO CONSTRUCTIONJMNICHIYUU

・・・

DX (digital links/back office)Corporate Data

“Construction”

Operations, maintenance,and management
Utilize advantages andexpand revenue

Business plan
Evaluation
Investments

Sustainability

Engineering capabilities
Maintain, strengthen,and differentiate advantages

Cooperating companies

Downstream

1

2

Upstream

Capture and create
opportunities

Group companies

Expand and strengthen the business scope to all upstream and downstream areas, with “construction” as the axis

Expand operations to all infrastructure fields withthe focus on “de-construction”

Finance, regional networks,
partnerships

Business Models

Integrated Infrastructure Service Company“De-construction”

Top Message

Reinvestments

In order to increase corporate value through our growth strategy, we will expand our business through M&A and alliances, in addition to the growthof our own business and that of cooperating companies. By expanding our business into a variety of infrastructure fields, including roads, airports,
water supply and sewerage concession, and combining multiple fields, we will be able to provide more comprehensive and efficient services totowns and cities, and to all of society. As a result, we will contribute extensively to solving various problems faced by the government, local
governments, and private business owners.

While aiming to stabilize and expand our own revenue, we will take business risks and improve our corporate value through thecreation of added value and the continuous provision of infrastructure services to society that can be realized because we are an
integrated infrastructure service company.

21

Downstream

Area expansion

Reinforce strength, create opportunities, and expand revenues

The “construction” business represents a pillar of INFRONEER and its key strength.
The robust engineering capabilities built up over many years will provide us an essential advantage for promoting the “de-construction” business for reducing businessrisks and reducing costs. In this sense, strong “construction” business capabilities areimportant for maximizing returns from engaging in “de-construction” businesses.

Operations,maintenance, andmanagement

Take the entire life cycle as a business area

Upstream“Construction” × “De-construction”

By leveraging the engineering capabilities and financial expertise we have cultivated, “de-construction” business enables us to minimize risks and generate large
returns. Specifically, it involves concession projects of acquiring the right to construct, operate, maintain, and manage public infrastructures such as airports, watersupply and sewerage systems, and toll roads. It also includes such businesses as
renewable energy projects of making investments in everything from business development and construction to maintenance, management, operation, and sales.

Major renovation

Capitalrecycling

RenewalReinvestments, creationof secondary market

Partnership,
financing capabilities

Construction

Business models for the futureof our infrastructure

Manufacturing
andprocurement“Construction”
×“De-construction”

Planning anddesignChallenge
the status quo

Planning andproposalComprehensive
system×
area expansion

Know-how,
CSV thinking

Added value

INFRONEER is focusing on three business models to deal witheach of the following themes: “construction × de-construction,”“comprehensive system × area expansion,” and “capital recycling.”
In pursuit of establishing business models that enable sustained growth unaffected by external factors such as the economy and policies, we will aggressively promote the integrated
infrastructure service company model, which offers a comprehensive range of infrastructure management services from upstream to downstream, as the Group’s overall priority strategy
while capitalizing on the strengths of the three business companies. The Group’s robust business capabilities are applicableto approaching various fields by utilizing expertise accumulated
over many years of engaging in business development and operations; professionals possessing diverse and rich knowledge andexperience; and financial competence based on minimization oflife-cycle costs and accurate risk assessment. With these advantages, we intend to maximize our competitiveness while creatinga highly profitable and stable revenue base.

Value Creation Story

Three Business Models That are Challenging
the Future of Our Infrastructure

For details of infrastructure management projects, visit our websites at: https://www.infroneer.com/en/company/ourbusiness.html

22Chapter 3 Business Models

Capital Recycling
Creation of Added Value through Capital Recycling
Capital recycling represents the business model by utilizing our engineering capabilities cultivated over many years and the financial
know-how we have acquired through forming domestic and international business partnership, with the goal of promoting
reinvestments and creating secondary markets.
Reinvestments

Holding Company Structure

Secondary market creation

 or details on secondary market creation projects, visit the following websites:F
Building new infrastructure business platforms https://www.infroneer.com/jp/news-article/2022/07/05/524.html (in Japanese)
Structuring equity income funds for the infrastructure investment market in Japan https://www.infroneer.com/jp/news-article/2022/07/05/523.html (in Japanese)① SaleNational government / local government⑦ Reinvestments② Operation

New projects for solving Existing infrastructuressocial issues+ Added value

Pension funds, infrastructure funds,
and others③ Improving public services,
revitalizing regional communities

Local communities and society⑥ Investments④ Infrastructure investment
multiplier effect⑤ Investments

Individual pensions, retirement benefits,
and others

Secondary market① National and local governments sell the rights to operate government-owned infrastructure facilities to private companies, including INFRONEER, toundertake necessary maintenance and renewal work. By purchasing the operating rights, private companies take business risks. INFRONEER draws on its
engineering capabilities and financial know-how to mitigate such risks and reduce costs.
② Right-holding companies operate the infrastructure facilities under the agreement, drawing on the business know-how of the private sector while expertly
demonstrating engineering capabilities to implement renewal work (for added value).
 he infrastructure renewal is expected to raise the quality and comfort of living in the local communities, encouraging population inflow and regional revitalization.
③ T⑤ Through pension funds and infrastructure funds, individual pension and retirement plans are targeted as a primary investment destination, which basicallypursue long-term stable investment performance.
⑥ INFRONEER transfers equity stakes chiefly to pension funds, which basically pursue stable investment performance, while continuing to engage in theoperation, maintenance, and management of the infrastructure in order to provide sustainable and optimal infrastructure services.
 rivate companies can take on new projects to solve social issues based on profits earned from infrastructure transfer gains as well as maintenance and renewal.
⑦ P⑦´The national and local governments can use gains on the transfer of the operating rights acquired in the process ① to invest in new projects for solving social issues.

23

Role ofMD

Role ofMS

16 sales offices
outside Japan

55 dealers

298 sales offices
in JapanCollaboration with and Support for Business Partners
In addition to internal strengthening through M&A and the like, we will accelerate problem-solving in a wider range of areas throughbusiness alliances to supplement areas in which we are deficient, collaborative and joint technical development with partner companies
that share our strategies, and investment in business partners that understand our strategies. In addition to establishing long-term partnerships by enhancing our economic and human resources as well as technical support for cooperating companies, we will proactively
develop future partners through investment in promising venture companies.

Business Portfolio Management
In pursuing the enhancement and utilization of the strengths of “construction” and “de-construction” as well as promoting the expansion ofsegments and areas (enrichment), we intend to accelerate reforms through strict business portfolio management by INFRONEER Holdings
and through DX. We will evaluate each business by combining market growth potential with ROIC, and optimize the allocation of management resources based on timely and rational judgments and decision-making.

Corporate Data

④ Infrastructure investment multiplier effect is expected to improve the fiscal position of the national and local governments. It also brings additional benefits,
such as employment creation and building a stable basis of livelihood, as well as having a positive ripple effect on individual pensions and retirement benefits.

Making use of domestic and international sales offices and local business networks
built by the Group’s individual business companies in various regions, we facilitate
the sharing of sales information and referral of customers between companies, seeking
out new business opportunities.
We use the existing networks of Group companies to obtain a foothold in carryingout global business development in new regions, ensuring efficient market expansion
with minimized risks.

Role ofMK

Sustainability

INFRONEER will promote the strategy of taking investment risks to develop infrastructure projects to generate long-term returns basedon its engineering capabilities for building and infrastructure construction by engaging in a comprehensive range of processes from planning,
design, construction, operation, maintenance, and management. This strategy is expected to produce a number of benefits as follows inalignment with the chart above.

Utilizing Regional Networks of Business Companies toCreate Synergy throughout the Group

Role ofMS

Growth Strategy⑦´ Reinvestments

Private sector(Public-private partnership business, private-sector business)Role of
MD

Business Models

Take on new challenges to address social issues through capital recycling

MK: MAEDA CORPORATION
MD: MAEDA ROAD
MS: MAEDA SEISAKUSHO

Role ofMK

After shifting to holding
company structure

We are aiming to establish business as an integrated infrastructure service company to implement these business models effectively and ensure a highly profitable and stable revenue base, with an eye to addressing social issues associated with infrastructure while achieving our sustained growth.
We believe this will enable us to contribute to solving social challenges relating to the entire nation, such as pension financing,in addition to infrastructure-related issues.

Previously, the major business companies of the INFRONEERGroup faced constraints, particularly related to resource efficiency, when tackling social challenges individually. To remedy
this situation, the three companies decided to shift to theholding company structure so that MAEDA CORP., MAEDA
ROAD, MAEDA SEISAKUSHO, and INFRONEER Holdings could
demonstrate team synergy throughout the Group.
INFRONEER is responsible for medium- to long-term strategy planning for the entire Group, ensuring stable capitalthrough IR activities, and enhancing our business portfolio
through effective capital allocation. Furthermore, with a focus
on business management based on growth and capital profitability, we aim to build a system that achieves Group-wide
added value and ROE goals through timely decision-making.
In addition to being able to focus on their own core businesses
as well as operating autonomously, the companies will accelerate collaborative participation in high-compatibility businessareas that had previously been difficult for individual companies, and improve corporate value for the entire Group.

Before shifting to holding
company structure

We transfer equity stakes to pension funds and other investors while continuing to engage in the operation, maintenance, and management of
infrastructure that increases its added value over time and generates stable returns, with the aim of revitalizing the infrastructure investment market.

Synergy = Expansion x Centralization(centrifugal force and centripetal force)

Top Message

Based on our engineering capabilities and financial know-how, reinvestments entail creating a capital flow from taking risks to invest in an infrastructuredevelopment project, constructing facilities, and managing the project to be able to generate long-term returns. The project is then transferred principally to pension funds, which pursue stable investment performance, with the goal of using gains on the transfer of the project to invest in new projects.

To achieve perpetual growth of the entire Group, we have set the medium- to long-term goal of becoming an
integrated infrastructure service company. Toward this end, we are taking on the challenge of transforming toa business model that enables us to maintain stable and high profitability continuously by expanding businessareas while leveraging the strengths of the three business companies in operating existing businesses. We arepromoting this endeavor with Group companies, cooperating companies, and co-creation partners, with theaim of realizing our vision of creating “a world where there’s no limit to what can be asked from and what canbe delivered by infrastructure services.”

Value Creation Story

INFRONEER’s Competitive Advantages

24Chapter 3 Business Models

INFRONEER’s Primary Stakeholder Communication Channels

Stakeholder

For other articles on stakeholder dialogues and opinions in addition to the following, visit the sustainability page of our website at:

Major Dialogues

25• Investor presentation 
Quarterly• Issuance of financial reporting/quarterly reporting 
Quarterly• Issuance of the integrated report 
Annual• Corporate governance report 
As needed• Information disclosure on the IR website As needed• Information disclosure to ESG ratings agencies 
As needed• Visiting and having individual interviews with institutional investors inand outside of Japan 
As needed• Small meeting with investors As needed• Ordinary general meeting of shareholders 
Annual• Issuance of the investor newsletter 
Semiannual• Ensuring transparency of management processes,
enhancing governance• Timely and appropriate information disclosure• Appropriate shareholder returns• Improvement in corporate value• Building relationships of trust through proactive dialogues

Be aware of being a member ofthe local community, have communication with each community
on an ongoing basis, and carryout various activities to solve
social and regional issues. Formpartnerships with NPOs andNGOs to promote collaborative
projects to contribute to solvingsocial issues.

• Cooperation with economic organizations and trade organizations  As needed• Dialogues with NPOs and NGOs 
As needed• Cooperation with international initiatives 
As needed• Dialogues with municipalities and local communities 
As needed• Town meeting with local residents 
As needed• Offering site/facility tours As needed• Information distribution via industrial newspaper and other media  As needed• Cooperation/sponsorship for social contribution activities  As needed• Support to post-disaster reconstruction efforts 
As needed• Sponsorship and hosting events for sports promotion, regional revitalization,and SDGs-related activities 
As needed• Contribution to local communities, mutually beneficial
relations with local communities• Solutions to issues faced by each community• Improving employees’ awareness of CSR through encouraging their participation in social contribution activities

Accurately grasp needs of customers, challenge conventional
infrastructure business models,and offer optimal services andinnovative solutions to customers around the world, thereby
winning the trust of society.

• Customer satisfaction survey (construction performance evaluation score)
As needed• Day-to-day sales activities 
As needed• Regular meetings (for construction projects) 
Periodical• Inspection of buildings Periodical• Trade exhibitions and events 
As needed• Issuance of PR magazines, etc. As needed• Information disclosure through the website As needed• Collecting user feedback via telephone and website As needed• Issuance of the integrated report 
Annual• Provision of optimal infrastructure services• Safe and secure social and local environment• Sustainable social and local development• Solutions to issues faced by customers• Appropriate management of customer information

Implement Group-wide humanresources recruitment and development strategies, with the aimof promoting sustained growthof individuals and organizations.

• Information distribution via “talentbook” and Instagram (Group common)
At least twice a month• O ffering company tours, site tours, and internship programs forstudents (jointly by three business companies) As needed• Providing student loan repayment support programs as a way to increase employee engagement (MAEDA ROAD)

Up to 120,000 yen per annum• Providing scholarship programs for overseas students of civil engineering(MAEDA ROAD) 
Every year
• Joint research with local schools and support through support groups(MAEDA ROAD and MAEDA SEISAKUSHO) 
As needed• Improving the quality and quantity of the recruiting basethrough increased name recognition and understanding of the
INFRONEER Group among existing and potential job seekers• Offering a solution to the social issue of outstanding student
loans while providing economic support to applicable employees of the company and increasing their engagement• Tackling workforce shortages in the constructionindustry and ensuring recruitment and developmentof engineers for the company• Promoting industry-academia collaborative R&D and emphasizing the significance of this activity when carrying out
recruiting activities to arouse the interest of students in thecompany• Awards program for cooperating companies 
As needed• On-site safety education 
As needed• Study sessions on quality management for cooperating companies
As needed• Successor training programs As needed• Support for recruitment activities 
As needed• Website operation of and support for Team-Z (network of cooperatingcompanies) As needed• Holding online exhibitions As needed• Making facilities of ICI Center available for public use As needed• Conducting supplier evaluations on an ongoing basis As needed• Setting up whistle-blowing channels As needed• Implementing measures to achieve a safe workplace(including those for foreign national workers [multilingual safety education programs and multilingual posts])• Fair evaluation of technical skills and for career development (career path program; internal technicalqualification program)• Development of future workers• Promotion of co-creation projects• Addressing issues related to legal compliance, humanrights, and the environment throughout the supply chain• Holding town meetings (at 13 locations) 
Annual• Holding philosophy dissemination sessions As needed• Conducting joint new employee orientations 
Annual• Self-evaluation and reporting 
Semiannual• Conducting ES surveys and publishing survey results 
Annual• Setting up whistle-blowing channels As needed• Collection and distribution of management information via the Group websiteAs needed• Online distribution of investor presentations to all officers and employeesQuarterly• INFRONEER Group’s group newsletter 
Annual• Expanding the lineup of benefits eligible for employees’ families  As needed• Development and utilization of human resources• Appropriate personnel evaluations (revision of evaluation systems)• Improving corporate culture (promoting teleworking,introducing free-seating office)• Providing diverse workstyle options, supporting
work-life balance• Creating a safe and comfortable workplace environment• Health promotion and maintenance of employees,
prevention of mental health disorders• Legal compliance, respect for human rights, etc.

• Regularly disclosing data on environmental impact (issuance of integrated report, etc.) Annual• Development of ecological technologies and products As needed• Activities and donations through “dividends for the Earth”  As needed• Cooperation/sponsorship for social contribution activities  As needed• Dialogues with NPOs and NGOs 
As needed• Internal eco point system "Me-pon" As needed• Compliance with environmental laws and regulations• Response to climate change• Building a circular society• Biodiversity conservation• Provision of ecological products (LEAB, bio heavy oil, etc.)

Proactively recruit industry-readyprofessionals and enter new
business areas in a timely manner.

Promote activities jointly to address
issues related to health and safety as
well as quality while fostering partnerships and building relationshipsof trust. Make joint efforts to secure
employment of future workers.
Engage in free and equitable competition and fair business transactions
while promoting efforts to solve environmental and social issues throughout
the entire supply chain, thereby
solidifying relationships of trust.
Respect the individuality of each
employee and create an appropriate workplace environment andcompany systems to promote diversity and increase job satisfaction.
Develop mindsets for challenging
the conventional way of thinking
and having an out-of-the-box
way of viewing things to makechanges as a way to achieve
corporate growth.
View the Earth as an important
stakeholder and work to support
people’s rich and safe lifestyles
through infrastructure service,aiming for sustainable development of the company and society.

Corporate Data

Simon SomervillePortfolio manager of Japanese equities
Marathon Asset Management LP (U.K.)

Earth

As an investment management firm, we at Marathon Asset Management have maintained regular meetings with MAEDA Corp. at their respective offices in London and Tokyo since before the company became
INFRONEER Holdings. We have high regard for INFRONEER as one of the Japanese companies that are
evolving with an eye on the future, including management’s focus on the growth areas of concessions/PPP
and renewables. The most recent news that the company is starting a group-wide Employee Share Ownership
Plan is a progressive initiative.

Ensure sustainable growthand medium- to long-term
improvement in corporate value
by holding constructive dialogues
and reflecting their requests inmanagement.

Sustainability

Investors

Employees and their families

inner

Stakeholder Remarks

Reflection in management processes andbusiness activities

Growth Strategy

Visit the Infroneer AtoZ page at: https://www.infroneer.com/en/company/atoz/

We organized the national
conference of female employees in the construction sector,
which was attended by 158
female employees. The event
ran a number of programs,
such as reports on employment situations and company systems; briefings on duties and career paths of various job categories, given by representatives of eachjob category; a panel discussion; and lectures by Outside Director
Murayama to discuss on the theme of “what should be aimed at bydiversity and inclusion initiatives.” We will continue working to createa workplace environment befitting a diversity-orientated employer.

Major engagement opportunities

Business Models

Employees

Cooperating companies,
alliance partners

In commemoration of our firstissue of the integrated reportin FY2022, we held a discussion inviting Professor Shoichi
Tsumuraya from Hitotsubashi
University’s Graduate School of Business Administration to talk about
the essential purpose and appropriate systems of corporate information disclosure. To improve our corporate value utilizing objective evaluations of experts, we aim to increase stakeholders’ understanding andengagement by presenting our views and directions. The company’s
website posts past dialogue sessions with experts, which are madeavailable from the corporate communications archive Infroneer AtoZ.

New hires and their families(recruitment)

Local Community(University)

We hosted seminars forindividual investors in Tokyo,
Osaka, and Nagoya, thethree major cities in Japan,
attracting a total of 521
participants over three days.
The seminar gave a onehour presentation on the earnings summary and future strategies
of INFRONEER. We provide IR information to individual investors
in a meticulous way to correct information asymmetry and aim toincrease the appetite of such investors, which constitutes a driver forstabler and higher share prices.

Customers

FBS and MAEDA CORP. formeda joint venture to undertakea contract for comprehensive management services,
including maintenance andmandatory inspections, for public facilities owned by Joso City, Ibaraki
Prefecture, and started operations in April 2020. Subsequently, thejoint venture and the Joso City Office had a number of study sessions
on the management of public facilities and infrastructure. As a result,
INFRONEER Holdings and Joso City signed a comprehensive cooperation agreement in September 2022 to improve civil services by utilizing
public facilities and infrastructure functions. We will continue with dialogues with the city office with the objective of offering value in termsof a safe and secure social and local environment and sustainability.

Investors
Local communities

Local Community(Municipality)

Policy(INFRONEER’s responsibilities,
stakeholders’ expectations)

Top Message

outer

https://www.infroneer.com/jp/sustainability/ (in Japanese)

Investors, ratings agencies(loyal shareholders)

To achieve our goal of creating “a world where there’s no limit to what can be asked from and what can bedelivered by infrastructure services,” it is important to conduct appropriate information disclosure and stakeholder dialogues. We have had dialogues and communication with stakeholders in various ways, and will continue to do so to maintain good and smooth relationships and build relationships of trust with stakeholders.
Based on such relationships, we will encourage joint efforts to pursue common benefits and create long-termvalue, thus contributing to generating social value.

In recent years, there has been a rise in public expectations for businesses to address social issues, which have been increasingly
becoming complicated and severe. To accurately understand these social expectations and promote initiatives aimed at achievinga sustainable society, we strive to ensure effective communication with stakeholders while building relationships of trust. The
following is an excerpted list of our major means of communication with stakeholders.

Value Creation Story

Stakeholder Dialogue

26

Chapter 3 Business Models

Important Themes
To identify material issues, we have extracted, compiled, and evaluated important themes related to the entire Group.

We have identified the following six materiality issues to quickly promote and implement initiatives to solve
social issues as well as to improve corporate value and contribute to society as a whole permanently by pursuingand offering added value on an ongoing basis.

Identifying Issues for Our Materiality Assessment

Reducing greenhouse gas emissions across the entire value chainImproving the working environment and conditions of workers/
promoting safety and healthIn FY2022, after transitioning to a holding company structure, INFRONEER set up a Sustainability Committee comprised ofrepresentatives of the three business companies. To add to discussions undertaken by management and by the Board of
Directors, INFRONEER asked committee members, who work in a variety of fields at the three business companies, to discuss
solutions to social issues and identify specific material issues that should be addressed over a period of roughly six months.
To give our stakeholders a broader understanding of the challenges surrounding infrastructure and the activities of
INFRONEER, the material issues have been summarized in the form of simple and easy-to-understand expressions. We have also
been careful to clarify the links between our business plan, each business segment, and the priority issues. In view of changes inthe environment and the views and expectations of our stakeholders, we will continue to review and identify the issues that arematerial to our business through discussion.

Reducing use of raw materials derived from fossil resources

Promoting diversity in the workplace and expanding career
opportunities

Reducing the environmental impact of manufacturing plants

Prevention of illegal work/forced labor (support for foreign laborers)

Conserving biodiversityImproving understanding of human rights and preventing violations

Improving the utilization rate of recycled materials and working toachieve zero waste

Enhancement and promotion of education and training

Management and proper disposal of hazardous substancesPromoting disaster prevention and mitigation

Appropriate management of water resources

Strengthening governanceReducing emissions of harmful substances into the atmosphereObservance of compliance and prevention of unfair competitionand corruption

Management of specific chemicals in building materials

Information security

Promoting construction methods and the development, sales, andconstruction of products that contribute to improving functionality
and comfort (buildings, bridges, tunnels, roads, dams, and others)Customer privacy

Promoting design, construction/development, and manufacturingof (respectively) construction methods, technologies, and productsthat save labor and contribute to efficiency on the construction sitePromoting support for ESG across the entire supply chain

Expanding our infrastructure management business contribution tosolving social issues (through the concession business)

Strengthening of risk management

Value-creating human capital and mutual respect

Strengthening governance

Extracting material issues
Value chain analysis

Stakeholder analysis

Mega-trend analysis

Requests and obligations
for the future based on
business plan
PLAN

Management/
business analysis
Risk analysis

Integrating criticalsustainability themes for thethree business companies

Requests and obligations
according to current project
FACT
Extracting criticalsustainability themes bybusiness company(segment)
P. 28

Other requests from society
Stakeholders + α

Weighting based on
assessment of social andenvironmental impact +financial impact assessment
Grouping of themes andconcepts
Identifying risks
and opportunities

Identifying
material issues

Specific action
KPIs

Value creation

P. 29

P. 28

Implementing SDGs and VMVIn addition to the relationship between individual material issues and the SDGs, INFRONEER, as a provider of infrastructureservices, also links its own VMV to the SDGs. Our mission (MISSION) is to create value directly and indirectly throughinitiatives, business content, domains, and value chains (VALUE), as well as to identify what society as a whole can achievethrough our initiatives and businesses (VISION).
VisionOur Mission

Value
The Value We Promise

A world where there’s no limit to what canbe asked of and what can be delivered byinfrastructure services.
We challenge the status quo of existing
infrastructure businesses and deliver the mostsuitable service globally with innovative ideas.
Safety, security, and sustainability of oursociety and local communities.

Risks and Opportunities
For the 29 important themes, we examined the risks and opportunities for the entire Group and each business company andevaluated their importance. We examined these as part of our long-term management policy and identified the corresponding
management issues.
The management issues identified were studied and debated by the Group’s management team and directors, including outside
directors, and issues of particular importance were designated as such by the Board of Directors.

Corporate Data

MissionOur Vision for the Future

Ensuring the safety and quality of buildings, structures, andproducts

SustainabilityImproving public benefit for local communities/preferential inregion procurement

Building a society that is conscious of protecting our environment

Growth Strategy

Promoting design, construction, and manufacturing of (respectively)
construction methods, equipment, and products with reduced
environmental impact (ZEB, wooden construction, geothermal, and others)

Strengthening value chain

Building a society that is proactively conscious of the environment

Business Models

Strengthening collaboration with partner companies/strengtheningof supply capacities and improving productivity

Top Message

Generation of electricity using renewable energy and constructionof power generation facilities

Creating a safe, secure, and more comfortable society

27

Important Themes

Value Creation Story

Materiality and KPIs

For details on risk management, see page 47.
For risks and opportunities, visit our website at: https://www.infroneer.com/jp/company/integrated_report/materiality.html (in Japanese)28

Chapter 3 Business Models

Materiality & KPIs

Materiality

Sub-issues

Enhance portfolio and increase
profitabilityE arn high ratings from customers (quality, safety, functionality,
comfort, and value-added
proposals)

Operating profit ratio between “construction” and“de-construction”: 50:50

80:20<Building construction> Customer satisfaction
survey: 80 points or higher out of 100 points

Survey started fromFY2023<Civil engineering> Construction performance rating:
80 points or higher out of 100 points

82.4 points<Road civil engineering> Customer satisfaction
survey: 80 points or higher out of 100 points

Construction: 88.0
Product: 85.5

<Machinery> Customer satisfaction survey: 4 or higher
on a 5-point scale

546,000 MWh/year(546 GWh /year)

Design and construction ratio (building construction)
70% (3-year average)

66.5% (3-year average)

Improve the supply capacity ofpartner companies and train
workers
E nhance labor productivity,
efficiency, and optimization on
the construction siteAccelerate development of certified technologies and productsthat save labor and contributeto an efficient construction site

Net sales of completed construction contracts perperson¥137 million/person (civil engineering)¥153 million/person (building construction)

ROIC is being formulated
Early formulation of certified technical standards
In preparation

20%

Rate of local employment
in SPC employees hired
for concession projects
operated by MK 56.5%
Business registration
rate: 73%
Registration rate oftechnicians: 71%
Registration rate at theregistration site: 100%
¥106 million/person(civil engineering)¥105 million/person(building construction)

5.3%

－

Reduce greenhouse gas emissions
across the entire value chainIntroduce non-fossil fuel certificatesto the entire company
Reducing greenhouse gas
emissions across the entire
value chain
Reducing use of raw
materials derived fromfossil resourcesImproving the utilization
rate of recycled materials
to achieve zero waste
Conserving biodiversity

Reduce greenhouse gas emissions
from plants
R educe waste in new construction
projects
Reduce waste at plants significantlyImprove the utilization rate of recycled materials in new construction
projects
Establish a management systemfor biodiversity conservation
 evelop preservation technology
Dfor biodiversity
Continue forestry activities anddevelopmentE ducation for the Group’s
human resources strategy(increasing and improving
training)
Improving the working
environment and conditions of workers/promoting
safety and healthPromoting diversity in theworkplace and expanding
career opportunities/
improving understandingof human rights andpreventing violations
Prevention of illegal work/forced labor (support forforeign laborers)B uilding an effective
governance system bservance of complianceOand prevention of unfair
competition and corruption
Information security
Customer privacy
Strengthening of risk
management

Give each employee the full training
requiredImprove rate of leave utilization forfamily reasons and the like
Ensure appropriate working hours
 aintain physical and mentalM
health of workers
Create an attractive workplaceImprove the employment rate ofpersons with disabilities, female
employees, and skilled female
employees
E nsure that all employees respecthuman rights and can makeappropriate decisions and takeappropriate actions
C ontinue to ensure legitimate working conditions for all foreign workers
employed on construction sites
Form a Board of Directors with amajority of outside directors
Operate the Nomination Committee, Compensation Committee, andAudit Committee
Promote ESG initiatives under theleadership of the Sustainability
Committee
Build a governance system that canbe trusted by stakeholders
Reduce the number of serious legal
violations to zeroEliminate serious information
security breaches
Eliminate customer data breaches
Operate an effective risk management system

Scopes 1 and 2
40% reduction by FY2030
Substantially zero emissions by FY2050–15.7％

Scope 2
Utilization rate of renewable energy (electrical
power)
RE60 in FY2030
RE100 in FY2050

55.4%

Scope 340% reduction by FY2030–47.6％

Waste discharged from new construction projects
Improve compared with previous fiscal year/total
amount basis

See page 61 for results inprevious fiscal year.

Usage rate of recycled materials in new construction projects
Improve compared with previous fiscal year/total
amount basis
Amount of dividends for the Earth to contribute tomaintaining biodiversity and ecosystem service
Increase from previous fiscal year

Improve employee engagement by building a
corporate culture and system in which diverse
personnel play an active role
Strengthen our advantages and create moreroom for us to grow (weaknesses) (Feedback
and implementation of measures)
Improve the employment rate of female
employees
Increase from previous fiscal year
Zero major accidents
Reduce frequency rate
Keep frequency rate below 0.6 up to FY2030 (MK)Implement human resource training to improve
individual skills
100% participation in required training

17.3%
Frequency rate: 0.56
Strength rate: 0.42

97.9%

Strengthen the governance function by introducing
a Nomination Committee into the company system
Outside director ratio: 50%

Outside director ratio:
55.5% (5 people/9 people)

Appoint independent outside directors aschairpersons of the Board of Directors andof the Nomination, Compensation, and Audit
Committees

Appoint independent outside
directors as chairpersons of
the Board of Directors and of
the Nomination, Compensation, and Audit Committees

Implement PDCA under a Sustainability Committee led by the president

Number of Sustainability
Committee meetings held: 2

Corporate DataA ppropriate allocation of management resources by maximizing operational efficiency andminimizing SG&A expenses
through economies of scale

Construction career advancement system site
registration rate for FY2023: 100%

* To be completed by September 2024

29

FY2022 Results

Sustainability

Promoting design, construction/
development and manufacturingof (respectively) construction
methods, technologies, andproducts that save labor andcontribute to efficiency on theconstruction siteE xpand local recruitment rateof locally based employees andintra-regional orders

Active employment of local human resources

600 t-CO2/year

Strengthening Governance P. 45

Strengthening value chain

Productivity reforms P. 37

Strengthening collaboration
with partner companies/
strengthening of supply capacities and improving productivity(hiring and training of workers)

KPIs (Targets for FY2030)

Growth Strategy

Amount of carbon fixed by adopting wooden structures and buildings
2,000 t-CO2/year

ZEB adoption rate for non-residential design andconstruction projects
40%

Improving public benefit for
local communities/preferential
in-region procurement

2030
Medium- to Long-term Goals(Achievement Vision)

Business Models

S trengthen efforts for designand construction facilities that
contribute to realizing carbon
neutrality

Develop facilities generating cumulative total of
1 million MWh/year (1,000 GWh/year) of power

Value-creating Human Capital and Mutual Respect P. 53

Grow businesses involved inrenewable energy

3.4

Strengthening and improving our corporate culture P. 38

P romoting design, construction,and manufacturing of (respectively) construction methods,
products, and equipment that
reduce environmental impacts(ZEB, wooden construction,and others)

Sub-issues

Reduce greenhouse gases (Compared to FY2018)P romoting disaster prevention
and mitigation

 enerating electricity usingG
renewable energy sources andconstruction and operation of
power generation facilities

Materiality

Top Message

Promoting construction methods
and the development, sales, andconstruction of products that
contribute to improving functionality and comfort (buildings,
bridges, tunnels, roads, dams,
and others)

Three
Strategic
Pillars

FY2022 Results

Building a society that is conscious of protecting our environment P. 49

Ensuring the safety and quality of construction (buildings,
bridges, tunnels, roads, dams,
and others)

KPIs (Targets for FY2030)

Strengthening business foundation

Building a society that is proactively conscious of the environment

Establishing a new revenue base P. 38

Solving social issues through our infrastructure services business

Creating a safe, secure, and more comfortable society

Expanding our infrastructure management business
contributing to solving social
issues (through the concession
business)

2030
Medium- to Long-term Goals(Achievement Vision)

Value Creation Story

Three
Strategic
Pillars30

Chapter 3 Business Models

Domestic and International Bases (Manufacturing Capital)

Among the various types of business foundations that constitute a source of value creation, we attach particularimportance to the following six types: human capital; financial capital; business know-how; domestic andinternational bases; long-term partnerships; and natural capital. While enhancing each of these business foundations built up over many years, we are promoting their efficient and effective combination with the objectiveof facilitating sustainable development of society and the Earth as well as the Group’s sustained growth.

Human resources who can create value through passion

No overseas base
28 domestic bases(1 head office, 27 branches, sales offices, and plants)
1 overseas base, 55 dealers
14 domestic bases (34 satellite offices)
3 overseas bases

The Group’s concept ofhuman capital

Co-creation

In the major segments of civil engineering, building construction, and road civil engineering, we form partnerships with many specialized
construction companies. For this purpose, we mobilize our large network of cooperating companies, which are known for their established track record and trust and are capable of stable and high-quality performance. In the infrastructure operation segment, we expand
our business areas both upstream and downstream through forming international alliances with leading players in the relevant fields. In
the process, we have earned the trust of the client base, including government agencies, real estate companies, transportation infrastructure operators, and energy developers.

Value-creating capital that challenge andco-create with a sense of ownership(Times)

50
45
40
35

0.8
0.6

33.3

0.6

30
25
20

38.1

37.4

0.4

FY18

24.2

29.1

FY19

FY20

FY21

FY22

Civil engineering and building construction segment: Zenyu-kai (567 companies)
Road civil engineering segment: Kyoei-kai (95 companies), Rekiyu-kai (56 companies)

Alliance partners

Nippon Telegraph and Telephone Corporation, Tokyu Corporation, Accenture Japan Ltd,
Fukuoka Jisho Co., Ltd., GL events, AEG, Suez, Whole Earth Foundation, Macquarie Group Limited,and others

Customers

Government agencies, real estate companies, transportation infrastructure companies, energy
companies, and others

D/E ratio (right axis)

Consolidation and upgrading know-how accumulated by individual companies

For details of each business segment, see our website at: https://www.infroneer.com/en/company/ourbusiness.html

Treating the Earth as a valuable stakeholder
Because we are conducting business activities with the benefits provided by the Earth’s resources, we set aside 2% of our consolidated
net income as “dividends for the Earth” in the same concept as wepay dividends to our shareholders. We do not simply contribute funds
as a company but we also promote activities that actively involve our
employees and their families while collaborating with local communities and NPOs. We also administer the in-house eco point system“Me-pon” to visualize individual environmental activities.

Corporate Data

For 100 years, the three businesses companies of the INFRONEER Group have been involved in infrastructure businesses that support thegrowth and development of regional communities and society. To anticipate and respond quickly to the diverse infrastructure needs thatare changing with the times, each company has cultivated its engineering capabilities and expertise and acquired financial know-how
through engaging in challenging new projects. Enhancing these strengths, we have pursued mutual growth with regional communities
and society while improving our corporate value. Going forward, while endeavoring to further reinforce the major business domains―civilengineering, building construction, road civil engineering, infrastructure management, and machinery―we will realize synergistic effects
across the Group as an integrated infrastructure service company in a bid to challenge the status quo for the infrastructure.

Natural Capital

Sustainability

Equity ratio (left axis)

0.4

1.0
0.9
0.8
0.7
0.6
0.5
0.4
0.3
0.2

Cooperating companies(number of member companies)

Growth Strategy(%)

Partnerships for establishing business as an integrated infrastructure service company

Business Models

Challenge

Business Know-how (Intellectual Capital)

31

JM

226 domestic bases(13 head office and branches, 112 sales offices, 101 plants)

Long-term Partnerships (Social and Relationship Capital)

Financial Capital

As a challenger to the status quo for the future of our infrastructure, wewill promote aggressive, occasionally even risk-taking, investment policies.
For investments in new businesses, increasing financial leverage, principally through borrowings, is expected to raise a return on investment incomparison with equity. At the same time, we need to secure a soundfinancial base in order to ensure ongoing investment activities. For thispurpose, we will manage our D/E ratio, equity ratio and other financial
indicators, while conducting financing activities appropriately according
to the situation based on good relationships with our financial institutions
and investors.
For specific financial data, see page 59.

MAEDA
SEISAKUSHO

15 overseas bases(As of March 2023)

Value-creating
human resources

For details of value-creating human resources, see page 55.

Offensive and defensive financial management

MAEDA
ROAD

44 domestic bases(16 head office and branches, 28 sales offices)

Sense ofownership

We are working on the continuous production of value-creating human resources
who can attain professional growth through autonomous learning activities andvarious experiences and take the initiative in co-creation with various partners inpursuit of business success. We are also striving to promote workplace diversity
and engagement by improving our recruitment competitiveness, nurturing humanresources through various opportunities, and fostering an employee-oriented
corporate culture that pursues higher work motivation and satisfaction.


In addition to the headquarters of each business company
in Japan and overseas, INFRONEER has its own base andregional network that realize comprehensive responses
such as our sales offices for MAEDA ROAD and the satellites(franchise companies) of JM (a 100% subsidiary of MAEDA
CORP.). We aim further to strengthen our business base andensure our competitive advantage by utilizing and collaborating with this regional network.

MAEDA
CORP.

Top Message

Human Capital

INFRONEER bases and regional networkthat realize comprehensive responses

Value Creation Story

Six Business Foundations to Support Growth

For details on “Me-pon,” see page 52 or visit our website at:https://www.infroneer.com/jp/sustainability/environment/ (in Japanese)32Chapter 4 Growth Strategy

Chapter 4

Growth Strategy

Executive Officer responsible for Financial Strategy

Capital Strategy and Return Policy / FY2022 Results and Forecasts
INFRONEER Medium-term Vision 2024

(Medium-term business plan until fiscal year ending March 31, 2025)

Capitalefficiency

33

Shareholder
returnsAsset
efficiency

―

ROE

9.5%

10.3%

Equity ratio

30% or more

38.1%

D/E ratio

0.6 times or less

0.4 times

Dividend payout ratio

30% or more

39.7%

Purchase of treasury
shares¥40 billion

or more by FY2024¥30 billion

by FY2021 andFY2022―

Annual dividend per share of ¥55 for FY2022

Expected to purchase ¥10 billion in FY2023

Total return ratio

―

69.5%

FY2022:
Dividend payout ratio (39.7%) + Purchase oftreasury shares (27.8%) + Dividends for the
Earth (2.0%)
Intend to pay interim dividends from FY2023

Cross-shareholdings /net asset ratio

20% or lower

19.8%

Approximately ¥8 billion sold in 4Q for a total of¥21.3 billion sold for the full year in FY2022
FY2022 3Q: 22.6% ➡ FY2022 4Q: 19.8%

Sale of owned assets

Corporate Data

The most important task I am committed to as theexecutive officer responsible for finance is to ensure
appropriate financial management to support theachievement of the ongoing INFRONEER Medium-term
Vision 2024 and thus ultimately improve corporate
value. I place particular emphasis on advancing the implementation of the capital policy and return policy asplanned to meet our commitment to our stakeholders.
In FY2022, our business performed well, chiefly owing to the completion of large projects, orders received
for design changes, and the sale of the wind powerbusiness, resulting in increased sales and profit year
on year. Full-year net income for INFRONEER and

MAEDA CORP. combined set a record high. As such,
INFRONEER Holdings has seen its business perform
solidly since its establishment.
In FY2023, while we are adopting IFRS reporting for
year-end settlement, we are expecting to see an increase in operating profit from FY2022 under the Japanese GAAP standard.
One major financial challenge is accommodating thehigh levels of demand for capital for an array of investment programs planned for this fiscal year and onward.
Such programs include new business creation, humanresources development, and IT implementation for thedigital transformation of business processes. In response,
we are pursuing appropriate fund procurement to reduce
capital costs. I am especially looking at reducing liability
costs by making use of low-interest loans as a measure toensure stable financing operations in the future.

Notes

Sustainability

Implementing Appropriate Fund
Procurement to Respond to HighLevels of Demand for Capital

Optimalcapitalstructure

FY2022 results

Growth Strategy

Joined MAEDA ROAD CONSTRUCTION Co., Ltd. in 1986; served as theManager of the Accounting Section at the Head Office and the General
Manager of the Accounting Department; in April 2019, became the
Executive Officer, Deputy General Manager of the Administration Divisionand the General Manager of the Accounting Department. In October 2021,
became Executive Officer of INFRONEER Holdings.

Recognizing the importance of financial discipline, we
adopt the optimal capital structure as the key financial soundness indicator and have set our target for
equity ratio at 30% or more and for the D/E ratio at
0.6 times or less, in accordance with the INFRONEER
Medium-term Vision 2024. In FY2022, results for theabove indicators were 38.1% and 0.4 times, respectively,
achieving the target for each. Furthermore, return on
equity (ROE) in FY2022 was 10.3%, which more thanachieved the target of 9.5% set under the INFRONEER
Medium-term Vision 2024.
INFRONEER Vision 2030 (Medium- to Long-term
Business Plan) includes growth-phase targets of operating profit of ¥100 billion or more, net profit of ¥70
billion or more, and ROE of 12% or more, to be achieved
by FY2030.
The Finance Strategy Department has formulated four
key policies to facilitate productivity reforms by max-

Business Models

Ryuji Endo

Pursuing Offensive andDefensive Investment Strategies to
Maximize Added Value
Top Message

Meeting Capital Demand for
Future Growth Investment toEstablish Japan’s First Integrated Infrastructure Service
Companyplanning an additional purchase of ¥10 billion.
As described above, results in FY2022 exceeded initialplans for each area of capital efficiency, shareholder return, and asset efficiency. Based on these strong results,
we will strive to maintain the momentum for sustainablegrowth, promoting group-wide efforts in order to ensure
an optimal portfolio and balance sheet.

Value Creation Story

Message from Chief Financial Officer

In the financing sector, demand for ESG-linked corporate
bonds and borrowing products has recently been increasing. The INFRONEER Group has already been engaged in
ESG initiatives, having issued its first green bond in 2022.
Going forward, we will positively consider the possibilityof various sustainable financing options, including green
bonds, with a view to slashing liability costs.
We strive to maintain an optimal portfolio and balance
sheet to be able to respond to high levels of demand
for funds while also working to increase asset efficiency as stated in the INFRONEER Medium-term Vision
2024. In FY2022, we worked vigorously to sell off ourcross-shareholdings, completing the divestment worth
more than ¥20 billion. As a result, cross-shareholdings
as a proportion of net assets declined to 19.8%, achieving the target of 20% or less set in the INFRONEER
Medium-term Vision 2024 two years ahead of schedule.
We will continue to work on reducing cross-shareholdings
while also conducting validity reviews.
We also address issues related to the efficiency ofowned assets, particularly the sale of assets. In FY2022,
we sold off two properties owned by MAEDA CORP. In
FY2023, we will continue with relevant activities for examining the validity of our owned assets including holdings of other business companies to identify inefficient
assets and take appropriate disposal steps, including
sell-off.
With respect to the shareholder return policy, we acquired ¥10 billion of treasury shares in FY2022, followinga ¥20 billion acquisition in FY2021. In FY2023, we are

Carefully examine the status of use of the Group’s owned assets and the like, and consider
selling or integrating inefficient assets

34

Chapter 4 Growth Strategy

By carrying out plans and strategies as described above,
I believe INFRONEER Holdings will be able to receive ahigher evaluation from shareholders and investors. The
Tokyo Stock Exchange recently issued a request for its
listed companies with a below-par PBR to disclose andimplement improvement measures. In response, weare striving to address the immediate issue of attaining
targets for financial indicators while also adhering to thepolicies on capital efficiency and shareholder returns.
The Group has raised its PBR to above one*. We willcontinue working to achieve targets for key performanceindicators, including ROE, with a view to improving theequity spread.
* As of August 31, 2023

Sustainability
Corporate Data

As one of the return policy measures, we have set thegoal of acquiring at least ¥40 billion of treasury shares
by FY2024. At present, an acquisition worth ¥30 billion
has been completed and we have announced the plan
to complete an additional purchase of ¥10 billion within
FY2023, one year ahead of schedule. As in the past, we
will continue to carry out the shareholder return policyof proactively offering payouts to the extent possible
according to the situation. I believe this will allow us toobtain greater investor support and approval.
The dividend payout ratio target has been set at 30%
or more. Recent past ratios have been remarkably highat 42.2% in FY2021 and 39.7% in FY2022. The ratio
for FY2023 is planned to surpass the past figures ataround 45.8%.
In October 2021, when INFRONEER Holdings wasestablished, the company announced to stakeholders
its plan to start the voluntary application of IFRS fromthe FY2023 year-end reporting. The primary objectiveof adopting IFRS is to boost the structural efficiency andmaintain the quality of financial reporting related to theGroup’s business management as well as to increase
suitability for comparative analysis of financial information in international capital markets.
One major advantage of adopting the IFRS is, in general terms, that it will make it easier for businesses toprocure funds from overseas and establish cross-border corporate partnerships. In addition, the shift awayfrom the Japanese GAAP will likely be accompanied by
an expansion in the scope of the balance sheet due toan increase in the number of consolidated subsidiaries
and the application of new lease accounting standards,
which will cause a substantial impact on ROE and other

Growth Strategy

35

While adopting various financing methods, we are considering the introduction of ROIC as a measure of our
profitability relative to the amount of capital invested byshareholders as well as the amount of value created inaddition to the possible effective use of the indicator.
One major challenge with using ROIC is that certain
areas of the Group’s business, such as construction andcivil engineering, have a funding structure that makes
them unsuitable for segment-based analysis, making
it difficult to apply unified rules conducive to using theindicator for the overall business. We are therefore considering the need to invent what would be called the
INFRONEER ROIC, a scheme specific to our company,
which takes into account added value. For this purpose,
we are studying calculation standards and methods todetermine those best suited to the Group and analyzing
study results to adopt an efficient mathematical formulation model.
To implement the INFRONEER ROIC, the Finance
Strategy Department needs to work with other related departments to create opportunities to explain thereasons and purposes for introducing the new indicator
to the business companies as well as all officers andemployees to ensure a full understanding of all thoseconcerned. The first and foremost objective is to raise
ROE, one of the major goals stated in the INFRONEER
Medium-term Vision 2024. I believe that the INFRONEER

Contributing to Improving
Corporate Value through Implementing
Financial Strategies

financial indicator figures. Currently, we are engaged
in transition work to prepare the IFRS balance sheet
format, and are moving forward with the required tasks
while considering the relevant impacts on financial indicators and steps to take to address the issues.
Financial statements based on the IFRS framework
will make it easier to conduct a comparative analysis of
the global competitive situation, attract buy-and-holdinvestors from overseas, gain higher market confidence,and reduce liability costs as a result.
I believe the transition to IFRS reporting will also havea notably beneficial role in promoting a global mindset to underpin our corporate vision—“A world where
there’s no limit to what can be asked from and what canbe delivered by infrastructure services”—and raising
the consciousness of all officers and employees. On thefinancial front, IFRS rules require that a goodwill impairment test be performed annually without necessarily
implying that amortization be conducted on a regularbasis. This, I think, may have a favorable effect on ourbusiness results.
I am firmly committed to carrying out financial strategies to achieve the INFRONEER Medium-term Vision
2024 and INFRONEER Vision 2030, our promise to all
our stakeholders. I will thus endeavor to wisely and proactively accommodate high levels of demand for capitalfor various programs, such as enforcing the capital policy
and return policy, creating new businesses, developing
human resources, promoting M&A projects, and implementing IT and DX initiatives.
To support the INFRONEER Group in accomplishing theaim of becoming Japan’s first integrated infrastructureservice company, I will make all-out efforts in my capacity
as chief financial officer while engaging in solving socialand environmental challenges through business activities.

Business Models

Calls for business enterprises to address ESG issues are
growing more insistent. In line with this trend, business-

Introducing ROIC
as a Value Creation Indicator

ROIC would be a useful indicator that could help businesscompanies carry out management strategies to achieve
the ROE goal. I would also suggest that ROIC be used asa key indicator for achieving INFRONEER Holdings’ goalof improved capital, and that it be taken into accountwhen considering plans for new M&A projects and entry
into new fields.

Top Message

Commitment to Sustainable Financees are expected to place more emphasis on improving
ESG and other non-financial performance in addition totheir pursuit of economic growth such as net sales andprofit—to rethink, in other words, their attitude toward
corporate value enhancement. Recognizing this situation, our Group has already been engaged in addressing
environmental and social issues through business activities, as exemplified by efforts to develop the renewableenergy business.
We will continue with these efforts and seek to improve our corporate value by promoting and expanding
businesses conducive to creating a decarbonized society
and building sustainable and autonomous local communities. This is our way of achieving the sustainable development of business and society, and we will pursue
sustainable finance in earnest to this end.
Sustainable finance represents the set of financial
mechanisms and initiatives set up to encourage efforts
to solve environmental and social challenges. In 2022,
INFRONEER Holdings issued its first green bond, which
received a “Green 1(F),” the highest grade under the JCR
Green Finance Framework Evaluation, conducted by
Japan Credit Rating Agency, Ltd. (JCR).
The purpose of issuing the green bond was bigger
than simply lowering the cost of financing. Rather, we
are also pursuing sustainable finance as an essential
financial strategy, based on the Group’s policy on promoting ESG activities.

Value Creation Story

imizing added value, optimizing administrative costs,
and promoting Group financial strategies.
The first policy is to ensure financial soundness by
maintaining the financial discipline to attain ROE targets,and to examine methods for increasing financial leverageby making effective use of interest-bearing debt.
The second is to compile the financial plans of individual business companies to create and manage an
overall financial plan for the entire Group. As a costcutting measure, we will apply CMS efficiently to raise
the efficiency of fund operations while reducing externalborrowings to reduce add-on interest rates.
The third is to consider a number of subjects basedon a summary of major accounting issues and practicaloperation guidelines, which were completed in FY2022
ahead of the shift to IFRS reporting. Business processreviews and system improvement for overall operations,
including those of business companies, as well as preparation of financial statements and disclosure policy are
the targets of such consideration.
The fourth is to dispose of surplus properties byworking together with business companies to identify
inefficient assets and arrange selling processes where
possible. Our intention is to reduce total assets throughappropriate sell-offs, with an eye to curtailing administrative costs, including general administrative expenses andfixed expenses, thus helping to improve corporate value.
Following these four policies, we will proceed with
operations to contribute to achieving the goals of the
INFRONEER Vision 2030.
For the purpose of achieving the goals for FY2030,
we are promoting the dual-approach investment strategy—“proactive” growth investment and “reactive”
permanent investment—to maximize added value, witha view to additional enhancement. Specific plans havebeen laid out to invest in a broad range of areas such as
the creation of new revenue bases, aggressive M&A, IT
and DX strategies, production facilities, and R&D. In the
INFRONEER Medium-term Vision 2024, concrete plans
were presented for two areas defined as the source ofour competitiveness, with the schedule and scale specified: spending of ¥36 billion in the infrastructure management business and ¥50 billion in M&A projects, overthe course of three years for each.
Our basic strategy for business portfolio development
is to expand the infrastructure business. We will help
enhance the portfolio by ensuring effective capital allocation to facilitate personnel transfer to the infrastructure management segment and promote M&A and alliance projects. One key approach is to use profits fromexisting segments to invest in expanding businesses in
the infrastructure field, aiming to become an integrated
infrastructure service company.

Together with members of the Finance Strategy Department

36Chapter 4 Growth Strategy

Establishing a New Revenue Base

(Medium- to Long-term Business Plan)Establishing a position
at home and abroad ininfrastructure services

Overview of INFRONEER Vision 2030

• Expanding concession projects in Japan and overseas• Building a system for new
business areas• Increasing availability payment contracts• Promoting DX/shared services• Improving productivity throughDX/shared services• Promoting M&A• Further promoting M&A

25

100

80.5

Operatingprofit59

57

40→Results
44.2

(8.3)
FY2022

FY2024FY2027

Transition to International Financial
Reporting Standards (IFRS) in FY2023

Progress of INFRONEER Vision 2030

FY2030Operating profit margin:

8.0% level

Operating profit*¥48.8 billion
Net income*Target for
FY2030Operating profit*¥100 billion
or moreNet income*¥44.2 billion¥70 billion

ROE

ROE

or more10.3%

12% or more

Dividend payout
ratio

Dividend payout
ratio

39.2%

30% or more

* Profit figures assume the application of
IFRS (including profit from sales, profits
from application of equity method, andM&A without amortization of goodwill) andtherefore differ from the figures provided in
the financial results report.

Productivity Reforms
Maximizing added value

Optimizing fixed expenses and administrative costs

Promoting Group financial strategy
We have introduced a group-wide cash management system (CMS), which has enabled us to improve efficiency in working capital management within the Group, bringing about a year-on-year reduction of ¥48 billion in short-term borrowings. Also, taking advantage ofpossessing the highest financial rating in the Group, INFRONEER undertakes the Group’s overall operations for raising external funds toreduce financing costs. We will continue striving for efficient fund management within the Group.

37

iOS:

Android:

Strengthening and Improvement of Corporate Culture
Promoting a Group human resources strategy―introduction of trust-type stock compensation to foster Group engagement
We have decided to introduce a new stock benefit trust (J-ESOP) to grant
our entire workforce of around 8,000―all regular and contract employeesof INFRONEER Holdings and Group companies―the right to acquire sharesof the company. This compensation will be offered in addition to current
salary, starting from FY2024. The new plan represents one of the many
incentive plans being considered to encourage employees to undertake
highly challenging tasks aiming to achieve lofty visions and goals as well as
reward their performance. Our rationale behind this is as follows: sharesof INFRONEER Holdings are an embodiment of the shared entity of theGroup and its corporate value, and by being offered to employees, they willplay a catalyst role in increasing the centripetal force of the organizationand fostering a sense of belonging to the same organization or a sense ofunity. To be more specific, we are looking to nurture employees’ mindset in
the following areas: “a sense of emotional attachment and closeness to theGroup,” “interest in business management,” “interest in the stock market,”and “consciousness of the Group’s profit.”For more details, visit our website at:https://www.infroneer.com/jp/news-article/2023/05/11/662.html (in Japanese)Strengthening governance

SharesSharesSharesShares

MAEDA CORP.

MAEDA ROAD

MAEDA SEISAKUSHO

SharesSharesSharesConsolidated companies

Consolidated companies

Consolidated companies

・Eligibility: all regular and contract employees of the Group (approx. 8,000)
・4% of the Group’s consolidated net income equally allocated to eligible
employees
・Also offered in recognition of childbirth and long service (decade milestone)of employees

Corporate Data

In pursuit of promoting shared services, we have established INFRONEER Digital Solutions Inc. (IDS) to improve business process efficiency
and outsource accounting and personnel affairs. While optimizing fixed costs and administrative expenses, we aim to create an environment
where employees previously engaged in these operations can be shifted to undertake more productive tasks.

We have launched a new data-driven infrastructure management business by investing a total of ¥2.0 billion in Whole Earth Foundation, which
has developed the user-based data collection app TEKKON. Our aim is toutilize infrastructure-related data collected by the tool and build a new
ecosystem connecting general citizens, infrastructure companies, andlocal governments through the app and cryptocurrency.

User-based data collection app TEKKON is available for download from the following site at:

Sustainability

Since INFRONEER Holdings was launched, we have won a growing number of contracts through concerted sales efforts of the three business companies. One such contract was undertaken jointly by MAEDA CORP. and MAEDA ROAD for the relocation of Asahi Breweries’
plant in Fukuoka (scheduled to reopen in Tosu City, Saga Prefecture, in 2026). This project constitutes a part of the new industrial area
development project led by Tosu City aiming for employment creation and economic promotion in the region. We will encourage thethree companies to share their knowledge with each other and ramp up concerted sales efforts to maximize added value.
At the same time, we will consider the possibility of global expansion, targeting regions where INFRONEER is likely to have the opportunity to make effective use of its strengths to suitably respond to local needs.

Further expanding business areas

Growth Strategy¥6.6 billion goodwill from
MAEDA ROAD TOB, ¥1.7 billion
amortization of machinery, etc.

Operating profit

70

10

FY2022
results

Business Models

Unit: ¥ billion

Net
50.5
income →Results
48.8
36

30

Since the establishment of INFRONEER
Holdings, we have begun to win a growing
14
14
260
number of contracts for public-private
partnership projects. As opposed to the7past practice of MAEDA CORP., MAEDA
86
ROAD, MAEDA SEISAKUSHO, and otherGroup companies conducting sales activities separately, the new group-wide
Before
FY22
FY22
FY23
Before
FY22
FY22
FY23
sales operation system organized under
shift
Q2
Q4
shift
Q2
Q4
the holding company structure has led
Concession projects: 5 in operation; 1 under construction
to an increased number of municipalities
Comprehensive private “construction” projects: 8 in service
with which the whole Group has businessconnections, resulting in a growing number of public-private partnership projects being undertaken by the Group.
Meanwhile, the Japanese government defines public-private partnership (PPP/PFI) as a key element of its “new capitalism” economic
policy and has announced its plan to expand the related framework significantly in the coming 10 years, increasing the budget from ¥20
trillion to ¥30 trillion and the target number of projects from 70 to 575. We will take advantage of this favorable opportunity to accelerate
our efforts to achieve further growth and solidify our market position.

Top Message• Pursuing Group synergy

Returns to remunerationaccording to performance

Growth phase

Number of projects undertaken

Number of municipalities with which
INFRONEER has connections

329

INFRONEER aims to become an integrated infrastructure service company that provides one-stop infrastructure management services
covering the entire process from upstream to downstream. To this end, we are promoting group-wide strategies, centering on the threestrategic pillars to address “productivity reform,” “establishing a new revenue base,” and “strengthening and improvement of corporate
culture.” The vision contains the phase for building bases for growth from FY2025 onward, setting out a range of targeted and specificinitiatives for pursuing Group synergy, building a system for entering new business domains, promoting DX and shared services, andpromoting M&A. According to this vision, we have set financial targets for FY2030 as follows: net sales of ¥1.2 trillion or more; operating
profit of ¥100 billion or more (operating profit margin of 8.0% level); net income of ¥70 billion or more; and ROE of 12% or more.

Base building phasePublic-private Partnership Undertaken after Shift to the Holding Company Structure

Value Creation Story

Overview and Progress of INFRONEER Vision 2030

For details of enhancing governance, see page 45.

38

Chapter 4 Growth Strategy

Management Roundtable among Three Business Companies

Masaaki Shioiri

President and Representative Director
MAEDA CORPORATION

President and Representative Director
MAEDA SEISAKUSHO CO., LTD.

Joined MAEDA CORPORATION in 1981; served as an
Executive Officer and General Manager of the Planning
Promotion Department of the Building Division from2010; became Director and Senior Managing Officer andGeneral Manager of the Building Division of the company
in 2017; became President and CEO of MAEDA ROAD
CONSTRUCTION Co., Ltd. in June 2020; became Directorof INFRONEER Holdings Inc. in June 2023.

Joined MAEDA CORPORATION in 1997; served as a
Director and Managing Officer from 2002; served asa General Manager of the Building Division and was incharge of Sales Promotion; served as President andRepresentative Director of the company in 2016; inOctober 2021, became the Director and Chairman of
INFRONEER Holdings.

Joined MAEDA SEISAKUSHO CO., LTD. in 1981;
served as an Executive Officer and General Manager
of Machinery Sales Department, Industrial Machinery
Division in the company from 2008; served as
President and Representative Director of the company
from 2013; became the Director and Executive
Officer responsible for Capital Investment Strategy of
INFRONEER Holding in October 2021.

39

For *1, *2, and *3, refer to the glossary on page 64.

INFRONEER Group’s UniqueStrength Derived from Networks andComprehensive Capabilities
Maeda: MAEDA CORP. is receiving increasing orders

Imaizumi: In future phases, it is vitally important that
MAEDA ROAD strive to expand its business areas, utilizing information to be shared under the integrated structure. As part of such efforts, we are currently engaged
in a project to provide services for the comprehensive
management of roads and other facilities in Fuchu City
(East District), which was launched in April 2021 by the
consortium formed by MAEDA ROAD, MAEDA CORP.,
and six other companies. Going forward, we will put
more focus on this business area, seeking to develop it
into the third pillar of our business along with construction and manufacturing. We are also looking to increase
our chances of winning a contract by cooperating with
MAEDA CORP. to offer joint proposals.
Shioiri: MAEDA SEISAKUSHO is also promoting technicalcapabilities development in cooperation with MAEDA
CORP.’s ICI Center. We are strongly aware of the need toproactively adopt new technologies to be able to provide
the machinery and equipment required for comprehensive
management and other forms of infrastructure services.
Maeda: As a successful demonstration of comprehensive
capabilities by the three companies, we jointly undertook
a project to build a private driving course in Minamiboso
City in 2022. While the project could not have been undertaken by a single company, we provided deliverables
with superior work quality and a shortened delivery time,
which was only possible by taking full advantage of thethree companies’ engineering capabilities. Going forward,
we will endeavor to build a substantial track record in collaborative undertakings by enhancing our comprehensive
capabilities, thus moving closer to becoming an integrated
infrastructure service company.

Group’s Common Cultural Principle
INFRONEER^ Provides a Guidepost for
Post-integration Development
Maeda: The Group’s common philosophy INFRONEER^(“INFRONEER Caret”) plays an important role in enabling the three companies to work together to promotebusiness.

Corporate Data

Maeda: MAEDA CORPORATION (“MAEDA CORP.”) has
been aiming to establish its business as an integrated
infrastructure services provider since even before thefounding of INFRONEER Holdings (“Holdings”).
Specifically, we have been pursuing “de-construction”
businesses such as concession projects and renewableenergy development, while at the same continuing to engage in “construction” business. It is my view that MAEDA
CORP. should assume significant roles and responsibilities
in promoting cooperation among the three companies forthe provision of integrated infrastructure services.

The “construction” business, a major segment of thebuilding construction business, is susceptible to economic fluctuations and external factors. Establishinga business model that ensures stable profitability has
been our long-term issue. For this reason, we have expanded into other areas related to renewable energy
development, infrastructure operation, PPP*1/concession*2, and comprehensive management services.
One major benefit of integrating the management
under Holdings is related to finance. The overall corporate
size has become sufficiently large to achieve economies
of scale so that we can delegate our entire financing
operations to Holdings.
Imaizumi: The concept of an integrated infrastructure

For “Establishing a position at home and abroad in infrastructureservices,” see page 38.

Sustainability

Synergistic Effect from Transition to theHolding Company Systemservice company as envisioned by Holdings represents
an ambitious undertaking. I anticipate that the Groupwill be expanding in the future from the current structure composed largely of the three business companies.
Each business company must work to fulfill our commitment to performance goals and achieve growth.
A m o n g t h e t h re e c o m p a n i e s , M A E DA R OA DCONSTRUCTION (“MAEDA ROAD”) has benefited mostfrom the synergies generated. We receive support from
MAEDA CORP. for securing human resources and IT
system implementation. We also receive assistance withsales operations, such as referral of customers and information sharing, which has led to a significant increasein orders received.
MAEDA ROAD will be able to make substantial contributions to the Group by utilizing our well-establishedregional offices in more than 200 locations around
Japan. In particular, we can provide a strong advantage
to Holdings for undertaking PPP/PFI*3 projects by drawing
on our strengths in promoting locally based development
strategies. Sharing our strengths among the four companies, including Holdings, should increase the possibilities
for creating new value and new businesses.
Shioiri: MAEDA SEISAKUSHO, a machine manufacturer, boasts strong technical capabilities to deliver noveland specialty machines, as opposed to ready-mademachinery, by offering customized proposals from product planning to design. We are leveraging this strength
to respond to orders from MAEDA CORP. and MAEDA
ROAD for high-mix low-volume production of specialty machines to be used on construction sites. We are
ramping up proposal-based sales activities to increase
orders received while considering the future possibilityof manufacturing machines related to infrastructure
management services.
In my view, the starting point for generating synergies will be personnel exchanges. This involves not only
cooperation with Holdings through personnel transfer
but also cooperation and information sharing between
the business companies. As a result, we have alreadyreceived new project orders.

Growth Strategy

Soji Maeda

President and CEO
MAEDA ROAD CONSTRUCTION Co., Ltd.

President and Representative Director
MAEDA CORPORATIONBusiness Models

Yasuhiko Imaizumi

Soji Maeda

Top Message

It has been roughly 18 months since INFRONEER Holdings was founded. In Japan, the environment surrounding the infrastructure industry
is becoming increasingly challenging due to a shortage of engineers, weakening of local government revenues, and aging infrastructure.
Meanwhile, it is giving rise to a number of social issues, including the need for how infrastructure should be managed, maintained, andoperated. Against this background, the company is being put to the test in its efforts to establish business as an integrated infrastructureservice company that engages in the entire range of infrastructure development processes from upstream to downstream. To respondeffectively to social needs while achieving the Group’s continued growth, it is imperative that all Group companies work closely together
to increase its comprehensive capabilities. This section presents a report on a talk session held by the presidents of the INFRONEERGroup’s three business companies. They share their views on the future direction their organizations will take as members of the Groupand the effect and synergies of the management integration.

Increase Group synergies
as an integrated
infrastructure services
providerfor large-scale concession and PPP projects as well ascomprehensive management services for buildings andfacilities under the control of municipalities. As a comprehensive management services provider, we send representatives of the Local Business Promotion Department
to municipalities to learn about their infrastructure-related problems and propose solutions. In this area, demandis rising due to the rapidly worsening engineer shortage
and facility aging, giving us a larger number of orders for
projects across Japan than before Holdings was established. The number of municipalities we serve has also increased. For such projects, we can leverage the strengthsof MAEDA ROAD and MAEDA SEISAKUSHO based on theindividual and organizational networks they have builtwith local governments and enterprises through regionally oriented business development.

Value Creation Story

Maximizing Group Synergies through Three-way
Collaboration and Making Strides as an Integrated
Infrastructure Service Company

40

Chapter 4 Growth Strategy

Group-wide Sustainability Initiatives* ZEB/ZEH-M: stands for “Net Zero Energy Building & Net Zero Energy House Mansion,”
which refers to buildings and housing with a net zero or negative level of primary energy
consumption.

adopt the product for standard use.
Shioiri: To reduce CO2 emissions, MAEDA SEISAKUSHO
is developing battery-powered machines and broadening the product lineup. In Europe, the world leader inpromoting environmental initiatives, demand for electrically operated construction machinery is rising, and I
anticipate that this trend will arrive in Japan before very
long. MAEDA SEISAKUSHO will work to contribute to
reducing CO2 emissions from the Group as a whole.
Imaizumi: I take note of the benefit of the formation of
Holdings for the purpose of recruiting employees for thebusiness companies. At MAEDA ROAD, I tell new hires
about the future possibility of working with employees
from MAEDA CORP. and MAEDA SEISAKUSHO to launcha new business project and the chance to engage in various businesses as they choose.
Maeda: Some people may feel anxious about the factthat MAEDA CORP. was delisted as a result of the integration. The delisting may affect recruitment results.
However, I believe such anxiety will be diminished byeffective communication of the fact that INFRONEER
Holdings is newly listed and of the Group’s holistic
status. Appropriate communication to the public tocommunicate the growth of the INFRONEER Group will
improve public expectations for MAEDA CORP.
Shioiri: MAEDA SEISAKUSHO, based in Nagano Prefecture, is having difficulties recruiting employees in otherprefectures, where the company has a lower profile.
A particularly challenging issue is hiring mechanics forservice engineering. We visit vocational schools for mechanics to hold recruiting sessions, but many students
prefer to be employed by automakers. As members of
the INFRONEER Group, we will now utilize nationwide
networks, in addition to regional networks in Nagano,to promote recruiting activities with an emphasis on
MAEDA SEISAKUSHO’s appeal as an employer. We hope
we will have better results.

Taking on Future Challenges as an
Integrated Infrastructure Service Company
Shioiri: MAEDA SEISAKUSHO has been committed to©THE MAGARIGAWA CLUBEnhance technicalprowess and support
strong public
infrastructure
Masaaki Shioiri

President and Representative Director
MAEDA SEISAKUSHO CO., LTD.

developing a strong reputation for technical prowess.
Maintaining this commitment, we will aim to play a rolein building public infrastructure by providing MAEDA
CORP. and MAEDA ROAD with machines to increase
their productivity and worksite safety. At the same time,
we will endeavor to enhance employee engagement andmotivation.
Imaizumi: My long-held aspiration is to make MAEDA
ROAD a leading road construction firm, which is now
within reach. We will strive to enhance our technologicalcapabilities and workplace environment as well as ourbusiness performance and to offer appropriate returns
to employees and shareholders, which in turn will createa virtuous cycle that will take us to where we aim to be.
Maeda: Since the launch of Holdings, a synergistic effect has begun to take place in a favorable way. MAEDA
CORP. is bracing itself to play a leading role in promoting
efforts toward the provision of integrated infrastructureservices, primarily by building a robust track record as abusiness company.
The whole world has begun adapting to the new“living with COVID” environment. And labor shortages
are threatening various industries. On the other hand,
the market is expanding rapidly and generating many
more business opportunities, which is likely to provide afavorable environment for us to meet the needs of society and grow our business. To develop the INFRONEERGroup as an integrated infrastructure services provider,and contribute to society, the three business companies
will work together more closely.

Corporate Data

President and CEO
MAEDA ROAD CONSTRUCTION Co., Ltd.

For a report of the discussion held by project members, visit our website at:https://www.infroneer.com/jp/sustainability/topics/minamiboso.html (in Japanese)

Sustainability

Yasuhiko Imaizumi

This project was implemented within a 400,000 m2 development area locatedin a mountainous district of Minamiboso. The project involved the constructionof the full-scale driving course and six different facilities for delivery to theclient, Japan’s first private driving club. The project was the manifestation of
INFRONEER’s comprehensive capabilities, with MAEDA CORP. responsible forbuilding and civil engineering construction, MAEDA ROAD for constructionof the course, and MAEDA SESAKUSHO for offering working prototypes of
purpose-built machinery.

Growth Strategy

Play a leading role
in reducing CO2
emissions generated
by the Group

Asia’s first members-only driving course (Minamiboso City, Chiba Prefecture)

Business Models

Maeda: Climate change is posing a major challenge tothe construction industry.
Imaizumi: Within the INFRONEER Group, MAEDA ROAD
is the largest CO2 emitter, principally due to its asphalt
mix materials manufacturing business. We are committed
to carbon neutrality as an urgent issue to be tackled toachieve sustained growth. As part of related efforts, wehave set up Japan Biofuel Co., Ltd., a subsidiary that will
use animal and plant fat and oil waste to manufacture
a fuel alternative to heavy oil. We are scheduled to start
producing biofuel in September 2023. The product will be
supplied not only for use within MAEDA ROAD but also byother Group companies and later offered for sale in theexternal marketplace. Our plan is to grow the biofuel project into a mainstay business as well as make it a driving
force for the Group’s CO2 emissions reduction initiatives.
Maeda: MAEDA CORP. entered the renewable energy
business early on. While undertaking solar and wind
power development projects, we also take on challenges
to adapt to advanced energy-saving technologies, suchas for meeting ZEB/ZEH-M * standards, and develop
wood building techniques. We are also discussing thepossibility of applying these technical capabilities tosupport the biofuel business of MAEDA ROAD. In a similar fashion, we adopt environmentally friendly products
made by MAEDA ROAD, including LEAB. It’s an asphalt
mixture that has a lower mixing temperature and therefore generates less CO2 emissions and also produces
a more durable pavement, for improved quality. At
MAEDA CORP., LEAB is on the list of items for standard
use in pavement construction work. In addition to internal use, we are also proposing to environmentally conscious customers at the design planning stage that they

Demonstration of synergy created by the three companies

Top Message

41

for the Highway Techno Fair, a trade show for highway
construction and maintenance technologies. I observed
employees from each company start to interact with
one another, which, along with the expanded scale ofthe booth, gave me a solid sense of team unity. I hope
the Group’s corporate culture and employee mindset
will continue to advance according to the guideposts
provided by INFRONEER Caret.

Value Creation Story

Shioiri: Contained in INFRONEER Caret is the phrase“Respect: Building trust through acknowledging eachother.” I am glad this idea is permeating throughout theentire Group and serving to “power” the diverse strengthsof employees to generate new value. I truly hope thatevery one of us has built a mindset based on this idea.
Maeda: MAEDA CORP. is committed to the philosophy
represented by RESPECT, an element of INFRONEER
Caret, which is to be applied not only to its employees
but also to society, customers, and partner companies.
The entire statement will serve an important function byacting as a common language that connects the businesscompanies.
One notable benefit from the establishment of Holdings
is that it has caused a valuable change in the mindset ofindividual employees at Group companies, who are now
more aware of the importance of cooperation. We havealso increased synergistic effects by sharing information.
Specifically, sales and customer information owned by individual business companies is shared at regular Marketing
Strategy Meetings held by executive officers at Holdings.
MAEDA CORP. has begun to refer its customers to
MAEDA ROAD for a road-related civil engineering project,and MAEDA CORP. receives an order for land development from a customer of MAEDA ROAD. These are actual
examples indicating the significant effect of the establishment of Holdings.
Imaizumi: I have noticed a remarkable effect in termsof personnel exchange. Previously, although they weremembers of the same corporate group and shared thename MAEDA, there was not enough cooperation between the companies. We should have been more active
in promoting inter-company sharing of our strong technical and business resources to put them to more effective use. Although MAEDA ROAD’s understanding thissituation at the time was not the best, there was also
the fact that there was a sense of rivalry, in a good way,
as they did not want to lose to MAEDA CORP. as a groupcompany. Therefore they missed some opportunity tocollaborate with MAEDA CORP.
Through such history, the three companies are now
positioned on an equal footing under Holdings. This
structure has encouraged each company to pursue personnel exchange while maintaining its own corporate
culture, which exposes employees to different ways ofthinking and viewing things and fosters mutual respect
for the culture of the other companies, thus achieving
inclusion. This is very significant. In these rapidly changing
times, if the Group is reduced to a homogenized organization with minimal diversity, it may undermine ourorganizational strength.
Maeda: As personnel transfer to Holdings is increasing,
I hope to see a growing number of employees broaden
their perspective to take on a viewpoint that includes
the entire Group.
Shioiri: I am sure that the structural shift to the holding
company system will produce desirable effects slowly
but steadily. I noticed a related sign the other day when
the three companies set up a joint exhibition booth42

Chapter 4 Growth Strategy

Two Strategies for Accelerating Advancement toward Integrated
Infrastructure Service Company

For details on human resources strategies, see page 55.

INFRONEER’s Approach to DX

Management

MAEDA CORP.

Data-driven evolution of “construction” and “de-construction” businesses

In the “construction” business, MAEDA CORP. is making company-wide efforts to collect and analyze data related to construction
production, principally construction costs. The purpose of these efforts is to systematize construction processes and know-how,which have been developed on an individual worker and on-site operation basis, into codified knowledge through data analysis.
In the infrastructure management (“de-construction”) business, the company develops optimal repair plans by utilizing inspection
and repair data, in addition to prediction programs for road pavement aging. In this way, MAEDA CORP. plans to combine data on
construction production and facility management to precisely simulate the lifecycle of infrastructure.

MAEDA ROAD

Combining road civil engineering service know-how with
big data technology to contribute to better public services

MAEDA ROAD boasts a wealth of experience as a long-time contractor of comprehensive private
contracting road construction projects, including one launched by Tokyo’s Fuchu City in 2014, whichbecame Japan’s first to introduce the relevant contract scheme and where the company served as alead manager. In an effort to continuously contribute to municipal road management, the company isdeveloping and offering database systems that take advantage of its strengths: its extensive experience in the area of comprehensive private contracting road construction; expertise it has built up as aroad civil engineering contractor; and big data such as for daily road maintenance and vehicle traffic.

MAEDA SEISAKUSHO

Launching the internal program “Full-power DX 100” to produce new activities

MAEDA SEISAKUSHO has formed the DX Promotion Team, comprising members selected from each business division and theInformation System Department. The team aims to accomplish the target of creating and implementing 100 plans for DX promotion
in five years under the slogan “Full-power DX 100.” The team is working on four DX-themed activities: data-driven marketing;manufacturing (smart factory); development of digital technology professionals; and improvement of organizational culture.
Among them, data-driven marketing DX is a priority subject of discussions for exploring approaches to achieving rule changes toenable the use of data to generate added value.

Corporate Data

43

DX Initiatives Promoted by Each Company

Sustainability

In the past, DX strategies were developed for each
Change of Planned Digitization Investment Allocation
business segment according to the specific situation,
100%
10.3%
Expand10.0%
Advance reformand digitization investments were discussed by each
20.0%
investment into achieve
reform forbusiness company independently. However, to utilize
continuous
80%
26.2%
growth
growthdatasets on infrastructure collected from every phase of
40.0%
30.0%
the life cycle to facilitate business growth, standardized60%
IT and data utilization platforms must be prepared.
Reduce permanent
Suppress growth
40%
Therefore, we have decided to create the Group’s
operating costsin permanent
63.5%
comprehensive digitization strategy by adopting the
50.0% operating costs 50.0%
20%enterprise architecture*1 framework and setting up
the basic policy by layer to achieve the Group’s total
0
optimization. In this process, we are planning to create
Present
Growth phase
Futurea platform that contains the Group’s overall directions,
■Run
■Grow
■Transform
IT/DX strategies pursued by each business, and eachindividual initiative in complete alignment. We also
recognize the importance of defining the Group’s overall enterprise architecture and achieving total optimization when promoting
M&A, one of the Group’s key growth strategies and facilitating post-merger integration processes.

At INFRONEER, the IT/DX Strategy Office is tasked with formulating and managing the Group’s overall policies under the leadershipof the responsible executive officer, while at each business company, the respective Business Reform Department and Information
System Department work together to promote each company’s IT/DX strategies. Especially, MAEDA CORP. takes the lead in
implementing various initiatives by mobilizing its abundant information system professionals and a dedicated DX team.
Specifically, MAEDA CORP. performs DX skills assessments for all employees and management team members to develop DX
professionals across the organization. The assessments were made based on the two criteria of digital skills and work process reform
capabilities to be acquired by March 2024, and MAEDA CORP. provided support to all employees for achieving target scores foreach of the two criteria and improving skills individually according to their levels. As a result, the target achievement rate rosefrom 38% in the first evaluation (July 2022) to 78.5% in the third evaluation (August 2023), indicating an obvious improvement
across the organization. Additionally, the in-house Data Science & AI Center has been established under the leadership of technicaland information professionals, which engages in planning for data analysis and utilization aligned with business needs as well asinternal implementation of generative AI and other cutting-edge technologies.
Going forward, we will ramp up structure building efforts for the entire INFRONEER Group.

Growth Strategy

INFRONEER Group’s Medium-term IT/DX Strategies

Building Structures and Developing Human Resources for
Implementing IT/DX Strategies

Business Models

As part of its management strategies, INFRONEER defines DX as a digital technology-enabled function for transforming itself into an integrated infrastructure
Contents
Story
service company. If rule changes in all infrastructure areas are described as the“story” of the management, then digital technology corresponds to the “content”
of the management.
As an integrated infrastructure service company, INFRONEER holds huge datasets relating to various types of infrastructure facilities that cover every phase of
the life cycle. INFRONEER aims to maximize the utilization of these datasets toDXoffer effective solutions to many social issues associated with infrastructure, andDigitalRule
DX will play a crucial role for this purpose.
technology
changeTake an example from construction production. Production processes andprocurement prices vary according to the environment around the construction
site, weather conditions, and many other factors. On-site operations develop
knowledge for assessing the impact of such factors on production and taking appropriate responses, and previously, such knowledge was usually retained only in an implicit form and within individual projects.
Seeking to turn such implicit knowledge into explicit knowledge, we are presently collecting and analyzing data on production
processes and procurement prices. Then, we plan to use the explicit knowledge to achieve data-driven, precise cost simulation
processing to create a function for optimizing construction costs in a true sense, thereby offering appropriate stakeholder returns.

*1. Enterprise architecture refers to a business tool concerned with a corporation’s organizational structures and roles as well as information systems supporting its operations, which
provides a framework for working out an overall optimal system design for all the above functions, considering the two different timeframes of the present and future.
*2. CSIRT stands for “computer security incident response team” and refers to a dedicated function for responding to information system security incidents.

Top Message

Culture and people are the key to the growth of INFRONEER, and we are therefore committed to strong human resources and DX
strategies. To realize our vision of becoming an integrated infrastructure service company, we need to challenge the conventional
infrastructure business model. To this end, it is essential to promote transformation at the organizational and individual levels,and to expedite this process, we pursue digital transformation (DX), a form of “rule change” driven by digital technology. By implementing DX strategies, INFRONEER seeks to effect business process innovation as well as organizational and individual innovation,
which is more than simply digitizing work processes. Based on this thinking, we are promoting culture- and people-driven growth
while building a unique sense of teamwork to challenge the status quo.

Value Creation Story

INFRONEER’s Growth DriverIn the growth phase we will enter before long, we will run the Group’s common IT platform to drive transformation toward theestablishment of the integrated infrastructure service business. At the same time, we will engage in governance reform initiatives
to support the defined enterprise architecture. To ensure the Group’s ongoing growth, we will reform digitization investment
structures, suppress growth in permanent operating costs, and expand investment allocation to priority areas to advance reform
for growth. (See the chart for Change of Planned Digitization Investment Allocation on page 43.)
We will endeavor to enhance information security, primarily by providing information security education to the management
team as well as officers and employees to improve their awareness while implementing measures to prevent information leakage
and fend off cyberattacks throughout the Group. As one of such countermeasures, the Group’s CSIRT*2 will be set up to promptly
detect a case and take appropriate action in the event of a cyberattack.

44

Chapter 5

Sustainability
Message from chairperson for each committee
Chairperson of the Audit Committee

Keiichiro Hashimoto

Basic Approach

Corporate GovernanceCorporate Governance Structure
Male

FemaleInternal directors

Chairperson

Women and people with overseas experience are invited to join the Board of Directors as a means of increasing its diversity.

Chairperson of the Nominating Committee

Chairperson of the Compensation Committee

We have been discussing succession plans, taking
into account diversity and anticipating changes
expected to occur in the business environment overthe coming five or 10 years. The plans will be carried out from the next fiscal year. When chairing themeeting, I work to create an open atmosphere thatencourages a frank exchange of opinions. Goingforward, we will ramp up discussions in order to establish governance systems that are fully functional.

We have submitted aggressive compensation design plansthat benchmark leading companies in and outside of Japanand are primarily aimed at fostering a growth-oriented mindset. To achieve our aim, we believe remuneration systems
must be designed to powerfully incentivize the entire workforce to aim for growth. With an eye to improving corporate
value (discounted cash flow, market capitalization), we arecommitted to developing strong remuneration systems that
help secure excellent talents and elevate employee motivation.

Koichi Moriya Outside Director

Atsushi Takagi Outside Director

Supervisory function
Board of Directors: 9 members
Determine basic management policies, etc.
Supervise the execution of duties by directors andexecutive officers

Nominating Committee:
8 membersCompensation Committee:
7 members

Audit Committee:
4 members ominate candidates for company
N
director and executive officer positions
Nominate candidates for president,
director, and executive officer positions atmajor subsidiaries

 etermine the amount of compensationD
to be paid to the company’s directors andexecutive officers
Deliberate on the amount of compensation
to be paid to presidents, directors, andexecutive officers of major subsidiaries

Audit the execution of duties by directors
and executive officers
Audit business reports and financial
statements; prepare audit reports

Board of Executive Officers:
8 membersMarketing Strategy
Meeting

Construction & Engineering
Strategy Meeting

Capital Investment
Strategy Meeting

Risk Management
Committee

Sustainability
Committee

E xecute operations based on basic
management policiesD eliberate and decide on businessstrategies, etc., related to the Group

Formulate and manage
the Group’s overall sales
strategies

Formulate and manage
collaboration strategies related to
the Group’s overall construction
and technology development

Formulate strategies
related to the Group’s
overall assets; manage
procurement/development/
administration policies formaterials and equipment

Conduct the Group’s overallrisk assessments; deliberateand decide on policies andspecific measures for risk
management

Conduct examinations onrisks, opportunities, andissues associated withsustainability, and reflect
results in management plans

Internal Control Committee
Manage matters related to effectiveness assessments of overall internal control functions

On April 1, 2023, the INFRONEER Group established the Anti-Corruption Policy. Both in Japan and abroad, the prevention of corrupt
practices including bribery of public officials or stakeholders, giving and receiving excessive entertainment and gifts, collusive relationships, embezzlement and trespassing is positioned as one of the most important issues in ensuring compliance. In our “Code of
Ethics,” we have committed ourselves not to conduct acts that are illegal or that could be misconstrued by society, and to maintain ahealthy and appropriate relationship with public officials and political organizations. We provide appropriate training for employees.
Also, we have signed the UN Global Compact and we support and affirm the principles related to anti-corruption.
For the Anti-Corruption Policy, visit our website at: https://www.infroneer.com/en/anti-corruption/

Prohibition of Anti-competitive Acts
The company has set forth provisions in the Code of Ethics for compliance with competition law and other related regulations,and business companies have set out a bid rigging prevention policy, in an effort to avoid the practice more effectively. The policies
and provisions have been revised to require employees and officers to abide by highly effective bid rigging prevention rules. For
example, we have clarified the rules governing leaving a meeting that apply when an employee suspects a bid rigging is being
discussed at a meeting with another company in the same industry. We also fully implement compliance training.
For details on compliance training, visit our website at: https://www.infroneer.com/jp/sustainability/social/ (in Japanese)

Sustainability

Representative Executive
Officer

Anti-corruption
Growth Strategy

Executive function

ComplianceBusiness Models

Outside directors

General Meeting of Shareholders

The Audit Committee is composed of four members, all of whom are appointed from among the five outside directors. The
Committee is striving to upgrade organizational audit functions using internal control systems. Toward becoming an integrated
infrastructure services company, INFRONEER will undertake a larger number of group-wide business collaborations, often involving infrastructure-related special purpose companies (SPCs). Anticipating such a situation, we have worked on the structural
alteration of auditors at business companies in conjunction with the shift to the holding company system. The Audit Committee
will promote closer cooperation with auditors of business companies, aiming to boost the Group’s overall governance.

Top Message

The INFRONEER Group is committed to strong governance as an essential mechanism for promoting sound risk-taking and taking
on the challenge of entering new business fields. To realize our vision of becoming an integrated infrastructure service company,
we need to take on an array of challenges to enter new areas related to various upstream and downstream infrastructure
management processes while continuing to pursue the Group’s existing businesses. Venturing into fields unknown to us willpose substantial risks. The company therefore needs to establish systems to enable management to conduct appropriate
risk assessments and promote sound risk-taking. Such advanced governance systems designed to ensure appropriate risk
management will allow business managers to take risks appropriately when making decisions and embrace the challenges
of entering unknown fields. We will commit to taking on these challenges to achieve the objective of becoming an integrated
infrastructure service company. This is the core of our approach to governance. Accordingly, we have adopted the system of acompany with a nominating committee to further enhance governance.

Outside Director / Chairperson of the Board of Directors

Value Creation Story

Governance

System and Policy for Determining Executive Remuneration

For details of executive remuneration, etc., read our securities reports, which are available at: https://www.infroneer.com/jp/ir/security_report/ (in Japanese)

45

Transparency of Taxes
We will respond appropriately to changes in local laws and regulations and provide timely and appropriate tax information toensure transparency. Furthermore, we are working to build trust with the tax authorities in each country and region, such as byresponding honestly to tax investigations and ensuring transparency and reliability in tax-related matters. We use appropriate
and effective measures to reduce our tax burden, and if the tax risk is assumed to be high, we will seek advice and guidance fromtax experts to reduce tax risks when necessary.
We will strengthen the internal restraint mechanism and we will establish an internal audit system to ensure that these are
implemented. Furthermore, we will always clarify the difference between public and private, correct our own attitude, and respondto the trust of society by staying close to our management philosophy.

Corporate Data

Matters related to the remuneration of the company’s directors and executive officers are determined by the Compensation Committee.
The Committee ensures a high degree of fairness and transparency in the decision-making process and verifies compensation levels,
collecting information and providing advice by utilizing external remuneration consultants. In FY2021, the company began to apply its
basic policies for the executive remuneration system as well as the remuneration system itself. From FY2023, the scope of application of thebasic policies and the rollout of the executive remuneration system has been expanded to include major subsidiaries.
Executive remuneration comprises base remuneration, performance-linked remuneration, and non-monetary remuneration. Performance-linked remuneration contains a number of incentives linked to the achievement of company-wide performance goals and targets
laid out in the INFRONEER Medium-term Vision. Non-monetary remuneration consists of stock remuneration for the purpose of ensuring
a shared interest with shareholders. With an eye to improving corporate value, executive remuneration is designed so that the proportion of
performance-linked remuneration increases in accordance with the level of responsibility.

46

Chapter 5 Sustainability

INFRONEER has established procedures for managing major potential risk factors associated with its business development asfollows. First, the risk management committee at each business company collects risk-related information, identifies issues, anddeliberates on the effectiveness of measures. Relevant results of such discussions at each business company and INFRONEER arebrought up at the quarterly INFRONEER Risk Management Committee meeting for a comprehensive review to identify risk factors.
Identified factors are classified in terms of frequency and impact level, and those classified into high risk groups are discussed withregard to specific steps that can be taken to increase the effectiveness of risk reduction measures, and necessary processes are
implemented following the PDCA cycle.
INFRONEER Holdings Risk Map

54

 onflicts and disputes
Cat the national level

Approx.
¥10 million

 hareholder, IR
SFinancial

Communication
Public relations
Human capitalCompetitor

 abor/employment
LInformation systems
Laws and regulations
New businesses sset preservationATrading partners

GovernanceOrganization/
corporate culture

3. Risk management system for the management of risk
We established the risk management regulations and established a Risk Management Committee, the highest-level body related to risk
management, on a quarterly basis to establish risk management regulations and implement cross-cutting risk management across theentire Group.

4. Compliance system

Overseas business

2
1
1

2

3

Roughly once in 10 years

4

Roughly once in 3 years

All documents related to executive officers’ execution of their duties, such as minutes of the Board of Executive Officers meetings andrequests for approval, are appropriately stored and managed by relevant departments in an easily searchable state based on relevantlaws and regulations and relevant internal regulations, and the status of execution of executive officers’ duties is regularly reported to theBoard of Directors.

5
More than once in 1 year

FrequencyFor details, visit our website at: https://www.infroneer.com/jp/sustainability/governance/ (in Japanese)

5. Group management system
To ensure that our subsidiaries carry out their business adequately, we have developed a risk management system, a compliance system, asystem to eliminate anti-social forces and a system to ensure that documents and other information related to financial calculations relating
to Article 24, 4(4) of the Financial Instruments and Exchange Act are kept. These systems receive the approval of the Board of Executive
Officers or executive officers according to the level of importance, based on the rules of affiliated companies prescribed by the Company.

6. Internal audit system
The Company has established a Corporate Audit Department that is responsible for conducting internal audits for the entire Group. During
an audit, we use a risk approach that reviews the reliability of financial reports, effectiveness of operations, and compliance with laws andregulations. We have also established an internal audit department at each of our main subsidiaries that is linked with the Corporate Audit
Department to strengthen the Group’s internal audit function.

Growth Strategy

In FY2023, our assessments identified “governance” and “organization/corporate culture” as critical factors with high risk.
For governance-related risks, we particularly note potential risks arising from inadequacies in the Group’s overall internal control functions
as a result of M&As, and conduct measures to reduce such risks. Specifically, we will ensure the effective monitoring of the implementation
status of initiatives promoted to accomplish targets set for the INFRONEER Vision 2030 (Medium- to Long-term Business Plan) by holding regular discussions with the management teams of business companies and performing ongoing monitoring via the business execution supervision function of INFRONEER’s directors.
For organization/corporate culture, we will take steps to mitigate risks posed by organizational/cultural differences between businesscompanies. Our plan is to foster a shared sense of unity throughout the Group and reduce risks by carrying out corporate culture promotion
activities at town meetings, where the president personally explains management policies to employees, and disseminating VMV statements
and the Group’s common guidepost (action guidelines) INFRONEER^ (“INFRONEER Caret”) (see page 1).

We disseminate our Code of Ethics, which defines the social roles and responsibilities our company must fulfill, to all employees via ourinternal intranet to ensure business ethics and compliance. We have also established an internal reporting system and set up methods ofcontact including a workplace hotline telephone and a compliance hotline. We will work to prevent and detect fraud at an early stage.
We have also established and operate a system that ensures the confidentiality and anonymity of users and related parties to protect
them against adverse treatment. In FY2022, a total of 52 cases were reported across the entire Group.

Business Models

Approx.
¥100 million 3

Natural disasters andaccidents
Customers

ComplianceExisting businesses
Procurement
Safety

The Audit Committee Office, a dedicated organization that assists the Audit Committee in its functions, comprises four employees.
To enhance the effectiveness of the audits carried out by the Audit Committee, we hold regular meetings with outside directors and accounting auditors, as well as the presidents of subsidiaries, auditors and internal audit departments to exchange information and opinions.

2. Information storage and management system

High-risk areas
Environment
Markets
Product and service
defects

1. System required for the execution of the instructions of the Audit Committee

Top Message

Impact level (in terms of monetary value)

Approx.
¥1 billion
or moreINFRONEER has built and operates an internal control system to ensure the execution of appropriate administrative orders in theGroup and efficient business execution, and audit systems to respond to changes in the business environment quickly and flexibly
with good risk management, and compliance.

Value Creation Story

Overview of the Operational Status of the Structure to Ensure Our
Business is Appropriate

Risk Management

Internal Control System

Board of Directors

Board of Directors

Risk Management Committee

Supervise

Chairperson: Representative Executive Officer
and President, and CEO

ReportInstruct

ReportInstruct

Risk Management Committee at business companies

 ollection of risk information
CIdentifying, consolidating, andmanaging risks
Confirming implementation
status and effectiveness ofcountermeasureEvaluation, correction, andimprovement of effectivenessInternal Control Committee
Chairperson: Representative Executive Officer and President, and CEO
ReportReport to
the Board of
Directors

InstructInternal Control Subcommittee
Business Improvement Subcommittee

Financial Reporting Subcommittee

Compliance Subcommittee

IT Governance Subcommittee

Risk Management Subcommittee

Report to
the Audit
Committee

Collaborate
Assist operations

Audit
Committee
OfficeCommission
investigation

Assist operations
Corporate Audit Department
Collaborate
INFRONEER Group Internal Audit Department
Audit

Collaborate

Collaborate

Corporate Data

Each department in INRONEER Holdings

ReportAccounting Auditor

ReportIdentification of risks and reviews
thereofConsideration, development, andmaintenance of countermeasures
Monitoring, evaluation, correction,and improvement
Deliberation on risk-related
disclosure items

Audit Committee

Sustainability

Risk Management System

Group companies

47

48

Chapter 5 Sustainability

Environment
Basic Approach
The INFRONEER Group is moving forward with initiatives from a long-term perspective, focusing on climate change, resource recycling, biodiversity, pollution prevention, and water security, to enable the sustainable use of and symbiosis with natural capital,
which is our business base. In addition, we are promoting activities through INFRONEER’s own “Dividends for the Earth.”

The Group is moving toward “carbon neutral 2050” by enhancing the function to perform embodied carbon* assessments as ameasure to reduce emissions across the entire value chain. Goingforward, in the infrastructure management business, we aim tobuild a one-stop management to reduce environmental impact
by building a mechanism for exchanging and sharing information
to increase the effectiveness of GHG emissions reductions among
our suppliers and stakeholders in the value chain. In FY2022, wereceived third-party assurance for our GHG emissions calculation
reports (INFRONEER Holdings supply chain emissions in FY2021).

307

86

77

313
76
76

0

(13.7%)

309
72

270

72

40

25
[(40%)]
50

200

0

237

230

227

100

237

230

75

187

[(100%)]

2018

2019

(Benchmark)Scope 1

2020
Scope 2

2021

2022

2030

2050

(Target) (Target)

100

[FY]

GHG emissions reduction rate
(benchmark: FY2018) (right axis)

GovernanceSupervision and Guidance

Report

The Group recognizes climate change as one of the key management issues
and a major risk. While we have a strong sense of crisis, we also view it as anopportunity and will implement concrete initiatives to achieve our INFRONEER
Medium- to Long-term Vision. Our basic policies and issues related to climatechange are regularly reviewed by the Sustainability Committee, and we have astructure in place to ensure proper oversight by the Board of Directors.

Scope 1

Direct emissions by fuelcombustions• Capital goods• Fuel and energy related activities notincluded in Scopes 1 and 2• Transport, delivery (upstream)• Processing of waste generated from operation

Scope 2

Indirect emissions by use ofpurchased energy

Scope 3

Instruction
ReportResponsible department in INFRONEER(Corporate Strategy Department, Human Resources Strategy Department, etc.)

Instruction

Report
MAEDA CORP.

MAEDA ROAD

MAEDA SEISAKUSHO

ScopeThis indicates risks, opportunities, and responses related to migration and physical changes based on the assumed climate change scenarios
for 2030.
For details on risk management, visit our website at: https://www.infroneer.com/jp/sustainability/environment/ (in Japanese)
CO2 Reduction Targets(Category 1: Commissioned construction, purchased materials)

Targets (Compared to FY2018)

RE100 in FY2050
RE60 in FY2030
40% reduction by FY2030(Category 11: Emissions associated with the use of our 40% reduction by FY2030
constructions and products)• Leased assets (downstream)• Transport, delivery (downstream)

Scope 1

Streamline work and use leading-edge construction machinery
Reduce emissions by using low-carbon fuels
Promote the above initiatives with the cooperating companies as the main entities
Reduce emissions during asphalt mixture production (promote foamed asphalt technology and sell low-carbon mixtures)

Scope 2

Conserve energy at each business office
Offset with non-fossil fuel certificates and the like
Develop infrastructure for climate change countermeasures through the renewable energy business
Reduce emissions during asphalt mixture production

Scope 3[Category 1: Commissioned construction, purchased materials]
Accelerate technical development with open innovation centered on ICI for resource recycling and decarbonizationA chieve environmentally friendly procurement through the visualization of Scope 3 emissions and resource recycling rates in theinfrastructure management business, and promote DX[Category 2: Capital goods]C ontribute to reducing GHG in the supply chain when procuring asphalt mixtures[Category 11: Emissions from our construction projects and products during use]S
 ubmit customer proposals for added value including for the environment, health, and productivity through W ZEB (double ZEB) for
new construction projects and renovation and promote wooden structures and buildings.
E xpand the use of EV construction machinery in the machinery business

Metrics
Disclose graph of results in emissions
Disclose graph of usage rate of renewable energy (electrical power)
Disclose emissions from commissioned construction and calculable
purchased materials
Disclose emissions* The service period of buildings is calculate with the LCCO2 method with CASBEE* The calculation standard for Group emissions is in accordance with the GHG protocol (obtained third-party assurance in March 2023).

For details on the obtained third-party assurance, visit our website at: https://www.infroneer.com/jp/sustainability/evaluation.html (in Japanese)

Bio Heavy Oil

MAEDA ROAD previously used a large amount of heavy oil to manufacture asphalt mixture. As asolution, the company decided to switch from fossil fuels to an animal and plant oil derived alternativethat can reduce CO2 emissions from burning to net zero, and set up Japan Biofuel Co., Ltd., a bio
heavy oil manufacturer. The company has strong processing techniques to support various types ofraw materials, including a by-product from refining kitchen oil (oil residue), skimmed oil, waste oil,and fat products in addition to waste kitchen oil.
In September 2023, the new company started operations at its factory in Hiroshima, allowing
MAEDA ROAD to take its first step of the emissions reduction plan by addressing its Scope 1 emissions
and Scope 3 emissions from users of the asphalt mixture, then move to the next step to sell the bio
heavy oil to external marketplaces, with an eye to contributing to decarbonizing society at large.

New factory in Hiroshima

For other projects related to GHG emissions reduction, visit our website at: https://www.infroneer.com/jp/sustainability/environment/ (in Japanese)

Sustainability FinanceCorporate Data

Scope 2 emissions
Utilization rate of renewable energy (electrical power)• End-of-life treatment of sold productsContent of initiatives

Related Projects

40% reduction by FY2030

Category 11
Emissions associated withthe use of our constructions
and products

Sustainability

Risk Management

Scope 1 and 2 emissions• Business travel• Employee commuting

Scope 3Growth Strategy

The Group recognizes climate change as a major risk factor that can significantly affect its business. In FY2022, based on the results of
TCFD’s financial analysis, we identified priority issues related to energy cost, effect of low-carbon building materials, and response to newmarkets, and started discussing related action plans and financial evaluation models. As a large energy consumer, we have incorporated
the internal carbon pricing mechanism into investment indices to promote the adoption of scalable renewable energy supply systems. In
the fields of public-private partnerships promoting infrastructure projects for maintenance, management, repair, renewal and new construction, new markets related to carbon neutral initiatives will bring added value to regional economies. We will give the value a tangible
form, looking to enhance stakeholder engagement while expanding the market.

Net zero emissions by FY2050

Scope 3

Downstream

Sustainability Committee

Strategy

Subject

INFRONEER

Business Models

Board of Directors

Upstream
Category 1
Commissioned construction
and purchased materials

Top Message

Disclose Climate-related Information Based on TCFD Recommendations

49

313

(%)

(1.3%)

Main CO2 Emissions in Our Upstream and Downstream Business Activities

The Group recognizes climate change as one of the key management issues. We anticipate that the new market for carbon neutral initiatives will expand rapidly in the maintenance, management, repair, renewal and new construction infrastructure fields
through public-private partnerships. We have set out a target value for CO2 emissions at net zero by 2050. At the same time, weare strengthening our initiatives to tackle climate change while reducing and increasing the efficiency of energy usage.

Scope 3 emissions

300

0.0%

(1.9%)For the chart for Scope 3, visit our website at: https://www.infroneer.com/jp/sustainability/environment/ (in Japanese)

Policies and Philosophy Regarding Climate Change

Scope 3 emissions* Scope 2: market-based

0.0%

400

* Embodied carbon: Total amount of carbon emissions from building structures and materials related to all stages of their life cycle

Climate Change

Targets and Metrics

GHG emissions: Scopes 1 and 2[kt-CO2]

Value Creation Story educe Greenhouse Gas (GHG) Emissions acrossR
the Entire Value Chain

In September 2022, INFRONEER issued its first green bond. In FY2023, we are planning to apply for positive impact finance programs.
We will continue to commit to sustainability finance going forward.

50

Chapter 5 Sustainability

Pollution Prevention

There is a need to respond to international developments, including conversion to a circular business model, the business modelthat results in a circular economy. From a comprehensive perspective as infrastructure operators (ordering parties), emitters,
and processors, the INFRONEER Group is introducing designs for products that are environmentally friendly throughout their life
cycle, thereby diminishing the usage of resources and alleviating and avoiding the negative impact of resource usage, in order tocontribute to a circular economy. Almost all of the recycled asphalt mixture and recycled roadbed materials used in our construction
business use products recycled and processed at our crushing plant in our road civil engineering business. As a one-stop management system for infrastructure operations from upstream to downstream, we aim to centralize resources and by-product logistics(Scope 3) data, improve productivity, and build a social implementation model.

Management of Hazardous Substances
The Group manages operations for building, civil engineering, pavement construction, crushing stone, mixture manufacturing,building machinery manufacturing, and others, appropriately in compliance with applicable laws and regulations. Major issues
under management are related to monitoring the usage of PRTR-listed chemical substances; proper processing of wastewater
to be discharged; and prevention of soil contamination and alleviating and avoiding negative impacts in case of contamination.
Recognizing that inappropriate management poses reputational risks that can result in a lost business opportunity, we will ensure
appropriate management on a constant basis.

Related Projects

Crush and separate

Recycled roadbed
material/recycled
aggregate

MAEDA CORP. has developed a water treatment system to remove organofluorine compounds(PFOS, PFOA) from wastewater. The system, composed of two types of units, each for the clarifier and ion-exchange resin, is suitable for transportation on a general-purpose vehicle. The
clarifier unit removes free-floating substances and the ion-exchange resin unit removes PFOS
and PFOA. Anticipating an increase in the amount of detected PFOS and PFOA nationwide in the
future, we are planning to aggressively market this technology.

Straight asphalt
Virgin crushed stoneand sand
SupplyRecycling-oriented society
formation system

Crushing
plant

Asphalt
mixtureproduction
plant

In FY2022, we reported three cases of violations of environmental laws and regulations.
AcceptConstruction site

Manufacture and sell

For more details, visit our website at: https://www.infroneer.com/jp/sustainability/environment/ (in Japanese)Water Security
Policies and Philosophy Regarding Water Security
The Group recognizes the conservation of water resources as one of the key environmental issues and is committed to reducing
water usage by increasing usage efficiency and promoting recycling as well as securing safe water resources, a factor for ensuringlocal residents’ sense of security. We promote related efforts through our overall businesses, particularly water and sewage
concession projects, exemplified by those for managing industrial water supply systems in Osaka City and a public sewer system
concession in Miura City (for east area treatment).

Dividends for the Earth
Because we are conducting business activities with the benefits provided by the Earth’s resources, we are introducing “Dividends
for the Earth” to return a portion of the business profits to our investor Earth in the same concept as we pay dividends to ourshareholders. Based on this idea, we set the amount of “Dividends for the Earth” at 2% of our consolidated profit.

Eco-Aid

Eco-system

Eco-Angel

Eco-School

SII (Social Impact Investment)
Eco Point System “Me-pon”

Green Commitment
This is mainly a mechanism to support activities designed to solve social issues related to the environment. Each issue is categorized, andthe content is carefully reviewed and supported for each of these activities.
SII (Social Impact Investment)
We provide support through investments in businesses, technologies, and venture companies with ideas that contribute to solving social
issues.
Eco Point System “Me-pon”
This is an eco-point system designed to support employees and their families who proactively engage in environmental activities in their
daily lives. Through our dedicated website, the company awards points to employees and their families for any voluntary environmental
activities they are involved in outside of their work.
Corporate Data

For other projects related to biodiversity, visit our website at: https://www.infroneer.com/jp/sustainability/environment/ (in Japanese)
For timeline of our past biodiversity actions, visit our website at: https://www.infroneer.com/jp/sustainability/environment/biodiversity.html (in Japanese)

Green Commitment
INFRONEER Forest

Sustainability

Content of Dividends for the Earth

Ogasawara Environmental Education Project: Bonin Infrastructure Initiative

In FY2022, MAEDA ROAD launched an environmental education project on the Ogasawara Islands
where its sales office is located. This is an industry-academia collaboration project organized to give
students aspiring to be engineers an opportunity to learn about the “coexistence of biodiversity andinfrastructure,” with a view to building future plans. Participants attended four advanced study sessions
and visited the islands to experience the abundant nature and listen to lectures from local experts on
local environmental conservation activities and infrastructure development. The program was designed
to help students gain an in-depth understanding of a diverse range of topics relating to biodiversity
and the business of MAEDA ROAD. We received comments from participants expressing their stronger
awareness of the importance of developing sincere attitudes toward addressing issues that have a large
impact on the environment as well as aspiration for engaging in environmental conservation throughbuilding careers in the relevant fields. In FY2023 for its second event of the program, the company
offers an upgrade by inviting external experts to give lectures at advance study sessions. MAEDA ROAD
will utilize knowledge gained from this environmental education project in order to enhance its
activities to contribute to society as a “road builder friendly to the environment and people.”

Growth Strategy

The Earth’s environment is an indispensable foundation for achieving “a world where there’s no limit to what can be asked fromand what can be delivered by infrastructure services,” which is one of our goals. The Group is committed to conserving biodiversity
and the sustainable use of resources in all business areas, including procurement, operation and renewal, to increase social andcommunity safety, security, and sustainability. In addition, we are introducing green infrastructure that uses the functions of thenatural environment to solve various issues in society. In the civil engineering, building construction and road civil engineeringbusinesses, we are committed to the use of building materials with low environmental impact and the construction of a resource
circulation model, especially because it requires a great deal of natural capital input. In addition, during development, we conduct
environmental assessments to help preserve ecosystems and the like. We are committed to protecting endangered species andprotecting local ecosystems. In the machinery business, R&D in the forestry and processing machinery sectors contributes to therecycled use of forest resources. In the infrastructure management business, we are promoting the conservation of biodiversity
with the use of sustainable resources.

51

Ion-exchange resin unit

Environmental Laws and Regulations Compliance Status

Biodiversity

Related Projects

Clarifier unit

Business Models

MAEDA ROAD accepts debris, mainly asphalt
clumps and concrete clumps, that are wastematerial from our construction sites, andrecycles about 8 million tons of that per year
(recycling rate is around 100%). Recycled
aggregate is used as a material for recycledasphalt mixture, and is sold as a recycled
roadbed construction material. At the sametime, we are promoting initiatives to diminish
the usage of natural resources and develop
petroleum substitutes.

Development of Aquatic PFOS/PFOA
Adsorption Treatment System

Top Message

Recycling Construction By-products andLong-term Resource Cycling Initiatives

Industrial Waste (Construction) Recycling Diagram

Value Creation Story

Resource Recycling

For details on “Dividends for the Earth,” visit our website at: https://www.infroneer.com/jp/sustainability/environment/ (in Japanese)52Chapter 5 Sustainability

Approach to Health and Safety

Basic Approach

Human Rights and Labor

Certified as a Health & Productivity Management Outstanding Organization
MAEDA CORP. was certified as a Health & Productivity Management Outstanding Organization 2023 (large
enterprise) under a Japanese government program to recognize large enterprises and SMEs for the outstanding
practice of health and productivity management to deal with health issues effectively and engage in healthpromoting activities recommended by the Nippon Kenko Kaigi.
◎ Previous certification: MAEDA CORP., MAEDA SEISAKUSHO (2020)

All Employees to Have an Interview with a Public Health Nurse (MAEDA ROAD)

Human Rights Policy

For details of the Human Rights Policy, visit our website at: https://www.infroneer.com/jp/blog_assets/attachments/314/HumanRightsPolicy.pdf (in Japanese)

MAEDA ROAD runs a program to allow all its employees to have an interview with a public health nurse once a
year for the management of their physical and mental health. The interviews are held at the head office and 11
branch offices across Japan according to the annual schedule set for each office. Individual employees make an
appointment from the dedicated website according to their own schedule and have an online interview with oneof the six nurses. The nurses are qualified for privacy management and provide guidance and advice on various
health topics, including recommendations for re-examination, health promotion, self-care for mental health, andsmoking cessation, using the employee’s latest health check-up results.
◎ Program use rate in FY2022: 98%

Basic Approach toward Labor Standards

Kazuhiko Miyazaki
Chairperson of MAEDA SEISAKUSHO Labor Union

Activities and initiatives carried out in FY2022
April–June

Spring headquarters union organizing campaign (32 sessions)

SeptemberLabor-management consultations regarding reduction ofinternal documentation work

September–
November

Autumn headquarters union organizing campaign(23 sessions)

October–November

Branch labor-management consultations (11 branches)

NovemberMembership satisfaction survey

Activities and initiatives carried out in FY2022
June

Collective bargaining (summer bonus)

September

Annual conference, collective bargaining(autumn wage negotiation)

NovemberCollective bargaining (year-end bonus)

March

Collective bargaining (spring wage negotiation)

Support for securing and training human resources
Securing and training skilled construction workers will make the construction industry more attractive and lead to the development of a more developed social infrastructure. As part of efforts to assist the recruiting activities of cooperating companies,
MAEDA CORP. makes budgets for enhancing the brand image of TEAM-Z, the recruitment website of Zenyu-kai, the network of
MAEDA CORP.’s cooperating companies, principally by employing services for content creation and branding item development.
The company also prepares budgets for providing extensive personnel training programs for cooperating companies, such as
rank-based upskilling and training courses for employees, managers, engineers and candidates for management team members.
For details of TEAM-Z, visit our website at: https://team-z.jp/ (in Japanese)

Support for technical capabilities development in consideration of needs of cooperating companies
Improvement of cooperating companies’ technical capabilities is a crucial issue not only for the purpose of increasing theirprofitability but also for adequately securing and developing human resources, a challenge that requires more focused
attention in the future. MAEDA CORP. sets aside budgets for development projects based on suggestions submitted by cooperating companies to deal with their needs in order to maintain and improve their construction capabilities.

INFRONEER is an SDGs partner to the professional basketball team LEVANGA HOKKAIDO
based on the partnership agreement signed in October 2022. The company sponsors theteam’s SDGs project LEVANGA ACTION, specifically for donating basketballs to local elementary schools, in a bid to contribute to community revitalization through promoting
sports activities. Going forward, we will engage in communication with regional communities
through social contribution activities.

Corporate Data

Labor-management consultations regarding wages and systems

Local contribution
activities

53

April

We will work to resolve social issues and promote regional revitalization by participating in public-private partnership projects suchas concession projects and others, and we will introduce initiatives that will contribute to improving the stability and productivity ofthe management of cooperating companies, who are our partners nationwide and who are indispensable in sustaining growth in ourcompany. From FY2023, MAEDA CORP. has started to budget for supporting cooperating companies, chiefly in areas related to humanresources development, establishment of construction structures, and development of technical capabilities for improving productivity,
to accelerate efforts for these purposes. Also, as steps to provide support with cash management, the company has abolished the useof electronically recorded monetary claims and begun to make all-cash payments.

Sustainability

Yoshihito Ryuo
Chairperson of Central Executive Committee
MAEDA ROAD CONSTRUCTION Labor Union

Despite its small size with 30 members, our labor union
promotes activities to improve working conditions, including bonus negotiations as well as spring and autumn wage
negotiations. Our other important activities include preparing a summary of the concerns and fears of employees
about the introduction of new systems and submitting thesummary to the company, looking tobuild a better labor-management relationship and contribute to the sustained
development of society.

Revitalize the Community and Support Partners

Major activities to support cooperatingcompanies

We have 1,840 members, representing a majority of theentire applicable workforce. We conduct an annual survey
to monitor chronological changes in membership satisfaction and use the survey results to plan activities to raise
the motivation of members. Also, we hold constructive
labor-management consultation sessions several times a
year, seeking to improve working conditions and the employment environment.

Japan Metal, Manufacturing, Information andTelecommunication Workers’ Union (JMITU)
MAEDA SEISAKUSHO Branch

Local Communities

Growth Strategy

The INFRONEER Group respects the freedom of association and rights to collective bargaining protected by laws and regulations applicable in each country and region where we conduct business, as stated in our Human Rights Policy. Also, the policy describes that in countries
and regions where the freedom of association and rights to collective bargaining are restricted by local laws and regulations that do notmeet international human rights standards, we will pursue appropriate ways to respect these rights by establishing alternative means forhaving a dialogue with local employees.
In the INFRONEER Group, labor unions are promoting activities to improve working conditions, such as wages and working hours, withthe aim of maintaining and improving the employment conditions and increasing the economic status of workers. Some details of suchactivities are provided below.

Business Models

We take the impact that risks and opportunities related to human rights have on companies seriously. We have implemented the
INFRONEER Group Human Rights Policy (hereinafter referred to as the “Human Rights Policy”). We recognize that our business activities
may directly and indirectly affect human rights. We will provide all our officers and employees with appropriate training and education
to ensure that our Human Rights Policy permeates INFRONEER and the Group and is implemented effectively across all of our corporate
activities. Furthermore, we will regularly disclose our commitment to respect human rights on our website and in our integrated reports.

MAEDA ROAD CONSTRUCTION Labor Union

Top Message

The INFRONEER Group recognizes that investments in human capital are the starting point for improving corporate value, because our human resources are the driving force for maximizing added value. To realize our vision of becoming an integrated infrastructure service company, we are proactively promoting investments so that we can not only continuously produce value-creating human capital that will embrace challenges and engage in co-creation with a sense of ownership but also improve corporate
value. In addition, aiming to take on the challenge of building future infrastructure together with all our partners, we have beenpromoting initiatives throughout the entire supply chain by establishing a human rights policy, a bedrock for solid business operations, while pursuing diversity and ensuring occupational health and safety.

At the INFRONEER Group, officers, employees, and other related parties act together according to health and safety management systems,
following not only laws and regulations but also relevant rules and standards. Each person carries out disaster prevention measureseffectively and works to ensure health, safety, and security when engaging in business activities. The Group’s workplace accident reportfor FY2022 (workers employed by INFRONEER only) presents 14 accidents accompanied by lost work time, out of which eight cases
involved four or more days of absence and no case was fatal.
Also, based on the recognition that the physical and mental health of employees serves as a basis of business activities and a driver ofthe development of the Group, we implement various measures to support employees’ health.

Value Creation Story

Health and Safety

Society54

Chapter 5 Sustainability

Strengthening Competitiveness in Acquiring Human Resources

Policies and Approach to Human Resources
The INFRONEER Group has formulated an INFRONEER Vision 2030 (Medium- to Long-term Business Plan) and an INFRONEER
Medium-term Vision policy to increase added value and improve our corporate value through continuous production of valuecreating human capital. Based on this, we formulated a Group human capital strategy based on social conditions, how people work,changes to how to value our work, and the current status of human capital management in the Group.

To create value through a diverse and productive workforce, the INFRONEER Group promotes recruitment activities to raise the recognition
and understanding of the Group in the labor market. For this purpose, we run “talentbook,” a website to present stories of INFRONEER
believers performing their work, as well as our official Instagram account that focuses on the talent of people involved in infrastructureservices and attention-grabbing situations occurring in day-to-day operations. Using these tools, we aim to raise awareness and arouse theinterest and empathy of more people in the company, seeking to attract many new members to join our Group.

Future INFRONEER believers

Overall View of the Group’s Human Capital Strategy

Instagram

JOIN

Corporate value

Communication

Maximized added value cycle

Empathy
Interest

Top Message

Awareness

Value Creation Story

Human Capital Strategy

Communication

Added value
Allocate

Existing and potential job seekers

InvestValue-creating human capital(conceptual view of the Group’s human capital plans)“talentbook,” the Group’s recruitment andpromotion website, carries articles introducing
INFRONEER’s magnetic personalities.

Training

INFRONEER’s Instagram account is its internal andexternal communication tool, posting photos of a diversity
of INFRONEER believers engaged in day-to-day work.
For more details, visit our website at: https://www.talent-book.jp/infroneer (in Japanese)Pursue Ease of Work and Value of WorkGroup’s human capital management to produce value-creating human capital

Human capital strategy
Awareness of internal environment

Vision
INFRONEER Vision 2030
INFRONEER Medium-term Vision

Gap
Solve issues

Current status of human capitalmanagement in the Group

Awareness of external environment
External environment and social situation of our human resources

To prioritize issues that are important in managing the Group’s human capital to continuously create value, we will formulate key measuresand invest through the four pillars of our medium- to long-term human capital strategy.
Conceptual view ofrequired human capital

Co-creation

Strategy pillar

Specific measures

Recruitment

Strengthen competitiveness in acquiring
human resources

Ensure diversity in recruitment branding

Training

Invest in strategic training of humanresources

Train managers and executives
systematically
Improve basic skills of entire Group

Assignment

Assign human resources optimally

Group talent management

Evaluations andremuneration

Pursue ease of work and value of work

Improve engagement
Establish Group human resources system** Talent management: A management method that manages information such as employee abilities, qualities, and experience values centrally; it is useful for the strategic development
and allocation of human resources

55[Status to achieve]
DE&I is an essential part of
conducting business.

Blooming
Planting seeds/Watering
Preparing flowerbeds

Change in mindset brings
about change in action.
Understanding of theimportance of DE&I isshared across the Group.

 ive training for change in mindset to make the understanding of the importance of DE&I shared across the Group.
GBring the change in mindset to the phase of change in action by implementing appropriate personnel exchange and personnel systems.
Achieve results from the change in action (practice DE&I policy)

Human capitalmanagement

Sense ofownership

Diversity, Equity & Inclusion (DE&I) Roadmap

For details of the Policy, visit our website at: https://www.infroneer.com/jp/blog_assets/attachments/583/20230622.pdf (in Japanese)

Philosophy Dissemination Workshop
In FY2022, we started holding workshops for disseminating the Group’s common philosophical guidepost INFRONEER^ (INFRONEER Caret) for realizing the Vision, Mission, and Value. The workshops wereattended by a total of roughly 900 employees in managerial positions. In FY2023, they are organized atbusiness sites across Japan in sequence, targeting a total of 5,000 non-managerial employees. Throughteamwork activities transcending companies and departments, the workshops are designed to foster
mutual understanding and a sense of unity while increasing an understanding of the Group’s vision anddirection as well as actions to take to approach them, with an eye to increasing employee engagement.
For details of the philosophy, see page 1.

Corporate Data

Value-creating human capital

Challenges

To continue providing infrastructure services toan increasingly diverse society, it is important toensure that each employee with diverse values,
attributes, skills, and other background factors
fully demonstrates their abilities to generate newvalue. Based on this recognition, we have formulated our Diversity, Equity & Inclusion Policy. Goingforward, we will implement all the initiatives
according to the related roadmap and strive toachieve sustained growth and improvement of ourcorporate value over the medium to long term.

SustainabilityGroup Human Capital Strategy

Formulating Diversity, Equity & Inclusion Policy

Growth Strategy

Achieve management plan

We build a system and corporate culture in which diverse human resources can work together productively with a sense of unity andfulfillment, by implementing a performance-based remuneration system, proactively investing in employee engagement improvement
measures, promoting health & productivity management, supporting work-life balance, and introducing flexible working styles. Since
FY2022, we have been promoting activities at each business site of Group companies to instill the Group’s management philosophy andthe common philosophical guidepost (action guidelines). We will continue with these activities with unabated eagerness, with a focus on
improving employee engagement in and motivation for group-wide activities and increasing productivity.

Business Models

Remuneration

Problem-solving teamwork activity at a philosophy
dissemination workshop

56

Chapter 6 Corporate Data

Chapter 6

Corporate Data
Financial Statements
Unit: Millions of yen

Consolidated Balance Sheet
AssetsCurrent assets
Cash and deposits

Notes receivable, accounts receivable from completed construction contracts and other

78,03588,800310,801 296,088
30
30
1,987
1,894
1,573
2,341
13,69830,0033,444
3,815
43,14951,900(117)(140)
452,602 474,732
107,476 107,958
171,647 175,106
83,59981,241
1,334
1,513
2,550
3,850
(203,029) (213,407)
163,578 156,264

120,123221
354
840
14,907
5,418(402)
141,464473,76762
926,432

100,429
267
220
1,077
16,567
18,133(268)
136,428
451,80524
926,563

6,933
110,997
84,492
1,194
—
236
9,614
10,89634,862
181
8,080
406
379
1,083
836
4,555
1,016
23,468299,236

25,752
116,170
36,688922
10,000133
8,875
10,27237,807
154
8,264
488
—
1,082
342
4,664
1,030
35,625298,273

45,00052,851
9,947
451
14,305
16,767—
103,843
24,5883,573
271,330
570,566

48,00054,886
3,893
413
10,01817,055
169
99,59028,225
3,721
265,974
564,248

Consolidated Statement of Comprehensive Income
ProfitOther comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans, net of tax

FY2022

390,678 400,937
292,234 308,703
682,912 709,641
338,718 345,862
252,583 265,654
591,302 611,517

Financial Highlights
INF Added Value AmountNet Sales(¥ billion)200(¥ billion)
800
145.1

150

140.2

151.2

Operating Profit(¥ billion)
682.9

678.1
600

492.1

487.9

40

55,07543,04998,12457,62840,495

221
2,253
543
652
407
4,078

241
2,193
112
1,032
683
4,264

Profit Attributable to Owners of Parent and ROE

Net Assets and Equity Ratio

2,571
960
3,531
38,036

2,264
726
2,990
41,768

Profit(¥ billion)
60
10.4

Net Assets(¥ billion)
400

331
7,808
320
8,460

609
11,700163
12,473

40

529
686
494
261
1,972
44,524
14,64995
14,74429,7793,089
26,689

425
258
1,461
291
2,436
51,805
15,762(778)
14,98336,821951
35,870

FY2021

FY2022

29,77936,821(11,080) (8,414)
46
(451)
(71)
305
1,322
253
Share of other comprehensive income of entities accounted for using equity method
42(6)Total other comprehensive income(9,739) (8,313)
Comprehensive income
20,039 28,508
Comprehensive income attributable toComprehensive income attributable to owners of parent
17,029 27,510
Comprehensive income attributable to non-controlling interests
3,010
998

88.5

FY2019FY2020

FY2021

FY2022

ROE (right axis)

24.0

(%)
12

10.3

9.3

8.7

6.1

20

35.9

26.7

23.3

8

FY2018FY20194

FY2020

FY2021

0300

FY2018FY20220

FY2019FY2020

FY2021

FY2022

358.6

367.5

355.9

362.3

（%）
60

37.4

33.3
24.2

100
0

FY2018FY201940.5

FY201938.1

FY2021

FY2022（%）
60

FY2021

42.2

Target dividend
payout
ratio
40

20

20

0

0

FY2022

39.7

30.3

30

29.1

FY2020

FY202015.9

FY201825.9

FY2019FY2020

FY2021

FY2022

Non-financial Highlights
CO2 Emissions (Scopes 1 and 2)

Renewable Energy Rate*1
All electrical energy usage
Renewable energy rate (right axis)（MWh）200,000（kt-CO2）
400
316

300

310

313

167,930

309
270

200

158,533 163,315 161,792

Contributed Amounts in Dividends for the Earth

179,143

（%）
60

30

FY2018FY2019FY2020

FY2021

FY20220.6

0Group-wide（Persons）
8,000
6,545

6,929

0

7,149

7,421

Holdings (non-consolidated)

（％）
30
25.7

16.8

4,224

17.4

17.2

155

133

17.4

0

FY2018FY2019FY2020

FY2021

FY2022

Human Resource Training Investments andTraining Time Per Person*3, *4

25.0

Human resource training investments
Training time per person (right axis)(¥ million)(Hours/person)
80
1,000
70.9
912
868
823
60
750
701
61.9

17.3
500

15

2,000

0

289

66

3.3

FY2018 FY2019 FY2020 FY2021 FY2022

Female Employment Rate

Number of employees*2

4,000

400

200

100

0

600

600

51.3

100,000(¥ million)
800

54.3

46.8

20

250

FY2018FY2019FY2020

FY2021

FY20220

FY2018FY2019FY2020

FY2021

FY2022040

FY2018FY2019FY2020

FY2021

FY2022

Corporate Data

18,275
9,850
3
(453)
(95)
191
680
915
18,863
10,502
8,953
9,622
355,865 362,315
926,432 926,563

0

40

6,000
20,00020,000134,117 106,455
198,273 234,129(24,342) (18,395)
328,048 342,189

FY201837.5

Dividend Payout Ratio

Equity Ratio (right axis)

252.6

200

14.3

0

34.0

20

200

FY2018

35.9

400

88.6

50
0

60
46.3

51,95939,651
91,61054,12037,489100

709.6

Sustainability

105,144
27,15813,15913,651
159,113

Net sales
Net sales of completed construction contracts
Sales in other businesses
Total net sales
Cost of sales
Cost of sales of completed construction contracts
Cost of sales in other businesses
Total cost of sales
Gross profit
Gross profit on completed construction contracts
Gross profit - other businessTotal gross profit
Selling, general and administrative expenses
Operating profit
Non-operating income
Interest income
Dividend income
Foreign exchange gains
Share of profit of entities accounted for using equity method
Other
Total non-operating income
Non-operating expenses
Interest expenses
Other
Total non-operating expenses
Ordinary profit
Extraordinary income
Gain on sale of non-current assets
Gain on sale of investment securities
Other
Total extraordinary income
Extraordinary losses
Loss on retirement of non-current assets
Loss on valuation of investment securities
Impairment losses
Other
Total extraordinary losses
Profit before income taxes
Income taxes – current
Income taxes – deferred
Total income taxes
ProfitProfit attributable to non-controlling interests
Profit attributable to owners of parent

FY2021

Growth Strategy

109,721
24,122
19,891
14,988
168,724

Unit: Millions of yen

Consolidated Statement of Income

Business Models

57

FY2022Top Message

Securities
Real estate for sale
Merchandise and finished goods
Costs on construction contracts in progress
Raw materials and supplies
Other
Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures
Machinery, vehicles, tools, furniture and fixtures
Land
Leased assets
Construction in progress
Accumulated depreciation
Total property, plant and equipment
Intangible assets
Right to operate public facilities
Assets related to replacement investment to operate public facilities
Goodwill
Other
Total intangible assets
Investments and other assets
Investment securities
Long-term loans receivable
Distressed receivables
Deferred tax assets
Retirement benefit asset
Other
Allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Deferred assets
Total assets
Liabilities
Current liabilities
Electronically recorded obligations – operating
Account payable for works in progress and other
Short-term borrowings
Current portion of non-recourse loans
Current portion of bonds payable
Lease liabilities
Accounts payable – other
Income taxes payable
Advances received on construction contracts in progress
Provision for repairs
Provision for bonuses
Provision for bonuses for directors (and other officers)
Provision for share awards
Provision for warranties for completed construction
Provision for loss on construction contracts
Liabilities related to right to operate public facilities
Liabilities related to replacement investment to operate public facilities
Other
Total current liabilities
Non-current liabilities
Bonds payable
Long-term borrowings
Non-recourse loans
Lease liabilities
Deferred tax liabilities
Retirement benefit liability
Provision for share awards
Liabilities related to right to operate public facilities
Liabilities related to replacement investment to operate public facilities
Other
Total non-current liabilities
Total liabilities
Net assets
Shareholders' equity
Share capital
Capital surplus
Retained earnings
Treasury shares
Total shareholders' equity
Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets

FY2021

Value Creation Story

Financial and Non-financial Highlights

0*1 Purchased 600MWh of green power certificates annually prior to FY2019 *2 Consolidated number of employees of the INFRONEER Group*3 Human resource training investments: Total amount of training materials, outsourced instructor fees, system costs, and total statutory welfare expenses for salary and bonuses for the human resource development department*4 Training time per person: The total number of training hours divided by the average number of all employees during the period

58

Chapter 6 Corporate Data

MAEDA (MK)
2012

2013

MAEDA ROAD (MD)INFRONEER(INF)

MAEDA SEISAKUSHO (MS)

2014

2015

2016

2017

2018

2019

2020

2021

2022

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2021

2022

Operating Results (Billions of Yen)
Orders Received

307.7

316.8

367.8

369.8

448.1

369.6

425.6

395.6

408.8

423.4

368.8

134.2

143.6

156.6

157.0

153.1

162.4

157.2

165.0

165.6

162.1

175.1

—

—

—

—

—

—

—

—

—

—

—

—

—

Net Sales

301.2

323.9

331.3

372.6

338.1

374.2

401.3

387.3

366.1

365.8

375.9

213.2

230.1

233.0

232.7

233.1

234.4

223.8

237.8

234.6

235.6

248.7

25.3

32.6

33.8

35.0

35.4

36.7

36.5

37.0

33.5

37.1

39.5

682.9

709.6

Operating Profit

(8.7)

5.3

8.2

15.6

17.5

27.9

29.8

28.6

29.7

27.3

29.9

16.7

20.0

23.7

28.8

26.6

23.4

17.1

19.6

20.7

11.7

11.5

0.6

1.4

1.5

1.4

1.8

1.9

1.7

1.9

1.4

1.8

1.7

37.5

40.5

(8.0)

5.7

9.3

16.5

19.4

29.4

32.2

29.8

45.2

35.2

32.3

17.8

20.8

24.5

29.3

27.0

23.8

17.6

19.9

21.1

12.2

11.9

0.6

1.4

1.5

1.4

1.8

1.9

1.8

1.9

1.5

1.9

1.8

38.0

41.8

(8.6)

5.5

7.3

12.9

19.0

19.0

20.4

21.4

36.2

28.5

30.2

10.1

12.6

13.4

17.5

17.9

9.2

11.5

18.8

16.8

9.6

9.4

0.6

0.9

1.1

0.9

1.3

1.3

0.9

1.3

1.0

1.2

1.5

26.7

35.9

Depreciation

2.3

2.2

2.4

3.0

2.6

2.6

3.7

5.1

4.7

5.4

5.5

7.3

7.2

7.6

7.0

7.2

7.5

8.0

8.4

8.5

8.8

9.0

1.6

1.3

1.3

1.5

1.6

1.7

1.6

1.5

1.4

1.4

1.5

31.6

31.3

Capital Investment

2.6

2.0

5.7

1.7

3.0

7.9

13.5

11.5

7.5

7.1

7.4

8.5

10.2

8.2

9.9

15.0

11.6

10.1

8.2

11.2

11.8

7.0

2.6

2.2

1.8

1.6

1.3

1.5

1.9

1.9

1.5

2.0

3.2

21.7

18.4

EBITDA

(6.4)

7.4

10.6

18.6

20.2

30.5

33.6

33.7

34.4

32.7

35.4

24.0

27.3

31.3

35.8

33.8

30.9

25.2

28.0

29.2

20.5

20.5

2.2

2.7

2.8

2.9

3.4

3.6

3.3

3.3

2.8

3.2

3.2

69.1

71.8

R&D Cost

1.5

1.1

1.4

1.7

1.8

2.1

3.6

5.2

4.3

4.2

3.3

0.4

0.5

0.4

0.4

0.5

0.4

0.5

0.7

0.9

1.1

1.2

0.2

0.5

0.4

0.3

0.3

0.4

0.4

0.3

0.3

0.4

0.4

5.7

4.9

Labor Expenses

31.2

33.4

33.2

34.6

36.7

39.1

39.8

41.6

41.4

42.3

42.6

24.3

25.7

27.3

26.9

26.4

26.3

26.3

28.7

29.6

29.3

30.1

3.7

3.9

3.9

4.1

3.8

4.3

4.4

4.0

4.1

4.8

5.1

81.4

83.6

Total Assets

341.0

351.2

363.3

359.4

384.3

411.3

455.7

519.6

555.4

482.4

475.0

199.6

215.6

227.8

247.1

258.0

287.0

290.0

264.1

222.9

218.9

237.1

22.3

25.3

26.2

27.4

28.9

30.7

31.4

29.4

31.2

30.7

35.8

926.4

926.6

Net Assets

90.0

100.1

118.8

125.4

151.2

173.6

190.1

187.7

233.3

245.3

248.1

141.8

150.2

164.7

173.7

194.4

202.0

207.7

206.9

163.6

164.5

165.6

5.0

5.8

7.5

7.9

9.6

11.2

11.5

12.1

14.0

14.8

16.4

355.9

362.3

Equity

90.0

100.1

118.8

125.4

151.2

173.6

190.1

187.7

233.3

245.3

248.1

141.6

149.8

164.3

172.6

193.3

200.8

206.2

205.3

162.2

163.1

164.2

5.0

5.8

7.5

7.9

9.6

11.2

11.5

12.1

14.0

14.8

16.4

346.9

352.7

Interest-bearing Debt

84.7

83.7

73.6

84.9

60.0

57.0

69.9

149.2

127.0

73.2

47.2

0

0

0

0

0

0

0

0

0

0

0

5.8

5.9

6.2

7.1

7.1

6.9

6.5

5.8

5.6

2.7

5.0

193.5

154.4

Retained Earnings

21.8

26.0

33.5

44.7

61.7

78.0

95.2

109.0

141.3

162.1

171.9

102.9

113.3

124.2

138.2

151.4

155.8

162.6

170.9

125.8

119.7

122.7

1.1

2.0

3.4

4.2

5.4

6.6

7.4

8.5

9.3

10.3

11.8

198.3

234.1

Business Models

Financial Condition (Billions of Yen)

Top Message

Ordinary Profit
Profit Attributable to Owners of
ParentValue Creation Story

11-Year Financial Summary

Cash Flows (Billions of Yen)
9.7

(13.4)

18.3

(9.5)

56.0

33.8

(28.9)

22.7

39.4(34.7)

37.4

19.0

16.2

22.8

27.1

28.6

28.7

17.8

2.6

25.6

10.3

25.4

2.8

2.3

2.9

1.3

2.6

3.6

3.7

2.5

3.4

2.1

0.7

(16.3)

71.0

Cash Flows from Investing
Activities

(0.7)

0.4

(4.7)

(0.6)

(7.6)

(10.3)(16.8)(106.5)

(5.0)

(5.9)

7.5

(15.8)(16.5)(14.1)(18.0)(21.7)(11.4)

(5.0)

21.6

0.2

(24.7)(11.9)

(1.8)

(2.1)

(1.9)

(1.8)

(1.0)

(1.3)

(1.9)

(1.8)

(2.4)

(2.0)

(2.9)

(22.5)(5.3)

Cash Flows from Financing
Activities

(6.4)

(2.3)

(10.4)

9.4(16.0)

(4.4)

10.0

73.8

(25.7)

33.3(41.7)

(1.8)

(2.2)

(2.6)

(4.0)

(4.8)

(4.8)

(4.3)

(16.0)(62.2)

(5.9)

(6.4)

(0.9)

(0.2)

(0.3)

0.2

(0.7)

(0.9)

(1.0)

(1.4)

(0.7)

(3.3)

2.1

15.3

(56.4)

Free Cash Flows

9.0(13.1)

13.7(10.1)

48.4

23.5(45.7)(83.8)

34.3(40.7)

44.9

3.2

(0.4)

8.8

9.1

6.8

17.3

12.8

24.2

25.8

(14.4)

13.5

1.0

0.2

1.1

(0.5)

1.6

2.3

1.9

0.7

1.0

0.2

(2.2)

6.2

76.2

Cash and Cash Equivalents at End
of Period

31.9

16.8

20.4

19.4

51.8

70.7

35.0

24.9

33.9

26.6

30.0

40.4

37.9

44.1

49.1

51.0

63.6

72.2

80.7

44.3

24.0

24.3

2.1

2.2

3.0

2.8

3.7

5.1

6.0

5.2

5.6

2.5

2.4

76.0

86.0

Total Number of Shares Issued(in Thousands)

185,214 185,214 185,214 185,214 197,956 197,956 197,956 194,608 194,608 194,448 194,448

94,15994,15994,15994,15994,15994,15994,15989,15989,15982,41982,41916,100

16,100

16,100

16,100

16,100

16,100

16,100

16,100

16,10015,822

15,822 291,071 274,845

Average Number of Shares
During the Period(In Thousands)

185,096 185,093 185,088 185,085 188,381 197,820 197,707 193,540 193,499 194,079 194,448

86,42886,24586,23586,25886,30686,29986,334

84,41682,42082,41982,41916,064

16,056

16,04816,042

16,041

16,03916,062

15,96815,891

15,845

15,822 281,729 259,197

Ending Number of Shares(In Thousands)

185,095 185,090 185,087 185,084 197,823 197,819 196,324 193,254 193,713 194,448 194,448

86,25986,22986,24886,31086,30286,29586,42182,42082,41982,41982,41916,063

16,052

16,045

16,041

16,04016,03916,073

15,875

15,873

15,822

15,822 264,376 252,515

Growth Strategy

Cash Flows from Operating
Activities

Stock Information

7

7

9

11

14

16

20

20

38

—

—

25

30

40

55

55

55

70

750

70

—

—

6

7

7

7

7

9

10

10

10

—

—

40

55

Dividend Payout Ratio (%)

—

23.6

22.9

15.8

13.9

16.6

19.4

18.1

20.3

—

—

21.4

20.6

25.7

27.2

26.5

51.6

52.6

336.3

34.4

—

—

17.4

12.4

9.8

12.9

8.7

10.8

17.1

12.5

15.9

—

—

42.2

39.7

EPS
(Earnings Per Share) (Yen)(46.53)

29.64

39.33

69.60

100.9996.23

103.31110.36187.33146.91

155.34116.71145.71155.86202.46207.67106.62133.00223.02203.23116.47114.60

34.55

56.43

71.41

54.29

80.92

83.42

58.65

79.97

62.80

75.01

94.20

94.73

138.39BPS(Book Value Per Share) (Yen)

486.22540.90641.91

677.29764.24877.66968.15971.52 1,204.24 1,261.60 1,275.76 1,641.75 1,737.80 1,905.13 1,999.39 2,239.97

2,326.81 2,386.55 2,490.89 1,967.73 1,979.32 1,992.44

313.14359.45465.19494.23600.76695.37714.88764.04880.30934.81 1035.62 1,312.19 1,396.72

ROIC (%)

(3.0)

1.8

2.8

5.2

5.8

8.7

8.4

6.6

5.9

5.6

6.8

7.5

8.5

9.7

11.4

10.0

8.2

5.8

6.6

7.8

4.9

4.8

3.7

7.8

7.7

6.6

7.7

7.5

6.5

7.2

5.2

6.6

6.2

4.7

5.3

ROE (%)

(9.4)

5.8

6.7

10.6

13.8

11.7

11.2

11.3

17.2

11.9

12.2

7.4

8.6

8.6

10.4

9.8

4.7

5.6

9.1

9.1

5.9

5.8

11.7

16.8

17.3

11.3

14.8

12.9

8.3

10.8

7.6

8.3

9.6

8.7

10.3

ROA (%)

(2.6)

1.6

2.0

3.6

5.1

4.8

4.7

4.4

6.7

5.5

6.3

5.1

6.1

6.1

7.4

7.1

3.4

4.0

6.8

6.9

4.3

4.1

2.6

3.8

4.4

3.3

4.6

4.5

3.0

4.2

3.3

3.8

4.5

5.8

3.9

D/E Ratio (Times)

0.94

0.84

0.62

0.68

0.40

0.33

0.37

0.79

0.54

0.30

0.19

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

1.16

1.03

0.84

0.90

0.73

0.62

0.56

0.48

0.40

0.18

0.30

0.56

0.44

Operating Profit to Net Sales (%)

(2.9)

1.6

2.5

4.2

5.2

7.4

7.4

7.4

8.1

7.5

8.0

7.8

8.7

10.2

12.4

11.4

10.0

7.7

8.2

8.8

5.0

4.6

2.6

4.3

4.5

4.0

5.0

5.1

4.6

5.0

4.2

4.8

4.4

5.5

5.7

Equity Ratio (%)

27.4

28.9

33.3

34.7

40.7

43.6

43.8

38.5

43.4

47.3

51.8

71.7

72.2

74.1

72.7

76.5

73.7

71.5

74.1

66.6

73.8

72.0

23.3

24.2

29.0

29.6

34.2

37.4

37.0

39.9

46.1

47.8

49.2

37.4

38.1

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

3.01

3.07

4.49

3.72

4.49

5.44

4.81

5.26

3.34

6.28

4.81

—

—

Sustainability

Dividend (Yen)Management Index

59

Corporate Data

Overseas Sales Ratio (%)*MS Only

60

Chapter 6 Corporate Data

MAEDA (MK)MAEDA ROAD (MD)

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

CO2 Emissions:
Scopes 1 (t-CO2)*1

—

—

—

—

—

—

4,165

4,168

3,439

3,256

CO2 Emissions: Scope 2
Market Standards(t-CO2)

—

—

—

—

—

—

26,47822,62520,282CO2 Emissions: Scope 2
Location Criteria(t-CO2)

—

—

—

—

—

—

—

—

19,952CO2 Emissions: Scope 3 total(t-CO2)*1

—

—

—

—

CO2 Emissions: Scope 3
Category 1 (t-CO2)

—

—

—

CO2 Emissions: Scope 3
Category 11 (t-CO2)

—

—

—

2012

2013

2014

2015

2016

2017

2018

2019

INFRONEER(INF)*

MAEDA SEISAKUSHO (MS)
2020

2021

2022

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2021

2022

3,271 267,393 285,049 268,396 246,329 246,462

243,880 225,575 228,793 232,618 232,378 225,943

1,324

1,256

1,167

1,162

1,050

1,029

1,035

1,056

1,159

1,193

1,070 236,827 230,284

17,3653,700

51,32257,44456,83068,20160,59264,05457,922

52,88854,63453,664

34,773

1,485

1,583

1,552

1,484

1,501

1,478

1,444

1,458

1,428

1,400

1,302

72,42939,775

17,791

26,454

—

—

—

—

—

—

—

—

50,39750,66949,607

—

—

—

—

—

—

—

—

1,491

1,599

1,487

70,05977,548—— 4,547,168 3,017,885 3,348,164 3,264,500 2,569,857

—

—

—

—

—

—

—

—

— 300,867 327,220

—

—

—

—

—

—

—

— 175,796 184,396 187,456 3,749,763 3,084,533——— 918,593 489,954 1,097,138 708,078 658,044

—

—

—

—

—

—

—

—

— 206,554 239,380

—

—

—

—

—

—

—

—

—

—

—

—

— 3,492,141 2,400,821 2,109,691 2,340,981 1,702,279

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

175,796

184,396

187,456

Energy: Total Energy
Consumption (MWh)*2

218,263 312,547 287,539 343,166 264,294 262,506 338,875 331,291 236,688 287,636 270,866

1,167,537

1,193,873

1,131,037

1,096,318

885,489

1,092,581 1,006,652 1,010,400 1,025,265 1,106,589 1,284,116

—

9,776

8,805

8,693

8,649

8,101

8,250

8,769

7,639

8,295

4,466 1,402,520 1,559,448

Energy: Power Consumption(MWh)35,211

61,142 119,809 122,896 122,959 122,554 122,302

125,359 117,613 114,590 115,377 117,019 114,566

—

3,914

3,757

3,635

3,695

3,531

3,607

3,610

3,115

3,694

3,435 153,722 179,143

Waste: Total Emissions (t)512,126 614,364 566,392 586,118 560,127 593,102 539,370 579,133 388,124 532,883 677,275

—

—

—

—

—

—

— 367,599 406,653 507,590 343,107

—

77

88

104

115

145

168

188

201

963

Waste: Final Disposal Amount(t)*3

45,00031,00013,115

—

—

—

—

—

—

—

12,165

11,237

—

—

—

—

—

—

—

—

—

—

Water Intake (m3)267,773

609,691 347,714 471,112 399,090 459,493 424,611 466,493 388,529 455,576 571,993

—

—

—

—

—

—

—

—

— 273,171 302,315

—

—

—

—

—

—

—

19,856

16,78918,771

18,667 747,518 892,975

Water Discharge (m3)265,002758,805 391,168 557,773 455,740 256,753 496,800 455,336 417,315 476,625 438,707

—

—

—

—

—

—

—

—

— 273,171 302,315

—

—

—

—

—

—

—

19,856

16,78918,771

18,667 768,567 759,689

Environment

44,07619,00062,07530,00040,16526,00038,13620,00046,71015,00040,333

20,76844,823

17,11741,07931,973

12,215

17,3562,525,377 1,889,735— 1,041,436

1,020,382

49,32924,352

—

40

46

52

90

200

603

289

155

133

600

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

600

66

Number of Employees(Persons)*4

2,666

2,790

2,942

3,023

3,152

3,304

3,526

3,683

3,719

3,771

3,798

2,140

2,201

2,246

2,247

2,223

2,219

2,231

2,215

2,196

2,233

2,428

539

533

556

578

590

591

588

589

596

592

589

6,597

6,818

Female Employment Rate (%)

10.7

11.5

12.0

12.5

13.2

14.4

15.8

16.4

16.5

16.6

16.4

19.0

19.6

20.0

20.2

19.9

20.1

19.9

20.6

19.9

20.1

19.9

10.6

10.3

10.8

10.7

10.5

10.8

11.4

11.2

11.7

12.3

12.7

17.4

17.3

Employment Rate of Persons
with Disabilities (%)

1.91

1.83

1.89

2.18

1.98

2.01

2.39

2.06

2.21

1.83

2.11

1.85

2.29

2.05

1.88

1.91

1.79

2.07

2.26

2.00

1.85

2.33

1.55

1.74

1.68

1.63

1.86

2.32

2.36

1.86

1.60

1.18

1.35

—

—

Annual Paid Leave Rate (%)

17.8

16.9

20.2

24.1

36.9

42.6

46.0

56.6

56.1

60.5

67.2

31.8

29.8

31.0

32.1

35.2

38.3

38.2

48.3

55.4

57.8

58.8

48.8

40.6

51.8

52.6

57.8

69.7

67.7

72.0

70.0

70.0

67.8

—

—

Number of Bases (Locations)

61

65

59

60

62

62

62

61

58

57

59

232

232

233

233

236

235

233

230

230

227

226

33

33

27

27

28

28

26

25

25

29

29

313

314

Number of Cooperating
Companies (Companies)

478

473

475

507

522

524

525

533

545

561

567

129

138

149

151

154

154

156

156

155

155

151

—

—

—

—

—

—

—

—

—

—

—

—

718

Frequency Rate*5

1.28

1.38

0.97

0.59

0.75

0.57

0.44

0.90

0.80

0.51

0.56

8.00

13.00

11.00

4.46

3.31

2.19

3.56

1.06

1.41

4.13

1.75

1.00

1.00

1.05

1.01

0.00

0.90

0.00

0.87

4.21

0.00

0.00

0.51

0.56

Average Employee Salary(Thousands of Yen)*6

7,521

7,403

7,405

7,770

8,088

8,600

8,819

9,061

9,287

9,272

9,322

8,388

7,850

7,863

7,780

7,678

7,643

7,632

7,865

8,069

8,465

8,561

4,703

4,822

5,151

5,238

5,393

5,660

5,731

5,794

5,918

6,184

6,543

9,830

9,671

Internal Directors (Persons)

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

4

4

Outside Directors (Persons)

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

5

5

Board of Directors AttendanceRate (%)

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

99.0

95.8

Audit Committee AttendanceRate (%)

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

100

97.4

Nomination Committee
Attendance Rate (%)

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

92.9

95.9

Compensation Committee
Attendance Rate (%)

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

97.2

91.0

Number of Serious Legal
Violations: Compliance*7

—

—

—

—

—

—

—

—

—

3

1

—

—

—

0

2

1

0

1

0

0

0

0

0

0

0

0

0

0

0

0

0

1

3

2

Business Models

Contributed Amounts in
Dividends for the Earth(Millions of Yen)

51,732—— 914,632 897,424

Top Message

2012

Value Creation Story

11-Year Non-financial Summary

Society

Corporate Data

61

Sustainability*1 MAEDA has changed the categories of Scope 1 and 3 in 2020. For numerical values from before 2019, view the MAEDA CORPORATION website. MAEDA ROAD has changed the aggregate range of Scope 3 since 2021.
*2 The numerical values from before FY2020 for MAEDA ROAD are calculated using estimated values based on FY2021 results *3 Numerical values for MAEDA CORPORATION before 2018 are estimates only.
*4 Persons who have labor contracts with INFRONEER, MAEDA CORPORATION, MAEDA ROAD, and MAEDA SEISAKUSHO (excluding sub-subsidiary companies). *5 Based on four or more days of lost worktime for MAEDA ROAD from FY2022.
*6 Based on individual company figures *7 Number of legal violations discovered through whistle-blowing for MAEDA CORPORATION and MAEDA SEISAKUSHO; Number of administrative and criminal penalties for MAEDA ROAD.

Growth Strategy

Governance*Figures for INFRONEER are totals for the entire Group, with some exceptions.

62

Chapter 6 Corporate Data

Initiatives Valued by the INFRONEER GroupU N Global Compact
We support the 10 principles
related to human rights,
labor, environment and anticorruption, and will continue
our efforts to achieve asustainable society.

Company Overview (As of March 31, 2023)
INFRONEER Holdings Inc.

Headquarters

2-10-2 Fujimi, Chiyoda-ku, Tokyo

Established

October 1, 2021

Business Category

Management of the entire Group including provision of allsorts of infrastructure services from planning to design, construction, and operation & maintenance of infrastructures

MAEDA CORPORATION

Paid-in Capital¥20 billion

MAEDA ROAD CONSTRUCTION Co., Ltd.

Net Sales¥709.6 billion

Aichi Road Concession Co., Ltd.

Number of Employees

7,421

Listed Stock Exchange

Prime Market, Tokyo Stock Exchange (Stock Code: 5076)(Fiscal Year Ended March 31, 2023)

Administrator of the
Shareholder Registry

Mizuho Trust & Banking Co., Ltd.

Number of Shares Per Unit

100 sharesG roup Companies

MAEDA SEISAKUSHO CO., LTD.

On Completing the Integrated ReportJapan Management
FUJIMI KOKEN Co., Ltd.
FBS CO., LTD.

Changes in Market Capitalization (As of July 2023)(¥ million)
400,000

Major Shareholders (Top 10)*1

418,314350,000
300,000

238,455

250,000

100,000
50,0000115,227

64,532
48,4892011 12Q3

187,347

258,071

179,020
147,235

148,726

67,366
13

14

15

16

17

18

19

20

21

22

23
Aug

INFRONEER

MK (consolidated)

Shareholding
Ratio (%)

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

31,736

12.10

Hikarigaoka Corporation

26,274

10.02

Custody Bank of Japan, Ltd. (Trust Account)

13,203

5.04

Sumitomo Realty & Development Co., Ltd.

8,695

3.32

INFRONEER Employee Shareholding Association

8,352

3.19

STATE STREET BANK AND TRUST COMPANY 505001

5,634

2.15

STATE STREET BANK AND TRUST COMPANY 505103

3,807

1.45

Custody Bank of Japan, Ltd. (Trust E Account)

3,644

1.39

KIA FUND 147-TOKIO MARINE

3,102

1.18

Sumitomo Mitsui Banking Corporation

3,061

1.17

*1 The shareholding ratio is calculated by deducting treasury shares (12,629,496 shares).
*2 The Company holds 12,629,496 treasury shares, but is excluded from the above list of major shareholders.

1,200,000,000 shares

Total Number of Shares Issued

274,845,024 shares

Number of Shareholders

22,506(Fiscal Year Ended March 31, 2023)

FY2022

Plans for Fiscal Year Ending March 31, 2024

Dividend (Yen)55

55 (including interim dividend)

Dividend Payout Ratio (%)

39.7

45.8

Status by Owner
1.59%

Foreign nationals

24.66%

23.79%

24.42%

25.54%

Individuals and others

IR Activities

Financial institutions

Quarterly briefing for analysts (president in attendance)
Individual IR and small meetings (held 99 times)
Seminars for individual investors (held three times in Tokyo, Osaka, and Nagoya;
521 participants)
Work site/facility tours (held twice)YouTube streaming (distributed three times)

65,377,548 shares(21,722 shareholders)

67,767,237 shares
300 shareholders

Domestic corporations
67,134,231 shares(401 shareholders)

63

Term

70,192,735 shares(43 shareholders)

For more information on our IR activities, visit
https://www.infroneer.com/en/ir/

Definitions in Management Plan

Infrastructure

Constructed structures, such as schools, medical facilities, prisons, stadiums and the like, and civil structures, such as roads, water supply and sewer systems,
airports, ports, and renewable energy facilities and the like; indicates tangible (hard) facilities of all social infrastructures.
Note: An intangible (soft) infrastructure other than the above is indicated separately as XX infrastructure. (e.g., “information infrastructure”)

Infrastructure service

The operation, maintenance, and management of the above infrastructure and services provided directly and indirectly through the infrastructure; indicates “soft”
as opposed to “infrastructure” that indicates a tangible (hard) facility.

A world of boundlessinfrastructure services

A status of providing unrestricted services beyond the established mechanisms, regulations and rules of the infrastructure industry and market. As a result, astate making it possible for the beneficiaries to make “optimal choices.”

Engineering capabilities

A construction technology capability that demonstrates the strengths of each business company of INFRONEER in the “construction” business. This includes not
only technical capabilities at the construction stage, but also sales capabilities, design and proposal capabilities, technical development capabilities and others.

Concession

A PFI project in which a private business operator acquires the right to operate a public facility or the like (the right to operate a public facility or the like owned by the
public and to receive usage fees of the facility as its own income) based on the PFI Act (Act on Promotion of Private Finance Initiative). This enables private business
operators to operate, maintain, and manage public facilities and the like in a stable manner over the long term, making it easier to demonstrate private ingenuity.

PPP/PFI

PPP (Public Private Partnership): A partnership between the public administration and the private sector in the construction, maintenance, management, andoperation of public facilities to achieve efficient use of financial funds and administrative efficiency by utilizing the ingenuity of the private sector.
PFI (Private Finance Initiative): Based on the PFI Act, utilize private funding, management capabilities, and technical capabilities for the construction, time, andoperation of public facilities and the like.

Corporate Data

4,373,273 shares
40 shareholders

The definitions of the key terms used in this integrated report and the INFRONEER Vision 2030 are shown below.

Dividend Per Share and Dividend Payout Ratio

Total Number of Shares Authorized

Brokerages

Glossary
SustainabilityS tock Information (As of March 31, 2023)

Mitsuhiro Okazaki
Representative of the Integrated Report Editorial Team
Head of the Sustainability Promotion Office, Corporate Strategy Dept.

Growth Strategy

154,579

206,983

Number of Shares
Held (In Thousands)

Shareholder Name

Thank you for reading this report to the end.
The mission of this integrated report is to present INFRONEER’s present situation and future plans as well as the approach to the futureso that our stakeholders will better understand and support our thoughts and activities. In addition to this tool, with its limited capacity tooffer everything we would like, we utilize other media and opportunities to communicate our thoughts and activities on an ongoing basis
according to our stakeholder dialogue policy.
Having shifted to the holding company system in October 2021, about two years ago, the company has taken only its earliest steps
on the path toward becoming an integrated infrastructure service company. We have a myriad of challenges to overcome to implement
future plans, as described in this report by the presidents of INFRONEER Holdings and the three business companies, as well as outside
directors and the chief financial officer.
These challenges are formidable and cannot be solved by the company alone, nor even overcome by a selected few within the company. The essential thing is cooperation of all stakeholders. We would like you to join our journey toward drawing a “future,” traveling a “path,”and creating “a world where there’s no limit to what can be asked from and what can be delivered by infrastructure services.” Taking thisopportunity, I would like to express my deepest appreciation to all the people who have extended cooperation to us in preparing this integrated report as well as our predecessors who have contributed to the Group’s long history of business. And I want to thank the membersof the Integrated Report Editorial Team, who have worked to overcome many challenges by making persistent efforts to negotiate anddiscuss with various people concerned.
We hope this report will serve its role as a stakeholder communication tool in encouraging many people to join us in challenging thestatus quo for the future of our infrastructure. We appreciate your continued support and cooperation.

Business Models

Share-related Information (As of March 31, 2023)

150,000

We aim to procure 100% of the electricity we use in ourbusiness activities from renewable energy sources.

Editorial Notes and Glossary

75 other companies

200,000

Recognizing climate change as one of our key management
issues, we will continue our efforts to achieve carbon neutrality.

R E100Top Message

Trade NameTCFD (Task Force on Climate-related Financial Disclosures)

Value Creation Story

Company Overview and Stock-related Information

64