January 21, 2021

Company Name
Representative Name
Securities code
Contact

Takamatsu Construction Group Co.,Ltd.
Nobuhiko Yoshitake, Representative Director and President
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Masahiro Shimabayashi,Managing officer, Group Integration Division（TEL：+81-3-3455-8108）

Notice regarding issuance ofStraight Bonds（the first series）and Sustainability-Linked Green Bonds（the second series）
Takamatsu Construction Group Co., Ltd. (“TCG”) held the Board of Directors on January 20, hereby announces thatTCG decided to issue straight bonds (the first series), which will be our first public offering of bonds, and Japan's first
Sustainability-Linked Green Bonds (the second series) (*1) (*2), which combines Sustainability-Linked Bonds andGreen Bonds as follows.
This Sustainability-Linked Green Bonds are to set revenue target that corresponds to the 17 goals of the SDGs
(SDGs Contribution Revenue), and to allocate all funds raised to a green project (construction of a new “TCG Building”(TCG Group's Tokyo headquarters building) with superior environmental performance) which will be the first SDGs
Bonds in Japan.
The overview of the Sustainability-Linked Green Bonds is as follows. At the same time, we are planning to issue
Straight Bonds (10-year bonds) in the form of a public offering.
Ⅰ．About Sustainability-Linked Green Bonds
１．Purpose and Background of Sustainability-Linked Green Bonds Issuance
TCG Group have adopted “We conduct the construction business as a mutually complimentary activity vital to society.”as our management credo. We will responsibly provide useful and safe buildings and reliable services to society. We willbuild better relationships not only with our customers, business partners, and employees, but also with countries,
communities, nature, and the global environment.
We believe that it is necessary to fulfill our social responsibility.
At present time, TCG Group are working on Mid-Term Management Plan “Create！2022” which ends in FY ending
March 2022.
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This Mid-Term Management Plan is made up of five “Creates”. The fifth pillar, “Create Value towards Economy,
Society and Environment”, We position our efforts toward the SDGs as essential for the long-term growth of TCG
Group. To sustainably increase corporate value, we are proactively addressing Environmental, Social, and Governanceissues, with each of unique companies of TCG Group demonstrating a high level of expertise in their respective
business fields.
TCG Group’s five “Creates”① Create High-growth, High-profit Group② Create New Business Domain③ Create Group Culture that Respects Diversity and Compliance④ Create Synergy Effect⑤ Create Value towards Economy, Society and Environment
Under the circumstances, TCG has decided to issue Japan's first Sustainability-Linked Green Bonds, whoseissuance conditions are linked to the achievement of sustainability performance targets (*3) (“SPTs”), to raiseawareness of our environmental initiatives.
Sustainability-Linked Green Bonds are bonds that combine the features of Green Bonds, in which the entire amountof funds to be raised is allocated to green projects, unlike Sustainability-Linked Bonds, in which the use of funds is notlimited.
The SPTs that are linked to the conditions of issuance are set as "the cumulative total of SDGs Contribution
Revenue of TCG Group total for the 4 FY in the future (FY ending March 2022 and beyond) is at least 391.1 billion yen.
（*1）Sustainability Linked Bonds （SLB）
SLB are bonds whose terms and conditions vary depending on whether or not they achieve predetermined sustainability/ESGtargets. Therefore, the funds raised need not be limited to a specific use of funds. SLB are assessed by key performanceindicators (KPI) and SPTs predetermined by the issuer. A bond in which SPT is set as target values to be achieved withrespect to KPI, and the terms of the bond change depending on whether the KPI achieve the SPT, thereby motivating theissuer to achieve the SPTs.
（*2）Green Bonds
A bond that conforms to the Green Bond Principles set forth by the International Capital Market Association (ICMA) and the2020 edition of the Ministry of the Environment's Green Bond Guidelines, and is issued to raise funds for projects that
contribute to solving environmental problems, i.e., “green projects”.
（*3）Sustainability Performance Targets （SPTs）
A target based on the issuer's business strategy that determines the terms and conditions of the Sustainability-Linked Bonds
issue.

２．The Outline of Sustainability Linked Green Bond
Maturity

5years（Schedule）

Issue period

March, 2021（Schedule）

Issue amount

10 billion yen（Schedule）

Use of funds(Tentative name) Construction funds for new construction of“TCG Building”（Schedule）

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SPTs linked to issuance conditions

Premium
Lead managers

Achieve a cumulative total of 391.1 billion yen in SDGs
Contribution Revenue of TCG Group over the next 4 FY
(FY ending March 2022 and beyond).
If SPTs are not met, a premium of 0.5 yen per 100 yen of thebond amount is paid.
Daiwa Securities Co. Ltd.（administrative lead manager）,
Mizuho Securities Co., Ltd.

Sustainability-Linked Bond Structuring Agent（*4）/
Green Bond Structuring Agent（*5）

Daiwa Securities Co. Ltd.

（*4）Sustainability-Linked Bond Structuring Agent
An entity that provides support for the issuance of Sustainability-Linked Bonds through the development of a SustainabilityLinked Bond framework and advice on obtaining second-party opinions.
（*5）Green Bond Structuring Agent
Provide support for the issuance of Green Bonds by formulating green bond frameworks and advising on obtaining second
party opinions.

３．Definition of SPTs
In issuing the Sustainability-Linked Green Bonds, TCG has set the targets for SDGs Contribution Revenue asSPTs.
１） SPTsTCG Group aim to achieve a cumulative total of 391.1 billion yen (*6) in SDGs contribution Revenue over thenext four years (FY ending March 2022 to 2025).
（*6）About 391.1 billion Yen as SPTs
In the past three years (FY ended March 2018 to 2020), the average of SDGs Contribution Revenue per FY was 92.7 billionyen.
We have set targets for each FY to grow this average by 1.52% per year to reach 100 billion yen in SDGs Contribution
Revenue in the FY ending March 2025.
Considering the unevenness of the results for each FY, the SPTs were set as a cumulative total for 4 future FY.

２） SDGs Contribution Revenue is total of the simple sum of TCG group of each of the following revenue as defined.

（1）. Contribution to Environment Reservation① Civil engineering revenue directly linked to renewable energy
・ Revenue from the construction of solar, wind, geothermal, small and medium sized hydroelectric,
and biomass power generation facilities
・ Revenue from installation of solar power generation equipment②③

Revenue of slope construction using natural symbiotic materials and methods
・ Revenue of slope construction work using greening methods based on nature recovery greening
technology that considers biodiversity and local landscape
Revenue of buildings that comply with energy conservation standards
・ Revenue of buildings that comply with certain environmental standards designated by us, such3

as CASBEE (Comprehensive Assessment System for Built Environment Efficiency) (*7) and ZEB(Net Zero Energy Building) (*8).
（*7）CASBEE
It refers to the Comprehensive Assessment System for Built Environment Efficiency (“CASBEE”), which is a method ofevaluating and rating buildings based on their environmental performance.
It is a system that comprehensively evaluates the quality of buildings, including not only environmental considerations suchas energy conservation and the use of materials and equipment with low environmental impact, but also indoor comfort andconsideration for the landscape (*8).
（*8）ZEB
It is an abbreviation for Net Zero Energy Building, which is a building that aims to achieve a zero annual primary energy
consumption balance while providing a comfortable indoor environment.
In addition to the ZEB standard, buildings that meet the Nearly ZEB, ZEB Ready, and ZEB Oriented standards are also
included in the calculation.

（2）. Contribute to Sustainable Cities and Communities① Revenue of Present safe and long-life residence
・ Revenue of Architectures with its strength exceeding Buildings Standards Act by more than
15%
・ Revenue of anti-seismic reinforcement work
・ Revenue of excellent long-term housing② Construction revenue that maintains safety, comfort, and high quality
・ Revenue of large-scale renovation work for condominiums and other buildings.
③ Revenue of construction leading to the inheritance of traditional architecture and culture, and the protectionof buried cultural properties.
・ Revenue of shrine and temple construction and excavation of buried cultural properties④ Revenue related to housing services for the elderly
・ Revenue related to the operation of residences with health and welfare services for theelderly（3）. Revenue related to other technologies similar to (1) and (2) above that are acquired by TCG Group inconnection with new business start-ups, technology development, mergers and other acquisitions.
４．Conformity as Sustainability-Linked Bonds
In order to issue Sustainability-Linked Green Bonds, TCG has received confirmation from Japan Credit Rating
Agency, Ltd. (“JCR”) regarding its compliance with the "Green Loan and Sustainability-linked Loan Guidelines 2020" ofthe Ministry of the Environment and the "Sustainability-linked Bond Principles 2020" of the International Capital MarketAssociation (“ICMA”).

4５．Conformity as Green Bonds
With regard to the conformity assessment of the Green Bonds, TCG has received a preliminary assessment of“Green1,” the highest level of the "JCR Green Bond Assessment," from JCR to the effect that we conform to the"Green Bond Guidelines 2020" of the Ministry of the Environment and the "Green Bond Principles 2018" of ICMA.
Please refer to the news release issued by JCR today for the valuation.
URL: https://www.jcr.co.jp/en/greenfinance/６．（Tentative name）The Outline of New “TCG Building”
Location

4-8-2 Shiba Minato-ku, Tokyo, Japan

Site area

1,529.49 ㎡

Total floor area

16,493.48 ㎡

Number of floors

18 floors above ground, 1 floor below ground

Structure

Steel-frame construction, partially steel-frame reinforced
concrete construction

Scheduled start of construction

September, 2020

Scheduled for completion

February, 2023 （Schedule）

Construction
Main environmental certifications, etc.

Joint venture between Asunaro Aoki Construction Co., Ltd. andTakamatsu Corporation
Acquired CASBEE A rank（December 21, 2020）■ Rendering of the completed new “TCG Building”【Reference Information】
TCG’s ESG Web Page https://www.takamatsu-cg.co.jp/eng/about/esg/
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Ⅱ．About Straight Bonds
Maturity

10years（Schedule）

Issue period

March, 2021（Schedule）

Issue amount

5 billion yen（Schedule）

Use of funds

The funds will be used for repayment of loans and operating
funds.

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