UT Group Co., Ltd.

UT Group Co., Ltd.

UT Group Co., Ltd.

O u rChange is certain to come, as in all eras of history.
Now, a giant tsunami is striking the entire society.

M i s s i o nCreate vigorous workplaces empower i ng workers.

This is likely to change the world’s landscape.
UT Group has used such change as a trigger
to make the next advance as a company.
Our mission now is to present
an explementary workstyle of a new era to the society.
Our new stage of creation is kicking off.
Let us together create a "diversity & inclusion"
workstyle platform.

C o nt e nt s
02

Message from the
President and CEO

Chapter 02

Chapter 03

33

Sustainable enhancement ofcorporate value

41

Financial information

42

Business overview by segment

34

UT Group’s corporate
governance framework

44

Analysis of operational
results of fiscal 2020

36

Roles of organizations thatcomprise the internal
control system

46

The Fourth Medium-term
Business Plan

37

Message from External
Director and Audit &Supervisory Board Member

48

Financial statements

56

Corporate profile andstock information

Chapter 01
15

Creation of value thatdovetails with developmentof employees

16

UT Group’s value
creating process

18

Measures to develop
high-value human resources

22

Voices from UT People

28

Value proposition toclient companies

32

Profit distribution to employees

38

Team of Board Directors
and Audit & Supervisory
Board Members

39

Team of Executive Officers

40

UT Group’s IR activities

To p Me s s a g e

A period of drastic change
in society isopportunity for growthfor UT Group.
We will implement
new strategies
to achieve growth.

Kick-off of new strategies,
responding to the changing environment in 2020—
In April 2020 UT Group celebrated its 25th anniversary. I
would like to express my sincere appreciation to shareholders and all other stakeholders.
During the past 25 years from 1995 when I was 24 years old,the IT bubble burst, the global financial crisis occurred, andthe East Japan Earthquake and Tsunami thrust us into a difficult situation but we overcame each difficult phase by flexibly responding to social needs. I firmly believe that our unswerving mission, "Create vigorous workplaces empowering
workers," has supported our growth.
Currently, the COVID-19 outbreak is forcing the world to
make significant changes. The manufacturing industry – ourmain field of operation – is not an exception. UT Group has
always used significant changes in society as a trigger for agreat advance. For example, during the global financial crisisof 2008, we strived to establish a strong relationship of trustwith client companies and acquired a high share to provide
dispatched workers at their manufacturing workplace. This
led us to receive an even higher share of business during thenext economic recovery phase, creating a virtuous cycle.
Any time when an external factor forces an old status quo tochange greatly, it is natural that dispatched operators are to
be sorted out and consolidated in a process of reformation.
Over the next five years we are likely to see a significant
change in the business environment. I expect this period to
become another growth phase for UT Group. We have decided that now is an opportune time for UT Group to kick-off
new strategies. We are therefore starting the fourth medium-term management plan from fiscal 2021 (ending March
2021) to fiscal 2025.

To p Me s s a g e

UT Group’s sales and growth phases

Founding
PeriodFirst
GrowthPeriodCreated a uniquebusiness model to dooutsourced service
for an entire
production process

SecondGrowthPeriodBecame No. 1 in thesemiconductor manufacturingoutsourcing service

Expanded business area fromsemiconductors to the entire
manufacturing sector, and became No. 1
in scale in manufacturing dispatch

ー Number of technicalemployees
President and CEO

Yoichi Wakayama

Sales of the personnel
service business
Sales of the
manufacturing
equipment business

GlobalfinancialcrisisIT
recession

FY1996

FY2000FY2005FY2010FY2015

FY202003

Achieved a CAGR of 36.2% in EBITDA, exceeding
our target of the third medium-term business plan—

UT Group’s initiatives that satisfied market needs have also

been highly regarded in society. In 2018 UT Aim, a corecompany of our group, received the Good Career Company
Awards 2018 Grand Prize from the Minister of Health, Labourand Welfare, from the viewpoint of its career development
support programs for dispatched employees. In October
2019, we received the Porter Prize from Hitotsubashi University Business School. The name of the award is derived from
Professor Michael E. Porter of Harvard University, a leading
authority on competition strategy. I am grateful that highcompetitiveness of our business model was academicallyendorsed from the competitive strategy viewpoint. Given our
expanded social influence and responsibility, we strengthened our corporate governance structure and changed ourlisted stock exchange from the JASDAQ to the First Sectionof the Tokyo Stock Exchange in November 2019.
Meanwhile, the business environment surrounding UT Grouphas been changing since 2019. First, demand for dispatchedworkers in the semiconductors and electronic components
segment – our mainstay segment in the Manufacturing Business – became stagnant, mainly due to the impact of the
U.S.-China trade problems. In the automotive-related segment where orders were increasing and offset that weak-

ness, demand turned into a downtrend after Japan’s consumption tax hike in October 2019. Then came the COVID-19
outbreak at the beginning of 2020. The disruption of theautomotive supply chain caused suspension of some clients’operation, leading to a harsh market environment.
In spite of such external environment, we recorded in fiscal
2020 (ended March 2020) net sales of ¥101.1 billion andoperating profit of ¥8.0 billion. They were at similar levels to
the favorable results achieved in the previous year. As webegan the third medium-term management plan startingwith operating profit of about ¥2.4 billion in 2016, CAGR of
36.2% in EBITDA was achieved, exceeding our commitment
or target CAGR of 32%. The average total return ratio for theperiod was 27.7%. As the COVID-19 outbreak caused thebusiness environment to be extremely uncertain, we opted
to increase internal reserves and be prepared for an emergency situation, as the action which we believe should be forthe best interests of shareholders. We therefore decided toforgo return to shareholders in fiscal 2020, which was the
final year of the third business plan.
I think that our shareholders must naturally be concernedover the future outlook. The COVID-19 has greatly been affecting the supply chain of the automotive and other manufacturing industries. I am convinced that the key point in thecurrent fiscal 2021 is to devise a specific strategy for a recovery phase, while assessing the external environment.

Operating profit

EPS

To p Me s s a g e

To p Me s s a g e

Let me first review the third medium-term management plan(from fiscal 2017 ended March 2017 to fiscal 2020). During
this period, thanks to the revised Worker Dispatching Act
that protects rights of dispatched workers, demand for regular (indefinite-term) dispatched workers, an area of strengthof UT Group, increased and resulted in a significant growthin sales and operating profit. As a background, major companies began to select dispatch operators who focused oncompliance concerning labor-related laws and regulations,and the dispatch industry was consolidated into companies
which did meet this criteria. In such an environment, UTGroup enhanced its relationships with major corporategroups through "committed orders," which involve committing to dates of assignment and numbers of personnel particularly to meet large-scale corporate HR needs. Partly due
to the successful outcome of this, we recorded net sales of¥101.1 billion and operating profit of ¥8.0 billion in fiscal
2020. As we had approached close to the initial target of¥8.2 billion in operating profit for fiscal 2021, we shortened
the plan period by one year and finished it in the fiscal 2020,
instead of fiscal 2021.

Review of the Third Medium-term Business Plan
Net sales(100 million yen)

1,600

EBITDA(100 million yen)

100

120

CAGR

Plan!26.9%

Result!23.1%(100 million yen)

CAGR

Plan!32.0%

Result!36.2%

90

1,400
100

180

CAGR

Plan!27.9%

Result!35.1%

80

Plan!27.9%

FY16

FY17

Result!29.0%

140

70

80

CAGR
160

1,200

1,000

(100 million yen)

120

60
100
50

60

800

80
40

600
40

60

30

400

40

20

20
200

20

10
0

0
FY16

FY17

FY18

FY19

FY20

FY21

0

0
FY16

FY17

FY18

FY19

FY20

FY21

FY16

FY17

FY18

FY19

FY20

FY21

FY18

FY19

FY20

FY21

※A dotted bar on the graphs indicate the targets for the initial final year.

04

05

Creating a career platformthat can satisfy
needs of more workers—

Flexible workstyle to match each life stage of workers[ Career-oriented workstyle ]Next UT

Since its 1995 start, UT Group has consistently been dedicated to the interests of dispatched workers, and particularly for improvement of their benefits and enhanced added
value. We created a new workstyle of "regular employee
dispatch," which means to hire dispatched workers in a
manufacturing workplace as our regular (indefinite-term)
employees and to make them fully covered by social insur-

To p Me s s a g e

Create jobs
nationwide in Japan

Flexibility

Companies

Twin Customer Strategy

Enhancedcompetence

Provision ofhigh-quality workplaces

Stable supply ofhighly-skilled personnel

Create a“diversity & inclusion”
workstyle platform
Women

06

Companies

Workers

Mostlyyoung men

Expand the scope ofTwin Customer Strategy
Foreigners

Provision ofhigh-quality workplacesServicesectorwork

Food
sectorwork

Medical,healthcare
work

Manufacturing operators

Reliable stable employment in workplaces nationwide

Reliability

Stable employment that maintains continuity
in work region or career

Career consulting to support growth of employees

Bonding

Career consulting for each life stage

Various career paths
that allow employees advance their career

GrowthCareer paths, opening to the next growth stage

Workers’ desire to obtain skills and experiences

Desire of workers

Workers’ desire to have a stable living base

Provision of growth opportunities to workers

Value provision
to workers

Provision of reliable, stable job opportunities

IT engineers

Constructionengineers

UT Solution
Workstyle that maintains the relationshipwith a certaincorporate group

Next UT: Program to make UT Group employees become employees of client companies
Compliance

Manufacturers
Mainly large factories

Mostly young men

Seniors

Officework

Local UT: Provision of a variety of work opportunities within a local area

GrowthThe Fourth Medium-term
Business Plan

Local UT
Factorywork

One UT: Program to provide opportunities to change job/career within UT Group

Stable supply ofhighly-skilled personnel
Bonding

Design anddevelopment
engineers

UT Entry

To p Me s s a g e

Career platform evolution

The Third Medium-term
Business Plan

Next UT

Workers selectworkstyle,depending on
their life stage

Manufacturing
engineersthat copes with changing work values.

Workers

UT Entry
One UT

We want to present to society a career platform

Reliability[ Stability-oriented workstyle ]Manufacturers
Medium-sizedfactories

Manufacturers
Mainly large
factories
OfficesOtherindustries

UT Solution: Workstyle that maintains the relationship with a certain corporate groupance and eligible for career development support programs. We then launched the Twin Customer Strategy,
which aimed at being chosen by workers as well as by
Monozukuri companies. Our value proposition to workers
was described in three key words – reliability, bonding, andgrowth. Conforming to the corporate mission, "Create vigorous workplaces empowering workers," we created a newworkstyle platform. This was the successful achievement of
our third medium-term business plan.
In the next fourth management plan for five years startingfrom the current fiscal 2021, we are expanding targets ofour career platform, with the underlying theme, "Create a‘diversity & inclusion’ workstyle platform." We are expanding our targets mainly from young men in a Monozukuri
workplace to include women, elder people, and foreigners.
Target client workplaces will also be expanded mainly fromproduction processes of large manufacturers to offices andservice areas.
Our growth strategies in the worker dispatch market arealso expected to change over the next five years. Up tonow, "committed orders," which responded to large companies’ large-scale HR needs, were a driving force of our
growth. Even in the environment of a historically high-leveljobs-to-applicants ratio of 1.6 times, we were able to hire
many personnel across Japan, thanks to doing business onfavorable terms, as we committed dates of assignment andnumbers of personnel. However, the COVID-19 outbreak ischanging the landscape. Various industries are adjusting
the number of personnel and the jobs-to-applicants ratio
may substantially drop in the short term. Workers’ aspiration may also change in the post COVID-19 world. Many
people may want to have a stable job in a local community
and we must respond to such changing needs. If the market
focuses more on locality, dispatch companies may have tooperate in units of each area. Up to now, our premise wasfor our employees to work anywhere in Japan. Going forward, we may need to establish a system to make careeradvance opportunities from a manufacturing operator to anengineer self-sufficiently available within the same area.
We will begin to create another new workstyle, which will
also be associated with a new area strategy, new management style, and all that goes with the changes.

07Three new growth strategies befitting

We want to build a long-lasting

to the post-COVID-19 age—

relationship of trust with shareholders—

While the economy cannot escape the impact of the
COVID-19, there must be ways to turn it into new growth
opportunities. Let me now explain UT Group’s specificgrowth strategies in the midst of the COVID-19 crisis. Our
growth strategies over the next five years is to focus on
these: 1) One-stop personnel strategy for major manufacturers; 2) Area platform strategy; and 3) Solution strategy.

To p Me s s a g eFirstly, the One-stop personnel strategy for major manufacturers. We plan to further enhance our industry’s top personnel services for manufacturers, which we achieved
during the third management plan, and to solidify its baseas core business. Specifically, we will provide one-stop HR
service, that includes a wide range from manufacturing operators to engineers in production technology and facility
maintenance,as we have a strong relationship with major
manufacturers - our existing business partners. As outcome,we expect career development of our on-site workers, andour partners may find it easy to give broader assignment tofamiliar dispatched workers. For highly-motivated employees, career advance to being a design/development engineer, which requires technology expertise, will also be available. This strategy is actually positioned as part of UTGroup’s mission in the manufacturing dispatch industry as it
involves development of next-generation Monozukuri personnel.
Next, the Area platform strategy is to respond to needs ofthose who want stable work in a local community; to expand

the role of area offices so as to promptly respond to different
client needs by each region; and to reorganize our structureso that area offices can make discretionary decisions fromsales and marketing to hiring. It is said that there are over
700 dispatch companies in Japan. We will promote alliancewith and M&A of local dispatch operators, which are deeply
rooted in a community, so as to raise employees’ workplacesatisfaction level in the area and establish a new career platform. Therein lies another objective of ours – to ingrain compliance awareness in small/medium dispatch operators ofeach area and make a more viable dispatch industry in Japan. I am confident that our strategy to present a workstylefor each life stage to those who desire to work in a familiar
local area, according to a safety/reliability standard, will bewelcomed as response to strong needs.
Lastly, the Solution strategy is simply to strengthen our Solution Business, which increased sales and profit in fiscal
2020. This involves support for large corporate groups’ HR
strategy, specifically in solving certain managerial issues, including review of almost-fixed personnel composition orbusiness portfolio, and reemployment of retired employees.
This is also projected to be a business domain with growing
needs in the manufacturing industry. We have supported HR
mobilization by accepting employees of Japan’s representative companies and other diverse client companies as employees of UT Group. Going forward, demand for personnel
mobilization will continue to rise in the rapidly changing business environment, which was affected by the COVID-19.

Three growth strategies

Expand the service toan engineer domain

1One-stop strategy for
major manufacturers
We plan to expand the fields forour manufacturing engineers byusing our existing client baseand raising competitiveness inour core business of outsourcing of manufacturing by large
client companies.

08

2

3

Establish a scheme that enables
employees develop careers evenwith in a local area

Accelerate support
for the HR mobilization oflarge manufacturers

Area platform strategy

Solution strategy

Raise market share in regions
via alliances with and M&A of local dispatch operators; and integrate the Group’s career platform to raise profitability.

Large company structural reform needs will increase; tocope with this we will improve
mobilization of human resources -- and capture business.

My ideal in managing a company is to establish a long-lasting relationship of trust with our shareholders. Coping withthe external environment, UT Group has created various
businesses and services, and has achieved sustainablegrowth. Our 25-year history can be described as the creationof growth opportunities through flexible response to thechanging business environment. Strategies may differ depending on the period, but our fundamental value proposition to client companies remain unchanged. Our mission has
been and will be to "Create vigorous workplaces empowering workers." Our business of connecting workers with client

I am proud to say that UT Groupcan be synonymous for a company
that has coped with changes andhas achieved growth.

companies will be in need in whatever environment.
I am proud to say that UT Group can be synonymous for acompany that has coped with changes and has achieved
growth. I am committed to creating a new career platform,
befitting an age of change, and to disseminate it across Japan over the next five years.
I sincerely hope that our shareholders and stakeholders will
be excited by our sustainable growth prospect from a medium- to long-term perspective.

UT Group has successfully challenged the common
practice of "dispatched workers = non-regular employees"—

The Worker Dispatching Act has been developed to satisfy needs of society
The human resources dispatching business refers to a businesspatch of workers in job categories other than those 26. In 2004,

of a dispatch agency, that dispatches its workers to client com-restrictions on dispatching workers in the manufacturing sector

panies. This definition is based on the "Act for Securing the Prop-

were lifted. This was followed by the implementation of a plan to

er Operation of Worker Dispatching Undertakings and Improved

tighten regulations for dispatching in 26 specified job categories

UT Group has employed dispatched workers as regular employees and has enabled them to

Working Conditions for Dispatched Workers (Workers Dispatch-in 2010. The Revised Workers Dispatching Act in 2015 obliged

develop their careers. This new workstyle was our challenge to the industry’s common practice ofing Act)," with oversight by the Ministry of Health, Labour anddispatch agencies to take measures for stable employment of"dispatched workers = non-regular employees."

Welfare. The Act, enforced in 1986, has prompted development

dispatched workers and to support their career development. Inof legal systems of the human resources dispatching businessits revision in April 2020, adherence to the principle of equal pay

from the viewpoint of protecting workers. Initially temporary dis-for equal work was adopted with the objective of eliminating un-

patch into 13 specialized job categories became possible. Thenreasonable differences in salary and other benefits, caused byin 1996, the target categories were expanded to 26 and the mar-differences in employment status. Resonating to changing public

ket for accepting dispatched workers also expanded. In 1999 theawareness on workstyle, the personnel dispatch industry is also

target categories was deregulated in principle, allowing the dis-moving into a new era.

Classification of regular employees andnon-regular employees in general terms[Regular employees][Non-regular employees]

In general, regular employees have (1) an indefinite-term

Non-regular employees mean all types of workers otherlabor contract; (2) full-time normal working hours; and (3)than regular employees in Japan. They include part-timers,

are directly employed by a company. In addition, they aredispatched workers, contract workers, and commissioned

eligible for participation in social insurance, such as healthworkers (all defined in the next page). Their status is weak

insurance, employees’ pension insurance, and employment

due to fixed-term (limited) employment, they tend toinsurance programs and plans. In addition, they cannot bereceive less training, and consistency in their career isterminated without consent of the employer and thehardly ensured. This has been increasingly recognized as

employed.

social problems.

The worker dispatch market( (100
millionyen
80,000$Total number of dispatched workers: General

Back in 1995 when UT Group was founded, dispatched workers inRegular calculation basis (General + Specified)

70,000manufacturing plants had no social security and were disengaged
with no bonding with co-workers. Would they have more initiativein choosing work, if they were hired as regular employees and acquired skills? Such thought was materialized as "indefinite-term
employment (regular employee) dispatch." Nowadays, some otherdispatch agencies have also adopted the similar scheme and thecommon practice of "dispatched workers = non-regular employ-•Fixed-term employment ......
Uncertainty over long-term prospects forwork and income•Individual dispatch ......
Disengaged in a workplace of a client company•Minimum training ......
No systematic skills to be acquired•Uncertain work environment ......
No consistent career developmentees" is diminishing in use.

40,000(10,000
workers (

2 015

2010

800

Drastic change in the
Workers Dispatching Act

Tighter regulations
for dispatchingin the 26 categories--$Total number of dispatched workers: Specified

700

2004

600

Lifting of restrictions for manufacturing dispatch

1999

50,000Conventional dispatched workers

Deregulation of dispatch term
Unlimited dispatch term
for the 26 categories$Total number of dispatched workers:

60,000

Provide dispatched workers anenvironment to work at ease and grow

2006

$Net sales: General

500

Liberalization of job categories
for dispatch in principle

400

1996
Expansion to 26 job
categories for dispatch

30,000300

20,000200

10,000

100

0

0
1996

UT Group's new workstyle of "indefinite-term employment (regular employee) dispatch"

10[Dispatching of teams]
A sense of ease fromworking together withcolleagues[Favorable workplace]
Improved retention rate andgrowth rate

98

99

2000

01

02

03

04

05

06

07

08

09

10

11

12

13

14

15

16

17

18

Source: Special Survey on Worker Dispatch Industry; Ministry of Health, Labour and Welfare•The graph covers only up to 2014, prior to the enforcement of the Revised Workers Dispatching Act on September 30, 2015.

<Keywords>

Reliability, bonding, and growth[Indefinite-term employment]
Obtaining of a stable basefor living

97[Ample training programs]
Enhanced mind-set toadvance own career

Dispatched workers

Contract workers

Commissioned workers

Personnel placement

They have an employment contract
with a dispatch agency and are dispatched to a client company. They do
not have any direct employment contract with the company they are dispatched to. No fixed contract term, ingeneral.

They have a direct employment contract
with an employer but, unlike regular employees, their contract specifies theirassignment and term of employment. In
general, the contract terminates when
the contract term expires.

They are directly commissioned or assigned by an employer. They work according to case-by-case agree-ments.
They are paid compensation for a specific assignment. In general, the labor
contract terminates when the assignment is completed. They are also called
independent contractors.

A business model to introduce personnel to a client company and receive a commission when the person
is hired. "Employment place-ment dispatching" is another business of dispatching personnel on the premisethat the person will eventually be
hired as a regular employee.

11Why cannot dispatched workers work happily?
Our story began from a simple question.
—

The Revised Worker Dispatching Act is a strong tailwind,pushing UT Group to its greatest strong phase since foundation

UT Group began with two persons with a shared ambition to change the human resources
dispatching industry. In March 2019, we passed a big milestone of ¥100 billion in net sales.
We are now entering into a next growth phase.

Founding
PeriodGrowthStage 1Created a unique business model
to do outsourced service for an
entire production process

Became No. 1 in thesemiconductor manufacturingoutsourcing service

UT Group began its human resources dispatching and subcon-

patch term has been abolished and UT Group is receiving more

tracting business in 1995, overcame the IT recession in 2001

requests for dispatched workers from clients as we have a longand the global financial crisis in 2008, and is now entering its

track record in dispatching regular (indefinite-term) workers.

second growth stage. In particular, the Revised Worker Dis-

Meanwhile, due to the Revised Labor Contract Law, enforced inpatching Act enforced in 2015, which strengthened pro-tection

April 2013, fixed-term contract workers with contract periods ofof rights of workers, created a strong tailwind to boost ourover five years in total are required to con-vert their employ-

growth. According to the Revised Act, dispatch agencies arement contract to an employment contract without a definite peri-

obliged to provide stable employment and career advance-ment

od. As five years had passed since the en-forcement, manufac-

opportunities for dispatched workers, and to obtain a licenseturers are accelerating their efforts to re-place contract workers

instead of just filing a notification of doing certain business. This

with dispatched workers. Here again, UT Group, with its strength

has resulted in shake-ups of agencies which could not cope within in dispatching regular (indefinite-term) workers, is playing a sig-

the revision. Moreover, the conventional three-year limit of a dis-nificant role as a new employment base.

GrowthStage 2

[ FY3/2020 ]

19,634technical employees¥101.1

Expanded business area from semiconductors to
the entire manufacturing sector, and became
No. 1 in scale in manufacturing dispatch

billion in sales

ー Number of technical employees
Sales of the personnel service business

GlobalfinancialcrisisSales of the manufacturing
equipment businessIT
recession

FY2000

FY1996

12

Founded as amanufacturing worker
dispatch company

Began outsourced
service for an entire
production process

1995-2000

Founding period

Specialized in thesemiconductor
manufacturingsector

FY2005
Became the first
listed company inmanufacturing
dispatch

Entered into thesemiconductor
equipment business

Sold the semiconductor
equipment business Focusedon the personnel dispatch/outsourced service business

FY2019 FY2020

FY2015FY2010
The Revised Worker Dispatch Act
was enacted. UT’s long practice in
dispatch of its indefinite-term
employees became a strength

2001-2007 First growth stage

UT Aim received the Grand Prize of theGood Career Company Award 2018 from
the Ministry of Health, Labour and Welfare

Changed its listed stock exchange to theFirst Section of the Tokyo Stock Exchange
Received the Porter Prize from
Hitotsubashi University Business School

2008- Second growth stage

Founded as a manufacturing
dispatching company

Provide "safety and reliability"with the "regular employment""Power to work createsvigorous workplaces."

The industry’s first company to be listed andlaunching of an employee shareholding plan

Becoming Japan’s No. 1
manufacturing outsourcing provider

Listed on the First Section of the Tokyo Stock Exchange, and moving on to the next stage forward

UT Group originated from Aim C.I.C. Company, founded by
24-year-old Yoichi Wakayama in 1995. Its corporate namein Japanese included the English word "aim" to emphasize
its high aspirations and determination. With a strong conviction that Japan’s strength lies in its Monozukuri, we
started a personnel dispatching and subcontracting company focused on the manufacturing industry. The company
was renamed Nihon Aim in 1996.

Back in 1995, Japan’s makers in general were troubled
with a low retention rate of dispatched workers and theresultant lower efficiency in production. We then proposeda scheme that would help dispatched workers growthrough training prior to sending them to the client factories, and raised their pay based on their skill levels. Nihon
Aim adopted the policies of providing "regular (indefinite-term) employment" and "social insurance for all employees," defying the industry norms.

In 2001, the IT recession hit the industry and Nihon Aim
recorded a decrease in sales and profit for the first time.
We then discussed the survival of the company for morethan a year and from that discussion arose our mission"Create vigorous workplaces empowering workers." We
concentrated our managerial resources in the semiconductor sector, established hiring, personnel, and training systems, and became No. 1 in the semiconductor manufacturing outsourcing service.

In 2003, Nihon Aim became the first company in the manufacturing outsourcing industry to be listed in the JASDAQ
market. We also launched the industry’s first employee
shareholding plan. In April 2007, UT Group Co., Ltd. wasfounded as a holding company

In 2008 UT Group recorded significant decline in profit,
triggered by the global financial crisis. We carried out
some reforms, including the sale of the manufacturing
equipment business which we began in 2006 and the renewed focus on the personnel dispatching business. We
emerged from this crisis and diversified business domains
to manufacturers in general other than semiconductors.
Aiming to become a company most chosen by workers, wewere able to achieve one of the largest business scales inmanufacturing outsourcing.

UT Group received the Grand Prize of the Good Career
Company Award 2018 from the Ministry of Health, Labourand Welfare in 2018 and the Porter Prize from Hitotsubashi
University Business School in 2019, having been highly accredited by these institutions. In November 2019 UT Groupchanged its market listing to the First Section of the Tokyo
Stock Exchange, making a step forward to the company’s
next stage.

13

History
1995

Apr.

Aim CIC Company was founded for the factory work dispatch and outsourcing business in
Yokohama, Kanagawa Pref.

1996

July

Aim CIC Company was reorganized to Nihon Aim Co., Ltd.

2003

Dec.

Nihon Aim was listed in the JASDAQ market.

2006

Apr.

Nihon Aim made Artista Co., Ltd. a subsidiary (entry into a design engineer dispatch business.)

2007

Apr.

Nihon Aim and Apex Inc. were integrated via a joint share transfer and established United
Technology Holdings Co., Ltd. (currently UT Group Co., Ltd.) (entry into a manufacturing equip
ment business), which was simultaneously listed in the JASDAQ market.

2008

June

Moved the head office to Shinagawa-ku, Tokyo.

2009

Jan.

United Technology Holdings was renamed UT Holdings Co., Ltd.

Nov.

Sold all shares of Apex to Hachitoku Co., Ltd. (withdrawal of the manufacturing equipment

Jan.

Comm Leading Co., Ltd. was established.

Mar.

Comm Agent Co., Ltd. was established. UT Revive Co., Ltd. was established.

2011

Dec.

Arista and Comm Leading were merged and integrated as Comm Leading.

2012

Apr.

Comm Agent was renamed UT icom Co., Ltd. UT Career Co., Ltd. was established.

busi ness.)
2010

Chapter 01

Creation of valuethat dovetails with
development of
employees

UT Construction Network Co., Ltd. was established.

2013

July

Nihon Aim was renamed UT Aim, Co., Ltd. and Comm Leading, UT Leading, Co., Ltd.

July

Acquired 81% of shares of Panasonic Battery Engineering Co., Ltd. from Panasonic Corporation,
made it a consolidated subsidiary, and was renamed UT Pabec Co., Ltd.

2014

Apr.

UT Aim absorbed and merged UT icom and UT Revive.

2015

Mar.

Acquired all shares of System Revolution Co., Ltd. and made it a consolidated subsidiary.

July

UT Holdings was renamed UT Group Co., Ltd.

Oct.

UT Leading was renamed UT Technology, System Revolution was renamed UT System Co., Ltd.,and UT Construction Network was renamed UT Construction Co., Ltd.

2016

2017

June

UT Career Co., Ltd. was renamed UT Agent Co., Ltd.

Dec.

UT Global Co., Ltd. was established. UTHP Co., Ltd. was established.

Mar.

Acquired shares of Tight Work, K.K. and made it a consolidated subsidiary.
Acquired 19% shares of UT Pabec and made it a wholly-owned subsidiary.

2018

July

Acquired all shares of Lei Hau'oli Co., Ltd. and made it a consolidated subsidiary.

Apr.

UT Technology and UT System were merged.
Tight Work was renamed UT Community Co., Ltd.
Acquired 51% of Fujitsu Aprico Limited and made it a consolidated subsidiaryC o nt e nt s

(renamed Fujitsu UT Co., Ltd.)
2019

Nov.

Moved its listed stock exchange to the First Section of the Tokyo Stock Exchange.

2020

Jan.

Sold all shares of Lei Hau'oli.

Mar.

Acquired all shares of Support System Co., Ltd. and made it a consolidated subsidiary.

Apr.

Acquired all shares of TBLS Service Business Corporation and made it a consolidated subsidiary(renamed UT Business Service Co., Ltd.)
Acquired all shares of Toshiba Information System Products Incorporated and made it a consoli
dated subsidiary (renamed UT System Products, Co., Ltd.)16

UT Group’s value creating process

18

Measures to develop high-value human resources

22

Voices from UT People

28

Value proposition to client companies

32

Profit distribution to employees

Acquired 80% shares of Toshiba Office Mate Co., Ltd. and made it a consolidated subsidiary(renamed UT Toshiba Co., Ltd.) UT Aim absorbed and merged UT Global.
May

UT Aim absorbed and merged the design/development engineer dispatch business of UT
Technology.

14

15

Chapte r 01

Creation of value that dovetails with development of employees

Creation of value that dovetails with development of employees

Chapter 01

UT Group’s value creating process—
UT Group’s growth is driven by its business model that identifies both workers andclient companies as customers and makes everyone involved aim at sustainable growth.
By providing equal growth opportunities to everyone who is willing to work, we nurture highly
skillful workers. At the same time, we enhance corporate competitiveness and cope withthe drastically changing business environment.

Business

InputsFinancial capital
No possession of unnecessary assets
Simple balance sheet

Model

Outputs

MissionCreate vigorous work-

places empowering workers.

Net sales

Operating profit

Technical employees

General employees¥ 101.1billion ¥ 8.0 billion

Human capital
Employees who can cope with diverse workplace conditions
Technical employees with high-level skills
General employees with a passion towork with others and help them growProvision
skilledof highlyworkers

Reliability

Social capital

19,634

Flexibility

Strong relationships of trust withJapan’s respected manufacturers
Branding as a company that nurtures employees

Work creating value

Growth¥ 93.1billion

Offering value
propositions tocompanies

Value proposition
to workers

Intellectual capital
Knowhow to develop human resources andprovide value to companies at the same time
Training programs to nourish employees,
including those with no experience

Competitivenessenhancement

Bonding[Work creating value = Operating profit + Total personnel expenses]
UT Group’s unique benchmark showing value of generating profit
while creating jobs for people at the same timeCompliance

ROE

30.3%

Manufactured capital
IT system that supports to realize
the high-compliance management system

1,207

Provision
work

ROA

12.4%

of goodplace
Operating cash flow

¥ 3.5 billion

Natural capital
Energy resources used in offices and for cars
Business model to define both job seekers and client

SocialRealization of a society that equally provides opportunities to raise skills andOut

16companies as customers and pursue provision of value to both

impactadvance careers to all people who are willing to work, and make them fairly treated
comes

17

Chapte r 01

Creation of value that dovetails with development of employees

Creation of value that dovetails with development of employees

Measures to develop high-value human resources

Chapter 01"Reliability" enhances dispatched workers’ willingness to work

Potential of each and everyone’s "growth",
which is expanded by "reliability" and "bonding"—
UT Group’s dispatched workers are motivated by a safe, reliable working environment as well as
self-realization through growth and career advance. They also benefit from the company’s arrangements
to allocate return to them, which gives another reason to our employees to try their best.
Their growth leads to growth of the company and return to themselves in a form of better compensation.

‰Creation of good workplaces‰Thorough on-site and labor affairs management

We identify client companies which are willing to accept many

Our on-site managers capture needs of clients and are also en-

dispatched workers who can be sent in team units and an in-

gaged in managing labor affairs of on-site employees. The man-crease in cost according to a level of their skills. We also estab-agers make sure not to cause trouble in clients’ production

lish a strong compliance system in order to create worthwhileplants, by managing attendance of employees and caring forworkplaces chosen by job seekers. We establish close relation-

their physical and mental wellness. Such caring attitude also

ships with clients and raise our share of dispatched workers incontributes to creating good workplaces for dispatched work-

their plants so that to secure stable workplaces.

ers.

"Bonding" helps improve retention rate of employees
Growth• Technical training program• Management training program

In general, dispatched workers receive
work instructions from client companies’ employees. UT Group, however,• Inter-group transfer program (One UT)

does outsourcing service for an entire• Support program of transfer to client

production process with our leader

companies (Next UT)

Bonding• Dispatching in team

General dispatch‰Dispatch in teamTeam dispatch

Clientcompany’s
employees

Clientcompany’scommanderand our employees working as a single

Direct chain of command

team. This saves the client company

Direct chainof commandfrom giving detailed instructions todispatched workers, while the teammembers create bonding with each

• Career Partners

other and benefit from augmented• UT appability to acquire practical skills in[Team leader]Partially carry out the
chain of command

Dispatchcompany’s
employees

Dispatchedworkers

leadership and management.

Reliability‰Career Partners‰UT app• Creation of good workplaces

Workers nowadays think and choose their career path so as to

UT app for smartphones is available to employees to facilitate• Thorough on-site and labor affairs

enhance their skill or advance their career by themselves. UTsmooth communications with their leader or team members.

Group’s internally certified Career Partner system assists em-

Messages can be exchanged, UT Group’s information can beployees’ career formation in align with their life plan. UT em-

seen, and their attendance and their paycheck stub can beployees can consult the Career Partners about training courses,

checked. UT app is a useful tool for creating a better work envi-

obtaining of certifications, or transfer to a client company,

ronment and a teamwork.

management

among other subjects. Career Partners give face-to-face support and advice to them.

Messages
To keep in touch with a leader ormembers of a teamRegular (indefinite-term) employment

Q& A
Check various procedures

Regularly (indefinite-term) employed dispatched workers have the base of“bonding” and “reliability” that support their “growth.” This is the major
premise in UT Group’s business strategy. This makes our dispatched workers highly motivated and improves our retention rate. Moreover, this is one
of UT Group’s answers to social challenges long borne by the personnel
dispatching industry.

18

and FAQs

P a ycheck stub
Check details of payment.

19Chapte r 01

Creation of value that dovetails with development of employees

Creation of value that dovetails with development of employees

Major career support programs that

Chapter 01

Available programs to enhance job skills

help "growth" of employees—
UT Group’s employees in on-site workplaces can draw up their career advancement plan, such as to bepromoted to an executive position, transferred to an engineer position, or to work at a certain clientcompany. We have career advancement schemes as well as diverse support programs to realize theseobjectives. We help the self-realization process of each employee, centered around career consulting.

‰Initial training to become an engineer‰Super Manager School

The One UT program that supports employees who work in

Super Manager School is a training program for selected em-

manufacturing workplaces to change a career to that of an en-ployees to foster future top-level executives of UT Group. The

gineer gives applicants the initial training course on basic

school emphasizes the ability to understand the corporate poli-knowledge as the first step. By taking this course, UT employ-cies and take initiatives in how to contribute to the group, in-ees in a different job category can open up a possibility to movestead of just waiting to get instructions from a boss or the com-to another group company or to change their career. About 500

pany. We intend to foster those who can make a strategy toemployees in manufacturing workplaces change their careerachieve operating targets and deliver results, and those whoevery year. We thus respond to employees’ ambition and devel-take up the challenge to grow themselves and the organization

op highly-valuable employees.

through work.

Major career support programs‰Equipment maintenance training
Career path to becomea business manager
and an executive

Selectan optimal job

Good Job

UT Entry

Career path to become
an engineer

Support transfer toa client company

Equipment maintenance training programs respond to such

One UT

Next UT

client companies leads to deepening of the relationship of trustneeds in the manufacturing industry. Responding toneeds ofwith them and to expanding our employment. Our other objectives include development of more skillful employees, enhance-

Enable employees in the
manufacturing
department to selecttheir own workplace

Enable voluntary
nomination to a business
staff, a manager,
or an executive

Enable a career change
from a manufacturing operator
to an engineer
a client companyto an engineer

Support a change to
become a regular
employee ofa client company

ment of their salary level, and creation of a longer-term careerformation environment for these employees. The programs areoriented from the viewpoint of employees. Career options include a transfer to a major manufacturer.

UT Advanced Career Center (UTACC) for engineers

UT Entry
The UT Entry System is to respect willingness of employees andWe currently focus on the Engineering Business in order to fulfill

forts in training. We also give guidance tailored to the compe-

enable employees to nominate themselves for a position to op-

needs for dispatch engineers in Monozukuri workplaces and totence of each learner by repeated interviews by lecturers, so

erate business or an important position. This is one of attempts

promote our inter-group transfer program One UT, which en-that the learner would not lose sight of the how and why to stay

to facilitate workers to expand their own potential.

ables a career change from a manufacturing operator to an en-

in the course.

gineer. Aimed at further expanding the Engineering Business,

The UTACC also has a program for experienced engineers to

we opened the UT Advanced Career Center (UTACC) near our

step up in their careers. We in particular are focusing on thehead office in Shinagawa-ku, Tokyo, in January 2017.

Product Lifecycle Management (PLM) software course, which

A great feature of the UTACC is a variety of practical programshas recently beenemphasized in the Monozukuri workplaces. In

to train employees with no experience in engineering to be-alliance with Siemens, a frontrunner in this field, we carry out acome engineers. The courses from basic training to expert

training course using Siemens’ software with a view of the In-training include a lot of group work to nurture a culture of giving

dustry 4.0 era. We are thus developing high-value-added engi-

of help and competing with each other in addition to obtaining

neers who will support future Monozukuri.

Self-recommendation and selection
Self-recommendationand selection

knowledge. We find it important that they make conscious efExecutive
officers

Employees inworkplaceManagers(leaders inworkplace)

Every employee can run for candidacy to a different job ora manager once a year. Managers can run for candidacy to
an executive officer. There is a case of a technical employee in manufacturing workplace became a senior executive
officer in the seventh year since joining UT Group.

20

21

Chapte r 01

Creation of value that dovetails with development of employees

Voices from UT People

partners are deeply involved not merely in dispatched workers’
current jobs but also in their next career formation or future life
design. This is a valuable service and a source of great human—resource power, unique to UT Group.
I am currently in a position to head up professional career partners (PCP) activities in the Career Development Division. We

UT Group has many employees who, while working at clients’ workplaces, use our diverse career supporting
programs to raise the level of their skills and advance their careers. There are also other employees who
assist and support on-site associates to help them grow and be active in improving their work environment.
Each and every one of UT people help enhance the value of UT Group and may ultimately have a part to play

have two types of Career Partners: those who support workers’
everyday assignment at their workplaces; and those who support their career development from a longer perspective (PCPs).
While Career Partners help solve daily work troubles, the role of
PCPs is to help create a future career path for workers. PCPS
help the workers draw a future design by choosing among op-

in creating a viable future workstyle in Japan.

tions in the career platform, such as an advance from a manu-

UT × Interview—

UT Group’s long-term career development support programs are unique andhelp create highly valuable services

facturing operator to an engineer, acquisition of advanced

beside the skill of each worker, with the exception of some ad-skills,and a move to the client company.

vanced technical staff.

Forming of a long-term career plan
motivates employees, resulting
in a high retention rate
After being dispatched, workers learn skills needed and gradually come to have a settled or stable life. Conventional dispatch

SupporterInterestingly, not many dispatch companies undertake such longterm career development support, as it requires a long-term vision and fair cost.

UT Group's philosophy and high aspiration
help me keep committed to workers

companies relax support during that time but in fact, many work-

With regard to measures to assist employees’ long-term careerers start questioning about their future – "Shall I continue at myformation, cost comes first in the immediate term and good earn-

Takahiro TOKUYASU

current job?" or "What do I really want to do?" – at this timing ofings are not easily brought about. I sometimes struggled with thisSenior Manager, PCP Promotion Unit, Career Development Division
Management of professional career partners
Head up career development support to enhance value of staff

getting used to the job and a stable life. This may possibly lead toreality but UT Group has continued to deeply commit itself to its

a passive attitude toward the work or to a reason to leave the job.

employees because of high aspiration and desire of Mr. Wakaya-

UT Group has therefore established a system wherein a PCP

ma when he founded the company to raise the value of dis-meets with a dispatched employee and encourages the person

patched workers and to expand the potential of workers.

to decide on a future goal, such as to aim at becoming an engi-

Such an ideal has remained a fundamental source of our initia-

neer in X years or at raising skills so as to get a desired job, andtive, which by now is regarded as UT Group’s strength in human

to be motivated in the daily job.

resources and has resulted in receiving orders at high unit prices

Such measures have contributed to raising our employee reten-

and expanding our share at the clients’ workplaces. Major manu-tion rate and securing experienced, skillful staff, in addition to

facturers and other clients have urgent need to secure high-motivating our employees. PCP’s considerate career support toly-motivated human resources who make long-term commit-

workers results in high evaluation of UT Group’s staff and a valuements to work. More and more client companies empathize withto differentiate oneself from peers, as dispatched workers at aour initiative and help jointly develop dispatched workers.

manufacturing site are evaluated by the learning level of a team,Sometimes, a contract with a client is terminated and our dis-

Supporter—

patched workers lose their workplace. At such a time, CareerPartners scramble to find the next workplace for the workers.
Other Career Workers struggle with workers toward realizing
their goals and share their joy when the goal is achieved. Such
images of Career Workers may symbolize UT Group. We may look
like overly polite and disregard business, compared to our peers.
However, it is a part of my important responsibility to appeal that
our initiative be taken as a service that creates value and helps
bring about good operating performance. We intend to enhanceoffering of opportunities for our workers to grow, and strengthen
our career platform. Our Career Partners will deeply commit
themselves to our workers and we will thereby have a better en-

22

Personnel training of many conventional personnel dispatch

patched workplace. They are not readied for engagement in thevironment to realize workers’ growth. I firmly believe that theseagencies tends to be limited to support of staff at the initial

next career step, and even less so for assisting the future life

will lead to UT Group’s unshaken strength and contribution tostage of learning the job and getting accustomed to the dis-design of dispatched workers. UT Group is different. Its career

society via our business.

23

Chapte r 01

Creation of value that dovetails with development of employees

Creation of value that dovetails with development of employees

Chapter 01

UT × Cross Talk—

Experience of seeing my supervisor
develop staff with passion up
close has made who I am today.

Mr. Hiraoka’s workstyle of being
locally based and expanding
his career is an ideal form of work.

Careerminded
Employee

Supporter

Nomura: I am Manager of the West Japan Section of the PCP

support employees’ development.

Promotion Unit, Career Development Division, the same unit as

Supporter—

Mr. Tokuyasu (P22). I am based in the Kita-Kyushu Career Center and my assignment is to head up career design training andManami NOMURA

career development support of employees in the Kyushu, Kan-

Joined in 2012;
Head up career formation support as the General Manager ofthe West Japan Section, PCP Career Promotion Unit,
Career Development Divisionsai, Chugoku, Shikoku, and Hokuriku Areas. In plain words, I am
engaged in development and follow-up of Career Partners (CP),24

Career-minded Employee—

Hiraoka: Nomura-san, are you thinking of taking up a challenge?

Kentaro HIRAOKA

Nomura: I would like to create workplaces that empower women

Joined in 2014;
Career Center Manager, Kita-Kyushu Career CenterIn charge of organization management andgeneral labor affairs of the Fukuoka and Oita Areasand the elderly. A little modification of work shifts will allow parenting moms or seniors to work comfortably. I am hoping tocooperate with our clients and propose a new workstyle for

who are consultants to our on-site employees.

adoption across Japan.

Hiraoka: I actually received Nomura-san’s guidance to become

Hiraoka: I want to make efforts even for just a bit in realizing UT

a CP. I am now the Career Center Manager in the Kita-Kyushu

at the client’s site.

walls around themselves because of their academic background

Group’s goal: Creating a "diversity & inclusion" workstyle plat-

Career Center. My assignment is diverse: from organization

Hiraoka: I feel lucky to be able to join UT Group at a good tim-

or career? With no manual I have sought how to give them aform. As I believe, in particular, that our mission is to expand

management and general labor affairs of the Fukuoka and Oita

ing. I joined UT in 2014, worked as an on-site process manager,

supportive push forward. Hiraoka-san, what triggered you to bearea platforms, I hope to increase more workplaces that em-

Areas to development of young staff and new client develop-

and in 2016 filed myself as a candidate for executive position,

eagerly aware of career advance?

power our staff, after assisting their career development.

ment. In the Kita-Kyushu Career Center, I have three Careerby using the "UT Entry" system (P20). This is thanks to advice

Hiraoka: I participated in the Super Manager School (P21),

Managers, who look after over 250 employees dispatched toand encouragement by you and Tokuyasu-san. I was 33 backthanks to your recommendation, in 2016. This was a great turn-eight clients’ workplaces.

then. That was my Aha! moment. I felt I could advance my ca-

ing point. Prior to that, I was locally oriented. The school opened

Nomura: You moved to our company from another dispatchedreer even from an on-site job, if I make efforts.

up my eyes that going out of my comfort zone would enable mecompany?

Nomura: 2016 is when "One UT", "Next UT" and other programs

to grow. I was made to think about what makes me happy andHiraoka: Yes. I started as a dispatched engineer at a plant andbecame functional and career advance options were expanded.

came to realize that to grow and increase my potential is aworked as an on-site leader before joining UT Group. I was

I myself was also excited with the great potential of the career

workstyle I was looking for.

gravely concerned over my future at the previous dispatch

development support initiative.

Nomura: I think Hiraoka-san’s workstyle of being locally based

company, which drove me to change jobs.

Hiraoka: I was greatly aspired to see up close my supervisorand expanding your career is an ideal form of work. By the way,

Nomura: What was a decisive factor for the job change?

who was passionate in helping develop staff. Nomura-san, what

what do you think is a role of an on-site leader of UT Group?

Hiraoka: I was very intrigued to learn UT Group’s career devel-

do you keep in mind when supporting career development of

Hiraoka: In my view, the role of Career Planners and other on-

opment support scheme. Dispatched workers are not treated as

staff ?

site leaders is to be a model who enjoy to keep learning. Actu-

mere cogs on a wheel at UT Group and its kind treatment of

Nomura: No less than my wish that each employee will become

ally, it is not easy to keep learning [laughing]. However, I want

employees surprised me.

aware of his or her potential. Each and every individual is uniqueto overcome my feeling, keep growing, and vigorously and hap-

Nomura: At that time, we were looking for a reliable on-siteand should have a place where he or she can be successful.

pily work. I am always making conscious efforts.

leader as we were thinking about opening an outsourcing office

How can I present a next opportunity to those who have built

Nomura: I am all for enjoying to work, as my utmost joy is to25

Chapte r 01

Creation of value that dovetails with development of employees

UT × Interview—

am currently in charge of evaluation and quality control of

I semiconductor manufacturing equipment at a foreign
semiconductor maker. It is a job with a lot of responsibility as I

"With the help of Kuragaki-san,I was able to grow."
I feel so rewarded when an employee
under my coverage tells me so.

need to rigorously adjust the equipment for achieving the quality required by the client. I have a background in liberal arts anddid not image four years ago when I graduated from universitythat I would be in charge of such specialized assignment.
I joined UT Aim as a new graduate and began my career as an
LCD panel assembly operator in the Kumamoto Career Center. I
subsequently moved to the Okayama Career Center and became a manufacturing equipment operator of a Japanese semi-

Supporter—

conductor maker. That was when my supervisor or Career Man-

Noboru KURAGAKI

ager spoke to me about participating in an "One Unit" briefing

although this may be unique to a foreign company. I was also

Joined in 2018;
currently Career Manager in the Kita-Kyushu Career CenterIn charge of labor affairs of 75 employees
in 4 CFs of the Kita-Kyushu Area

and I attended it. Back then, I vaguely questioned myself

rewarded with a higher salary. I was nervous when I transferred

whether I was truly satisfied with my job as an operator andfrom the previous work environment where I was used to. How-

dispatched staff. At the briefing, I learned about a potential next

ever, I am now grateful for taking up the challenge to advancestep and became hopeful. I remember I was highly motivated.

my career by use of "One UT". In fact, I would never experience

In November of my second year at UT Aim, I used the "One UT"

a job of a foreign market unless I would not join UT Group.

program and transferred to UT Technology (current UT Aim af-

I am now enjoying to learn a new job and expand my work. My

ter being absorbed and merged). Since then, I have expanded

goal is to make use of my on-site experience of the world’s

my work to a domain of engineers at the present foreign semi-

cutting-edge technology of the semiconductor industry andconductor maker. "One UT" is truly attractive as it allows you towork as a specialist in semiconductor manufacturing 5 or 10

maintain a regular employee status while expanding your ca-

years from now.

reer. As I thought job transfer was risky, this program was per-I strongly recommend the "One UT" program to those who havefect to me.

concern over their present work or who want to change. I be-

Recently I feel getting great challenge in being trusted to makelieve that if you think and act, and raise your value, you cana discretionary judgment concerning the process I am in charge,

contribute to revitalizing the entire UT Group.

am a Career Manager in the Kita-Kyushu Career Center,

I Fukuoka Prefecture, and am in charge of four client facto-ries (CF). The Center dispatches workers to diverse clients, in-

Supporter

cluding semiconductor makers and automotive parts makers. I
am in charge of general labor affairs of 75 dispatched workers
in four CFs. My assignment is everything that supports workers,
which includes attendance management as well as individualinterviews and matching of employees and their dispatched

Second is to raise compliance awareness, together with clients.

workplace.

The possibility of a conventional practice, such as off-time work,

As a Career Manager, I always keep two things in mind. First is

at a manufacturing workplace to become compliance violation

to sincerely face with employees and clients. When I become

even unintentionally is not zero. I therefore strive to firmly in-aware of anything unusual at a work site, I listen to employees

form others about the importance of compliance so as to pro-even for a small matter for consultation, and respond properly.

tect our on-site staff and to raise clients’ corporate value.

Honest, early actions are most important in avoiding a trivial

I used to do similar administrative work at a different dispatch

trouble turning into a big deal of someone resigning.

company but I was lucky to be able to move to UT Group, as I
was attracted by its diverse career advance options. Opportunities to consult with a Career Partner, learning support for acquisition of qualifications, and "One UT", "Next UT", and other at-

Careerminded
Employee

UT × Interview—

I work in the world’s cutting-edge
manufacturing site of a foreign
semiconductor maker,
as UT has expanded my career.

tractive programs are all what I could not dream of in myprevious workplace.
In Fukuoka Prefecture where I am based, people tend to be locally-oriented and prefer stable work rather than frantic workfor higher salary or advanced career. I therefore make it a habit
to tell young employees about diverse growth opportunities
while supporting a local community as an employee of UTGroup. I feel so rewarded when an employee under my coverage told me "With the help of Kuragaki-san, I was able to grow."

Career-minded employee—

Kouki KATASE

Joined in 2016;
Applied for the "One Unit" program in 2017and has worked at a foreign semiconductor
maker since that year

The COVID-19 infections are greatly changing the work environment of dispatched workers. I feel strongly more than everbefore that my mission as Career Manager is to build a strong
relationship of trust with clients and grow our share in the clients’ work site.

26

27

Chapte r 01

Creation of value that dovetails with development of employees

Creation of value that dovetails with development of employees

Chapter 01‰Solution consulting on labor affairs

Value proposition to client companies

Ensuring flexibility in the number of workers,
matching demand. Providing workers who meet
expectations, for manufacturers throughout Japan—
A core value that UT Group creates is to provide as many highly-motivated workers
as needed to a client company when needed.
We even strive to provide workers who exceed expectation of a client company.
As we give clients flexibility in the number of workers who have similar levels of capability
to those of their directly-employed workers, clients are shifting from temporary use of

UT Group’s consulting services provide solutions that precisely

skilled dispatch workers in order to comply with the Revised Labor

match the personnel structure of manufacturing workplaces: theContract Act and other regulations. Lastly, in the "core segment""flow segment" is where the number of workers fluctuates ac-

where the decline in hiring of regular employees for manufactur-

cording to the level of production; the "core-flow segment" is

ing workplaces has resulted in a labor shortage, we propose towhere workers’ skill level is high; and the "core segment" is whereclient companies that they make use of our Next UT program. We

mostly client companies’ regular employees are engaged in a key

furnish those companies with information on our skilled workers

production process.

as applicants to be hired as their regular employees. We also

Our proposed solution to the "flow segment," which faces theoffer the client employee transfer-type of outsourced work (In-challenge of a low retention rate of general dispatched workers

house Solution Service) in which tall manufacturing employees ofand hence a low productivity, is to introduce the Job Grade Sys-

one plant of the client company as well as of its work are trans-

tem which provides for wages to increase according to the level

ferred to UT Group. This is useful to companies which have hadof skills and functions to raise retention rates. Our solution to thesome of their manufacturing business to become non-core due"core-flow segment" of a client company which uses its direct-

to restructuring. Through these comprehensive HR services, wely-employed contract workers is to use UT Group’s highly-

help solve diverse labor-related issues of client companies.

dispatched workers to constant use of them.
Client companies’
regular employees
move to UT Group

Ensuring flexibility in the numberof workers, matching demandCore segment
Mostly regular
employees

Client companies reducelabor costs, make them into
variable costs, and avoid
future employment risks

Having branches and (because of traditional

Core-flow segment

Regular employees + highly-skilled
non-regular employees↓
Mostly regularly employees +directly-employed contract workers

employment practices in Japan) company
housing nationwide, we have a strong nation-wide mobility to move regular (indefi-

UT Group employees
are dispatched toclient companies

nite-term) employees across Japan. We also
have diverse employment adjustment func-

Flow segment
Mostly non-regular employees↓
Mostly dispatched workers fromdispatching agencies

tions, including the acceptance of workers
from clients and the assistance for workers’

UT Group employees
use the Next UT programand become regular
employees of a clientcompany, which initially
received them asdispatched worker

UT Group employees
advance to thecore-flow segment due
to their development
and high retention ratetransfers to client companies.
Typical structure of a company’s human resources

Strong hiring capacity due to strength in development of personnel and ensuring of good workplaces

A workplace management systemthat emphasizes compliance
Our group-wide compliance is based on the
RBA standard, which is stricter than Japan’s*labor regulations. We maintain and manage
an appropriate labor environment in order toenhance protection of the rights of workers
and to raise corporate productivity and evaluation.
* Responsible Business Alliance, formerly the Electronic Industry
Citizenship Coalition’s (EICC) CSR alliance, sets standards toethically carrying out operations, such as provision of a safe labor environment and treatment with respect and dignity toworkers.

28

Provision of a quality workforce

While the personnel dispatch industry has conventionally regarded workers
as purchased asset, and as "cost and flow", UT Group has pursued "value
for workers" since foundation. By providing "reliability" in the form of infinite-term employment and dispatch to good workplaces and "bonding"stemming from to team dispatch and support by Career Partners, whichleads to "growth" of workers, UT Group has become a company chosen byworkers and ranked the first in mid-career personnel hiring* in Japan.
* Mid-career personnel ranking in 2018 (Nikkei Sangyo Shimbun; October 15, 2018)

Higher income

Workers’ high motivation and high retention

Career advancement

rates, in addition to their high skills, are UT
HiringGroup’s strength. We constantly upgrade

Provision ofhigh-value workers

training programs and address advanced areas to keep up with advances at client companies. Disciplined performance by our teams

Workstyle thathelps raise valueof workers

of dispatched workers further raises our production efficiency.

Skill upJob training

Securing ofCareer development
good workplace
supporting
Enhancedfunctionself-efficacy

Career consulting

Workers

Manufacturing
companies

As a company chosen by workers, UT Group hires over 1,000 workers every month29

Chapte r 01

Creation of value that dovetails with development of employees

Creation of value that dovetails with development of employees

Takahito YAMADA

Nobuyuki TSUKUISenior Executive Officer
In charge of General
Affairs Division
Chairman of the Compliance
Risk Management Conference

Senior Executive Officer
in charge of Manufacturing,Engineering, and Service BusinessPresident of UT Aim Co., Ltd.

UT × Interview—

UT × Interview—

One-stop provision of highly-skilled personnel in areas from design anddevelopment to manufacturing and quality control

Needs for dispatch workers shift focus from quantity to quality
High compliance awareness is becoming greater strength of UT GroupD FY3/2020), we enhanced "capacity in hiring and worker

ment for personnel. Having identified these industries as a core

R maintaining stable business growth. What is required is

es of the required compliance standard, we have carried out

business that has large order potential, along with the automotive

and team mobility" in view of the labor shortage environment andindustry, we intend to supply highly-skilled personnel who are able

to enhance compliance awareness in the organization and toployees, that started in 2016. Dispatching of engineers who

further strengthened "capacity in sales and marketing," thereby

to satisfy clients’ expectations in the manufacturing site. Thisestablish a compliance management scheme. UT Group holds

have both high-quality skills and compliance awareness to acreating a virtuous cycle. In addition to facilitating that cycle, we

makes development of engineers all the more important. We have

the Compliance Risk Management Conference once a month.

client’s manufacturing site leads to raise the value of the cli-enhanced career development activities. As a result, we received

therefore integrated some of UT Technology’s functions at UT

I am Chairperson and other members are two outside law-ent company. Strict adherence to compliance, which is evolv-

high-unit-price, large-lot committed orders from major manufac-

Aim, a core company of UT Group, and have enhanced a careeryers, two Internal Directors, two Senior Executive Officers,

ing at the global level, is our strength and contributes to dif-turers and established a strong business base with high growth

path scheme that enables a manufacturing operator to advanceone Internal Audit & Supervisory Board Member, and one Ex-

ferentiating ourselves from peers.

potential. UT Aim, where I currently serve as president, I had aand become a production technical engineer. For employees, ca-

ternal Audit & Supervisory Board Member. At conference

One of the growth strategies in the fourth medium-term busi-

great dynamic experience of seeing the number of our staff doing

reer advance opportunities will expand and for client companies, ameetings, after identifying and understanding potential risks

ness plan is the "Area platform strategy," which calls for alli-

hiring explode from an initial five to 100, who now hire or mobi-

structure to provide one-stop service – from design and develop-

for each job ranking such as senior positions and mid-level

ances with and M&A of local dispatch companies. This is one

lize 1,000 persons a month. I am proud that we were able toment into manufacturing and quality control – will become avail-managers, we identify possible risks and discuss specific is-reason that labor affairs management will become increas-

achieve this growth because of superior prompt supply of large

able.

sues. We then control or evaluate these risks, and take pre-ingly important along with the expansion of our business

numbers of high-quality personnel, greater and better than our

Another core strategy of the fourth medium-term business plan isventive measures as well as measures to minimize loss orbase. Here again, UT Group’s strength of having employees

peers do, to satisfy the clients’ manufacturing sites’ robust per-the "Area platform strategy." The COVID-19 crisis is expected toprevent recurrence in case the risk occurs. Recently, we havewith strong compliance awareness manage a manufacturing

sonnel demand. During the next fourth medium-term businessresult in an increase in people who want to stay in a local commu-

been discussing urgent issues such as employee safety risks

work site is likely to stand out. In the future, the workforce

plan period, demand for personnel is expected to change signifi-

nity and have a stable job or advance skills. In order to meticulous-and risks in maintaining employment, in addition to risks as-

will be more diverse and include more women, elderly per-cantly, being affected by COVID-19 effects. I believe that now is

ly respond to such diverse needs, we plan to promote alliances

sociated with business growth.

sons, and foreigners. We are determined to further enhance

the time to return to basics, sincerely listen to needs of our cli-with or M&A activities involving dispatch agencies in various parts

In the present Internet Society, one employee’s trivial behav-

our compliance system and create safe, reliable workplaceents, and establish solid relationships.

of Japan and to establish an organization engaged in sales, hiring,ior may affect the entire group’s performance or image. We

for all workers.

With regard to the "One-stop strategy to provide personnel toand personnel development in each area. Our goal over the next

therefore regularly carry out compliance training to close tolarge manufacturers" – one of growth strategies of the fourth me-

five years is to establish a career platform that allows anyone, any-

20,000 employees nationwide, not only for managers but

dium-term business plan – a shift into growth industries will be an

where, in any job type to use UT Group’s high-quality services.

also for technical employees and general staff. Given the on-

important theme, in my view. Despite the COVID-19 crisis, semi-

Please look out for UT Group’s new challenges that transform thegoing COVID-19 crisis, we plan to proactively organize online

conductor and other 5G-related industries have stable require-changes of the times into opportunities.

training, using web contents. In response to ongoing chang-uring the third medium-term business plan (FY3/2016 –30

Chapter 01

isk management is becoming increasingly important ina three-year plan to raise compliance awareness of all em-

31

Chapte r 01

Creation of value that dovetails with development of employees

Profit distribution to employees

Growth of each and every employee
directly links to corporate performance.
That gives a reason to employees to try their best.
—
UT Group’s dispatched workers are motivated by a safe, reliable working environment as well as
self-realization through growth and career advance. They also benefit from the company’s arrangements
to allocate return to them, which gives another reason to our employees to try their best.
Their growth leads to growth of the company and return to themselves in a form of better compensation.

Chapter 02
Growth ofemployees
Increase inshareholder value

Increase in unit price ofworker dispatch

UT Group’s policy to support its workers has not been changed

enhancement ofcorporate value

since UT’s foundation. Employees enhance their skills and

Growth cycle bytherefore their value, which leads to higher unit prices, higher

making employees

salaries, and higher sales and profit of the company. We also
assist employees to become UT Group’s shareholders in ordershareholders
Increase in sales
and profit

Increase in market cap

Sustainable‰Virtuous growth cycle

to make them feel the impact of their efforts in growth of thecompany and to support their long-term asset formation.

Growthof UTGroupC o nt e nt s
Employees as
executives

Employees asshareholders‰UT’s core

UT Entry

Employeeshareholding plan

In keeping with the mission to "create vigorous workplaces em-

Executives

Shareholders

powering workers", UT Group has created a cycle in which
workers play a key role, manage the organization, and support
other workers. UT Group’s workers include dispatch workers
who work at our client companies’ site and employees who sup-Employees

port business as administrative or office staff. In the management team, roughly one half has the experience of having beena dispatched worker. UT Group’s workers can also be its shareholders through the employee shareholding plan. That is why

Employees
as customers
Indefinite-term employment
Career consulting
Education and training
Career advance opportunities

32

Customers

we say that our employees are our customers, managers, andshareholders. This is another reason why UT Group continues to34

UT Group’s corporate governance framework

36

Roles of organizations that comprise the internal control system

37

Message from External Director and Audit & Supervisory Board Member

38Team of Board Directors and Audit & Supervisory Board Members

39

Team of Executive Officers

40

UT Group’s IR activities

realize growth.

33

Chapte r 02

Sustainable enhancement of corporate value

Chapter 02

Sustainable enhancement of corporate value

UT Group’s corporate governance framework—‰Board Directors and Audit & Supervisory Board Members

Fairness is very important for UT Group, which is engaged in a business primarily involving humanresources. We have always believed there is a certain correct way of managing from the perspectives ofboth of investors who provide financial capital and employees who provide human capital.

Title in UT Group

Independent
Term ofboard director/
office audit & supervisory board member

Yoichi WAKAYAMA

President & CEO

1 year●Yuji WATANABE

Full-time Board Director
Concurrently Senior Executive Officer

1 year●●●Manabu SOTOMURA

Full-time Board Director
Concurrently Senior Executive Officer

1 year●●●Noboru HACHIMINE

Board Director

1 year●●●Nomination
Committee
memberCompliance Risk
Management
Committee
member

IT Investment
Committee
memberGovernanceCouncilmember◎

As a company that has a role in social infrastructure by its sup-pervises and monitors these operations.

porting Japan’s employment environment, UT Group aims at

Based on such a train of thought, UT Group’s basic policies of

Tetsuro YOSHIMATSU

Board Director

1 year●●●raising its sustainable corporate value through management

governance policy are (1) to carry out speedy decision making

Taisuke IGAK

Board Director

1 year●●●that is responsible to all stakeholders. In this regard, we recog-and respond to changes in a flexible, prompt manner from thenize continual enhancement of our corporate governance struc-viewpoint of "responding to change in the management envi-

Riichiro KOMATSU

Full-time Audit &Supervisory Board Member

4 years

●

●

●

◎

ture as an important management priority. In addition, as theronment"; (2) to enrich the supervisory function of manage-

Masahito FUKUMORI

ment from a viewpoint of "management transparency"; and (3)Full-time Audit &Supervisory Board Member

4 years

human resources service business is susceptible to economic

●

●

●

fluctuations, we believe that we must appropriately and prompt-

to comply with laws and regulations and respect social ethics

Hirokazu MIZUKAMI

Audit & Supervisory Board Member

4 years●

ly make decisions and execute business so as to minimize busi-

from a viewpoint of "management soundness."

Hiroyuki YOSHIDA

Audit & Supervisory Board Member

4 years●●●

ness risks, and construct an organization that appropriately su-

Board Directors

Audit & Supervisory
Board Members

Ratio of External Board
Directors and Audit &Supervisory Board Members

6

4

3 Internal Board Directors and3 External Board Directors

1 Internal Audit & Supervisory
Board Member and3 External Audit & Supervisory
Board Members

60

Legal system

A "Company with
Audit &
Supervisory Board"◎Chairperson%

Chairperson

Members
General Meeting of Shareholders

Supervisory andDecision-making Bodies

Nomination & dismissal

Nomination &dismissal

Board of Directors

Consultation
Collaboration

Proposal

Proposal

Nomination Committee Collaboration
Governance Council

Collaboration

Accounting Auditors
Consultation

Objective

IT Investment
Committee
Decision-making& supervision

Proposal

Consultation

Accounting
audit

Nomination
Committee

Compliance Risk
Management
Committee

IT Investment
Committee

External expert

Seniorexecutive offi cer

President

President

2 full-timeboard directors

President

2 full-timeboard directors

1 internal audit & supervisory board member

2 full-timeboard directors

3 externalboard directors

1 external audit & supervisory board member

1 external expert

2 external expert

2 external lawyer

1 senior
executive offi cer

1 internal audit & supervisory board member

2 senior
executive offi cer

Ensure transparency
and objectivity in theprocedure to designate candidates for
positions of board
director, audit & supervisory board member
or executive officer

Control UT Group’s
breach in complianceand risks, and minimize loss（%）

(Person)

1 external audit & supervisory board member

Audit

Audit & Supervisory Board

Audit

Nomination &dismissal

Collaboration‰Numbers of Board Directors andAudit & Supervisory Board Members, andRatio of External Board Directors andAudit & Supervisory Board Members‰Advisory Bodies

Consider long-term
development and investment plans for UTGroup’s information
system infrastructure

880Internal Board Director
External Board Director

7Internal Audit & Supervisory
Board Member

70

6External Audit & Supervisory
Board Member

60

5ー Ratio of External Board
Directors and Audit &Supervisory Board Members

50

4

40

3

30

2

20

1

10

0

12

13

14

15

16

17

18

19

20

21

0

(FY)

‰Initiatives to Enhance Corporate GovernanceCollaboration

Business Execution Bodies

President & CEO

ReportingInternal Audit Room

Instruction &supervision
Management Committee
Instruction &supervision

Auditing

Operating divisions
Operating companies
Collaboration

34

Compliance Risk Management
Committee

Fiscal 2018 (ended March 2018)

Fiscal 2019 (ended March 2019)

Fiscal 2020 (ended March 2020)• Established the Nomination Committee, chaired• Added highly-independent outside experts to• Set agenda items for the Board of Directors

by an outside expert, to enhance objectivity inselection of board directors and audit & supervisory board members.

the Nomination Committee.
• Expanded the Nomination Committee’s scope of

meetings, based on opinions raised at the governance study groupnomination for the selection of executive officers• Give advance explanations of the Board of Direc-• Extended the discussion time at the Board of

tor agenda items to the Audit & Supervisory

Directors meetings

Board• Established a study group on a corporate gov-

ernance structure, comprised of external board
directors and external audit & supervisoryboard members, to discuss on a continuing basis enhancement of corporate governance

35

Chapte r 02

Sustainable enhancement of corporate value

Sustainable enhancement of corporate value

Chapter 02

Roles of organizations that comprisethe internal control system—
UT Group’s legal system of board governance, based on Japan’s Companies Act,is a "Company with Audit & Supervisory Board."
Under this system, separation of business supervisory functions and business execution functions
is called for, the Board of Directors grants the majority of business execution authority to executive
officers, and advisory bodies are established for each important managerial theme.

TetsuroYOSHIMATSU‰Board of Directors‰Compliance Risk Management Committee

As UT Group’s highest decision-making body of management, the Board of

The UT Group Compliance Risk Management Committee, chaired by the

Directors decides basic management policies and important matters based

Representative Director and with participation by senior executive officers

on the Companies Act, UT Group’s Articles of Incorporation, and internalin charge of business division and management division and a few outside

rules. It also focuses on appropriately supervising execution of duties bylawyers, is an advisory entity serving the Board of Directors. The Committeeboard directors. In order to accomplish these roles, the number of board

discusses compliance policy and action plans, studies matters needed for

directors is limited to facilitate active discussion, while independent board

ensuring legal compliance, does research, and establishes recurrence pre-directors represent over a half of the Board in order to enable highly objec-tive

vention measures. In addition, the Committee identifies types of risks ofsupervision.

the Company and its Group, controls and evaluates these risks, takes action
to prevent risk occurrence, and, in the event of risk occurrence, minimizes‰Executive Officer System
The Company has adopted an Executive Officer System to separate businessloss and establishes recurrence prevention measures.

supervisory functions from business execution functions. The term of office‰IT Investment Committee

for Executive Officers has been set as one year. They perform business

The IT Investment Committee has two roles: a role as an advisory body tooperations based on the management policy decided by the Board of Direc-

the Board of Directors by which it reviews medium- to long-term deve-lop-

tors. Executive officers perform their respective assigned functions accord-

ment and investment plans concerning the information system infra-structure

ing to their area of expertise, while senior executive officers manage suchof the entire UT Group; and a role as a decision-making body concerning

function for a certain unit of organization and are assigned to a group-wide

execution of duties related to shorter-term system investment and the like.

coordinating function. Once a year, executive officers are appointed by the

The committee, chaired by the President and comprised of full-time board

Board of Directors among candi-dates selected by the Nomination Commit-tee

directors and outside IT experts, reviews IT system solu-tions for manage-out of those who obtained a certain level of managerial experience, applied

rial issues and discusses the appropriateness of invest-ment decisions andat their own initiative and were screened according to the Executive Officer

effectiveness after investments have been made.

Entry System.

‰Management Committee‰Governance Council
The Governance Council, chaired by a full-time audit & supervisory board

The Management Committee, which is chaired by the Representative Direc-

member, shares information concerning corporate governance and exchang-

tor and is comprised of full-time board directors and senior executive officers,

es opinions in order to facilitate external executives to engage in active

is positioned as the second decision-making body following the Board of

discussions at the Board of Directors. Certain opinions shared at the Gov-

Directors in the internal control system. The Committee discusses pol-ernance Council are submitted to the Board of Directors as a discussion

icies of matters discussed by the Board of Directors and basic management

theme to enhance corporate governance, as needed.

policies as resolved by the Board. The status of execution and issues onimportant matters concerning execution of duties by executive officers arereported at the Committee, so that the group-wide management issues are‰Internal Audit Room

shared and discussed in order to be resolved.

The Internal Audit Room, which is under the direct control of the President,
examines and evaluates compliance, effectiveness, and efficiency of the‰Nomination Committee

status of corporate organization establishment and business managementof the entire Group, based on the internal control plan, and reports the results

The Company has established a Nomination Committee as an advisory en-

to the President and Audit & Supervisory Board Members. The Internal Audit

tity serving the Board of Directors, with the aim of ensuring transparency

Room also cooperates with Audit & Supervisory Board Members to appro-and objectivity in the procedure to designate candidates for positions ofpriately audit effectiveness of the status of governance and the internalboard director, audit & supervisory board member and executive officer, andcontrol system of the entire Group.

of enhancing accountability of the Board of Directors. The Nomination Committee, chaired by an outside lawyer and composed of some board directors,

36

audit & supervisory board members and outside experts, designates persons‰Accounting Audit

who shall contribute to the Group’s sustainable growth and medium- to

The Company has entered into an accounting audit agreement with Gyosei &long-term increase in corporate value and refers the candidates to the Board

Co. As its accounting auditor who performs audits of financial statements basedof Directors.

on the Companies Act and the Financial Instruments and Exchange Act.

Board Director
President & CEO of
Istyle Inc.

The unpredictable age calls fora new type of governance

Hiroyuki YOSHIDA
Audit & Supervisory
Board Member
Director of Yoshida Certified
Public Accountant Office
Representative Director ofHigh Brain Co., Ltd.

Toward creating a flexible governance system,
tailored to an expanded business scale

I founders of start-up companies, which meets on a regular

first met with President Wakayama at a study group of

I mid-2010s when the company began M&A activities forbasis. I was impressed with his coherent manner and clear-headed personality. A few years later he asked me to become an
external director of UT Group. I accepted his offer, thinking I
myself would have a lot to learn as UT Group differs from mycompany in terms of business fields and size.
When I joined the Board, President Wakayama was taking up
various challenges concerning the company’s medium- to longterm growth and governance to help bring the company to anext stage. For example, the company introduced the Entry system for advancement to managerial positions, or a system toencourage in-house candidates for executive posts Some people may think governance as a means to apply the brakes towhat the top management wants to do or to avoid risks. UTGroup, however, thinks of governance as a means for decision
making and to take or control risks upon full understanding ofthem. Over the course of structure enhancement, such as creation of a Governance Council or a Nomination Committee,
President Wakayama’s policy to emphasize rules and principles
has served as a valuable basis for what is done.
And now, the unprecedented, unpredictable nature of our age
has arrived, with grave changes in the social environment. In
the midst of it, governance calls for realizing an environmentthat allows the top management to fully exert its strength. I
believe that "governance of an unpredictable age" needs to beestablished by incorporating internal and external opinions andmaking top management spearhead business development.
While UT Group is seeking to further enhance its governance, I
take it as my own challenge, as I am personally in the same
position of being a founder of a start-up company as President
Wakayama. I am determined to share and return my accumulated experiences as management executive to UT Group.

business expansion. The previous Auditor of UT Group recommended me to replace him as I had professional experience in
M&A. UT Group back then was a fast-moving organization witha young workforce in the midst of a significant growth stage but
I must say that the company had a lot to do for establishing asufficient governance system. With the goal of becoming listed
in the First Section of the Tokyo Stock Exchange as an objective,
UT Group people then were raising awareness of the need toestablish a solid governance system.
I was therefore proactively involved in achieving highly effective
corporate governance. There were three crucial points for improvement: 1) to enhance the supervisory function of the Boardof Directors; 2) to adopt an executive officer system to achieve
prompt execution of operations; and 3) to set up a nominationcommittee. I also think that a successful clear separation of supervision and execution deserves high evaluation. Meanwhile,the term of office for executive officers has been set as one
year. I think this has contributed to realizing agile, speedy organization management.
In November 2019 UT Group achieved its goal to be listed in theFirst Section of the Tokyo Exchange but we should not be complacent. During business expansion via M&A activities, we needto through a steady integration process and with the understanding that change in our corporate culture could result. We alsoneed to make conscious efforts concerning country risks if we
aim at using foreign workers and expanding overseas. By
the way, I highly regard UT Group’s thorough, appropriate COVID-19
measures. It is critically important to create a flexible organization which can cope with business expansion and changes in thebusiness environment. I am committed to making efforts for realizing an organization that can manage diverse risks.

was appointed as an Outside Director of UT Group in the37

Chapte r 02

Sustainable enhancement of corporate value

Sustainable enhancement of corporate value

Team of Board Directors and Audit & Supervisory Board Members as of June 30, 2020
Term in office／Number of shares held

＊ Independent Director

Team of Executive Officers as of August 31, 2020

Concurrently Senior Executive Officer

Board Directors

Audit & Supervisory Board Members

Senior Executive Officers

Yoichi WAKAYAMA(49)

Yuji WATANABE(50)

Manabu SOTOMURA(52)

Riichiro KOMATSU＊(73)

Masahito FUKUMORI(59)

President & CEO

Full-time Board Director

Full-time Board Director

13 years/
9,031,178 shares

1 year/48,714 shares

1 year/1,500 shares

Full-time Audit & Supervisory
Board Member
2 year s /−Full-time Audit & Supervisory
Board Member
3 years/2,200 shares

After having worked at Temporary Center, Inc. (currently
Pasona Inc.) and other companies since 1989, Mr. Wakayama established Nihon Aim Co.,
Ltd. (current UT Aim Co., Ltd.).
He has been President & CEO(current position) of UT Groupsince 2007.

Mr. Watanabe joined Argus
Co., Ltd. in 1991. After serving
Icon World Co., Ltd. (currently
Fujiwork Co., Ltd.) as Director,
he joined UT Group in 2012.
After serving as Senior Executive Officer of the Solution Division, he was appointed
Board Member (current position) in 2019.

Board Director of UT Life
Support Co, Ltd.

After serving many years inthe banking business, at Taiyo
Bank and Sakura Bank (bothcurrently Sumitomo MitsuiBanking Corporation), Mr. Komatsu
was assigned to a position of arepresentative director andpresident of KOSAIDO Co., Ltd.
and has abundant knowledge
and insights on general management.

After working at Daiwa Bank
(currently Resona Bank, Limited) and Icon World Co., Ltd.,Mr. Fukumori jointed UTGroup.
After serving as Head Officerof Internal Audit Office and Senior Manager of General Affairs Division, he was appointed Audit & Supervisory Board
Member of UT Group in 2017.

Noboru HACHIMINE＊(53)

Tetsuro YOSHIMATSU＊(47)

Taisuke IGAKI＊(47)

Hirokazu MIZUKAMI＊(72)

Hiroyuki YOSHIDA＊(51)

Board Director

Board Director

Board Director

4 years/2,000 shares

4 years/1,400 shares

2 years/−

Audit & Supervisory Board
MemberAudit & Supervisory Board
MemberManabu SOTOMURA

11 years/−

5 years/−

Representative Director,
Advan Capital K.K.

Director of Yoshida Certified
Public Accountant Office
Representative Director ofHigh Brain Co., Ltd.

Management Reformation
Division

Chairman of Digital Holdings,
Inc.President of Digital Soft,Inc.
Worked at Mori Building Co.,
Ltd. and then founded OPT
Holding (current Digital Holdings), which supports growthof many IT companies in the
rapidly-changing IT industry,based on the "business creation platform concept."

President, istyle Inc.Director,
Outside Director, Planet, Inc.
After working at Andersen
Consulting (currently Accentureplc), Mr. Yoshimatsu foundedistyle Inc. and has expanded its
business that uses its proprietary database under the vision of "consumer-centeredmarket creation."

Chapter 02

Mr. Sotomura joined Recruit
Group in 1991. After service
Bellsystem 24 Holdings, Inc.
as Executive Officer, he joined
UT Group in 2017. After serving as Senior Executive Officer
and Head Officer of the CEO’s
Office, he was appointed Board
Member (current position) in
2019.

LPC Partner, Nishimura &Asahi
Japan Association of Arbitrators, Deputy Secretary of
Kansai Branch
Guest Professor, Graduate
School of Medicine, Osaka
University
Outside Statutory Auditor,
en-japan Inc.
After working at Kitahama Partners, Mr. Igaki joined Nishimura& Asahi (law firm). He hasabundant knowledge and experience on overall corporate
legal affairs, particularly on
cross-border deals, M&As,
business restructuring andlawsuits. He was appointed
External Board Director (current position) in June 2018.

After serving as Director of
The Sumitomo Trust and Banking (currently Sumitomo Mitsui
Trust Bank) and President ofAozora Bank, Ltd., Mr. Mizukami established Advan Capital
K.K. He has many years of experience in financial institutions and abundant knowledge.

After working at Deloitte Touche Tohmatsu LLC and Hongo
Tsuji Tax & Consulting, Mr.
Yoshida joined Watanabe &Co.
(tax accountant corporation).
He has professional knowledge
in tax and accounting and awide range of experience.

Nobuyuki TSUKUIYuji WATANABE

Kentaro YAMAGISHI

Satoshi MORIYASU

Takahito YAMADAManufacturing, Engineering,and Service Business Division
President, UT Aim Co., Ltd.

Group Sales and Solution
Business Division

Career Development Division

Business Development
Division

General Affairs Division
President, UT Heartful
Co., Ltd.

Toshinori MIGITA

Naoki ITO

Tsutomu KOKUBO

Masaru MORIOKA

Hiroshi HOKARI

Manufacturing, Engineering,and Service Business Division
President, UT Community
Co., Ltd.

Manufacturing, Engineering,and Service Business Division
President, Support System
Co., Ltd.

Manufacturing, Engineering,and Service Business Division

Manufacturing, Engineering,and Service Business Division

Manufacturing, Engineering,and Service Business Division
President, UT Construction
Co., Ltd.

Hisanori KINOSHITA

Kosuke KASHIWAGI

Koji SHIGETA

Masumi SATO

Koji HIROTA

Manufacturing, Engineering,and Service Business Division

Group Sales and Solution
Business Division

Group Sales and Solution
Business Division
President, UT Toshiba Co.,Ltd.
President, UT Business
Service Co., Ltd.

Group Sales and Solution
Business Division

Group Sales and Solution
Business Division

Riken ISHIWATA

Koji MORIKAWA

Hajime NISHIKAWA

Okihiko OGUCHI

Yuki OMORIGroup Sales and Solution
Business Division
President, UT Pabec Co., Ltd.

Group Sales and Solution
Business Division
President, UT Technology
Co., Ltd.
President, FUJITSU UT Co., Ltd.

Group Sales and Solution
Business Division

Group Sales and Solution
Business Division,in charge of Corporate
Strategy BusinessPresident, UTHP Co., Ltd.

Group Sales and Solution
Business Division

Masahiko HIOKITomokazu NAGAI

Akihiro HOTATE

Masaki ISOBE

Junya KOIKE

Career Development Division

Business Development
Division

General Affairs Division

General Affairs Division

Management Reformation
Division

Dai NAMIKI

Chonga HON

Management Reformation
Division

Unit directly controlled
by the President

Executive Officers

39

Chapte r 02

Sustainable enhancement of corporate value

UT Group’s IR activities

Enhancement of corporate value through dialogues
with shareholders and investors—
UT Group recognizes that engagement with shareholders, investors, and other stakeholders is
indispensable for the achievement of sustainable growth and medium- to long-term increase in its
corporate value. Along this line, investor relations (IR) activities are considered as one of the mostimportant matters of the management and UT Group actively communicates with stakeholders.

‰Promotion of constructive dialogues
with shareholders
The general meeting of shareholders is UT Group’s highest decision-making body and a place of dialogues where the man-

Participants in the general meeting of shareholders...............................................71 shareholders

Chapter 03

Number of questions...............3 questions
Voting rights exercise rate.......80.10％

agement shares thoughts and vision with shareholders. We

Financial information

hold the meeting on a Saturday when there is not a concentration of annual meetings (a long-standing tendency in Japan), sothat as many shareholders as possible can attend it. The 13th
general meeting of shareholders was conducted and its live video streaming was simultaneously arranged, with due consideration to the impact of COVID-19. We also try to send a convocation notice well ahead in order to provide sufficient time forshareholders to review proposals for resolution . After the general meeting of shareholders, a presentation by the president ismade, sharing future business plans with shareholders and including constructive dialogue. After the 13th general meeting ofshareholders, a presentation by the president was not held inview of the COVID-19 outbreak.

‰Promotion of constructive dialogues
with institutional investors
UT Group holds IR briefings on financial results with presentations by the president. UT Group’s executive officer
in charge of IR activities is mainly responsible for engagement in constructive dialogues with institutional investors,

IR briefing in 2019

Institutional investors who we have had
dialogues with....................342 companies in fiscal 2020
IR briefings.........................5 times
Participants in IR briefings...774 investors＊ Financial results briefings for the first quarter and the third quarter
were conducted in video streaming. The above figures included thenumber of video views from outside the company.

C o nt e nt s
42Business overview by segment

44

Analysis of operational results of fiscal 2020

46

The Fourth Medium-term Business Plan

48

Financial statements

56

Corporate profile and stock informationsuch as one-on-one meetings and small meetings with investors in Japan and abroad, and participation in conferences and other occasions. Opinions of institutional investors obtained through these dialogues are reported at theBoard of Directors meeting and used for improvement inmanagement and IR activities.

40

41

Chapte r 03

Financial Information

Financial Information

Chapter 03

Business overview by segment

Supply a high-value workforce to a wide range
of industries; mainly manufacturing dispatch—
UT Group provides diverse high-value human resources to client companies nationwide,

As of June 30, 2020

‰Manufacturing Business

UT Aim Co., Ltd.

This segment is engaged in manufacturing dispatch and outsourced work services and is carried out by three subsidiaries(Manufacturing personnel services,
Administration service and consulting businessof the Training Programs for Foreign Workers)

to staff mechanical assembly and processing workplaces and operate advanced electronic– UT Aim, UT Community, and Support System. UT Aim dis-manufacturing equipment. These men and women provide needed skills and abilities in a wide

patches teams of workers for outsourced work of an entire pro-(General personnel dispatch and outsourcing)range of industries with a main focus on manufacturing but also including design and development,

duction line to Japan’s major manufacturers engaged in pro-

Support System Co., Ltd.

and construction and management. Operational reporting for this business is classified based on
characteristics into three components – Manufacturing, Solutions, and Engineering.

duction of semiconductors and electronic components, andUT Community Co., Ltd.

(General personnel dispatch and outsourcing)automobiles. UT Community and Support System provide personnel dispatch services to mid-sized growth companies.

‰Solution Business

UT Pabec Co., Ltd.

This segment supplies large corporate groups with labor issue
solutions by accepting their employees as UT Group’s employees. The Group deploys diverse solutions to assist client companies’ structural reforms, including the type of outsourced
work called client employee transfer (In-house Solution Service)(Primary battery assembly, packaging, andmanufacture personnel dispatch and outsourcing)

UTHP Co., Ltd.

(Manufacturing personnel dispatch and outsourcing)

FUJITSU UT Co., Ltd.

in which all manufacturing employees of one plant of the client(Manufacturing personnel dispatch, outsourcing, andconsulting services)company as well as their work are transferred to UT Group.

UT Toshiba Co., Ltd.

Reforms also include establishment of a joint company with aclient company in which we assist fixed-term employees’change in status to regular (infinite-term) employment.

(General personnel dispatch and outsourcing)UT Business Service Co., Ltd.

(General personnel dispatch and outsourcing)

UT System Products Co., Ltd.

(Sales of information system equipment)‰Engineering Business[ Manufacturing ][ Design and development ][ Construction and management ]Diverse equipment operation;
product inspection; quality assurance;
production management;
production technologies; logistics management;
equipment maintenance

Design & development; production &process technologies; CAD & CAM;
measurement; structural analysis;
system consultant; sales engineering;assessment & inspection; R&D

Diverse management functions (production,
manufacturing, construction); quality assurance& control; operation & maintenance (systems,
equipment); technical support; help desk;
environmental preservation, management,
research & analysis)

UT Aim Co., Ltd.

This segment is engaged in transfer of engineers in design &development, software, IT, and construction. In addition to new
graduates, operators in the Manufacturing Business with no experience in engineering are trained and transferred to clientcompanies as engineers. We also focus on developing high-(Design and manufacturing engineer outsourcing andcommissioned business)

UT Technology Co., Ltd(IT engineer outsourcing and commissioned business)

UT Construction Co., Ltd.

(Construction engineer outsourcing)

er-value-added engineers by operating a training facility where
we assist engineers to further enhance their skills.

We can promptly plan anddeliver a large workforce to every
industry domain nationwide

To manufacturing industries andadvanced domains in engineering,UT Group delivers capable workforce

UT workers’ abundant experience andhigh skills greatly contribute to production efficiency in clients’ workplaces

Under the vision "Create jobs nationwide in Japan",UT Group’s industry coverage in dispatch business is

UT Group’s overall workforce has high motivation and

UT Group serves customers and takes care of workers

diverse: the manufacturing business extends fromhigh levels of skill, acquired through unique training

at branches and corporate housing across Japan. By

semiconductors and electronic equipment to auto-

making use of economies of scale in doing this, we canmobiles, environment and energy, and medical do-

and do promptly deliver a large workforce to clientcompanies nationwide.

Aishin Group

Kurita Water Industries Ltd.

Mitsubishi Electric Group

Keihin Corporation

Daiwa House Industry
Co., Ltd.

NEC Group.

INES Corporation

Hakuyosha Co., Ltd.

Meltec Business Co., Ltd.

programs. Our high retention rate has resulted in hav-

Asahi Chemical Group

GS Yuasa Group

Takenaka Corporation

Panasonic Group.

Yamaha Grouping many experienced employees. Combined with dis-Isuzu Group

Shimizu Corporation

Disco Group

Hitachi Groupmains; the engineering business includes fields such

ciplined performance driven by our unique dispatch of

Intec Inc.

SCREEN GroupDensan System Co., Ltd.

Hibiya Engineering Ltd.

Yokogawa Solution
Service Corporationas machinery and electric design, production technol-

teams rather than individual workers, these strengths

SUBARU Group

Fujitsu Group

Likes Co., Ltd.

have become clearly evident, as a manifestation of

NTT GroupTokyo Electron Groupogies, ICT systems, construction and civil engineering,and robot simulation. We have diverse training pro-how UT Group contributes greatly to clients’ manufac-

Sony Group

Toshiba Group

Honda Group

LIXIL Groupgrams that address needs in these diverse domains toturing workplaces as compared to other workers from

Olympus Group

Taisei Corporation

Toyota Groupfurther develop workers and support Monozukuri

general dispatch companies.

Kajima Corporation

Daihatsu Motor Group

MITSUBISHI MOTORS
Group

Renesas Group

Nissan Motor Group

workplaces all over Japan.

42[ Major client companies or groups ]Obayashi Corporation

Rohm Group

NISSHA Group

43

Chapte r 03

Financial Information

Financial Information

Analysis of Operating Results of Fiscal 2020

Minimized the impact of the U.S.-China trade friction
and the COVID-19 outbreak and maintained the results.
Posting of extraordinary loss in the 1Q led to a decline in net profit.

Minimized the adverse impact of thedeteriorating business environment andmaintained the flattish y-o-y operating results

work in their local community. We also sought to strengthen re-ourselves to making the manufacturing dispatch industry more

6,213 million yen), while the number of technical employees

lations with major corporate groups by offering comprehensive

open to society and to continuing a good relationship with ourwas 14,044 (down 1,604 from 15,648 a year ago).

HR services to them. As a result, in fiscal 2020, UT Group record-

stakeholders.

ed net sales of 101,191 million yen (up 0.1% from 101,103 mil-In October 2019, we received the Porter Prize from Hitotsubashi‰Solution BusinessIn fiscal 2020 (April 1, 2019 – March 31, 2020), the Japaneselion yen in fiscal 2019), operating profit of 8,040 million yen

University Business School. The name of the award is derived

In the Solution Business, the number of technical employees

economy experienced lackluster consumer spending in the sec-

(down 0.5% from 8,083 million yen), ordinary profit of 8,113 mil-from Professor Michael E. Porter of Harvard University, a leading

and segment sales increased, contributed by the enhanced re-ond half, mainly due to the October 2019 consumption tax ratelion yen (down 0.7% from 8,166 million yen), and profit attribut-

authority on competition strategy. This prize bestows recognition

lationship with major manufacturers by receiving a large order

hike, in the midst of a gradual recovery in capital expenditures byable to owners of the parent of 4,509 million yen (down 9.2%

on Japanese companies that have achieved and maintained su-

for dispatched workers and by making comprehensive HR ser-domestic companies and a moderate increase in consumer

from 4,968 million yen). Despite various deteriorating factors inperior profitability in a particular industry by implementing unique

vice proposals, in spite of production adjustments by some cli-spending. Looking at the global economy, in addition to thethe business environment, we managed to keep the impact low

strategies based on innovations in products, processes, andents in electric vehicle batteries.

U.S.-China trade friction which emerged in 2019, the global

and maintained the same level of operating performance to theways of managing. We believe that our business model’s highAs a result, in fiscal 2020, the segment recorded net sales of

spread of the novel coronavirus (COVID-19), which began in ear-previous year. In the first quarter of fiscal 2020, extraordinarycompetitiveness, from the competitive strategy viewpoint, was13,925 million yen (up 14.4% from 12,171 million yen in fiscal

ly 2020, had seriously damaged the society and the economy.

loss was recorded due to a change in the ESOP-type stock ben-academically endorsed.

2019), segment profit of 1,031 million yen (up 12.3% from 918

With no prospect of the end of COVID-10, the economic andefit trust plan, which was implemented as part of employees’social outlook remains extremely uncertain.

benefit programs. The number of technical employees was

In terms of the environment surrounding UT Group, the clients in

19,634 (down 949 from 20,583 a year ago). We have basicallythe semiconductors and electronic components sector continued

kept our workforce stable -- no significant reduction. In the

production adjustments, due to a slowdown of China’s economy,

meantime, as the COVID-19 outbreak caused the business envi-

global sluggish demand for smartphones, and semiconductorronment to be extremely uncertain, we opted to increase internal‰Manufacturing Business

manufacturers’ postponement of capital expenditures. The auto-

reserves and be prepared for an emergency situation, as the ac-

In the Manufacturing Business, personnel demand was robust

down, being affected by their production adjustment, demand

motive-related sector, where we had increased orders to offset

tion which we believe should be for the best interests of share-in the automobile-related sector, responding to a production in-for field engineers, equipment maintenance operators, andthe weakness in the semiconductor and electronic components

holders. We therefore decided to forgo return to shareholders increase ahead of the October 2019 consumption tax hike, butworkers for construction and civil engineers continued to be

sector, was affected by a decline in production after the con-fiscal 2020.

tapered off along with a production decline after the tax hike. In

strong. UT Group roughly doubled new hires from a year ago

the meantime, in the semiconductors and electronic component

and placed them in these positions.

sector, production adjustment by some clients appeared to bot-As a result, in fiscal 2020, the segment recorded net sales of

tom out, but the trend to reduce dispatched workers continued

16,929 million yen (up 20.5% from 14,051 million yen in fiscal

and the number of technical employees and revenues de-2019) and segment profit of 1,152 million yen (up 7.2% fromsumption tax rate hike and temporary suspension of production

Received the Porter Prize, which highly
recognized unique business strategies

lines as the spread of COVID-19 disrupted automakers’ supply
chains. These developments mainly affected our mainstay Manufacturing Business.

million yen), and the number of technical employees of 2,970

Acquisition of new clients in the Engineeringand Solution Businesses resulted
in an increase in profit(up 326 from 2,644 a year ago).

‰Engineering BusinessIn the Engineering Business, while demand in personnel by thesemiconductor manufacturing equipment-related clientscalmed

In this environment, in addition to the established strategy of dis-

UT Group was the first company in the manufacturing dispatch

creased due to the impact of the spread of the coronavirus ef-

1,074 million yen), while the number of technical employees

patching of many employees to large companies, we promoted

industry to be listed, in 2003. On November 14, 2019, we

fects.

was 2,620 (up 329 from 2,291 a year ago).

the Area-based strategy to increase local opportunities to dis-changed our listing from the JASDAQ (Standard) to the First Sec-As a result, in fiscal 2020, the segment recorded net sales ofpatch workers at second-tier and medium-sized companies fortion of the Tokyo Stock Exchange. On the occasion of celebrating

70,336 million yen (down 6.1% from 74,880 million yen in fiscal

the purpose of meeting the needs of job seekers who want to

the Company’s 25th anniversary in April 2020, we re-committed2019) and segment profit of 5,951 million yen (down 4.2% from

Net sales（Million yen）

Operating profit andOperating profit margin（Million yen）

Earnings per share（Yen）

Net sales

101,191

101,103

Operating profit margin

101,103123.07
8,040

8,083

81,751111.7181,751

91.19
5,197

+23.7%

8.0%

FY3/2019

FY3/2020

FY3/2018+20.5%

16,92912,171+14.4%

13,925+25.3%+35.0%
60,822

FY3/2019

14,051Engineering Business

13.0%

△0.4

13.9%

+2.8

12.6%

△1.6

12.0%

+1.8

74.4%

+2.0

74.1%

△ 4.6

16.7%
13.8%

Solution Business△ 9.2%
7.9%

6.4%

FY3/2018+38.6%

101,191

10,272△ 0.5%+55.5%+0.1%

10,655

Sales composition（Million yen）

Operating profit

44

Chapter 03

FY3/2020

FY3/2018

FY3/2019

FY3/2020

FY3/2018+45.9%

74,880FY3/2019△6.1%

70,336

FY3/2020

Manufacturing
Business

FY3/2018

FY3/2019

69.5%

FY3/2020

45

Chapte r 03

Financial Information

Financial Information

The Fourth Medium-term Business Plan

Expand a workstyle platform,
incorporating hiring of more diverse personnel and client companies.
Respond to the imminent social changes and evolve a business model.

The Fourth Medium-term Business Plan
aimed at business expansion in adjacent areasof the established business basecompanies, which are mainly major manufacturers, we provided'diversity & inclusion' workstyle platform." At the same time, wevalue, through means such as provision of highly-skilled person-seek to establish a highly flexible business model.

nel, an administrative system based on high-level compliance,

Toward realizing this goal, six medium-term main themes have

The prolonged infection prevention measures against COVID-19

and a scheme to re-allocate dispatch workers to other plants

been set: 1) develop and provide manufacturing workers; 2) ex-

and the slowdown in the economy have drastically changed theIn the long-term vision up to fiscal 2030 as a final year, we aim toduring production adjustment. This business base is at the heartpand area platforms; 3) create vigorous work environment em-

labor shortage situation and a supply-demand balance for per-"Create a 'diversity & inclusion' workstyle platform" with numer-of our expansion of our business base in adjacent areas in the

powering foreign workers; 4) exploit work areas for highly skilled

sonnel may be relaxed for a short term. These new three growthical targets of 600 billion yen in sales and 100 billion yen in EBIT-

Fourth Five-year Business Plan (fiscal 2021 – fiscal 2025).

engineers; 5) accelerate support for the mobilization of humanstrategies aim at achieving sustainable growth by flexible chang-resources; and 6) build a business base in new job areas. Theseing the content of business according to the changes of thethemes are then expressed in three growth strategies: 1) One-times, without changing UT Group’s mission of achieving growthstop strategy for major manufacturers; 2) Area platform strategy;

of both workers and client companies. Facing the seriously-dam-and 3) Solution strategy.

aged Japanese economy and at the prospect of further changes,

DA. During the Third Five-year Business Plan (fiscal 2017 – fiscal
2021), we achieved higher profit growth than projected in 2016
and thus shortened the plan period by one year and revised profit target in May 2019. We then quickly moved on to develop thenext plan that would start in fiscal 2021. However, the U.S.-China

Six medium-term main themes and three
growth strategies for expansionof a workstyle platform

man resources mobilization business.

we were forced to modify our Fourth Medium-term Business Plan

One-stop strategy for major manufacturers

trade friction and the COVID-19 outbreak have greatly affected"Create a 'diversity & inclusion' workstyle platform" is our goal in

the global economy and social situations. Our business environ-the Fourth Medium-term Business Plan. To date, UT has mainly

We aim to expand the fields for our manufacturing engineers byof the business broadly needed for weathering the current

ment was also greatly affected and we were forced to make atargeted young men in hiring but looking ahead, we now wel-using our existing client base and raising competitiveness in ourchanges in the society is expected to further solidify our Long-change in our fourth business plan in preparation with due con-come women, senior citizens, and foreigners. Our customer basecore business of outsourcing of manufacturing by large client

term Vision "Facilitating the healthy birth of the next workstylesideration to the post-COVID-19 situation.

will also be expanded from large factories in the manufacturing

companies.

platform."

As part of the basis of the Fourth Medium-term Business Plan, we

industry to mid-tier factories in the manufacturing and other in-adopted our Twin Customer strategy and built on the foundation

dustries and offices. We thereby can cope with the "workstyle

put in place in the Third Business Plan: to hire regular employeesthat prioritizes stability" (focus on work-life balance) in addition

We plan to raise market share in regions via alliances with andshareholders, we are committed to surefire return, including a(indefinite-term employment), dispatch these regular employees

to the "workstyle that prioritizes career development" (focus on

M&A of local dispatch operators; and integrate the Group’s ca-

total payout ratio of 30% or more, while balancing M&A-driven

to worksites of clients, provide them with stability for life plan-acquisition of skills and career advance). We will enhance thereer platform to raise profitability.

growth and financial stability.

ning, raise their skills through career consulting and training, andassessment process to find the optimal job for each person andenable them to become engineers or to become client-company

the training programs for personnel to obtain skills needed for aemployees. We have thus established an environment that en-job. We will thus expand targets in hiring, capture more client

Foreseeing large company structural reform needs, driven by theables workers to be aware of their growth through work. To clientcompanies, and expand our business areas in order to "create a

COVID-19 outbreak and other reasons, we will enhance our hu

1. Develop and provide manufacturing workers
Build a vigorous work environment
with potential career advance in mind

2. Expand area platforms

3. Create vigorous work environment
empowering foreign workers

Numeric goals of the Fourth Medium-term Business Plan are

Area platform strategy¥200 billion in net sales and ¥20-30 billion in EBITDA. To our

Solution strategy

Sales targets

EBITDA targets（100 million yen）

Build a vigorous work environment for foreigners

Build a local vigorous work environment

at the last minute near its completion. Nevertheless, expansion

Commitments（100 million yen）
300

2,000

Foreign labor management agency businessspecialized for large companies
One-stop strategy to provide
manufacturing personnel to large manufacturers
Top share in manufacturing
process of large factories

Expand the manufacturing
engineer field

Ensured placement and skilled
personnel to raise productivity

A career advance path from
mfg. operators to produce mfg

Flexible hiring to cope withdemand fluctuation

Enhance assessment andtraining programs

Workplace development to satisfy stability-fi rst workstyleHigh-level compliance baseCareer consulting for foreign workers

Exploit workplaces without
limiting to the
manufacturing field

Foreigners’ desire to acquire
skills in Japan

Foreigners’ desire to use
acquired skills

High-quality sendingorganizations

Dispatch business with clients
being major local manufacturers

Increase the number ofworkplaces within an area

Establish a sales/hiring/management modelthat matches local needs

Enhance functions oflocal offices

1,800

Overseas personnel service business by having
capital/business alliance with major local companies

Operational alliance with major
local Companies and M&As

200

1,500

1,300

150

Build a vigorous work environment in their native country
for foreigners who are trained in Japan120
4. Exploit work areas for highly-skilled engineers
Build a vigorous work environment for workers
concurrent with pursuit of higher technological goals
Enhance the highly-skilled engineer fieldIT engineers

Design & development engineers

Enrich training programs for engineers
Strengthen the sales/hiring/management organization
Operational alliance with major local companies andM&As to expand business scale and enhance functions

46

Chapter 03

5. Accelerate support for the mobilization ofhuman resources

6. Build a business base in new job areas

1,011 1,038

100
86

Build a vigorous work environment
for experienced personnel

Build a vigorous work environment for women

Establish the OB businessIn-house solution

A joint company to support
continuous employment

Acquire manufacturing businessand accept its personnel

Establish and expand theoffi ce dispatch business
Acquire an officedispatch businessSupport employmentof the elderly

Liquidate non-core businesses

Cope with the continuous
employment system

Consolidate business for boosting competitivenessMostly large companies’ managerial issues concerning use of personnel

49

Establish a business process
outsourcing (BPO) business
Acquisition of a
BPO business

EBITDA growth rate: 30% or more（CAGR starting from FY3/2021）
The UT Group emphasizes earnings growth as much as sales growth bybusiness expansion. The Fourth Medium-term Business Plan includes
strategic M&A activities aimed at formation of a long-term businessbase. We therefore use EBITDA to show our commitment in earnings
growth and set 30% or more CAGR in EBITDA for the period startingfrom FY3/2021.
Total return ratio: 30% or more
The UT Group recognizes return to shareholders as an important management priority. We intend to achieve a corporate growth through strategic investment as well as return to shareholders. We are committed
to a total return ratio of 30% or more by dividend payment and sharebuyback.

Gross D/E ratio: 1.0 or less（at the end of FY3/2025）
We intend to achieve both a high growth and a stable financial position
by balancing debts with shareholders’ equity, which stems from efficientbusiness operation and capital policy.
Total return ratio
The total return ratio represents the proportion of shareholder return to net profit.
Total return ratio = (Dividends + Shares bought back) / Net profit after tax

Gross D/E ratio
FY20 FY21 FY22 FY23 FY24 FY25

FY20 FY21 FY22 FY23 FY24 FY25

The gross debt/equity ratio indicates the ratio of interest-bearing debt to shareholders’equity of the fund sources of a company. A ratio of 1.0 or less is generally regarded asindicating a healthy financial position.

47

Chapte r 03

Financial Information

10-year Data

Chapter 03

Financial Information∣Fiscal year from April 1 of the previous year to March 31 of the year∣(Million yen)

F Y2011

F Y2012

F Y2013

F Y2014

FY2015

F Y2016

F Y2017

F Y2018

F Y2019

F Y2020

Net sales

20,227

24,10627,85430,77936,47844,05057,58881,751

101,103

101,191

Gross profit

3,740

4,314

4,484

5,429

6,760

8,747

11,462

16,01020,73820,006

EBITDA

1,520

1,519

1,523

1,882

2,288

2,574

3,652

5,713

8,686

8,604

Operating Profit

1,442

1,453

1,473

1,824

2,232

2,462

3,413

5,197

8,083

8,040

Net profit before income taxes and other adjustments

1,237

1,273

1,217

1,432

2,149

2,353

3,154

5,385

7,718

6,705

Net profit attributable to owners of the parent

766

880

922

934

1,168

1,497

2,033

3,534

4,969

4,509

Net profit attributable to owners of the parent

17

75

85

86

24

376

236

371

543

286

Depreciation and amortization

78

66

49

56

51

68

155

118

195

251

Total assets

9,022

8,550

9,505

12,05816,427

17,13923,14429,71033,72036,308

Shareholders’ equity

2,586

3,120

2,711

3,101

3,520

4,096

5,605

8,947

12,89014,900Interest-bearing debts

4,040

2,577

3,732

5,495

6,856

7,049

7,822

7,696

5,543

8,789

Cash flow from operating activities

1,585

1,367

915

358

3,131

517

3,107

4,942

6,864

3,509

Cash flow from investing activities

△32

△527

△447

△23

△679

△334

△1,052

△975

△669

△805

Cash flow from financing activities△1,828△1,916

△220

1,196

515

△789

△147

△519

△3,184

721

1,553

840

468

335

2,451

183

2,054

3,967

6,195

2,703

18.03

21.30

22.63

23.96

30.29

40.40

57.19

91.19

123.07111.71

Free cash flow

Per-share data

単位：円

Earnings per share△154.7%

18.1%

6.2%

5.9%

26.4%

33.4%

41.6%

59.4%

35.0%

△9.2%

Dividend per share

60.81

73.34

69.49

79.58

91.20

111.16158.75220.45319.26369.01

Book value per share

12.00

12.50

13.00

13.50

0.00

0.00

0.00

0.00

61.93

0.00

Gross profit margin

18.5%

17.9%

16.1%

17.6%

18.5%

19.9%

19.9%

19.6%

20.5%

19.8%

EBITDA margin

7.5%

6.3%

5.5%

6.1%

6.3%

5.8%

6.3%

7.0%

8.6%

8.5%

Operating margin

7.1%

6.0%

5.3%

5.9%

6.1%

5.6%

5.9%

6.4%

8.0%

7.9%

Fully-diluted earnings per share

Financial indices1

Return on Equity (ROE)

30.6%

30.9%

31.7%

32.2%

35.3%

39.3%

41.4%

48.1%

45.5%

30.3%

Return on Equity (ROE)2

8.1%

10.0%

10.2%

8.7%

8.2%

8.9%

10.1%

13.4%

15.7%

12.4%

Return on Invested Capital (ROIC)3

13.2%

17.7%

17.3%

14.2%

12.2%

14.7%

16.9%

20.5%

28.4%

21.7%

Equity ratio

28.7%

36.5%

28.5%

25.7%

21.4%

23.9%

24.2%

30.1%

38.2%

41.0%

1.56

0.83

1.38

1.77

1.95

1.72

1.40

0.86

0.43

0.59

1,110

Debt to Equity Ratio (D/E Ratio)4

Stock information
Stock price (fiscal year end)

235

305

328

540

470

525

1,447

3,500

2,536

Price to Earnings Ratio (PER)

13.0

14.3

14.5

22.5

15.5

13.0

25.3

38.4

20.6

9.9

△0.08

0.96

1.54

3.37

0.59

0.39

0.61

0.65

0.59

△1.07

Total shareholder return

514

531

507

526

999

749

609

1,060

2,499

Total dividend amount

514

531

507

526

0

0

0

0

2,499

0

0

0

529

0

999

749

609

1,060

0

0

66.6%

60.4%

54.9%

56.3%

85.6%

50.1%

30.0%

30.0%

50.3%

0.0%

Price/Earnings-to-Growth Ratio (PEG Ratio)5

Return to shareholders

Purchase of treasury shares
Total payout ratio

単位：百万円0

Non-financial information
Number of employees

5,489

6,272

6,983

7,955

9,489

11,370

16,104

19,581

21,74622,180

Number of technical employees

5,346

6,082

6,821

7,768

9,299

10,926

15,48818,56920,583

20,906 ※7

Number of general employees

143

190

162

187

190

444

616

1,012

1,163

1,274 ※8

25,58628,02932,944

39,18851,06173,867

92,05093,120Work creating value (million yen)
6

1 ROE = [Net profit attributable to owners of the parent] / [Shareholders' equity (fiscal year average)]
2 ROA = [Net profit attributable to owners of the parent] / [Total assets (fiscal year average)]
3 ROIC= [Net profit attributable to owners of the parent] / [Shareholders' equity (fiscal year average) + Interest-bearing debt (fiscal year average)]
4 D/E Ratio = [Interest-bearing debt] / [Shareholders' equity]
5 PEG Ratio = [P/E Ratio at year end] / [EPS growth rate] X 100
6 Work creating value = [Operating profit] + [Total personnel expenses]
7 and 8 including the number of employees of Support System, which was newly consolidated in March 2020

48

49

Chapte r 03

Financial Information

Chapter 03

Financial Information

Consolidated Balance Sheets ∣As of March 31, the last day of a fiscal year.∣(Million yen)

AssetsF Y2019

F Y2020

Current assets
14,99018,415

Short-term loans payable

Notes and accounts receivable - trade

12,42912,342Current portion of long-term loans payable

Other
Allowance for doubtful accounts

Total current assets

3

Accounts payable

840

800

Accrued expenses

6,231

5,353

△62

△49

Lease obligations

28,753

31,941

Accumulated depreciation

△87

△109

Property, plant and equipment (net)

247

231

Total property, plant and equipment

Accrued consumption taxes

2,345

2,245

Provision for bonuses

1,330

1,270

Deposits received
Other

Total current liabilities

90

36

2,741

2,208

59

58

16,907

14,277

3,682

6,742

154
△103

76

51

Long-term loans payable

324

282

Lease obligations

1

8

Net defined benefit liability

94

151

Deferred tax liability

-

68

Other

38

38

3,815

7,008

20,723

21,285

686

1,598

0

11

Software

522

622

Other

173

308

2,107

2,541

Total intangible assets

264

165

1,410

Lease assets

3

1,407

△89

Intangible assets
Goodwill0

Income taxes payable

Provision for directors’ bonuses
340

Other (net)

250
1,785

1,230

335

Accumulated depreciation

250
1,609

1

Property, plant and equipment

Other

F Y2020

1,394

Non-current assets
Buildings and structures

F Y2019

Current liabilities

Cash and deposits

Raw materials and supplies

Non-current liabilities

Total non-current liabilities
Total liabilities

Net assets

Investments and other assets

Shareholders’ equity

Investment securities

5

6

Capital stock686

Long-term loans receivable

39

6

Capital surplus

422

422

Long-term prepaid expenses

1,229

1

Retained earnings

11,781

13,791

Deferred tax assets

801

1,066

Other

515

518

Allowance for doubtful accounts

△55

△55

Total investments and other assets

2,535

1,543

4,966

4,366

Total non-current assets
Total assets

50(Million yen)

Liabilities

33,72036,308Treasury shares

Total shareholders’ equity△0△012,89014,900△4△5

Accumulated other comprehensive income
Remeasurements of defined benefit plans

Total accumulated other comprehensive income△4△5

Non-controlling interests

110

129

Total net assets

12,99615,023

Total liabilities and net assets

33,72036,30851

Chapte r 03

Financial Information

Consolidated Statements of Income ∣Fiscal year from April 1 of the previous year to March 31 of the year∣

Consolidated Statements of Comprehensive Income ∣Fiscal year from April 1 of the previous year to March 31 of the year∣(Million yen)

(Million yen)

F Y2019

F Y2020

Net sales

101,103

101,191

Net profit

Cost of sales

80,364

81,184Gross profit

20,73820,006

Other comprehensive income

Salaries and bonus
Provision of reserve for bonus

Remeasurements of defined benefit plans

Total other comprehensive income

Selling, general and administrative expenses
Compensation for directors

260

251

3,655

3,925

936

855

Comprehensive income

Provision of reserve for directors' bonus

90

36

Comprehensive income attributable to owners of the parent

853

944

Comprehensive income attributable to non-controlling interests

2,839

1,854

Depreciation
Commission paid
Goodwill amortization

195

251

1,166

1,406

406

312

2,250

2,128

Total selling, general and administrative expenses

12,655

11,966

Operating profit

8,083

8,040

Other

F Y2019

F Y2020

5,005

4,538

△4

△1

△4

△1

5,000

4,537

4,963

4,507

36

29

(Comprehensive income attributable to)

Welfare expenses
Expenses for hiring activities

Chapter 03

Financial Information

Non-operating income
Interest income

10

Subsidies for employment adjustment

86

89
20

Insurance bonus

11

Tax exemption gains for consumption tax, etc.

24

-

Other

16

11

141

122

Total non-operating income
Non-operating expenses
Interest expenses

40

31Commission fee

10

13

Other

Total non-operating expenses
Ordinary profit

7

4

58

48

8,166

8,113

-

8

-

8
16

Extraordinary income
Gain from reversal of special account concerning business combination

Total extraordinary income
Extraordinary losses
Loss on disposal of non-current assets

29

Impairment loss

378-

Loss on disaster12-

25th anniversary expenses-

205

One-off cost due to the change in the ESOP-type Stock Benefit Trust Plan

-

1,180

Other

Total extraordinary losses
Net profit before income taxes and other adjustments

28

14

448

1,417

7,718

6,705

Income taxes
Income tax, resident tax and business tax

2,816

2,427

Adjustment for income taxes

△103

△261

Total income taxes

2,712

2,166

Net profit

5,005

4,538

Net profit attributable to non-controlling interests

36

29

4,968

4,509

Per-share data

FY2019FY202 0Earnings per share

123.07111.71

Net profit attributable to owners of the parent

Fully-diluted earnings per share

52

-

-

Dividend per share

61.93

0.00

Book value per share319.26369.0153

Chapte r 03

Financial Information

Consolidated Statements of Changes in Shareholders' Equity

Consolidated Statements of Cash Flows ∣Fiscal year from April 1 of the previous year to March 31 of the year∣(Million yen)

Accumulated othercomprehensive income

Shareholders’ equity

Commonstock

Balance as of March 31, 2018

686

Capitalsurplus422

Retainedearnings

Treasury
stock

7,875

△36

RemeasureTotal
ments ofshareholders’definedequitybenefit plans

8,947

Net profit attributable toowners of the parent

4,968

-

-

Cancellation of treasury shares
Disposal of treasury shares

Total net
assets

8,947
-

4,968

4,968

△1,076△1,076△1,076△1,060

1,060

-

-

△0

52

51

51

Purchase of treasury shares

Net changes of items other thanshareholders' equity
Total changes of items during the period

-

Total
accumulated
othercomprehensive
income

△4

△4

110

105

251

406

312

Commission fee

10

13

Increase (decrease) in allowance for doubtful accounts

12

△12

Increase (decrease) in provision for bonuses

150

△67

Increase (decrease) in provision for directors' bonuses

113

△53

Interest and dividend income△1△0Interest expenses

40

31

-

△8

Loss on disposal of non-current assets

29

16

Impairment loss

378-

△1,087

308

△196

157

Loss (gain) on sale of shares of affiliated companies

Decrease (increase) in notes and accounts receivable - trade

3,906

36

3,943

△4

△4

110

4,049

Decrease (increase) in prepaid expenses

11,781△0

12,890

△4

△4

110

12,996

Decrease (increase) in inventories
Decrease (increase) in long-term prepaid expenses△2,499△2,499△2,499

4,509

4,509

4,509

△0

206

△164
△1,068△0

Increase (decrease) in accounts payable

△459

△84

Increase (decrease) in deposits received

1,088

△529

Disposal of treasury shares

-

18

1,229

761

-

△1

△1

132

Increase (decrease) in accrued consumption taxes

-

△1

0

Increase (decrease) in accrued expenses

Cancellation of treasury shares

Net changes of items other thanshareholders' equity

6,705

Amortization of goodwill

-

△0

7,718
195

422

Purchase of treasury shares

Total changes of items during the period

Net profit before income taxes and other adjustments-

Net profit attributable toowners of the parent

F Y2020

Depreciation

686

Changes of items during the period

Balance as of March 31, 2020

(Million yen)

F Y2019

Cash flow from operating activities
Minority
interests-

Changes of items during the period

Balance as of March 31, 2019

Chapter 03

Financial Information

17

-

-

2,009

△0

2,009

△1

△1

18

2,026

686

422

13,791△0

14,900

△5

△5

129

15,023

Other
SubtotalInterest and dividend income received
Interest expenses paid
Income taxes paid

Net cash provided by (used in) operating activities

139

11

9,639

7,046

1

0

△39

△33

△2,736△3,503

6,864

3,509

Cash flow from investing activities
Purchase of property, plant and equipment

△72

△14

Purchase of intangible assets

△471

△222

Payments for investments for capital△20-

Payments for purchase of subsidiary shares associated with change in scope of consolidation

△13

△634

-

△77

Payments for sale of subsidiary shares associated with change in scope of consolidation
Net decrease (increase) in short-term loans receivable△7

19

Net decrease (increase) in guarantee deposits

△88

12

Proceeds from maturity of insurance funds
Other

Net cash provided by (used in) investing activities

6

-

△3

111

△669

△805

Cash flow from financing activities
Proceeds from long-term loans payable
Payments of long-term loans payable
Redemption of bonds
Payments of purchase of treasury shares
Proceeds from sale of treasury shares
Dividends paid to owners of the Company
Dividends paid to non-controlling interests
Other

Net cash provided by (used in) financing activities

54

-

5,000

△1,998△1,764△150-△1,076

△0

51

-

-

△2,490

-

△11

△10

△13

△3,184721

Effect of exchange rate changes on cash and cash equivalents--

Net increase (decrease) in cash and cash equivalents

3,010

3,424

Cash and cash equivalents at beginning of period

11,97914,990Cash and cash equivalents at end of period

14,99018,41555

Chapte r 03

Financial Information

Financial Information

Corporate Profile ∣as of March 31, 2020∣

Share price performanceName

UT Group Co., Ltd.

(Yen)

Location

1-11-15 Higashi-Gotanda, Shinagawa-ku, Tokyo 141-0022 Japan

Originally started

April 14, 1995

4,500

Established

April 2, 2007

4,000

Capital¥680 million

Number of employees

22,180 (consolidated); 560 (non-consolidated)

Listed stock exchangeTokyo Stock Exchange, First Section

Securities code

2146

2,500

Fiscal year

April 1 to March 31

2,000

General meeting of shareholders

Annually held in June

Shareholder record dates

Four times a year (June 30, September 30, December 31, and March 31)

Trading unit

100 shares

1,000

Number of shares authorized

160,000,000 shares

500

Number of issued and outstanding shares

40,363,067 shares

0

Number of shareholders

7,478

Shareholders registry administrator

Mitsubishi UFJ Trust and Banking Corporation, Securities Agency Division,

Chapter 03

5,000

3,500
3,000

1,500

FY2016Shin-Tokyo Post Office, PO box No.29, Tokyo 137-8081 Japan

FY2017FY2018FY2019FY2020FY2017FY2018FY2019FY2020FY2018FY2019FY2020

Trading volume(10,000(Million shares)

2,500

Number of
Shares Owned

Percentage(%)

Yoichi Wakayama

9,031,178

22.37

Trust & Custody Services Bank, Ltd. (Trust Account)

3,178,900

7.88

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

1,953,900

4.84

Japan Trustee Services Bank, Ltd. (Trust Account)

1,369,400

3.39

CREDIT SUISSE (LUXEMBOURG) S.A./CUSTOMER ASSETS, FUNDS UCITS (Standing proxy: MUFJ Bank, Ltd.,)

1,100,000

2.73

J.P. Morgan BANK LUXEMBOURG S.A. 1300000 (Standing proxy: Mizuho Bank, Ltd., Settlement Sales Department)

1,041,161

2.58

STATE STREET BANK AND TRUST COMPANY 505001 (Standing proxy: Mizuho Bank, Ltd., Settlement Sales Department)

1,021,039

2.53

Infinity Co., Ltd

908,600

2.25

Copernicus Co., Ltd.

908,600

2.25

THE BANK OF NEW YORK, NON-TREATY JASDEC ACCOUNT (Standing proxy: MUFJ Bank, Ltd.,)

860,000

2.13

Major Shareholders

2,000

1,500

1,000

500

0

FY2016

Share price performance relative to TOPIX
Distribution of shares

Number of shareholders

900

UT Group
2020

21.9%

4.7%

37.9%

34.0%

7,478

2020

1.5%
2019

19.1%

TOPIX

800
700

5.0%

38.2%

36.6%

2019

7,364

29.1%

2018

7,049

31.8%

2017

0.9%

600
500

2018

19.3%

5.6%

44.1%

1.9%
2017

21.4%

6.2% 5.9%

34.6%

400
300

3,942

200
2016

26.0%

5.1%

38.9%

26.8%

■Securities companies■Foreign investors■Other corporations

2016

4,427

100

3.2%
■Financial institutions■Individuals and others

560* Including holders of shares less than one unit

FY2016FY201757