BUSINESS & CSR REPORT 2021 | SBS GROUP

Integrated Report

SBS GROUP

BUSINESS& CSR REPORT 2021
Integrated Report

CONTENTS
03
07
11
13
17
19
23
25
27

Commitment from Top Management / Key Topics
SBS Group Business Overview
The SBS Group’s Value Creation Process
Business Overview and Financial Status
External Environment and Mid-to-Long-Term Management Strategy
Ascertaining and Responding to Management Risks

Environment

Responding to the Effects of the COVID-19 Pandemic

29
30
31
32
33
34

Shaping the Future Through the SDGs
CSR Promotion in the SBS Group

Safety & Social
35

Key Indicators (Fiscal 2020 Results)
Review of Fiscal 2020 Initiatives (Environment)
Mid-to-Long-Term Environmental Plan
Action Plan
Climate Change Risks
Environmental Issues Tackled by the SBS GroupKey Indicators (Fiscal 2020 Results)<Safety>

36
37
38

Review of Fiscal 2020 Initiatives (Safety)
Education and Awareness-Raising, Accident Prevention
Safe Driving and Safe Operation Management<Society>39

Engagement Between the SBS Group and Society,Engagement with Customers, Engagement with
Employees

40

Engagement with Business Partners,
Communication with Stakeholders

41

Social Contribution Activities

Governance
43
44
45
47
50
51
52

Key Indicators (Fiscal 2020 Results)
Approaches and Systems
List of Directors
Ensuring EffectivenessCompliance
Risk management
Information Security

53
53
55
55
57
57

CSR Data
Financial Data
Corporate Profile, Shareholder Information and Key Challenges

About This Report

Editorial Policy
The SBS Group has published the Business & CSR Report since fiscal 2018 to informstakeholders interested in the Group's short, medium and long-term value creation
efforts by reporting on its business development as a comprehensive logistics group,
the basic directions, plans, progress and performance of the CSR management
activities that support it, and on future issues. The report is designed to be simple
and clear so that it can be easily read even without prior knowledge of the SBSGroup.
On the SBS Group website, we disclose comprehensive IR information and generalcompany information in addition to CSR information not listed in this report.
https://www.sbs-group.co.jp

The SBS Group commercial (produced in fiscal 2020)
expresses the SBS Group's passionate desire to not only
connect people's lives and society, but also to connect
people's dreams.

Management Philosophy

Highlights of our Management Philosophy Implementation (Fiscal 2020)

Customers

Total Distance Driven 130,844,007 km
Consolidated Net Sales 257.1 billion yen

meet shareholders' expectations, and to be a

Shareholders

Dividend per Share 35 yen

company caring of its employees.

Employees

Training Conducted All 37 Subjects
Actual Training Participants 6,824

Society and
PeopleNumber of Business Sites with G-Mark
Certification (Certification Rate) 167 business sites (87.9%)

We provide services to achieve client satisfaction, toLong-term prosperity is rooted in paying thenecessary attention to people and in the enthusiasmof our employees.

Logistics Research Grants 6

Social responsibility is essential to corporate growth.

Scholarships for Students Receiving Social Care 74

Harmony within the community, efforts to make

Investment in the Environment 4,444 million yen

those around us happy, and contribution to society

Environmental Efficiency (CO₂ emissions per unit of sales)
40.77% (17% improvement over the past five years)

far and wide, is crucial.

Quantity of Renewable Energy Delivered 11,017 kWh
Waste Processing Logistics Handling Volume 9,371 t
Development ofSociety in Japanand Abroad

Reporting Scope

Reporting Period■ 18 Domestic Consolidated Subsidiaries / SBS Toshiba Logistics Corporation / TL Logi Service Co.,

Fiscal 2020 (January to December 2021)

Ltd. / SBS Ricoh Logistics System Co., Ltd. / SBS San-Ai Logistics Co., Ltd./ SBS Logicom Co., Ltd.
/ SBS Logicom Kanto Co., Ltd./ SBS Freight Service Co., Ltd. / SBS Global Network Co., Ltd. / SBS
Flec Co., Ltd. / SBS Flecnet Co., Ltd. / SBS Zentsu Co., Ltd. /SBS Sokuhai Support Co., Ltd. / SBS
Staff Co., Ltd. / SBS Finance Co., Ltd. / SBS Asset Management Co., Ltd. / L-MAX Co., Ltd. /Marketing Partner, Inc. / SBS Driving School Co., Ltd.
* As Toshiba Logistics Corporation became a consolidated member of the SBS Group in November 2020, only
some environmental data is applicable.

■ Public Interest Incorporated Foundation / SBS Kamata Foundation

SBS GROUP BUSINESS & CSR REPORT 2021

01 02

Commitment from Top Management

Aiming to Achieve Net Sales of 500 Billion
Yen and Beyond as a Mega Venture
Growing on the Strength of Logistics × IT
Ushering in a paradigm shift in the world oflogistics as a mega venture
The SBS Group was founded in 1987, and at the time offered
what was considered an innovative service: same-day delivery
in the Tokyo metropolitan area. In the years since, the Group
has set a number of milestones - sales of 10 billion yen in its
first 10 years, 100 billion yen after 20 years, and 200 billion yen
after 30 years. By thinking outside the box and continuing toactively take on risks and challenges, we have achieved each ofthis goals. Even as a series of companies handling the logistics
functions of national brands have joined the SBS Group, ourindomitable venture spirit has been passed down as the DNA of
the SBS Group, and has continued to thrive.
With a wide range of logistics functions spread globally, theability to propose innovative solutions and as a "mega venture"with an unrivaled sense of speed, the SBS Group will usher ina paradigm shift in the world of logistics.

Responding to changes in the management
environment and setting sights on record earnings
For the SBS Group, the management environment in thefiscal year ended December 2020 put that underlying strength
to the test. The development of the COVID-19 pandemic put
the brakes on global economic activity and brought about adecline in imports and exports. While demand for B-to-B
logistics declined as a result, we saw vigorous demand forfood and other daily necessities against the backdrop ofincreased private consumption associated with stay-at-homepolicies, with the expansion in online sales driving a huge
uptick in demand for home delivery. The SBS Group has
strived to response flexibly to environmental changes while

Masahiko Kamata
President, SBS Group

Our Growth
History

Sales / Billion Yen

Fiscal 2020 Results

5,000

2020: Toshiba Logistics

Net Sales

Currently: SBS Toshiba Logistics

4,000

2018: Ricoh Logistics System

Currently: SBS Ricoh Logistics System

2006: Two companies
including Zentsu

3,000
2,000

Operating income

billionyenbillionyen

Currently: SBS Zentsu

2005: Nine companies including
Tokyu Logistic
Currently: SBS Logicom

Fiscal 2021 Plan

2004: 10 companies including
Yukijirushi Butsuryu
Currently: SBS Flec

1,000
0

257.1
10.9

Net Sales
1987

1995

2000

2005

2010

2015

2022 20XX

Operating income

400
20billionyenbillionyenplacing top priority on preventing infections and ensuring safety
among customers, business partners and employees.
While earnings in the logistics business were largely flat, withdeclines in some areas being balanced out by gains elsewhere,
increased earnings in the real estate business contributed to
net sales of 257.192 billion yen (+0.6% year on year) andoperating income of 10.960 billion +7.7% year on year). As aresult, the Group achieved recorded consolidated net sales
and operating income for the third consecutive year.

Setting sights on reaching the top tier ofthe logistics industry
In the logistics industry, we expect to see a further expansionof the online shipping (EC) market, the rapid advancement oftechnological innovations utilizing logistics technology (LT), andstructural changes to business models. In anticipation of thesedevelopments, the SBS Group will integrate logistics, M&A andlogistics facility development, continue to implement its uniquebusiness model that has growth with 3PL at its core, proactively invest in LT and IT, and accelerate collaboration with otherindustries in order to enhance its competitiveness and reachthe top tier of the logistics industry.
In fiscal 2021, we will further strengthen our sales activities
and focus on tapping into the strong home delivery demand fordaily necessities and online shopping. We also expect SBS
Toshiba Logistics Corporation, which has been newly added to
the SBS Group, to contribute to earnings, and have undertaken
the securitization of logistics real estate. Through these actions,we plan to achieve increased sales and profit with net sales of
400 billion yen, operating income of 20 billion yen, ordinary
income of 19.5 billion yen and net income attributable toowners of parent of 10.7 billion yen. To make this happen, we
will make a concerted Group-wide effort on our businessactivities and growth strategies.

Non-consecutive growth through M&A activities
M&A will continue to be important to the SBS Group as an
approach for achieving non-consecutive growth. Through M&A
actions targeting carefully selected companies, we will extend
our size and breadth as a corporate group and take measured

SBS Group Growth Strategy

steps to produce synergy. Instead of relying on simple
restructuring, we will enhance the growth potential of the entire
group from a long-term perspective with measures including
the reassignment of personnel and reallocation of management
resources.
In the fiscal year ended December 2020, the SBS Group's
largest M&A activity was the acquisition of shares (66.6%) in
Toshiba Logistics Corporation (now known as SBS Toshiba
Logistics Corporation). The company uses its global network toprovide logistics services for energy-related social infrastructure, semiconductors, IT, home appliances and other freight.
One of its strengths is in 4PL. This is an approach to comprehensively handle the logistics operation of an enterprise, improving efficiency and providing support including the formulation of core strategies. Adding the company to the SBS Group
strengthened the Group's ability to deliver 4PL proposals tocustomers around the world. Starting this fiscal year we havealso begun implementing a range of measures to promote synergy, including the reciprocal use or rebuilding of logistics facilities, optimum allocation of overseas sites, and integration of
mission-critical systems.
At the same time, we are also pursuing "small M&A"
activities in parallel, in order to respond to logistics needs ingreater detail. Hinomaru K.K., all shares in which wereacquired by SBS Flec Co., Ltd., maintains a delivery network in
Shikoku with a focus on food logistics in the three temperaturezones, and boasts a history of more than six decades. Its
motto is to always look for ways to contribute to society , todrive safety and considerately, and to treat everyone withgratitude and a smile. We also acquired 100% of shares in
TOYO WAREHOUSE & TRANSPORTATION CO., LTD. The
company's strengths lie in warehousing and customers
clearance services, and it maintains large warehouses in key
locations in Tokyo's bay area. Other additions to the SBSGroup include K.U.K. LINE (wholly acquired by SBS Logicom)
and Jass Co., Ltd. (wholly acquired by SBS Ricoh Logistics
System).
These new members joining has strengthened the delivery
network, supply chain support framework and overall brandstrength of the SBS Group.
* Made into a subsidiary on April 1, 2021

M&A activities in Fiscal 2020
SBS Toshiba Logistics Corporation(including 15 Group companies)

Total logistics(4PL operations)

HINOMARU KYUSO K.K.

Maintains service basein the Shikoku region

TOYO WAREHOUSE &TRANSPORTATION CO., LTD.

Logistics infrastructurein the Tokyo bay area

K.U.K. LINE
Jass Co., Ltd.

Regional delivery
networks

M&A

LT × IT

Reinforcing
logistics
infrastructure

SBS GROUP BUSINESS & CSR REPORT 2021

03 04

Commitment from Top Management / Key Topics

Reforming Logistics in the Field through LT × IT

Strengthening logistics infrastructure

Logistics technology (LT) has continued to rapidly develop,
and is creating the momentum to redefine the roles of logistics
and corporate activities. The SBS Group has actively invested
in LT as a part of its mission to reform logistics, and based on
the expectation that the roles of robotics, AI, RPA and othertechnologies will expand even more in the future, in April 2020
the information systems departments of SBS Holdings, Inc.
and SBS Ricoh Logistics System Co., Ltd. were restructured
to develop a framework promoting the strategic introduction of
information technology (IT) and LT. We will share, combine andaccumulate the skills and expertise possessed by each Group
company to pursue reforms to logistics in the field.
The LT × IT field introduction project being promoted under
the new structure covers a wide range of areas. A notable
example of an effort to improve the efficiency of existing
business is the development of delivery systems for the homedelivery business. To accommodate the rapidly growing needsof the home delivery business due to the COVID-19 pandemic,
next-generation delivery terminals that enable delivery staff tocarry out their work smoothly will be developed. We are also
introducing robots in our 3PL business sites (both existing andnew sites) in stages. In particular, at the Yokohama Kanazawa
Logistics Center that will be completed in October 2021, we
will introduce large-scale LT equipment with the aim of
doubling the processing capacity of existing sites.
We are also eyeing the development of new technologies on
multiple fronts. Since December 2019 we have worked under abusiness alliance with Pyrenee Corporation, which works on
the development of AI assistance equipment for drivers, andhave been providing support including the loaning out of ourdriving courses and trial use of prototypes. The SBS Groupalso continues to operate iGOQ, a vehicle and cargo seeking
service, which was developed to match information on cargothat lacks a carrier with information on trucks (vehicles) that arelooking for cargo to carry. The service has yielded results, withan increase in registered vehicles and improved matchingrates. The SBS Group is also engaged in demonstration testing
activities to deliver small parcels by drone in mountainous
areas.

By the end of December 2020, the total floor area of ourlogistics facilities exceeded 530,000 tsubo (approximately 1.75
million square meters). We expect floor area to increase every
year from here on, and based on current expectations, floorarea will surpass 900,000 tsubo (almost 3 million square
meters) by 2024. In particular, the addition of SBS Toshiba
Logistics to the SBS Group has added 200,000 tsubo(approximately 661,000 square meters) of floor area. In thenear future, we will aim to reach the milestone of one million
tsubo (3.3 million square meters) of floor area.
In the interim, we will systematically implement the securitization of logistics centers. With regard to the Nagatsuta Logistics
Center leased in blocks, its trust beneficiary rights were split
into three and transferred in three steps from 2018 to 2020,
with the sale completed in March 2020. Sale of the Nanko
Logistics Center was also completed in May 2021.
Enhancing delivery networks is an essential part of strengthening logistics infrastructure, and this is being pursued primarily
through the reciprocal utilization and improved functioning ofGroup resources. Our basic approach is to leverage the operational strengths of each Group company to expand even further
overall. For example, nationwide delivery operations for the customers served by SBS Sokuhai Support Co., Ltd. mainly in theTokyo metropolitan area are handled by SBS Ricoh Logistics
System Co., Ltd., using its delivery network. In this way, multiple
e-commerce companies can entrust the SBS Group with homedelivery and same-day delivery needs.
We are also expanding new networks by coordinating withexternal partners. The YC Delivery Service, a joint delivery
network operated with Yomiuri Shimbun, has expanded thedelivery area to all 23 wards of Tokyo and now also handles alltimes of day. Preparations to expand this service to the Tamaarea are now underway. We also continue to provide support
to companies handling domestic logistics infrastructure
through the Japan Logistics Future Investment Fund.

Total Floor Area of Logistics Facilities (as of December 31, 2020)

531,000(approx. 1.75 million
tsubo square meters)

Yokohama Kanazawa Logistics Center
Construction of the Yokohama Kanazawa Logistics
Center is in response to the growing volume of goods
customers have entrusted to SBS Ricoh Logistics
System Co., Ltd. We aim to achieve a high-level 3PL
service by combining the operational field expertiseof SBS Logicom in handling small lots of various
items with the cutting-edge LT and system design of
SBS Ricoh Logistics System Co., Ltd. The facility
features four aboveground floors and one basementlevel with a total floor area of 53,821.69 m 2 (16,281.06
tsubo).

CSR management

Increasing shareholder dividends by 3 yen

Despite the many restrictions on business activities imposedfrom fiscal 2020 onward, the SBS Group's commitment to
CSR management has held fast.
In terms of ensuring safety, we are making comprehensive
efforts towards the ultimate goal of zero accidents throughimprovements to operational management, the deployment
of operational support equipment, safety education andmeasures to prevent accidents caused by health issues. Fuelefficiency closely related to safety, and CO 2 emissions arealso being called into question in the context of responding
to climate change as an emerging global risk. In Sincere
Challenge 2030, the medium-to-long-term environmental
plan the SBS Group launched in fiscal 2018, reducing CO2
emissions from our vehicles and facilities is a a major theme,
and we have made steady progress on this front.
We have also focused on the development of human resources in Japan and abroad. In fiscal 2020, we accepted
technical interns from Vietnam for the first time. We are also
continuing with efforts to use our capabilities as a logistics
company to help solve social issues.
Through the SBS Kamata Foundation, we continue to offer
grants for excellent logistics research by university researchersand scholarships to students receiving social care.
In order to improve transparency and speed up decision-making, in December 2020 SBS Holdings decided totransition to a company with an Audit & Supervisory Committee. The move was approved by the General Meeting of Shareholders in March 2021.
With the United Nations' Sustainable Development Goals(SDGs) in mind, we will make logistics more sustainable anddevelop into a company that continues to respond to social needs.

The Company considers the return of profits to shareholders
to be one of its most important management priorities. The
Company’s basic policy on the distribution of profits is,while retaining sufficient internal reserves to develop solidmanagement foundations, maintain continuous dividends,
and improve the level of dividends in line with businessperformance. In light of solid business results in fiscal 2020, thedividend per share was raised 3 yen from the planned amountto 35 yen. We appreciate the ongoing support of our valued
shareholders in the future.

Dividend Paid (fiscal 2020)35

yen (+ 3 yen)

To net sales of 500 billion yen and beyond
Based on our slogan, "For Your Dreams," we are not only
committed to championing the success of our customers'
businesses, but are also pushing forward so that we continue torepresent the "infrastructure of hope" that delivers on the dreamsof people around the world. As we proceed along that path, we
believe that our next goal of 500 billion in net sales will come into
view, and even greater heights thereafter.
We intend to make strong progress together with everyone who
is interested in the future of the SBS Group. Looking ahead, we
appreciate your confidence in the efforts we are making and thankyou for your support.

Number of Business Sites with G-Mark Certification and Certification Rate
(Assessment as business sites with excellent safety in fiscal 2020)

167

business sites

87.9

%

Acceptance of Technical Interns from Vietnam
SBS Flecnet Co., Ltd. started accepting technicalinterns from Vietnam in 2020 in accordance with theTechnical Intern Training System established by thenational government. Over an eleven-month training
period, the trainees will acquire expertise in foodlogistics with the primary aim of contributing to thedevelopment of human resources who will lead theeconomic development of Vietnam. We will also makeefforts to promote international mutual understanding
through exchanges with local residents. There are 12
technical interns in the first group, and there are plans
to implement the training on a regular basis in the
future.

SBS GROUP BUSINESS & CSR REPORT 2021

05 06

SBS Group Business Overview

Transporting all manner of things safely,
securely and in an optimal environment
The SBS Group has organically developed its General
Logistics, Property Management and Logistics Support
businesses. In the General Logistics Business, we performthe transportation and delivery of raw materials andproducts, as well as the associated storage, loading,un load in g, p ack ag i n g , d i st r i b u t i o n p r o c e ssi n g a nd
information management. This is a third-party logistics (3PL)
related business in which we propose logistics reforms tocorporate clients and are entrusted with their logistics
operations on a comprehensive basis. The 3PL-related
business makes full use of the logistics facilities the Grouphas planned and developed through the Property
Management Business. By securitizing facilities as
high-utilization properties at the time they are sold, we obtaina gain on sale and recoup our investment. The Logistics
Support Business provides the supplementary functions thatthese businesses require.

Logistics Support
Business

Pet Wellness BusinessInsurance and Leasing
Environmental Business
Personnel Support

Number ofBusiness Sites

SBS Holdings, Inc.
Holding company for the SBS Group
Number of Employees: 276

Rent Business
Development Business

Marketing Business

General
Logistics Business
Truck Transportation
Rail Transportation
Low Temperature Logistics
Logistics Center Operation
International Logistics
Processing in Logistics
Same-Day Delivery for Corporations
Home Delivery (for Individuals)
Company Relocation / Individual Relocation
On-site Logistics
3PL Consulting

Property Management
Business

M&A

Number of Business Sites: 1

716

Renewable Energy Generating Capacity: 1,500 kW
Main Business: Company-wide strategy(Group strategy functions, corporate governance functions)Management, otherhttps://www.sbs-group.co.jp/

Number of
Vehicles Owned
Trucks and otherroad vehicles

Forklifts* Excluding driving school

4,405
1,369

vehiclesvehiclesNumber of Employees

23,270* All figures are the total number of employees and differ fromthe figures listed in securities reports.

SBS GROUP BUSINESS & CSR REPORT 2021

07 08

SBS Group Business Overview

M&A

3PL/4PL

Truck
Transportation

International
Logistics

Modal Shift

Logistics andDelivery for
E-commerce

Logistics Center
Operation

Processingin Logistics

Support for
LT Planningand Introduction

Company
Relocation

SBS Toshiba Logistics Co., Ltd. * Including TL Logi Service Co., Ltd.
A Fourth Party Logistics (4PL) company going beyond the boundaries of the Toshiba Group that proposes andrealizes logistics strategies in line with management strategies for a wide range of customers. Working in
partnership with SBS Group companies, SBS Toshiba Logistics provides integrated services from logistics
engineering (planning and design) to the operation of logistics functions at the implementation stages, both inJapan and overseas. By providing total logistics solutions that are not only high quality but competitive, thecompany provides powerful support for solving customers' management issues.

3PL/4PL

Truck
Transportation

International
Logistics

Modal Shift

Logistics andDelivery for
E-commerce

Logistics Center
Operation

Processingin Logistics

Support for
LT Planningand Introduction

Company
Relocation

Characteristics: International logistics (integrated
global logistics), logistics for mass produced goods,
logistics for electronic devices, indent logistics /Number of Employees: 2,577 / Number of BusinessSites: 76 / Number of Vehicles: trucks and other roadvehicles: -, forklifts: - / Certifications: ISO 14001, ISO
9001, ISO/IEC17025, ISO/IEC27001, AEO
https://www.sbs-toshibalogistics.co.jp/

Packaging Design
and Development

SBS Ricoh Logistics System Co., Ltd. * Includes SBS San-ai Logistics Co., Ltd.
Managing the supply chains of precision equipment manufacturers played a key part in the establishment of
SBS Ricoh Logistics System. With the impressive quality and "KAIZEN" capabilities for which national brands
are renowned in our DNA, we support the success of our customers through domestic and overseas third
party logistics (3PL). With our outstanding logistics technologies we continue to propose the best methods fora wide range of customers' logistics needs based on procurement, production, sales and venous logistics anda backbone of "recycling-oriented logistics" that integrates them.

3PL/4PL

Truck
Transportation

International
Logistics

Modal Shift

Logistics andDelivery for
E-commerce

Logistics Center
Operation

Processingin Logistics

Support for
LT Planningand Introduction

Company
Relocation

Packaging Design
and Development

Characteristics: Transportation of precision equipment for manufacturers, international logistics, delivery for corporations / Number of Employees: 4,631 /Number of Business Sites: 185 / Number of Vehicles:
Trucks and other road vehicles: 457, Forklifts: 521 /Certifications: G-Mark, ISO 14001, ISO 9001, ISO
27001, AEO
https://www.sbs-ricohlogistics.co.jp/

Environmental
Business

SBS Logicom Co., Ltd. * Includes SBS Logicom Kanto Co., Ltd.
As a partner company to its customers, SBS Logicom provides total logistics services covering everythingfrom logistics consulting and strategy to planning and operations. With various waves of change sweeping
through the logistics industry, SBS Logicom continues to make strides forward as a logistics company meeting the needs of a wide range of customers across various industries and supporting social infrastructure
through a focus on warehouse management, cargo handling and distribution processing services, along withlogistics centers, truck and rail transportation, special transportation, customs clearance and internationaltransportation, government, corporate and school relocations, and on-site logistics.

3PL/4PL

Truck
Transportation

On-siteLogistics

Packaging Design
and Development

International
Logistics

Low
Temperature
Logistics

Modal Shift

Logistics andDelivery for
E-commerce

Logistics Center
Operation

Processingin Logistics

Support for
LT Planningand Introduction

Logistics
Facility
Development

Characteristics: Total Logistics Services / Number of
Employees: 6,813 / Number of Business Sites: 93 /Number of Vehicles: Trucks and other road vehicles:
990, Forklifts: 531 / Renewable Energy Generating
Capacity: 6,812 kW / Certifications: G-Mark, ISO
14001, ISO 27001, Green Management Certification,
GPN Certification, Relocation Safety Markhttps://www.sbs-logicom.co.jp/

Company
Relocation

Property
Management
Business

SBS Flec Co., Ltd. * Includes SBS FlecNet Co., Ltd.
SBS Flec was founded in 1956 as Yukijirushi Logistics Co., Ltd. It handled food logistics as the logistics
subsidiary of the Yukijirushi Group, and has honed its expertise in food distribution technologies and quality
control through its nationwide network. Today, SBS Flec provides comprehensive support for food manufacturers from production to the placement of products in stores as one of the few 3PL companies able to handle
all three temperature zones, namely dry (room temperature), chilled (refrigerated) and frozen. As a leading
company in low temperature logistics, SBS Flec is committed to delivering foods with safety and peace ofmind.

3PL/4PL

Truck
Transportation

Low
Temperature
Logistics

Modal Shift

Logistics andDelivery for
E-commerce

Logistics Center
Operation

Characteristics: Food logistics services in the threetemperature zones / Number of Employees: 3,586 /Number of Business Sites: 121 / Number of Vehicles:
Trucks and other road vehicles: 688, Forklifts: 215 /Certifications: G-Mark, ISO 14001, ISO 9001
https://www.sbs-flec.co.jp/

Processingin Logistics

SBS Sokuhai Support Co., Ltd.
In December 1987, the SBS Group started SBS Sokuhai Support as a same-day delivery business. Revolutionary for its time, this business model is still utilized by many users. More recently, SBS Sokuhai Support has
been using the expertise it has developed in the same-day delivery business for the e-commerce home delivery business, which is experiencing rapid growth in demand, and is in the process of expanding its operations
to major Japanese cities. The company also combines venous logistics functions to play a part in recycling-oriented logistics.

3PL/4PL

Truck
Transportation

Logistics andDelivery for
E-commerceSame-Day
Delivery for
Corporate
Customers

Logistics Center
Operation

Processingin Logistics

Environmental
Business

Characteristics: Same-day delivery and other delivery
for corporations, intermediate processing of industrial
waste, manufacturing of store fixtures, distribution
processing for the apparel industry / Number of
Employees: 611 / Number of Business Sites: 84 /Number of Vehicles: Trucks and other road vehicles:
271, Forklifts: 39 / Certifications: G-Mark, ISO 14001,
ISO 27001
https://www.sbs-sokuhaisupport.co.jp/

SBS Zentsu Co., Ltd.
SBS Zentsu provides total support for the food supply chain by building logistics systems that consolidate
pre-cooled and temperature-controlled transportation, joint delivery and food in four temperature zones. In
response to increasingly sophisticated and complex logistics needs, SBS Zentsu uses the "creativity" it has
cultivated providing operations and services for many years as a powerful tool, overcoming difficulties andissues one after another while continually create new solutions.

3PL/4PL

Truck
Transportation

Low
Temperature
Logistics

Logistics andDelivery for
E-commerce

Logistics Center
Operation

Processingin Logistics

Characteristics: Logistics and Delivery of Foods in theThree Temperature Zones / Number of Employees:
3,983 / Number of Business Sites: 101 / Number of
Vehicles: Trucks and other road vehicles: 1,570 Forklifts: - / Certifications: G-Mark, ISO 14001, ISO 9001,
JAS Organic Agricultural Product Subdivider Certification
https://www.sbs-zentsu.co.jp/

Packaging Design
and Development

Environmental
Business

Low
Temperature
Logistics

Logistics
Facility
Development

On-siteLogistics

Property
Management
Business

Same-Day
Delivery for
Corporate
Customers

Personnel
SupportMarketingBusiness

Pet Wellness
Business

Insuranceand Leasing

Safe Driving
Training

SBS Freight Service Co., Ltd.
Transportation and delivery network covering the Pacific side of eastern Japan to Kansai. SBS Freight Service
offers an extensive range of transportation services from three-temperature-zone transportation, special transportation such as shipping for filming locations, marine container drayage transportation, warehousing,storage and distribution processing, and office relocation services. The company is also focusing on distribution center operation in response to expanding e-commerce needs.

Truck
Transportation

Low
Temperature
Logistics

Logistics Center
Operation

Processingin Logistics

On-siteLogistics

Company
Relocation

Characteristics: Special-purpose Transportation,
Marine Container Drayage / Number of Employees:
371 / Number of Business Sites: 21 / Number of Vehicles: Trucks and other road vehicles: 396 Forklifts: 62/ Renewable Energy Generating Capacity: 212 kW /Certifications: G-Mark, ISO14001, ISO9001, Privacy
Markhttps://www.sbs-freight.co.jp/

SBS Global Network Co., Ltd.
Based on its extensive overseas distribution network that extends from Japan to Asia and the world, SBS
Global Network supports supply chains in Japan and abroad. The company conducts analyses of the current
status of international logistics being implemented by customers (consulting). It then proposes and implements optimum import and export operations based on cargo characteristics and supply chain strategies.

Characteristics: Total coordination of international
logistics / Number of Employees: 163 / Number ofBusiness Sites: 8 / Number of Vehicles: 5 / Certifications: AEO certification (planned)
https://www.sbs-globalnet.co.jp/

International
Logistics

SBS Asset Management Co., Ltd.
SBS Asset Management is an asset management company responsible for developing the logistics facilities of
the SBS Group. Using expert knowledge and know-how regarding finance, real estate and logistics, the company independently develops specialized logistics facilities optimized for 3PL. With a strength in highly functional design informed by an intimate knowledge of logistics in the field, SBS Asset Management handles toincreasingly sophisticated logistics while responding to changes in the value chain based on in-depth
research. SBS Asset Management operates a total asset management business specializing in everything fromland acquisition and leasing to asset securitization.

Property
Management
Business

Characteristics: Asset management business specializing in logistics facilities / Number of Employees: 10 /Number of Business Sites: 1 / Renewable Energy
Generating Capacity: 1,500 kW
https://www.sbs-asset.co.jp/

Logistics
Facility
Development

SBS Staff Co., Ltd.
SBS Staff operates a worker dispatch business which specializes in the logistics business and are tailored tocustomer needs. With its unique matching system, the company is able to respond to sudden job openings.
Fee-based job placement services are also available.

Characteristics: Temporary staffing / Number of
Employees: 177 / Number of Business Sites: 21 /Number of Vehicles: 28 / Certifications: Privacy Mark
http://www.sbs-staff.co.jp/

Personnel
SupportSBS Finance Co., Ltd.
SBS Finance provides a wide range of services from leasing and sales to insurance. As a finance company
excelling in the area of logistics, SBS Finance provides a range of functions including the joint purchasing of
consumables for logistics businesses.

Characteristics: Leasing and insurance sales, jointpurchasing / Number of Employees: 22 / Number ofBusiness Sites: 1 / https://www.sbs-finance.jp/

Insuranceand Leasing

Marketing Partner, Inc.
Providing one-stop service for e-commerce site development and operation.
The company provides e-commerce business support covering the four areas of marketing, analysis, creativeand fulfillment.

MarketingBusiness

Characteristics: Premium pet food specialty store,
online sales business / Number of Employees: 50 /Number of Business Sites: 1 / Certifications: Privacy
Markhttps://marketing-partner.jp/

Pet Wellness
Business

SBS Driving School Co., Ltd.
We operate driving schools with the aim of developing safe drivers in the SBS Group and local community.
Students can obtain licenses for regular cars, mid-sized vehicles and motorcycles.

Characteristics: Driving classes / Number of Employees: 43 / Number of Business Sites: 2 / Number of
Vehicles: 72 (training vehicles (cars and motorcycles,
shuttle cars, etc.)
https://www.sbs-drivingschool.co.jp/

Safe Driving
Training

SBS GROUP BUSINESS & CSR REPORT 2021

09 10

The SBS Group’s Value Creation Process

As a logistics business operator, the SBS Group has worked to effectively utilize and enhance the capital used in its
business activities from a comprehensive long-to-medium-term perspective.
The Group will further raise the level of these efforts to continue to create value in the future.

INPUTS
Capital utilized for corporate activities

CapitalFinancial
CapitalCapital for
the Provisionof Services

Management Approach

Indicators

We seek to maintain an equilibrium between active investment activities and ensuring financial health.
Accordingly, a target shareholders' equity ratio of 30% has been
set. In terms of shareholder return,
the Company maintains continuous
dividends and makes every effort
to raise dividend levels in line withbusiness performance.

As a group of 3PL companies possessing logistics functions in every
direction, the SBS Group is committed to developing its comprehensive logistics infrastructure, including logistics facilities and vehicles,
at a scale and quality level that adequately satisfies its need to grow.

To secure and develop talented
human resources, the SBS Groupmakes improvements to its personnel systems, provides training andHuman andeducation to all employees, and deOrganizational velops a workplace that offers job
Capitalfulfillment. The SBS Group also enhances the operational quality ofthe organization by developing andoperating management systems.

Intellectual
CapitalSocialCapitalNaturalCapitalBased on its ability to operate awide range of logistics services, the
SBS Group further enhances its
proposal-making capabilities, expertise and problem-solving abilities.

The SBS Group gains an understanding of varied expectations anddemands through dialogue withstakeholders, reflects that insight inits corporate activities, and strives
to work in harmony with society. We
make particular efforts with respect
to ensuring safety, the most important social demand for a logistics
business operator.
We also contribute to society andlocal communities as a corporate
citizen.

The SBS Group pursues efforts tocontinually reduce its environmental
impact from a medium-to-long-term
perspective, positioning CO2 emission reductions, the promotion of
resource recycling and the preservation of natural resources as key
issues.

Change

2018

2019

2020

Total assets (million yen)

171,796

180,047

254,550

Net assets (million yen)

48,17354,077

68,146

Shareholders' equity ratio (%)

23.1

25.1

19.9

Net DE ratio (%)

1.44

1.21

1.39

Number of shareholders

2,921

2,878

3,911

Number of business sites

531

655

716

-

386

401

Number of vehicles

4,497

4,570

4,405

Number of forklifts

1,382

1,436

1,369

Investment in facilities and equipment(million yen)

11,607

11,71011,507

Number of employees

19,017

19,37923,270 *Actual training participants

5,095

7,173

6,824

Number of companies with ISO 9001 (quality)
certification

5

5

6

Number of companies with ISO14001(environmental) certification

7

7

8

Number of companies with ISO 27001(information security) certification

4

4

5

Number of employees taking eco-driving
training (cumulative total)

1,500

1,570

0

Group-average fuel efficiency (km/L)

4.93

4.93

5.01

Logistics service expertise such as 3PL--

Large numberof projects

Number of business sites with G-markcertification

153

162

167

Digital / Analog tachographs

3,554

3,692

3,692

Dashcams

2,937

3,752

3,752

Rear-view cameras

3,589

2,407

2,407

Logistics research grants

9

6

6

Scholarships for students receiving social care

34

57

74

Compliance awareness survey respondents

4,794

-

-

Number of eco-friendly vehicles introduced(cumulative total)

3,914

3,955

3,955

Environmental Efficiency (CO2 emissions perunit of sales)

47.77

38.09

40.77

Quantity of renewable energy delivered (kWh)11,017

11,017

11,017

Waste processing logistics handling volume (t)10,943

8,817

9,371

Investment in the environment (million yen)

3,854

3,202

4,444

Number of warehouses (number ofcompany-owned and leased buildings)

Number ofvehiclesequipped withdriving support
equipment* All figures are the total number of employees and differ from the figures listed in securities reports.

OurBusinesses
General Logistics
Business

Food Logistics
Business

OUTCOMESThe SBS Group continues to implement aunique business model that has enabled
growth while balancing logistics operations,
M&A activities and the development oflogistics facilities. At the same time, weenhance competitiveness by actively investingin IT and LT while accelerating collaboration
with other industries, and aim to reach the top
tier of the logistics industry.
Rolling out 3PL in every direction
Upgrading the delivery network
LT×IT

Medium-to-long-term value creation andcapital adequacy

Financial Capital
Achieve sales of 300 billion yen
at an early stage throughorganic growth

Increasing logistics facility floor area

Property Management

Pursing M&A and synergy

Business
Capital for the Provision ofServices

CSR
Social responsibility

Environment

To fulfill our social responsibility as a logistics
company, we have set up promotional organizations (Group meetings) to address important
themes across four fields, namely environment, safety, social and governance. Throughthis framework we promote activities that span
the Group and work to share information.

Logistics systems that respondto the evolving needs of society

Consideration of the environment

Human and Organizational
Capital● Promotion of the medium-to-long-term

environmental plan

Ensuring safety● Pursuing zero accidents

Safety & Social

Social engagement● Maintaining and improving the quality oftransportation and service, developing humanresources, ensuring occupational health andsafety, making social contributions

GovernanceMaximizing the capabilities ofeach human resource andGroup synergy

Sound management● Enhancing the governance framework andinternal control, ensuring thorough compliance,
taking risk countermeasuresIntellectual Capital
Accumulating and utilizing theexpertise that will support future
3PL/4PL business models

FOUNDATIONFoundation of corporate
activities

Management
Philosophy

SloganSocial Capital

By achieving the Group Management
Philosophy and Code of Behavior establishedbased on its founding spirit, the SBS Group
maintains a positive relationship with its
stakeholders and endeavors to build an
effective management structure by enhancing
the efficiency, soundness and transparency ofits management.

Building trust and cooperative
relationships with a wide rangeof stakeholders

Natural Capital

Code of Behavior

Roadmap for achieving the 2°C
target for climate change

SBS GROUP BUSINESS & CSR REPORT 2021

11 12

Business Overview and Financial Status

Business Environment
In fiscal 2020 (January 1, 2020 to December 31, 2020), we
faced a severe economic environment with declining B-to-B
logistics demand in the industry amid restrictions on global
economic activity and declining imports and exports due to the
spread of COVID-19 infections. At the same time, against the
backdrop of increased private consumption due tostay-at-home policies demand for home deliveries continued to
expand for food, daily necessities and general online shopping.
The SBS Group has taken aggressive action to respond to thisdemand while making it its top priority to prevent infections andensure the safety of customers, business partners andemployees alike.
In addition, on November 2, 2020 we acquired 66.6% ofshares in Toshiba Logistics Corporation, making it aconsolidated subsidiary of SBS Holdings. While the company's
profits and losses will not be a part of consolidated results until
the fiscal year ending December 2021, the acquisition willfurther enhance the SBS Group's service lineup andstrengthen its overseas network, helping the Group develop aframework offering stronger support to the logistics supply
chain.

Net Sales (million yen)2016

149,0542017

152,8702018

203,5162019

255,5482020

257,192

Composition of Net Sales by Business

Logistics business
Fiscal 2020

Property management
Business
3.6%

Sales and Profits
Net sales in fiscal 2020 were 257.192 billion yen, an increaseof 1.644 billion yen from the previous fiscal year (a 0.6%
increase compared with the previous fiscal year). The logistics
business accounted for 93.6% of net sales by value, while theproperty management business and other businesses
accounted for 3.6% and 2.7% respectively.
Operating income stood at 10.96 billion yen, rising 0.784
billion yen over the previous fiscal year (a 7.7% increase).
Additionally, net income attributable to owners of parent rose
0.747 billion yen year on year to end at 6.826 billion yen, a
12.3% jump.
The net sales and each income level achieved new records.

Net Salesbillion yen

Operating
Income+0.6%240.8 billion yen +0.0%

Logistics Business

Property Management Business9.3 billion yen +19.8%

Other Businesses

7.0 billion yen +0.7%

10.9
Logistics Business

5.9 billion yen -4.6%

Property Management Business

4.5 billion yen +20.4%

Other Businesses

0.2 billion yen +36.7%

6.8

2016
2017

+12.3%

7,514
7,832

Operating income
Ordinary income

6,229
6,475
8,240
7,607
10,176
10,172

2019

10,96010,8832020

Net Income Attributable to Owners of Parent (million yen)

2016

5,111

2017

4,446

2018

4,409

2019
2020

billion yen

2.7 %Operating Income and Ordinary Income (million yen)

+7.7%

billion yen

Net Income
Attributable to
Owners of Parent

Other businesses

2018

257.1

93.6%

6,079
6,826

■Logistics BusinessIn the Logistics Business, in addition to expanding transactions with existing customers, we focused on acquiring newcustomers looking for advanced logistics functions. B-to-B logistics including the office equipment, department store andrestaurant industries as well as overseas operations were significantly affected by the COVID-19 pandemic. However, in thesame-day delivery business we tapped into to demand for
e-commerce, a market that has continued to expand, andgrowing demand in fields such as logistics for everyday goods
and online supermarkets helped to underpin our performance.
As a result, net sales in the Logistics Business rose slightly
by 45 million yen (up 0.0%) year on year to 240.818 billion yen,with operating income declining by 287 million yen (down
4.6%) over the same period to 5.99 billion yen.

Factorial Analysis of the Change in Net Sales
in the Logistics Business (100 million yen)

2019

Impact of the COVID-19 Pandemic(Positive factors such as the shift to home deliveries
and expanded demand for food-related logistics)+44

Increased revenue due to the operation of newly established sites+23

Increased logistics volume from existing customers, including B-to-C+33

Impact of the COVID-19 Pandemic(Negative factors such as slumping B-to-B logistics and overseas lockdowns)

-100

2020

2,408

+0.45 (+0.0%)■Property Management BusinessIn the development business, we pursue an integrated approach to developing large-scale warehouses that meet customers' logistics needs from land acquisition to construction, inorder to promote the Group's 3PL business. In the rent business, we generate rental income from Group-owned warehouses, office buildings, residences and other properties. SBS
Holdings securitizes logistics real estate to recoup funds for
future investment, and income recorded from securitization is
included in the property management business.
In terms of the results of logistics real estate securitization in
FY2020, we transferred 40% of the Company's trust beneficiary rights in the Nagatsuta Logistics Center (Yokohama,
Kanagawa Prefecture), expanding revenue in comparison to
the 30% transfer from the same logistics center made in theprevious fiscal year. As a result, net sales in the Property Management Business rose 1.546 billion yen (up19.8%) year on
year to 9.349 billion yen, with operating income up 771 million
yen (up 20.4%) over the same period to 4.558 billion yen.

2,408

Factorial Analysis of the Change in Operating
Income in the Logistics Business (million yen)

2019

6,278
Impact of the COVID-19 Pandemic(Positive factors such as home delivery and food)+1,412+158

Other revenue-increasing effects+566

Fee optimization+391

Reduced fuel costs
Impact of the COVID-19 Pandemic(Negative aspects such as B-to-B and overseas)-1,998-355

Costs for launching new 3PL sites
M&A-related expenses
Increased personnel andsubcontracted transportation costs

2020

-122
-339

5,990

-287 (-4.6%)■Other Businesses

While conditions were severe in the Temporary Staffing Business, as a result of profit growth in the Solar Power Generation
Business and Environmental Business, net sales in Other Businesses increased by 52 million yen (up 0.7%) year on year to
7.024 billion yen, with operating income increasing by 68 million yen (up 36.7%) year on year to 254 million yen.

Capital Investment
The SBS Group has actively pursued investments in logistics
facility development and plans to increase the total floor area offacilities developed in-house by approximately 430,000 square
meters (approximately 495,000 square meters when leasing is
also included) over a six-year period from 2018 to 2023.
Capital investments made in fiscal 2020 totaled 11.570 billion yen. In the Logistics Business, we made investments of
10.971 billion yen on the acquisition of land for logistics facilities and their construction, routine vehicle upgrades, and soon. In the Property Management Business, total investments of
75 million yen were made in areas such as repairs for leaseproperties. In Other Businesses, investments of 107 million yen
were made in areas such as the purchase of software forin-house use. In fiscal 2020, there were no major disposals orsales of equipment.

CapitalInvestment

11.5

billion yen

Change in Capital Investment Amount (million yen)

2016

2017

2018

2019

2020

Total

10,455

9,576

11,607

11,71011,507

Logistics Business

9,575

8,727

10,77010,89910,971

Property Management
Business

88

691

502

153

75

Other Businesses

706

60

151

319

107

SBS GROUP BUSINESS & CSR REPORT 2021

13 14

Business Overview and Financial Status

Assets and Liabilities
Total assets as of the end of fiscal 2020 stood at 254.55
billion yen, an increase of 74.52 billion yen from the end of theprevious fiscal year. The increase was mainly due to a rise intrade receivables such as accounts receivable and fixed assets
in connection with the new consolidation of Toshiba Logistics
Corporation.
Liabilities stood at 186.44 billion yen, an increase of 60.433
billion yen compared with the end of the previous fiscal year.
The increase is mainly due to notes and accounts payable-trade in connection with the new consolidation of Toshiba
Logistics Corporation and short-term loans payable.
Net assets stood at 68.146 billion yen, an increase of 14.069
billion yen compared with the end of the previous fiscal year.
The increase was due to higher retained earnings resulting
from the recording of net income attributable to owners ofparent and an increase in non-controlling interests.

Change in Consolidated Balance Sheet (100 million yen)
As ofDecember
31,

644

Current
assets

2019

+401

1,045

Total assets

180.0

1,157

Fixed assets

+343

1,500

Current
liabilities

629

Long term
liabilities

631

billion yen

+482

1,111

Total assets

+745

+122

753

254.5
billion yen

Net assets

541

As of
December
31,

+140

681

2020

Trends in Finances
Working from a medium-to-long-term perspective, the SBSGroup intends to achieve the sustainable growth of its businesses and boost earnings capability and capital efficiency.
Additionally, as a part of key business and investment strategies, we will promote the unique business model of pursuing
the stable growth of the 3PL business by systematically iterating on a cycle of the in-house development and securitizationof logistics facilities. Due to this approach, we have placed anemphasis on maintaining a balance between active investment
activities and maintaining financial health, have set a target
shareholders' equity ratio of 30%, and position this as a decision-making indicator.
In fiscal 2020 the shareholders' equity ratio was 19.9%(down 5.2% year on year). Moving forward, we will continue toundertake business operation that is mindful of financial healthand pursue the optimum balance between investment andreturns.

Shareholders’Equity Ratio

Change in the Shareholders’Equity Ratio

Shareholders’ equity
Total assets (100 million yen)

2011 247

1,008

24.6

2012 274

1,044

26.3

2013 289

1,083

26.7

2014 318

1,311

24.3

2015 280

1,248

22.5

2016 325

1,223

26.6

2017

364

1,278

28.5

2018

397

1,717

23.1

2019

451

1,800

25.1

2020

507

19.9

2,545

Shareholders’ equity ratio (%)

19.9

Change in Net DE Ratio%

Shareholders’ equity
Net interest-bearing debt
(100 million yen)

2011

249

390

1.57

2012

274

381

1.39

2013

286

392

1.37

2014

307

512

1.66

2015

264

515

1.95
1.48

2016

319

471

2017

357

449

2018

393

565

1.44

2019

445

539

1.21

2020

502

1.26

1.39

700

Net DE ratio (times)

Net Interest-bearing Debt = Long-term Debt & Short-term Debt + Corporate Bonds Cash and Deposits
Net De Ratio = Net Interest-bearing Debt ÷ Shareholders' Equity

Cash Flow
As of December 31, 2020, cash and cash equivalents("cash," hereafter) had increased by 9.041 billion yen to 27.537
billion yen from the end of the previous fiscal year. The main
reasons for the changes in each cash flow are as follows.

Change in the Balance of Cash and Cash Equivalents (million yen)

2019

184

■Cash Flows from Operating Activities

Net cash provided by operating activities was 17.262 billion
yen, mainly due to income before income taxes of 11.266
billion yen, depreciation and amortization of 7.017 billion yen
and a decrease in inventories of 2.087 billion yen due to thesales of equity in the Nagatsuta Logistics Center, despite a
2.484 billion yen increase in trade receivables associated withsales growth. This marks an increase of 0.389 billion comparedwith the previous fiscal year, mainly due to rising earnings
capabilities.

■Cash Flows from Investing Activities

Net cash used in investing activities grew 17.9 billion yen
from the previous fiscal year to 30.48 billion yen, in part due to
expenditures for the new acquisition of 66.6% of shares inToshiba Logistics Corporation.

■Cash Flows from Financing Activities

In financing activities, net cash increased by 22.726 billion
yen, in part due to funds raised through bank loans inconnection with the aforementioned share acquisition.
Net cash increased significantly, rising 24.81 billion yen
compared with the previous fiscal year.

Balance of Cash andCash Equivalents asof December 31, 2020

27.5

billion yen

+227

35

yen

Investing CF
Financing CF

275

2020

Cash Management System Utilization
The main working capital of the SBS Group is sales cost including
vehicle hire, outsourcing expenses and personnel expenses, and operating
expenses including selling, general and administrative expenses.
Additionally, demand for funds aimed at investment includes routine vehicle
upgrades, the acquisition of shares in subsidiaries and affiliate companies,
the acquisition of land associated with logistics facilities developed
in-house, the costs of construction work, capital investment, and so on.
The SBS Group procures the funds required for the entire Group in acentralized fashion through its holding company. In addition to receivinglines of credit from multiple banks so that working capital can be secured
flexibly, the SBS Group also procures long-term funding in a systematic
fashion to address the capital demand for the purpose of investment. The
procured funds are put to the best and most effective use within the Groupthrough a cash management system. Specifically, this system adjusts
funding surpluses and shortages between subsidiaries (cash pooling) andperforms payment operations on their behalf.

Change in Dividends (yen)

3,000

2012

30

10

40

2013

30

10

40

2014

The Company considers the return of profits to shareholders
to be one of its most important management priorities. The
Company’s basic policy on the distribution of profits is, while
retaining sufficient internal reserves, to maintain continuous
dividends, and improve the level of dividends in line withbusiness performance.
The Company issues once-yearly dividends of surplus funds.
In light of the solid financial situation and business results infiscal 2020, the planned year-end dividend of 32 yen per share
was raised by three yen to 35 yen per share.
In this way, we have worked to consistently reinforce
shareholder return by effectively increasing per-share dividends
3.5-fold in ten years.

Operating CF

-304

2011

Shareholder Return

Year-End Dividend
Per Common Share

+172

0

2016

17

2017

18

2019
2020
2021

Regular dividend

Commemorative dividend
January 2012
1:100 Stock Split

15

2015

2018

* Change is shown with 2011 as the base year.

June 2014
1:3 Stock Split

33

16
3

21

Quarterly dividend basedon the end of March 2016
standard: 16 yen +year-end dividend: 17 yen

22
30
35
54
(planned)

Notes
The dividend for the fiscal year ended December 2016 included a quarterly
dividend with a record date of March 31, 2016 in addition to the regular year-end
dividend.
Due to a significant net loss in the fiscal year ended December 2015, unfortunately
no dividend was issued.
The Company conducted a three-for-one share split on June 1, 2014.
In commemoration of the Company's listing in the Second Section of the Tokyo
Stock Exchange on December 14, 2012 and in the First Section of the Tokyo
Stock Exchange on December 16, 2013, the Company paid commemorative
dividends of 10.00 yen per share in addition to the year-end dividends of 30.00
yen per share, in total of 40.00 yen for the fiscal years ended December 2012 andDecember 2013 respectively.
On January 1, 2012, the Company conducted a 100-for-1 stock split of common
stock and adopted a share unit system where 100 shares constitute one unit.

SBS GROUP BUSINESS & CSR REPORT 2021

15 16

External Environment and Mid-to-Long-Term Management Strategy

The SBS Group formulates and implements management strategy from mid-to-long-term perspectives while
keeping close watch on changes to the external environment. Based on the concept of being a "group of
3PL companies possessing logistics functions in every direction," we actively implement M&A activities tostrengthen our ability to provide comprehensive proposals, enhance our expertise and improve ourproblem-solving capabilities. We also work to develop our management infrastructure on an ongoing basis.

[Medium-to-long-term Management Strategies]
The Simultaneous Pursuit of Co-existence, Symbiosis and Synergy in M&A Activities
Through M&A activities, regarded as a pillar of its management strategy, the SBS Group pursues coexistence and symbiosis rather than dominance. We maintain the employment ofstaff and welcome new human resources into the Group. We
also implement measures to enhance Group-wide synergistic
effects, including market development, expanded sales channels, and the sharing and enhancement of service provision,
knowledge, people and organizational capital.
This approaches also represent the practical implementation of goals 8, 9 and 17 of the Sustainable Development Goals(SDGs).

Further Strengthening of the 3PL Business andEstablishment of a Unique Service Model
The SBS Group is employing a range of methods toenhance its strength in the 3PL business. We will proactively
consider and implement measures to expand new orders
through web marketing and improved sales capabilities, pursue
efficiency improvements by enhancing eld capabilities, andproceed with M&A activities to raise the level of business andexpand the fields in which we operate.
In addition to proposing 3PL including logistics facility development as a unique solution offered by the SBS Group, in the
future we will strive to establish a service model that is uniqueto the SBS Group to help customers solve their logistics related issues by incorporating the introduction of automation technologies, AI-related equipment and other advances.

Logistics Facility Development and Maintaining
Financial Health through the Securitization of Existing Facilities
We work to develop logistics facilities in-house in order topromote the expansion of the 3PL* business and higher service levels, and maintain financial health through the systematic
securitization of existing facilities.

Promoting selection and concentration of businesses
overseas
We clarify which regions and businesses should be
advanced and pursue their selection and concentration.

About the 3PL Business3PL (third-party logistics) is a service where we propose logistics reforms toconsignors and are entrusted with their logistics operations on a comprehensive
basis. The SBS Group denes logistics services meeting the criteria of directcontracts with consignor companies, medium-to-long-term plans and the joint
entrustment of multiple services as 3PL. As part of the 3PL business we are
entrusted with and undertake a range of operations arising in the supply chain field
on behalf of customers, including transportation, packing, storage, cargo handlingand information management.
The SBS Group leverages its strengths in consulting to achieve customers’ ideal
logistics visions, the development and operation of information systems, thein-house development and provision of logistics centers and outstanding low cost
operations to provide valuable 3PL services to customers in every line of business.

EconomyThe External Environment
Surrounding the SBS GroupThe SBS Group identifies and analyzes the short-,
mid- and long-term impacts due to changes inthe external environment, and uses that insight asa basis for formulating management strategy andreviewing strategy in a flexible manner.

[Domestic]
Changing consumer behavior due to the COVID-19 pandemic
Slumping employment or income environment, inbounddemand or capital investment sentiment
Stock market instability
Impact due to the holding of the 2020 Tokyo Olympics andParalympics[World]Global economic slowdown due to the COVID-19 pandemic
Uncertain overseas situations
Demands to disclose information on awareness of climate change
and action

[Developing Management Infrastructure]
Securing the Human Resources to Support the
Logistics Business and Facilitating Their SuccessTo continue to achieve future growth, it will be essential toretain the logistics human resources promoting our core 3PL
business, the global human resources driving overseas development and the professional human resources driving logistics
facility development and incorporating future technologicalinnovations. At the same time, with the dwindling working population, we see the stable retention of drivers and other management resources that support the foundations of the logistics business as a key management issue.
To that end, we are taking steps to improve personnel systems, hire and cultivate talented human resources, and develop a workplace environment in which each individual employee
can enjoy job satisfaction, pride and motivation. In developing
the workplace environment, we will also consider the publichealth risks that have become evident due to the spread of
COVID-19.

Continual Promotion of CSR Management
In addition to ensuring work safety and taking measures toprevent traffic accidents, we implement thorough environmental conservation initiatives, including the promotion of eco-driving and measures to reduce the environmental impact attributed to our vehicles and logistics facilities.
Moreover, we pursue the further enhancement of our corporate governance system that includes these initiatives.

Initiatives to address logistics industry-wide issues
We seek out collaboration with strong partners while promoting initiatives that help solve the short-, mid- and long-term
issues facing the logistics industry from various angles.

MarketHuman Resources and Society[Basic Trends][Human Resources]

Diversification of services
Smaller and more frequent lots
Demands for stable and flexible transportation capabilities
Increased competition due to e-commerce business operatorsdeveloping in-house logistics systems
Cooperation on logistics
Supplementary of logistics functions and services
Alliances with other companies including industry players[COVID-19]
Expanded role of logistics in society
Increased operational constraints
Remote work demands[Logistics Technology (LT)]
IoT, AI, big data, automation
Telematics
ETC 2.0

Worsening labor shortages
Worsening work environments for truck drivers andaging drivers
Expected increase in foreign workers
Long-term decline in the working age population[Society]
Emergence of the COVID-19 pandemic
Emerging effects of climate change
Requirements for appropriate operational managementof vehicles and stronger safety measures
Review of labor laws and regulations
Demands to adopt working style reforms
Demands for productivity improvements across Japan
Changes to human rights awareness and action
Definitive action on diversity

SBS GROUP BUSINESS & CSR REPORT 2021

17 18

Ascertaining and Responding to Management Risks

The SBS Group makes every effort to identify and analyze risks that could impact its management
results, financial situation or share price, and to respond whenever such risks emerge.

Risk Management Policy and System

Major Risks to be Addressed

The SBS Group has established the SBS Group Risk
Management Regulations and endeavors to manage all risk
events that could pose threats to management activities. In
addition to risks whose effects are immediately apparent, risks
we determine need to be addressed from a medium or
long-term perspective are also subject to management.
We have also established the SBS Group Risk Management
Council, comprising members selected from SBS Group
companies, to ensure that risk management is continually
implemented on a Group-wide basis. At meetings generally
held twice a year, the council separates risks into Group widerisks and risks affecting individual Group companies, monitors
the status of measures to deal with each risk, and strives toprevent risks from occurring or minimize the damages that
occur in the event of an emergency.

We have currently established 15 categories of risk events
that have the potential to affect the SBS Group's short,medium and long-term management results, share price andfinancial condition. While the risks differ as to whether they aremainly caused by external factors, caused by mistakes or otheraction by the SBS Group or exhibit both aspects, we manage
all of these risks in a comprehensive fashion in the interest ofenhancing the soundness and continuity of management.
Additionally, in light of the enormous impact on the global
economy and business activities of the SBS Group due to the
COVID-19 pandemic, from fiscal 2020 "risks associated withpandemics" has been added as a new risk event.

The Risk Management Process

Basic Policy
In light of the social significance of the SBS Group, on a daily
basis its officers and employees shall manage risks by placing
the highest priority on safeguarding human life and ensuringsafety, and in the event a risk occurs, endeavor to contain therisk, minimize damages and enable a quick recovery.

SBS Holdings and each Group company start by identifying
the risks to be handled by each department. Next, factors
including the likelihood of occurrence, impact and potential forcontrol are carefully examined and analyzed for each risk. We
then implement response measures and work to prevent or
minimize damages and losses due to risks.
The SBS Group Risk Management Council receives reports
from SBS Holdings and Group companies to verify andevaluate the implementation status and effectiveness of themeasures taken to address risks. The results of the evaluation
are reported to the SBS Group CSR Promotion Committee forapproval.
This cycle is repeated annually in an effort to not only ensurethat existing risks are being appropriately handled, but toresponse quickly to newly emerging risks.

SBS Group Risk Management Regulations (Key Points)

Establishment and Operation of the Risk Management
CouncilMonitoring, evaluation and approval of measures to addressrisks
Emergency Risk Response
Establishment of Business Continuity Plan

Report to CSR Promotion Committee

The Risk Management Process

Verify and evaluate

Implement response measures

Examine and analyze

Identify

Management Status of Major Risks

Risks due to changes in
economic conditions[Short-term]
Likelihood of
Occurrence

Overview

EffectResponse Status

The businesses operated by the
SBS Group are affected by economic and business trends in Japan andoverseas, and by fluctuations intransportation demand among enterprise customers.

In the event of sluggish consumption
due to a domestic economic contraction, a fall in import/export volumes
triggered by a sharp appreciation of
the yen or a serious contraction in an
overseas economy, a reduction in thenumber of orders received or downward pressure on transportation fees
could occur.

Promotion of business diversification
Diversification of risks by expanding
business partners
Promotion of an enhanced and optimized business portfolio in conjunction with the above measures

The use of fuels such as light oil andgasoline is essential in the logistics
business. But when fuel prices increase due to steep rises in crude oil
prices or fluctuating exchange rates,
they represent a factor that increases costs.

It may not be possible to changetransportation charges to reflect
higher-than-expected fuel prices andequivalent increased costs due tosharp rises in global oil prices or theeffects of currency exchange markets.

Creation of budgets that incorporate
fuel price fluctuations (predictions)by keeping close watch on market
trendsSwitching to logistics services withhigher fuel efficiency through the
adoption of eco-driving practices,the phased introduction of next-generation vehicles, and other measures

In implementing M&A activities as animportant growth strategy and developing logistics facilities to promote the 3PL business, we primarily
procure funding through loans fromfinancial institutions, and a worsening of the financial environment
could be a factor in rising costs.

Difficulties in obtaining funding forstrategic investments, or increased
interest rates to finance loans could
occur.
Additionally, these situations could
conflict with provisions in the case ofdebt with financial covenants.

Measures including paying down interest-bearing debt through the securitization of logistics facilities andoperating cash flow, and securing
fixed interest rates

When expanding its existing businesses and entering new fields ofbusiness, the SBS Group implements M&A activities, capital participation and capital tie-ups as part ofits business strategy. There is a riskthat these activities might not go aswell as initially planned.

Due to unexpected circumstances,the progress of a business plan following an acquisition or tie-up could
be significantly delayed comparedwith initial forecasts.

Thorough due diligence conductedin advance
Careful arrangements with the top
management of the company to beacquired

The key activities of the SBSGroup's Property Management
Business are the development ofreal estate such as logistics facilities,
and the provision of that real estate(through sale or leasing) to customers. If we are unable acquire customers who will use the developed
real estate according to our plans, it
could be a factor in declining sales
and profits. In addition, there may becases in which the posting of sales
and profits is delayed or is disproportionately allocated to certain time
periods due to the timing of when anorder for a logistics facility is received, the scale and specificationsof the project, or the timing for completion or sale.

The impact on sales and profits whencustomers cannot be acquired asplanned could be non-negligible, depending on the investment amount.
Additionally, the same would apply
if the sales and profits were skewed
towards certain time periods or delayed.

Degree of Impact
Potential for Control

Risks due to sharp rises
in fuel prices[Short, Medium and Long-Term]
Likelihood of
Occurrence
Degree of Impact
Potential for Control

Risks associated with aworsening financial
environment[Short-term]
Likelihood of
Occurrence
Degree of Impact
Potential for Control

Risks due to M&A activities[Short-term]
Likelihood of
Occurrence
Degree of Impact* Even in the cases of capital participation or tieups, similar action is taken

Potential for Control

Risks due to the property
management business[Short and Medium-term]
Likelihood of
Occurrence
Degree of Impact
Potential for Control*1

Development of logistics facilities
predicted on securing customers* We begin construction work on facilities after determining tenant consignors and sales destinations, as well as factors such as intended use,
specifications, rent and rental period

Detailed development schedulemanagement*1 The assessment was revised due to an improved risk management level, with the likelihood of occurrence reduced by 1 and the potential for control increased by 1.

SBS GROUP BUSINESS & CSR REPORT 2021

19 20

Ascertaining and Responding to Management Risks

Management Status of Major Risks

Risks due to legislativechanges[Short and Medium-term]
Likelihood of
Occurrence
Degree of Impact
Potential for Control

Risks related to natural
disasters and otherincidents[Short, Medium and Long-Term]
Likelihood of
Occurrence*2
Degree of Impact
Potential for Control

Risks associated withpandemics[Short, Medium and Long-Term]
Likelihood of
Occurrence*2

Overview

EffectResponse Status

The SBS Group's operation is affected by various laws and regulations, and changes to these laws
and regulations in response tochanging social conditions. In ourcore logistics business, for example,
various business laws related to logistics apply to cargo vehicle transportation operations, warehousing
services and customs brokerage. In
the property management business,
the Building Standards Act and Financial Instruments and Exchange
Act play a part, and in personnel
support, the Worker Dispatch Act
must be followed.

New cost burdens could be imposed, or changes could be required in business expansion due tosystems being revised, strengthenedor subjected to a different interpretation based on related laws and regulations changing in line with changing social conditions.

Collecting information through industry groups and other organizations
Preparations and actions in anticipation of legislative changes

The business activities of the SBSGroup revolve around truck-basedtransportation and the operation oflogistics centers, and these operations are susceptible to natural disasters and other incidents. In particular, the SBS Group has situatedmany logistics sites in the Tokyo
metropolitan area to cater to robust
logistics demand in that region, andif the Tokyo metropolitan area wasaffected by such a disaster, it would
have a significant impact on the SBSGroup.

When an event such as a major disaster occurs, SBS Group operations could be cut off and the Groupmay be unable to provide some or
all of its logistics services, due todamage to consignor companies orCompany facilities, disruption or cutting off of transportation networks,
and the shutdown of lifelines.

Anticipating the state of damage
through the formulation of business
continuity plans (BCP), and preparing of response measures
Regularly conducting drills in preparation for major disasters
Ensuring the earthquake resistanceof the main buildings used for projects
Decentralization of major businesssites to the extent possible

When an outbreak of a serious infecti o u s di s eas e o ccu rs , the SB S
Group businesses would be forced
to take measures not usually implemented to prevent the spread of infections, and if the situation worsened, it could even threaten continued operations.

The outbreak of an infectious disease causes various restrictions on
the business activities of the SBSGroup. Taking measures to prevent
infectious causes higher costs. In
addition, if an infected person is
confirmed in the SBS Group or shipping consignee, the SBS Group or
the shipping consignee could beforced to restrict or shut down operations.

Thorough hygiene management forbusiness sites and vehicles
Having employees thoroughly implement infection prevention measuresconsistent with government guidelines (temperature checks when arriving at work, checking health status,
washing and disinfecting hands,
wearing masks)
Taking swift measures to prevent the
spread of infections when a person is
confirmed to be infected

As the SBS Group uses public roads
to transport customers' products
and goods by truck and other vehicles, there is always a risk of traffic
accidents.

If a major accident in which many
people's lives are lost occurred, theCompany could be sued by the victims, suffer a decline in credibility
among customers and society, or be
subjected to action imposed by authorities, such as being suspended
from operating vehicles or conducting business.

Continued operation of SBS Groupwide transportation safety management under the Transportation Safety
Promotion Meeting
Promotion of transportation safety
based on the three pillars of education and awareness-raising, accident
prevent, and safe driving/operation
management

The SBS Group utilizes computersand networks for a range of applications from business systems to
manage customers’ cargo information, inventory control and customs
processing to in-house systems that
handle accounting, staff, salaries
and other operations. There is a riskof these systems failing or operating
incorrectly due to malfunction, computer viruses, hacking, natural disasters or other incidents

If any of these systems were to faildue to malfunction, computer viruses, hacking, natural disasters orother incidents, the provision of services to customers and business
partners may be interrupted, business processing may be delayed, or
operations could be thrown into
confusion.

Promotion of Group-wide security
measures, training and awareness-raising under the Information
Security Promotion Meeting
Strengthened defenses with AI-based
anti-virus tools and next-generation
firewalls
Enhanced monitoring and checking
functions through security operation
center (SOC) service
Third-party verification

Degree of Impact
Potential for Control*3

Risks due to serious
incidents[Short-term]
Likelihood of
Occurrence
Degree of Impact
Potential for Control

Risks due to system
shutdowns[Short and Medium-term]
Likelihood of
Occurrence
Degree of Impact
Potential for Control*2 In light of the growing frequency of natural disasters, the likelihood of occurrence was increased by 1 from the previous year.
*3 In light of the circumstances surrounding the COVID-19 pandemic, the likelihood of occurrence and potential for control were each increased by 1.

Risks due to the leakingof customer information[Short and Medium-term]
Likelihood of
Occurrence

Overview

EffectResponse Status

The businesses conducted by the
SBS Group involve handling large
amounts of customer information,
including personal information, andthere are potential risks of the leaking of customer information or thedestruction of data.

If an incident such as the leaking ofcustomer information or destructionof data were to occur, the trust
earned from customers could be
lost, and the incident could affect
the Group's business performanceand financial situation.

Clearly establishment of the proper
management of customer information in corporate ethics regulations
Continued implementation of measures ensuring the proper management of customer information andpersonal information as part of information security management

The SBS Group conducts its business activities based on laws related
to the logistics business and a wide
range of rules and social norms. Infringements of these requirements inany way could have a serious
impact.

In the event of an infringement of related regulations or improper conduct on the part of an officer or employee, the SBS Group could suffer
the loss of social credibility, suspension of business from customers, orclaims for costly monetary penalties
or compensation.

Establishment of the SBS Group
Code of Behavior and SBS Group
Compliance Regulations
Conducting awareness-raising activities, monitoring, confirming and investigating compliance violations
and driving improvements, primarily
through the SBS Group Compliance
Meeting in which Group companies
take part
Distribution of awareness-raisingtools and periodically conduct awareness surveys

While the SBS Group has worked to
expand its business overseas toensure continued growth into the
future, those businesses are affected by conditions in the countries
and regions in which we operate.

There are possibilities of changing
economic conditions, recessions,exchange rate fluctuations, politicalor legislative changes, and social
unrest due to terrorism, war or disease, in addition to trouble stemming from or a lack of understandingof the local culture or international
standards, and matters in conflictwith international norms, standards
or guidelines.

Ongoing collection and analysis of
information concerning the countries
and regions in which we operate

The SBS Group recognizes the importance of human resources andfocuses on hiring activities, education and training, but there is intensecompetition to continually secure thenecessary human resources, andsuch efforts may not proceed asplanned.

If we are unable to secure human resources in a timely fashion, experience a large exodus of human resources to elsewhere or if the development of human resources does
not proceed according to Groupplans, our business development,
operating results or growth forecasts
could be significantly impacted.

Proactively hiring talented human resources without drawing distinctions
between graduate or mid-career
hires
Various training for all employees ofGroup companies based on thebasic policy on human resource development Conducting training, supporting skill improvement and careerdevelopment

Due to the advance of climatechange, the businesses of the SBSGroup could be affected by changes
to the environment or systems surrounding the market (transitionalrisks) or phenomena such as abnormal weather and rising temperatures(physical risks).

The rising price of CO 2 emissions,costs to shift to low-emission technologies, the sharp rise in fuelenergy costs and similar developments lead to increased operating
expenditures and put pressure on
management. In addition, abnormal
weather events could damage products and operating assets or reduce
production capacity.

Promoting systematic businessstrategies and environmental strategies based on a low-carbon approach
Strengthening environmental management systems
Stockpiling for emergencies
Enhanced disaster response management

Degree of Impact
Potential for Control

Risks related tocompliance[Short and Medium-term]
Likelihood of
Occurrence
Degree of Impact
Potential for Control

Risks related tooverseas expansion[Short and Medium-term]
Likelihood of
Occurrence
Degree of Impact
Potential for Control

Risks related to theacquisition and developmentof human resources[Medium-term, Long-term]
Potential for Control
Degree of Impact
Potential for Control

Risks associatedwith climate change[Medium-term, Long-term]
Likelihood of
Occurrence
Degree of Impact
Potential for Control* See page 33 for details.

SBS GROUP BUSINESS & CSR REPORT 2021

21 22

Responding to the Effects of the COVID-19 Pandemic⇒ Framework Development

The changing businessenvironment due to
COVID-19 and the
SBS Group's response
When the COVID-19 coronavirus turned into a pandemic, social and economic activities were profoundly
affected in Japan and around the world. Companies
were forced to scale back office-based corporate activities, and the flow of people and goods stalled due
to travel restrictions. Logistics is highly susceptible tothese effects, and the SBS Group is no exception.
There was a dramatic fall in demand for the transportation of office equipment and supplies, one of the
SBS Group's key activities. In addition to the slowdown of overseas import-export businesses, there
was also a slump in logistics demand from industries
that actively cater to inbound demand from overseas,such as department stores, hotels and restaurants.
While placing top priority on ensuring the safety ofworkers, we were forced to hold off on launching newsites, leaving a large portion of our plans unfulfilled.
However, logistics demand increased significantly inother areas. There was rapid growth in logistics fromonline purchases for private consumption as people
found innovative ways to enjoy themselves at homewhile refraining from going out. Demand for home deliveries increased dramatically, at there significant expansion in logistics for retailers dealing primarily indaily necessities, such as supermarkets, drug storesand home improvement centers.
The SBS Group reallocated its human resources
and logistics infrastructure in an effort to actively tap
into the demand that grew as a result of the spread of
COVID-19 infections. M&A activities and the development of logistics facilities, which had already beenlong underway, greatly helped in responding to thisnew demand. We also made progress in enhancing
our last-mile delivery network. As a result of these initiatives, we managed to adequately cover decreases
in demand with increases in other areas, enabling us
to continue the trend of increased sales and profits.

In connection with the emergence of COVID-19, the SBS Group
has set up a task force, formulated basic response policies, andmade efforts to conduct its business during the COVID-19 pandemic.
Our Changing Response
March 30, 2020 In response to the rise in infections (first wave), the
COVID-19 Task Force is launched
April 3, 2020
Basic COVID-19 Response Policy is formulatedApril 8, 2020
To coincide with the first state of emergency declaration, we begin the introduction and operation of
the work system required to operate under the
COVID-19 pandemic such as at-home work, distributed work and staggered shifts for sales andadministrative department employees.
The taskforce plays a central role in coordinating information
The taskforce mainly comprises members of the Board of Directors of SBS Holdings and the representatives of core SBS Group
companies, and is responsible for determining and approving various measures while notifying and maintaining contact with SBSGroup companies.
Taskforce

Notification
and Contact

Representatives of SBS Group Companies
and Risk Management Committee

Administrative Office(CSR Promotion Division)

Notification
and Contact

Group Employees⇒ Measures to Prevent Infections
Based on the "list of reference materials to prevent COVID-19 infections and manage health in the workplace" released by the Ministry of Health, Labour and Welfare, the SBS Group has institute d key
measures to prevent infection and provided guidance to employees.
(1) Through implementation of infection prevention measures atworkplaces
・Washing and disinfecting of hands
・Wearing of masks, observance of coughing etiquette・Hygiene management and ventilation (ensuring distancing, regularventilation, measures in break rooms and changing rooms,
disinfecting areas touched by multiple people)
・Health management (checking body temperature and physicalcondition, creating an environment that makes it easy for employees
to report feeling unwell)・Promoting work from home and staggered shifts (adjusting thepercentage of employees coming into work based on the spread of
infections)・Utilizing online meetings, ensuring adequate distancing duringface-to- face meetings and discussions
・Ban on non-essential outings and business travel (handled based on
the state of infections)・Ban on non-essential parties and dinners(2) Private activities
・Moderation in behavior (waring masks when going out, avoiding
dinners and parties, avoiding crowded situations, etc.)
・Vaccinations (encouraging employees to get vaccinated)

Taskforce Notices

Administrative Office Notices

13

13

Information is also communicated to employees via email and theGroup's portal website.
As part of the Group wide policy that places an emphasis on business continuity during the pandemic (maintaining employment,
taking measures to prevent infection, ensuring the infrastructure thatis essential for continuing with operations, cash flow measures), theBasic COVID-19 Response Policy was formulated and we have been
pursuing business activities based on this policy.
The SBS Group Basic COVID-19 Response Policy
1 The SBS Group's basic philosophy is to value employees
・ Maintain the employment of staff
・Pay 100% of salaries during home furlough periods
・Ensure the health and safety of employees
2 Prevent infection clusters from forming within the Group・ General ban on face-to-face meetings
・ General ban on business travel
・ Requiring employees to report on their physical condition
・ Appropriate measures when a person is infected

3 Continue current business operations with a focus on logistics
・Prompt resumption of operations after an infected person is
discovered (flexible support systems, advance preparations suchas transferring some operations to other companies in the Group)・Maintaining employee motivation (reaffirming the significance oflogistics as a part of social infrastructure, providing livelihood
security to non-permanent employees)
・Establishing and maintaining the minimum necessary chain ofcommand and management functions
4 Ensure basic infrastructure
・ Ensuring a framework that can maintain the administrative
operations that are essential for business continuity
・ Implementing measures in response to the situation (at-home
work, distributed work, staggered shifts, etc.)
5 Adequate cash flow measures
・ Implementing financial measures at each Group company such as
postponing non-essential investments
6 Implement specific measures based on the above policy
7 Maintain lines of notification and communication within the Group
Based on decisions and approvals from the SBS Group COVID-19
Taskforce, notices and communications related to this policy areissued and communicated by SBS Group company representatives
and the Risk Management Committee.

⇒ Definitions Related to COVID-19 and Action to Take in the Event of Infection
The SBS Group formulated guidelines summarizing definitions related to COVID-19 (affected persons, close contacts, persons requiring
observation) and action to take in the event of infection based on
guidance from the Ministry of Health, Labour and Welfare and local
governments, and rolled out the guidelines throughout the Group.
While our basic policy is to always follow the guidance of local
health centers, when health centers are under strain and cannot
be contacted or when active epidemiological studies have beenscaled down, we make preparations to ensure accurate judgment
and action, including measures to quickly identify close contacts

and persons requiring observation and have them standby at home,and making sure that PCR tests and antigen testing kits are always
available at each location. In addition, while sets for performing initialdisinfection when infected persons are discovered have been allocated to each business site, in anticipation of constraints on market
supply, sets of disinfectant solution and protective equipment havebeen stockpiled at four major locations throughout Japan as a partof a system to deliver needed supplies to business locations in eachregion.

⇒ Situation in the SBS Group Regarding Infections and Other Developments
Standards for announcing infections
When an infection occurs within the Group, the SBS Group considers the need to protect the personal information and privacy ofthe people affected to prevent prejudice, discrimination and damage
to the reputation of business locations, and announces informationin the following way.
1. When it is determined that a cluster has formed and there is alarge impact on society

Cumulative figures starting from the first infection (as of June 30, 2021)
Infected Persons

Close Contacts

149

110

Persons Requiring
Observation

94

2. When an announcement is deemed necessary as a result of consultation with a customer (shipping consignor, etc.)
Details of announcement: The necessary information regarding
the infection person(s) and business locations is announced to theextent that the individual person(s) infected cannot be identified.

SBS GROUP BUSINESS & CSR REPORT 2021

23 24

Shaping the Future Through the SDGs

The SBS Group is keenly aware of its responsibility as a company handling logistics as a key part ofsocial infrastructure. We also place an importance on the sustainable development goals (SDGs) andtheir role in providing direction for solutions to the various issues facing the world. Helping to achieve theSDGs is one of the key aspects to our management policy.

The Future Vision the
SBS Group is Shaping
Through the SDGs
Build efficient and sustainablelogistics systems in Japan andaround the world
Maximize opportunities forsocial activities to be helpful
To the extent that is reasonably possible, we will
maximize opportunities for logistics systems tocontribute to social activities across a wide
range of actions, from the transportation of relief
supplies to the promotion of recycling.

Making full use of evolving technologies,
we will take the convenience, safety andenvironmental performance of logistics
systems - the foundation of social lives
and industrial activity - to the next level.

Make opportunities for anyone
to demonstrate their individuality
and succeed the new normal
To build an inclusive world, we will create
direct and indirect opportunities for all
kinds of people to demonstrate theirindividual and pursue their true potential.

Expand partnerships with adiverse range of entities to every
corner of society
In each area where the SBS Group operates, it will expand cooperative relationships with a wide range of parties, fromgovernments and financial institutions toresearch organizations, non-profit groups
and individual consumers.

The SBS Group views the SDGs as its vision for
creating a better world with all stakeholders towards
the year 2030.
Additionally, in the context of the SBS Group's businessactivities, we have shaped the following 3+1 future vision andare pursuing efforts aimed at its realization.

The 11 SDGs the SBS Group is Currently Tackling
Goal

Targets Towards 2030
End hunger, achieve food security andimproved nutrition and promotesustainable agriculture

2.1:

3.6:

Ensure healthy lives and promote
well-being for all at all ages

3.9:

4.3:

Ensure inclusive and equitable quality
education and promote lifelong learning
opportunities for all

Ensure access to affordable, reliable,
sustainable and modern energy for all

4.4:

7.2:
7.3:

8.2:

Promote sustained, inclusive andsustainable economic growth, full andproductive employment and decent
work for all

8.5:

8.8:

9.1:

Current Initiatives

End hunger and ensure access by all people, inparticular the poor and people in vulnerable
situations, including infants, to safe, nutritious andsufficient food all year round.

(1) Support for food banks

Halve the number of global deaths and injuries fromroad traffic accidents.
Substantially reduce the number of deaths andillnesses from hazardous chemicals and air, waterand soil pollution and contamination.

(1) Promotion of transportation safety
management(2) Sincere Challenge 2030
(medium-to-long-term environmental plan)

Ensure equal access for all women and men toaffordable and high-quality technical, vocational andtertiary education, including university.
Substantially increase the number of youth and adults
who have relevant skills, including technical andvocational skills, for employment, decent jobs andentrepreneurship.

(1) Basic policy on human resource
development and education & training plan(2) Scholarship program (foundation) for
students receiving social care

Increase substantially the share of renewable energy
in the global energy mix.
Double the global rate of improvement in energy
efficiency.

(1) Transmission of renewable energy throughsolar power generation(2) Sincere Challenge 2030 (medium-to-longterm environmental plan)

Achieve higher levels of economic productivity
through diversification, technological upgrading andinnovation, including through a focus on high-value
added and labor-intensive sectors.
Achieve full and productive employment and decent
work for all women and men, including for young
people and persons with disabilities, and equal pay
for work of equal value.
Protect labor rights and promote safe and secure
working environments for all workers, including
migrant workers, in particular women migrants, andthose in precarious employment.
Develop high-quality, reliable, sustainable and resilient
infrastructure, including regional and trans-borderinfrastructure, to support economic development andhuman well-being, with a focus on affordable andequitable access for all.
Upgrade infrastructure and retrofit industries to makethem sustainable, with increased resource-use
efficiency and greater adoption of clean andenvironmentally sound technologies and industrial
processes, with all countries taking action inaccordance with their respective capabilities.

(1) Declaration on respect for human rights andelimination of harassment(2) Basic policy on human resource
development and education & training plan

Build resilient infrastructure, promote
inclusive and sustainableindustrialization, and foster innovation

9.4:

Make cities and human settlements
inclusive, safe, resilient, and sustainable

11.2: Provide access to safe, affordable, accessible andsustainable transport systems for all, improving roadsafety, notably by expanding public transport, withspecial attention to the needs of those in vulnerable
situations, women, children, persons with disabilities
and older persons.
11.6: Reduce the adverse per capita environmental impactof cities, including by paying special attention to air
quality and municipal and other waste management.

(1) Addressing modal shift(2) Reinforcement of logistics infrastructure,enhancement of LT and IT(3) Risk management(4) Program to foster logistics research(foundation)(5) Sincere Challenge 2030
(medium-to-long-term environmental plan)

Ensure sustainable consumption andproduction patterns

12.5: Substantially reduce waste generation throughprevention, reduction, recycling and reuse.

(1) Sincere Challenge 2030
(medium-to-long-term environmental plan)(2) Expand functions of the venous logistics
business

Take urgent action to combat climatechange and its impacts

13.3: Improve education, awareness-raising and human andinstitutional capacity on climate change mitigation,
adaptation, impact reduction and early warning.

(1) Sincere Challenge 2030
(medium-to-long-term environmental plan)(2) Climate change risks andcountermeasures

Protect, restore and promote sustainable
use of terrestrial ecosystems, sustainably
manage forests, combat desertification,and halt and reverse land degradationand halt biodiversity loss

15.8: Introduce measures to prevent the introduction andsignificantly reduce the impact of invasive alien
species on land and water ecosystems, and control
or eradicate the priority species.

(1) Cooperation with environmental
conservation efforts

Strengthen the means of implementation
and revitalize the global partnership forsustainable development

17.17: Encourage and promote effective public,
public-private and civil society partnerships, buildingon the experience and resourcing strategies ofpartnerships.

(1) Partnerships associated with businessactivities and CSR management(2) Support for the social sector(1) Reinforcement of logistics infrastructure,enhancement of LT and IT(2) Fostering logistics research (foundation)

SBS GROUP BUSINESS & CSR REPORT 2021

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CSR Promotion in the SBS Group

CSR
Message
What does it mean to deliver goods?
To deliver goods is to connect goods with people
To connect goods with people
To connect people's lives and connect society
We will continue to deliver goods
to bring stability to people’s lives,
and realize a sustainable society.

Organizational Structure

The SBS Group promotes corporate social responsibility (CSR) and management in an integrated way based on the Group Management Philosophy
and Code of Behavior.
We have classified important CSR themes into four fields, namely environment, safety, social and governance. For each of these fields, we have further
established important tasks and promotional measures, which we tackle in an
ongoing and multi-faceted fashion. As two of these fields, the environment andsafety, are regarded as major issues for the Group's core business of logistics,
we focus on them with the highest priority.
Promotional organizations (Group meetings) have been set up for each of
the four fields to implement activities and share information. Additionally, the
CSR Promotion Committee, which oversees these organizations, comprises
representatives of SBS Group companies and assumes a pivotal role incoordinating the promotion of CSR activities as a Group-wide organization.
The committee's remit includes determining policy and approving specificmeasures.

CSR Promotion Committee
Risk Management Meeting
Compliance Meeting
Environmental Management Promotion Meeting
Transportation Safety Promotion Meeting
Information Security Promotion Meeting
Safety and HealthCommittee

SBS Kamata
Foundation

CSR Management Framework
Promotion Organization
FieldsEnvironment

Main Issues

Consideration of
the environment(reduction of CO2
emissions, energy
conservation)

Ensuring safety(zero accidents)

Important Tasks[Three pillars ofenvironmental measures]
Eco-driving(vehicles)
Energy conservation(facilities)
Environmental actions(employees)

Major Initiatives

Issue-Specific Group Meetings(managers of the departments
responsible at each Group
company)

Sincere Challenge 2030
Eco and safe driving training
Introduction of eco-friendly vehicles
Modal ShiftIntroduction of energy-saving lights
Creation of renewable energy
Environmental actions taken within a
5-meter radius

Environmental
Management
Promotion
Meeting

Safe driving training
Eco and safe driving training
Transportation safety
Analysis of near-miss accidents
management
Regular health checks, SAS screening
Thorough prevention of
tests
accidents
Introduction of digital tachometers and(education, healthdash cams
management, factor
Driver contests
analysis and risk prediction)
G-Mark certification
Enhanced safety measures
Fire prevention measures at logistics
facilities

Transportation
Safety Promotion
Meeting(representatives fromGroup companies)

CSR Promotion
Committee

Safety & Social

GovernanceIntegrated CSR
Meeting

Socialengagement

Human resource
development
Occupational health andsafetyQuality control
Social contribution

United Group training / correspondence
coursesCounseling services provided byindustrial physiciansFirst aid courses / introduction of AEDs
Commending social contributions
Subsidized projects
Support for the social sector

Safety and HealthCommittee
SBS Kamata FoundationSoundmanagement

Internal control
Internal reporting hotline
Compliance training
Risk management
Information security
measuresBusiness continuity
management

Compliance tools
General workplace consultation office
Auditor hotline / Outside reporting hotline
Business continuity planning (BCP)
Information security seminars
e-Learning
Investigations of response to targeted
attacks

Compliance Meeting
Risk Management
Meeting
Information Security
Promotion Meeting

SBS GROUP BUSINESS & CSR REPORT 2021

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Environment
Key Indicators (Fiscal 2020 Results)
Number of employees taking eco-driving and safe-driving training (cumulative total)

1,570

Number of eco-friendly vehicles introduced (cumulative total)

3,955

Modal shift transportation volume268,219t

Business sites where energy-saving lighting has been introduced(cumulative total)

51

business sites

Total CO2 emissions (compared with the previous year)

8.4% increase

CO2 emissions per unit of sales (compared with the previous year)

7% increase

For details about our basic policy on the environment and thestructure for promoting environmental initiatives, please checkour website.
TOP → CSR Initiatives
https://www.sbs-group.co.jp/sbsh/csr/

Review of Fiscal 2020 Initiatives (Environment)

In fiscal 2020, SBS Toshiba Logistics Corporation becamea member of the SBS Group. Additionally, even under the
COVID-19 pandemic, total CO2 emissions and usage of majorenergy sources recorded their highest levels since we began
measurements, in part due to the strong performance of the logistics business. On the other hand, CO2 emissions per unit ofsales showed a year-on-year increase of 7.04%. However, due
to the timing of Toshiba Logistics Corporation's entry into the
SBS Group, its fiscal 2020 sales were not recorded, and due
to time constraints not all of its environmental data could be

aggregated. For these reasons, we believe it will be possible toaccurately assess the environmental performance of the Group
following the addition of Toshiba Logistics Corporation startingwith the results of the following fiscal year. Even so, since
figures have peaked, including the results of the Environmental
Action 2020 action plan that is part of the Sincere Challenge
2030 mid-to-long-term environmental plan, we see there is aneed to consider and implement new measures in place of ourexisting ones.

Energy Usage and CO2 Emissions (Scope 1, Scope 2)

Facilities

VehiclesElectric PowerLight Oil

66,386,188 kWh

57,032 ℓ

LP GasType A Heavy Oil

Vehicle Fuel (light oil, CNG, LNG, gasoline)

111,128 m

58,409 ℓ

City Gas

Running Water

3

26,135,288 ℓ

784,250 m

147,097 ℓ

3

Gasoline

13,521 ℓ
Vehicle Total

Facility Total

66,088 t 1.4% increase

32,782 t 25.6% increase
Total Emissions

98,870 t 8.4% increase
Scope 1

Scope 2

Direct Emissions from Energy Sources

Indirect Emissions from Electric Power Purchasing, etc.

68,713 t 2.8% increase

30,157 t 23.7% increase* Increase or decrease is in comparison to the previous year

Usage of Electric Power, Paper and Water (fiscal 2018)

Electric
Power

Paper

Water

Usage

Usage

Usage

66,386,188 kWh

83,746,763 sheets

147,097m

Specific Consumption

Specific Consumption

Specific Consumption

285,000 kWh

3,598.92 sheets

6.32 mYear-to-year

Year-to-year

Year-to-year

5.78% increase (specific consumption)

29.91% increase (specific consumption))18.16% decrease (specific consumption)

3

3* Specific consumption is per employee (fiscal 2020: 23,270 employees)

SBS GROUP BUSINESS & CSR REPORT 2021

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Environment Mid-to-Long-Term Environmental Plan

The SBS Group started its third mid-to-long-term environmental plan from fiscal 2018.
Dubbed “Sincere Challenge 2030,” the plan comprises aslogan, medium-to-long-term priority issues and a medium-term action plan (Environmental Action 2020). We will workon this plan in a sincere and proactive way.

SBS Group Mid-to-Long-Term Environmental Plan

Plan Name

Sincere Challenge 2030

Slogan“We take on the challenge of making an eco-friendly society full of green!”

Priority Issues

Mid-term

Curtailment of CO2 emissions (reduction of carbon emissions
from vehicles and facilities)
Promotion of resource recycling (effective use and recycling ofwaste)
Conservation of natural resources (reduction of use of copying
paper and water)Long-term Strengthening reduction of CO2 emissions from vehicles(formulation and implementation of plan for introduction of
next-generation vehicles)
Strengthening Reduction of CO2 Emissions from Vehicles
If based on Japan’s nationally determined contributions interms for target energy-derived carbon dioxide emissions ineach sector in the Paris Agreement made at the Framework
Convention on Climate Change, 2030 energy-derived CO2
emissions in 2030 will need to be a 26% reduction from 2013
levels (24% reduction from 2005 levels, corresponding toroughly 927,000,000 tons of CO2), and in the transportation
sector, a reduction of 28% from 2013 levels (32% reduction

from 2005 levels), or roughly 163,000,000 tons of CO2. To
achieve these reductions by the year 2030, the SBS Groupcalculates it will need to replace at least 1,000 medium-sized
vehicles with next-generation vehicles (such as electric orhydrogen-powered vehicles). Moving forward, we will pay close
attention to national policies and the development trends ofautomotive manufacturers to formulate solid plans and find theright time to introduce these vehicles.

Action Plan

All action targets on reducing CO2 emissions in fiscal 2020
were unmet. However, we managed to meet our targets on
reduction of water usage and fuel efficiency improvements.

The SBS Group is implementing Environmental Action
2020 as the action plan of the Sincere Challenge 2030
Mid-to-Long-Term Environmental Plan. The plan sets six aims
and 10 environmental actions related to priority issues in themedium term, and defines medium-term goals (currently covering fiscal 2018 to fiscal 2020) to be achieved.

Environmental Action 2020
Goal
Aim

2018

Preventing
globalwarmingResource
conservation[water andforests]

Resource
recycling

Developmentof greenlogistics
services

Results

Action20192020

Socialcontribution

2020

Reduction in CO2emissions per unit ofsales

At least 3% year-to-year

38.09 tons /100 million

40.77t tons /100 million

Reduction of CO2
emissions per distancetraveled in vehicles

At least 1% year-to-year

0.49 t/km

0.50 t/km

Reduction in water
usage per employee

At least 1% year-to-year

7.72 m3

6.32 m3

2,770 sheets

3.598 sheets

Reduction in PPC paper
usage per employee

At least 5%
year-to-year

At least 10%
year-to-year

At least 15%
year-to-year

Visualization of industrial
waste product recycling

Sampling

Expansion of
applicablebusiness sites

Active promotion

Under consideration

7.04%
increase

1.18%
increase○

18.16%
decrease

29.91%
increase△

Improved fuel efficiency

At least 1% year-to-year

4.93 ℓ/km

5.01 ℓ/km○

Improved eco-friendly
vehicle ownership rate

At least 3% year-to-year

92.45%

92.45%△

Commendations
awarded to 6
business sites

Commendations
awarded to 6
business sites○

2,218 vehicles

2,218 vehicles△

Eco-driving promotion

Development ofan evaluation andcommendation
systemLaunch of the Firm establishmentof the evaluation
evaluation andcommendation and commendation
systemsystemYear-to-year increase in EMS introduction rate

Education

2019

Achievement
StatusRaising awareness ofenvironmental action(putting up posters, etc.)

Active promotion

Sincere Challenge 2030 posters and"Environmental Actions Taken Within a
5-Meter Radius" posters were displayed.

○

Support forenvironmental groups

Providing support to at least one group

One environmental group was supported
and provided assistance with its activities.

○

SBS GROUP BUSINESS & CSR REPORT 2021

31 32

Environment

Climate Change Risks

The SBS Group recognizes risks due to climate change asimportant management challenges. As an enterprise responsible for part of social infrastructure, risks due to climate change
are an issue that cannot be ignored. To achieve sustainable
management, we believe it is necessary to appropriately ascertain and manage these risks, and to respond and adapt tothem as appropriate.
Risks Due to Physical Impact
To the SBS Group, which maintains many business sitesaround ports and harbors, disasters caused by weather phenomena believed to be affected by global warming, including typhoons of increased severity, storm surges and frequent torrential rains, pose risks to business continuity. To address theserisks, we consider site conditions and facility design with flood
damage in mind when establishing new logistics sites, and have
prepared for emergencies with the creation of the SBS Group
Business Continuity Plan, which sets out the measures to betaken in the event of a disaster. Additionally, with rising temperatures in recent years, workers face a significantly heightened risk of heat stroke. To the SBS Group as an employer oflarge numbers of drivers and warehouse personnel, risks to employee health represent a serious issue. We will take multifaceted measures to deal with these risks, including the installationof additional water supply equipment, the regular stocking of
supplies, the provision of goods to help workers cope with theheat, careful monitoring of high-temperature warning information, and efforts to alert workers to the dangers.
Risks Due to Regulations
The strengthening of regulations based on international
agreements such as the United Nations Framework Convention on Climate Change (Paris Agreement) could be a risk thatplaces pressure on management costs. There is a possibility of new regulations and systems (carbon taxes, taxes on fueland energy consumption, etc.) being advanced. For the SBSGroup as a transportation business operator, for example, we
may be pressured to upgrade our vehicle fleet to next-generation vehicles and switch to more energy-saving facilities at
an early stage. To address these risks, we will pay close attention to national policies while developing steady plans andmake preparations so that we can swiftly invest in vehicles andequipment when the time comes.
SBS Group Business Continuity Plan
This is a plan to ensure business continuity in the event of a major disaster and isprepared in according with the SBS Group basic policy on business continuity
planning. The plan gives top priority to safeguarding people’s lives.

United Nations Framework Convention on Climate ChangeThis convention sets out an international framework to prevent the various adverse
effects that are caused by global warming, with the ultimate aim of stabilizing theconcentration of greenhouse gases in the atmosphere. The Paris Agreement (2015)
was adopted as a new international framework that includes greenhouse gas emissions reductions for the year 2020 onwards.

The SBS Group’s Climate Change Risks and Countermeasures
Type

Transition

Physical

Cause

Details

EffectDetailed Effects

Countermeasures

Rising greenhouse gas emissions prices

Strengthening of domestic environmental regulations due to international
agreements (carbon taxes, taxes onfuel and energy consumption, emissions trading)

Increased business expenditures (rising costs
to comply with laws
and regulations, rising
insurance premiums)

Pressure on management due to business expenditures / pressure on management due torising environmental investment costs (higher expenditures due to the decarbonization of vehicles and other equipment) / rising costs andlower revenues associated with stronger CSR
procurement on the part of customers

Formulating and executing systematic
business strategies (and environmental
strategies) based on a low-carbon approach

Costs to transition to low
emissions technologies

Pressure on management due to increased environmental investment
costs

Increased time andcosts spend adopting
and deploying new activities and processes

Higher expenditures due to the decarbonizationof vehicles and other equipment / introduction of
next-generation vehicles / introduction of energy-saving measures / introduction of other environmental conservation measures / usage andcreation of renewable energy

Formulation and execution of systematic business strategies (and environmental strategies)

Changes in the market environment

Market stoppages or the cutting off ofimport/export routes due to disasters
or conflicts caused by global warming

Sudden and unpredictable fluctuations inenergy costs andenergy shortages

Pressure on management or reduced production capacity from sharply rising fuel and energy
costs and supply shortages causing increased
expenditures

Increased installation and upkeep of
in-tanks to prepare for emergencies /In addition to the above, supplementary measures such as providing fuelsupply services during disasters will betaken

Damage to reputation due todelays in environmental measures under decarbonization
trends against the backdrop
of international agreements
and other developments

Rise in stakeholder concerns or feedback from negative stakeholders

Damage to public trust
arising from breachesof stakeholder trust

Falling share prices / reduced competitiveness /personnel exodus

Enhanced environmental management
structure (environmental initiatives, information disclosure, etc.)

Other impacts due toclimate change

Risk of customer difficulties with operations or business continuity fromthe effects of climate change causing lower revenue for the SBS Group

Changing sales sources and combinations
therefore leading to reduced sales

Reduced revenue and lost orders due to worsening financial conditions for customers

Strengthened CSR management andmonitoring of market conditions

Increased severity of abnormal weather phenomena including cyclones and flooding

Increasingly frequent weather-related
disasters including typhoons of increasing severity, frequent torrential
rain, heavy snowfall and so on

Direct damage to facilities and adverse
impact on production
capacity and workforce

Compensation for loss of product value due todamage to customer products or flooding, etc. /losses due to direct damage to business assets(business facilities, vehicles, etc.) / accidents
suffered by employees while commuting or atwork / reduced production capacity due to difficulties securing operational personnel or disruptions to vehicle operations

Strengthening of risk countermeasures(hazard management at sites and theassociated responses) and disaster response management

Rising mean temperatures

Adverse impacts on the health of employees and reduced production capacity due to rising temperatures

Lower sales and risingcosts due to the adverse impacts on theworkforce (Examples:
health, safety and absenteeism)

Workforce reductions due to employee healthhazards such as heat stroke / increased installation of air conditioning in warehouses and facility/equipment investments to combat risingtruck cabin and body temperatures / compensation for loss of product value for refrigerated
or frozen goods / facility investment to maintainquality to prevent accidents involving products

Implementation of measures, including,careful monitoring of related information
and warnings to workers / increased installation of air conditionings and watersupply equipment, regular stocking of
supplies, provision of goods to cope withthe heat / facility and equipment investment to curb in-vehicle temperatures

Environmental Issues Tackled by the SBS GroupThe SBS Group pursues initiatives to deal with major issues
concerning environmental conservation, with a focus on measures that relate to vehicles and facilities.
Global EnvironThe SBS Group’s Initiatives
mental Issues
Global warming

Energy conservation, the creation of renewable energy,
promoting eco driving, introduction of eco-friendly vehicles,
modal shift, promotion of eco tires, activity awareness-raising

Air Pollution

Introduction of eco-friendly vehicles, reduction of aging vehicles

Depletion of
the ozone layer

Compliance with Act on the Rational Use and Proper Management of Fluorocarbons

Resource
recycling

Company-wide 3R promotion (implemented on a trial basis
since fiscal 2018), promotion of retread tires, activity
awareness-raising

Forestconservation

Use of FSC certification, support for conservation groups,
promotion of paperless operations

Water issues

Water conservation, activity awareness-raising

Number of Employees Taking Eco-Driving and Safe
Driving Training (as of December 31, 2020)

1,570* In fiscal 2020, in light of the effects of COVID-19, eco-driving training was not conducted.

Number of Business Sites Where Energy-Saving
Lighting Has Been Introduced (cumulative total including
sites with partial introduction)

51

business sites

Initiatives Related to Vehicles
The SBS Group is striving to foster a deeper culture of
eco-driving through eco-driving (fuel-efficient driving) training(eco and safe-driving training: eco-driving workshops conducted in group settings) and through actual practice (voluntary fuelefficiency management: having drivers ascertain the effects of
their own driving by recording supplied fuel, distances driven
and fuel efficiency by hand to raise awareness of fuel-efficientdriving) in a two-pronged effort.
Initiatives Related to Facilities
The SBS Group is promoting energy savings at its facilities
through a range of energy conservation measures including
the introduction of energy-saving lighting (LED, electrodelesslamps, etc.), primarily at existing large-scale centers and newcenters. Energy-saving lighting has now been introduced at 51
business sites, and the effects of doing so have been visualized. We will continue to actively promote these activities.

* This initiative has helped curb CO2 emissions by more than 2,200 tons annually.

Modal Shift Transportation Volume (fiscal 2020)

268,219

Railway cargo: 251,661 ttShip cargo: 16,558 tCompanies targeted formodal shift

Modal shift is to shift the means of transporta-●

SBS Toshiba Logistics

portation, it means the movement of goods by●

SBS Ricoh Logistics Systemcargo truck is switched to rail or coastal ves-●

SBS Logicom

sel-based transportation. Since attention wastion for cargo and people, and in cargo trans-

drawn to modal shift at the 3rd Conference of
the Parties under the United Nations Framework Convention on Climate Change (Kyoto
Meeting) in 1997, various countries have pursued initiatives, and efforts have also beenpromoted by Japan’s Ministry of Land, Infrastructure, Transport and Tourism.

Other Initiatives
The SBS Group also supports modal shift. Modal shift refers
to social contribution-oriented modes of transportation that not
only reduce the impact on the environment but also address
the shortage of drivers. In 2015, SBS Logicom Co. Ltd. participated in promoting the model shift of sales routes for liquor
dealers and helped significantly reduce CO2 emissions as aresult. The company received a joint award under the Excellent
Green Logistics Commendation Program.
Environmental Actions Taken within a 5-Meter Radius andAwareness-Raising Concerning the Mid-to-Long-Term Environmental Plan
To encourage each and every employee to consider the environment, the SBS Group has adopted the slogan “environmental actions taken within a 5-meter radius.” We call on employees to continually put into practice six environmental actions and also endeavor to raise awareness of the Sincere
Challenge 2030 mid-to-long-term environmental plan.

SBS GROUP BUSINESS & CSR REPORT 2021

33 34

Safety & Social
Key Indicators (Fiscal 2020 Results)

SafetyNumber of Transportation Safety Promotion Meetings Held

4

times

Number of Group Safety Training Sessions Conducted

27

times

Group-Average Fuel Efficiency

5.01

km/l

Number of Business Sites with G-Mark Certification (certification rate)167

business sites (87.90%)

Number of Serious Accidents

0

For details about our basic policy and promotion system regarding safety,
please check our website.
TOP → CSR Initiatives
https://www.sbs-group.co.jp/sbsh/csr/

Review of Fiscal 2020 Initiatives (Safety)

In fiscal 2020, we strengthened our focus on priority areas,
including operational management and other measures aimed
at business optimization, measures to prevent accidents related to health (measures to deal with sleep apnea syndrome orSAS, preventing overwork, heat stroke, etc.), and specificoperations as part of fire prevention measures. We also
launched the eco and safe-driving evaluation and award
system as a new measure promoting safe and eco-friendly
practices. We are also pleased to report zero serious accidents
throughout the SBS Group.

Priority Risks
Strengthening employee health management, reducing major accidents, strengthening fire prevention measures at logistics facilities

Priority Issues
Improving fuel efficiency through eco-driving training and enhancing awareness of safe driving
Preventing accidents by conducting safe operational training for trucks and forklifts
Skill improvement initiatives to foster the development of operational managers, health officers and other key personnel

SBS Group Transportation Safety Management
Risk Management

Policies and Priority Issues

Transportation Safety Promotion Meeting

Education and Awareness-RaisingGroup safety education
Operation manager examination
preparatory seminars
Operational manager skill improvement
seminars
Operational manager basic classes

Accident Prevention

Accident factor analysis

Roll calls and alcohol checks

Near miss incident information collection anddashcam video analysis

Regular inspections

Risk prediction training

Operational manager general classes
Health officer examination preparatory
seminars

Aptitude diagnosis

Regular first-aid classes

Regular SAS screening examinations andhealth checkups

Eco-driving courses
Eco and safe-driving training
Truck safe driving training

Stress checks / consultations with industrial
physicians

Truck driver contests
Call for proposed safety slogans
Affixing of eco and safe driving vehicle stickers

Fitting of driving support equipment(digital tachograph, dashcam, rear-view
camera)Business audits, touring follow-ups, businesssite self-inspections
Acquiring certification (G-mark) as a businesssite with excellent safety
Truck driver / forklift operator contests

Forklift safe operation training
Forklift operator contests

Safe Driving and
Safe Operation Management

Training for persons causing accidents
Occupational health and safety movement
Introduction of vehicles equipped with safety
features(collision avoidance, reduced braking, roaddeviation prevention)

Safe operation award
Logistics facilities fire prevention measures

Blood pressure measurements
Heat stroke countermeasures

Eco and safe-driving evaluation andcommendation system

SBS GROUP BUSINESS & CSR REPORT 2021

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Safety & Social Education and Awareness-Raising, Accident Prevention

Group Safety Education
With reports of serious accidents attracting the attention ofsociety, operation managers have become increasingly important. The SBS Group focuses on cultivating and improving
the skills of operation managers and strives to raise the levelof transportation safety management capabilities across theGroup. In fiscal 2020, we made further additions to our curriculum for operational managers.

Meetings
NumberofTrainees27
374

Safety Slogan
Each year the SBS Group accepts proposals from employees for a safety slogan to be used in Group-wide awareness-raising activities to foster pride as professionals with responsibility for safety. The following slogan for fiscal 2021 wasselected from 13,962 submissions. This is the result of final
voting by Group employees after the Driving Safety Promotion
Committee narrowed the entries down to 19 submissions.

Fiscal 2021 SBS Group Safety Slogan

Safety Depends on Your Care
And Consideration
SBS Group Safety Education Curriculum Implementation
Status for 2020
Number of
Sessions
Held

Number ofTrainees

Operation manager examination preparatory seminars

10

143

Operational manager skill improvement seminars--

Operational manager basic classes

970Operational manager general classes

6

118

Health officer examination preparatory seminars

1

33

Regular first-aid classes

1

10

Eco-driving courses--

Eco and safe-driving training--

Truck safe driving training--

Forklift safe operation training--

Forklift operator contests--

Truck driver contests--

Curriculum

Shin Nakano, Nishi-Funabashi Branch, SBS Logicom Co., Ltd.

Affixing of Eco and Safe Driving Vehicle Stickers
Since December 2017, this sticker has been affixed to all
SBS Group cargo vehicles. The sticker represents our promise
to society that SBS Group vehicles take the environmentand safety into consideration. We are conscious of being
eco-friendly and safe drivers, and are committed to eco andsafe driving.

Driver Health Management

Employee Health Management

The SBS Group not only takes steps to prevent overwork
but also makes thorough efforts to regularly conduct healthcheckups and perform SAS (sleep apnea syndrome) screenings to prevent accidents attributable to employee health. SAS
screening tests not only involve secondary screening but also
regular monitoring after testing. Additionally, since there has
also been an uptick in accidents related to brain disorders
across society, we continually monitor the state of health ofdrivers by conducting brain MRI scans as necessary in orderto ensure safety and peace of mind in our transportation operations.

In light of recent rising temperatures, since fiscal 2018 the
SBS Group has stepped up measures to combat heat strokein its warehouses. We have thoroughly investigated information
related to incidences of heat stroke and installed additional
air conditioning equipment to enable proper temperature management within warehouse facilities. In addition, we actively
advise drivers to run air conditioning continuously. As a result,
we have managed to halve the number of heat stroke cases
compared with the previous year. We will continue to address
this issue with the aim of completely eliminating cases of heatstroke among our employees.

Safe Driving and Safe Operation Management

Truck Driver / Forklift Operator Contests

Fitting of Driving Support Equipment

We have been holding contests since fiscal 2016 with theaim of having drivers and operators compete over their knowledge of advanced driving skills, inspection technologies andrelated laws and regulations in order to raise awareness of
their social responsibilities as drivers and operators by honing
skills through friendly competition and acting as exemplary representatives of their respective workplaces. Each contest will
improve the awareness and skills of individual drivers and cultivate a Group identity that pursues safe driving and operation.

The SBS Group has proceeded to fit its vehicles with digitaltachographs (including switch-overs from analog systems).
A digital tachograph sounds a warning alarm when a driver
exceeds a speed limit or brakes suddenly. We are also steadilyequipping vehicles with dashcams. The company monitorsthese records and makes drivers aware of areas for improvement as necessary. In addition, we have made steady progressin the installation of rear-view cameras, which prevent collision
accidents when a vehicle is reversing.
Number of Vehicles Equipped with Driving Support Equipment

Digital / Analog Tachographs

3,692

vehiclesDashcams

3,752

vehiclesRear-View Cameras

2,407

vehiclesFire Prevention Measures at Logistics Facilities

The FY2020 Truck Driver Contest and Forklift Operator Contest were postponed due to the COVID-19 pandemic.

Business Sites Awarded Eco and Safe-Driving Evaluation
and Commendations in FY2020
Company Name

Branch NameSBS San-ai Logistics Co., Ltd. Kyushu Chuo Branch, Transportand Delivery Section
SBS Logicom Kanto Co., Ltd.

Shinsuna Branch

SBS Freight Service Co., Ltd.

Morioka Office

SBS FlecNet Co., Ltd.

Sapporo Office

SBS Sokuhai Support Co., Ltd.

Yokohama Office

SBS Zentsu Co., Ltd.

Chiba Delivery Section, Kaihin Office

The SBS Group has created its own fire prevention measures
check sheet based on guidelines from the Ministry of Land,
Infrastructure, Transport and Tourism and the Fire and Disaster
Management Agency. All Group logistics facilities are required
to perform periodic checks and report on the results. Criteria
have been established for the items to be checked, and when
the criteria are not met, facilities are obligated to take corrective
action. We strive to raise the level of fire prevention methods by
iterating on this cycle of checks and improvements.

Eco and Safe-Driving Evaluation and Commendation
SystemIn fiscal 2019 the SBS Group launched the Eco and SafeDriving Evaluation and Commendation System with the aim ofachieving transportation safety and appropriate business operation by widely disseminating eco and safe-driving awarenessand skills among SBS Group companies. The system recognizes those business sites in the Group's six transportation-oriented companies that have exhibited outstanding results in eco
and safe-driving. Fuel efficiency improvement rate (comparedwith the previous year) and the implementation status ofsafe driving management and safety education have been
established as evaluation items. In the system's inaugural year,
six business sites received commendations. The SBS Group
strives to improve quality in both environmental and safety
terms through this system.

SBS GROUP BUSINESS & CSR REPORT 2021

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Safety & Social

Engagement Between the SBS Group and Society, Engagement with Customers,
Engagement with Employees

The SBS Group undertakes its corporate activities with the
involvement of various stakeholders.
The SBS Group regards the customers to whom it provides
services, as well as shareholders and investors, the employees
who work together with the Group, business partners including
suppliers and contractors and the local communities where theGroup does business as major stakeholders.
To stakeholders, we commit to putting the customer first,

making appropriate information disclosures, developing a comfortable workplace, cultivating partnerships and contributing tolocal communities, and we endeavor to reflect these commitments in our corporate activities through wide-ranging dialogue
with stakeholders. We have established a Code of Behavior
prescribing compliance with laws, manners and morals, environmental conservation and social contribution as a corporate
citizen, and strive to coexist with society.

Quality Management System

Master Contest.” SBS Flecnet holds Business Improvement
Presentations with the aim of providing better services anddeveloping an improved work environment. Each of these initiatives is not only an opportunity to raise awareness of issues andshare lessons, but is also positioned as an opportunity to develop a positive corporate culture.

Each Group company in the SBS Group has established aquality management system and we endeavor to maintainand improve the quality of the transportation and services weprovide. In addition to the international ISO9001 standard thatindicates systematic requirements for quality management systems, we have also obtained other appropriate certifications including ISO27001 certification for information security management systems, the Privacy Mark related to the protection of personal information, as well as JAS Organic Agricultural ProductSubdivider Certification and the Relocation Safety Mark.
* See the CSR data on page 53 - 54 for more information on certification status.

Implementation of Improvement Activities
The SBS Group conducts a wide range of improvement
activities and holds an Improvement Contest designed to recognize achievements in those endeavors and share outstanding
expertise. For its part, SBS Ricoh Logistics System holds a
Global KAIZEN Contest under the themes of KAIZEN and
Reform incorporating management issues. Meanwhile at SBS
Zentsu, the Home Delivery Division responsible for the delivery
of foods at the four temperature ranges holds Improvement
Example Presentations to develop a comfortable workplaceenvironment, and has workers compete and learn homedelivery customer service skills through the “Customer Service

Respect for Human Rights and Eradicating Power
Harassment
To coincide with the enactment of power harassment prevention legislation, the SBS Group established a Declaration on
Respect for Human Rights and the Eradication of Harassment.
In our management philosophy, we at the SBS Group state
the belief that "long-term prosperity is rooted in paying thenecessary attention to people and in the enthusiasm of our employees." In keeping with this belief, we will make every effort torespect human rights and prevent harassment.

Provision of Information
In addition to disclosing information about the business
operations it is entrusted with, the SBS Group earns the trustof stakeholders by providing a range of information with a focus
on customers.
The LOGILINK, a logistics-oriented PR publication issued by
SBS Logicom for customers, has earned a favorable reception
among companies, groups and government organizations as
a medium for disseminating useful information to those responsible for and involved with logistics, including case studies oflogistics solutions and the latest information. Everything fromthe expertise and functions of SBS Logicom logistics services
to the ingenuity of its staff is introduced in an easily understoodformat that illustrates SBS Logicom’s collective strength as alogistics company.

SBS Group Declaration on Respect for Human Rights andElimination of Harassment
All people are born equal with dignity and rights, and no one
may harm their character.
Based on this basic philosophy, we deepen our understandingof human rights and act in accordance with a respect forhuman rights.
To maintain a workplace environment in which everyone canthrive, we will eradicate harassment.
To achieve this, we will actively take part in educational andawareness-raising activities, heed compliance information,acquire knowledge and development the ability to take action.
Whenever we suffer or witness harassment, we will consult withor report it to a consultation service and never leave it unaddressed.

Engagement with Business Partners, Communication with Stakeholders

Diversity
The SBS Group ranks the promotion of diversity among its key
issues in the medium term and is working on the following issues.
1. Cultivating a workplace environment that considers
individual differences to be something of value

The services provided by the SBS Group are supported
through the cooperation of many business partners. We regard
our business partners as fellow entities executing businessgoals in tandem with the SBS Group. Accordingly, we endeavor
to fulfill our obligations and develop in step with these business
partners, in keeping with laws and ethics.

2. Conducting diversity & inclusion training and awareness-raising to eliminate prejudice
3. Enhancing organizational strength through the proactive
hiring of a diverse range of human resources
4. Establishment and enhancement of support for minorities
5. Development of a workplace environment enabling all
employees to maintain a healthy work-life balance

Development of Telework and Work-From-Home Systems
In response to measures addressing the recent COVID-19
pandemic, telework and work-from-home systems were developed for the administrative divisions. Remote work functions that had previously been introduced for a subset of operations were expanded to cover roughly 90% of employees(as a percentage in SBS Holdings). In conjunction with thesedevelopments, we will establish new rules (establishment ofwork-from-home regulations) and revise existing systems (further systemization of administrative functions).
The SBS Group will ensure that new styles of working cantake root and work to promote a healthy work-life balance whilestrengthening business continuity functions.

The SBS Group strives to engage in dialogue as well as disclose and provide information by developing and utilizing various means of communication with stakeholders.

Communication with Employees

Publication of the SBS Express Group magazine

Compliance Training Tools

7

times

1. We will implement human resource development as a partof our management strategy and human resource strategy, and foster human resources able to contribute to thegrowth and development of the Group
2. We will cultivate human resources through a broad rangeof education and training, and strive to build up theGroup’s personnel-based assets
3. We will assist employees in achieving their self-actualization goals through life-long education

The composition of training is systematically organized into
tiered training, theme-specific training, specialist training and personal development support, and is designed to help employees
improve their skills and develop their careers.

Food logistics operator SBS Zentsu Co., Ltd. as commended
by the governor of Saitama as an Excellent Place of Business for
the Employment of People with Disabilities, as part of the 2020
Saitama Awards for Excellent Places of Business for the Employment of Disabled Persons and the Elderly. The company wasrecognized for introducing flexible working systems based on individual preferences and physical condition, developing wage
systems that are not dependent on whether employees have disabilities, and for actively accepting people with disabilities forpractical training and outsourced training.

* Individual educational tools for divisions
and business sites

154
112

Total Financial Results Briefing Attendees

Responses to Investors and Analysts(twice a year)/ yearMedia Communication

60
18

Press Releases Issued

Web Information

Website Communication

Number of Visitors

2,063,258(226,885)* See the CSR data on pages 53-54 for a breakdown of the curricula.

Commended as an Excellent Place of Business for the
Employment of People with Disabilities

times

Communication with Shareholders and Investors

Human Resource Development
The SBS Group provides wide-ranging education and training
to all employees working at Group companies in accordance withthe following Basic Policy on Human Resource Development.

4Page Views

12,423,013

PV(967,485)* Figures in parentheses are for SBS Holdings, Inc.

SBS GROUP BUSINESS & CSR REPORT 2021

39 40

Safety & Social Social Contribution Activities

The food bank support is a very meaningful initiative that not
only contributes to strengthening the food lifeline for people inneed, but also contributes to the reduction of food loss, which
is a recent social problem. In the future, we will continue towork together with 2HJ to create a society where people havea place they can turn to when they encounter difficulties withfood.

Food Bank Support Through the Provision of SBS GroupResources
The SBS Group began food bank support activities in 2018.
A food bank is an activity or organization that collects from corporates and other organizations food that has not yet expired
but cannot be sold for various reasons and distributes it topeople in need (people in distress).
We support Second Harvest Japan (2HJ), the largest foodbank in Japan which is based in Asakusabashi, Tokyo. We
were looking for ways to contribute to society through logistics, and 2HJ's needs for logistics support coincided with ourcapabilities, leading to the conclusion of a support agreement.
We provide support in two main ways, firstly providing the temporary transportation of goods between food donors and 2HJ
sites, and secondly providing advice and recommendations on
warehouse management and vehicle operation.
For the temporary transportation of goods, 2HJ usually uses
its own vehicles to pick up donated foodstuffs (at the request of
manufacturers, etc.), but when there is no way to secure a vehicle or manpower, such as when there are no available vehicles or drivers (who are all volunteers), an SBS vehicle can beused as an alternative transportation service. On rare occasions
when the 2HJ warehouse is full, we receive requests to store
supplies and respond as needed.

Manufacturers

Importers and Wholesalers

Retail Outlets

Regular Companies

Donations

Food Bank

Orphanages
WelfareFacilities

Local Public Entities
Social Welfare
Councils

NPO
Organizations

Local Food Bank
Organizations

IndividualHouseholds

Food Bank Support Results (Transportation and Storage)

Number of Times
Support Was Provided

Main Transportation (Shipping Destinations and Goods

Main Storage

12

Transported) * To 2HJ Saitama Yashio warehouse(including delivery to the 2HJ Saitama Yashio warehouse)

Asahikawa (Instant ramen)

780 case

Avocado oil

8,064 pieces

Ishikari (Fish sausage)

1500 case

Rosti (Potato Dish)

8,347 caseGranola Bars

10,584 casetimes

(Since 2018 launch to 2021 present)

Shiojiri / Oyama (Fruits and Vegetables) 25 pallets

The SBS Group's Major Social Contribution Initiatives
Details of Support

Reception /Implementation

Transportation support connecting companies that wish to donate food to
Second Harvest Japan (2HJ) with 2HJ logistics sites. In addition, advice andproposals on warehouse management and vehicle operation are also
provided.

Implemented at
the request of 2HJ

Sponsoring and support activities (participation in forest conservation
activities, donations of collected items such as used books, CDs and DVDs)

Collected items
are accepted at
any time

Social contribution-oriented sales drives
Contributing to (Sumida Ward Welfare Workplace Network <kai>)the local
Donation of used stamps (Sumida Ward Council
communityof Social Welfare)

We sell sweets and bread made at about 20 welfare workplaces in Sumida
Ward (where people with disabilities are involved in the work).

2 to 3 times / year
OlinasProceeds (stamps are purchased by a stamp company) are used for social
welfare projects in Sumida Ward

Accepted at
any time

Collection of toothbrushes<Toothbrush Collection Program>This initiative collects used toothbrushes and recycles them into new plastic
products, such as flower pots. The program aims to reduce plastic waste andpromotes the use of recycled resources.

Accepted at
any time

Type

Nature of Support and Recipients
Support for food banks

Coordination
with the Social
Sector*(Certified NPO Organization, Second Harvest Japan)

Support for environmental conservation
activities (Public Interest Incorporated
Foundation, OISCA)(LION / TerraCycle Japan G.K.)

Others(Collection of used
items, etc.)

Collection of school backpacks<Randoseru for Life Collection>(NPO, International Consulting Association)

An initiative to send "randoseru*" school backpacks to children in Afghanistan
who still lack educational opportunities due to the civil war and other factors.
This is recognized as supporting the empowerment of girls in their schooling,
especially because of the lack of cultural understanding female education.
* As the support has spread, the "randoseru" backpacks have become a symbol ofeducation in Afghanistan.

* In addition to the activities listed above, individual SBS Group companies also undertake various social contribution activities.

Accepted at
any timelectures for graduate students of the university's School ofEngineering. The course aims to develop high-level logistics
human resources who can use advanced science andtechnology to transform logistics, to solve issues faced bylogistics companies, and to contribute to the development of
the Japanese economy.

Endowed Course at the University of Tokyo
Together with Yamato Holdings Co., Ltd. and Suzuyo & Co.,
Ltd., SBS Holdings Co., Ltd. has established the Endowed
Research Department for Advanced Logistics Science at the
Research Center for Advanced Science and Technology,
the University of Tokyo, and from April 2020, began offering

SBS Kamata Foundation
The SBS Kamata Foundation is a support foundation thatprovides grants for excellent logistics research and offers scholarships to students receiving social care.
SBS Kamata Foundation Website (https://www.sbs-kamatazaidan.or.jp/)

Logistics Research Grants

Scholarships for Students Receiving Social Care

The foundation conducts aid
activities with the aim of supGrants Issued in
Fiscal 2020
porting academic research into
logistics, which is part of thesocial infrastructure, and contributing to the development of
the industry as a whole and thebetterment of people’s lives, for instance by using the fruits ofresearch to improve logistics efficiency and prevent accidents.

This project provides scholarship funding to motivatedNumber of Scholarship
Recipients in Fiscal 2020
and talented students andother persons to prevent
them from abandoning education for economic reasons,with the aim of contributing toequal opportunity in education and the development of humanresources, while helping enhance education and welfare.

Applicable Research: (1) academic research and (2) the holding of research workshops, symposiums, seminars, etc.
that contribute to the promotion or developmentof logistics are eligible.

Application Requirements: Students who are generally at least 18 years
old and have been accepted for enrollment
into higher education, who are children residing in a child welfare home or living in a
foster home in the Kanto region, and whoplan to advance to university, junior college,
a vocational school or similar

74

6* Examples of the themes addressed : improving logistics efficiency, improving safety in cargotransportation and reducing the impact on the global environment (reducing CO2 emissions) throughbetter logistics systems
Grant Amounts: Total of 3,000,000 yen, up to 500,000 yen per individual grant.

Scholarship Amounts:

300,000 yen per student (as a higher education allowance)

Results of Issued Grants and Awarded Scholarships
2015

2016

Logistics research grants

2017

2018

2019

2020

6

7

7

9

6

6

Number of scholarships granted (number of recipients)

-

-

30

34

57

74

Results of Logistics Research Adopted in Fiscal 2020
Grant Amount(thousand yen)

Name of Affiliate Organization

Position

Name

Research Subject

Organization for the Advancementof Research and Development,
Kokugakuin University

Associate
Professor

HajimeDaimonPredictions of the logistics workforce shortages in light ofchanging consumer purchasing behavior and research into
response measures to ensure last-mile delivery

500

Nihon University College ofCommerce

Associate
Professor

TakuyaAkikawa

Last Mile Logistics Costs and Value

500

Faculty of Commerce, Waseda
University

Professor

Naoshi
TaguchiResearch into the spread of incoterms in the Japanese logistics
industry

500

Academic Research Institute,Tokyo University of Marine Scienceand Technology

Associate
Professor

Toshimasa
Asou

Forklift operator work measurement system

500

The Kyoto College of Graduate
Studies for Informatics

Assistant
Professor

Xi ChenResearch into digital centralized management of logistics industry
in the apparel industry in anticipation of the post-COVID era

100

Planning and Management
Science, Institute of Liberal Arts
and Sciences, Toyohashi
University of Technology

Professor

KazukoSakamoto

Research into the application of UX design for the logistics
industry

500

SBS GROUP BUSINESS & CSR REPORT 2021

41 42

Governance
Key Indicators (Fiscal 2020 Results)
Outside Directors

5(out of 13 directors)

Board of Directors meeting attendance rate by outside directors
All directors:

99.25% Outside Directors

98%

Assessment of Internal Control Related to Financial Reporting for Fiscal 2019

Valid

See the SBS Group website for details about corporate
governance. The website includes the SBS Holdings Corporate
Governance Guidelines, which summarize the SBS Group's
basic framework and approach regarding corporate
governance, as well as the Report on Corporate Governancesubmitted to the Tokyo Stock Exchange.
TOP → Investor Relations > Corporate Governancehttps://www.sbs-group.co.jp/sbsh/ir/governance/

Approaches and Systems

mittee meets at least once a month and on an extraordinary
basis when necessary, and fulfills the role of auditing and supervising the execution of duties by members of the Board of Directors other than Audit & Supervisory Committee members
and matters of legality. The Audit & Supervisory Committee
members, primarily its chairperson Yasuhiro Yamashita, also
attend Board of Directors meetings and other key internal meetings where they provide advice as necessary.
There are two reasons why the Company has adopted thiscurrent structure: (1) to ensure the swift decision making andthe flexibility of decision-making bodies as the greatest management strengths of SBS Holdings and the SBS Group; and(2) to firmly maintain sound management through the objective
and neutral monitoring of management.

Basic Approach
As the holding company of the SBS Group, SBS Holdings("the Company") ensures the efficiency, soundness and transparency of overall SBS Group management. Additionally, tocontinually enhance corporate value and become a company
that earns the trust of society, the Company endeavors to build
a Group-wide corporate governance system with complianceand risk management forming key pillars of management.
SBS Holdings has also established Corporate Governance
Guidelines, which aim to help achieve sustainable growth for
the SBS Group and enhance its corporate value in the mid- tolong-term.

Corporate Governance System
SBS Holdings is a company with an Audit & Supervisory
Committee and has established a General Meeting of Shareholders, Board of Directors, Audit & Supervisory Committee
and Accounting Auditor as corporate bodies.
The Company's Board of Directors comprises 13 members, five of whom are outside directors. As a decision-making body, the Board of Directors decides on matters requiredby law, matters set forth in the Articles of Incorporation, management policy and important matters related to management.
The board also monitors and supervises directors in the performance of their duties. The Board of Directors meets at least
once a month and on an extraordinary basis when necessary,
operating under a structure that enables swift and effective decision making on the part of directors. In addition, some directors with the exception of outside directors serve concurrent
roles as directors of the Group's major subsidiaries, in order toenable the deliberation of important matters concerning subsidiaries and facilitate smooth communications within the SBSGroup through their attendance at Board of Directors meetings.
The Audit & Supervisory Committee is made up of three directors who are Audit & Supervisory Committee members, whoof whom are outside directors. The Audit & Supervisory Com-

Transition to a Company with an Audit & Supervisory
Committee
At the Board of Directors meeting held on December 11,
2020, the Board resolved to shift to the structure of a company with an Audit & Supervisory Committee. The resolution wasapproved at the 35th Ordinary General Meeting of Shareholders
held on March 25, 2021. The purpose of the shift to this structure is twofold, as described below.
(1) Enhancing management transparency
Audit & Supervisory Committee members responsible for auditing and otherwise overseeing directors in the execution of
their duties having voting rights on the Board of Directors enhances its monitoring function and further improves management transparency.
(2) Speeding up decision making
The provisions of the Articles of Incorporation make it possible to delegate decisions regarding the execution of importantbusiness to directors, and directors can make decisions on theexecution of business without requiring resolution by the Boardof Directors, which is designed to further improve the flexibilityof management decisions.

Organizational Chart of Corporate Governance
General Meeting of Shareholders
ReportingAppointment

Stating opinions

Appointment

Dismissal

Audit & Supervisory Committee

Dismissal
Coordination

Dismissal

Board of Directors

Director(Audit & Supervisory
Committee members)

Accounting Auditor

Appointment

Investigation Coordination

ReportingDirector

Audit(Not Audit & Supervisory
Committee members)

Supervision

Selection

Dismissal

Reporting

Risk Management Meeting
Compliance Meeting
Environmental Management
Promotion Meeting
Reporting

Coordination

Auditing Department

Instruction
Reporting

Audit

Correction
Reporting

Supervision

Instruction

Direction

SBS Holdings Departments and Group Companies

Internal Reporting System

ReportingExecutive Officer
ReportingTransportation Safety
Promotion Meeting
Information Security
Promotion Meeting

Representative Director
Instruction

Audit

CSR Promotion Committee(Chairperson: Representative Director)

Consultation
and reporting

General Workplace
Consultation Office
Audit & Supervisory
Committee Member Hotline
Attorney hotline

SBS GROUP BUSINESS & CSR REPORT 2021

43 44

Governance List of Directors

Board of Directors

Masahiko Kamata

Katsuhisa Wakamatsu

President, Representative Director and CEO

Director

Number of Shares Held: 14,388,400

Number of Shares Held: -Mr. Kamata has served as the Company's president
and representative director since March 1988, and as
CEO since March 2004. He also serves as representative director of SBS Group companies, including
SBS Logicom Co., Ltd. and SBS Sokuhai Support
Co., Ltd., and as a director of SBS Flec Co., Ltd.,SBS Zentsu Co., Ltd., SBS Ricoh Logistics Co., Ltd.
and SBS Toshiba Logistics Co., Ltd. Additionally, heassumed the post as director of the SBS Kamata
Foundation in July 2013.

After working as head of the Production Management
Center at Ricoh Company, Ltd., in October 2011 hebecame a director and executive officer of Ricoh Logistics System Co. Ltd. (now SBS Ricoh Logistics
System Co., Ltd.) as Representative Director, President and Chief Executive Officer of Ricoh Logistics in
October 2013. He has also served as a director of
SBS Holdings since March 2019.

Kenichi Iriyama

Gen Kato

Director and Senior Executive Officer

Director

Number of Shares Held: 144,000

Number of Shares Held: -After working at the Long-Term Credit Bank of Japan(now Shinsei Bank, Limited), he took on the post as
general manager of the Corporate Planning Office of
SBS Co., Ltd. (now SBS Holdings Co., Ltd.) from
June 2002. He has served as general manager of the
SBS Holdings Director Administration Department andas a managing executive officer, and took on his current post as senior executive officer from March 2019.
He also serves as President and Representative Director of SBS Asset Management Co., Ltd., and as a director of SBS Flec Co., Ltd., SBS Logicom Co., Ltd.,SBS Zentsu Co., Ltd. and Marketing Partner, Inc.

After working as general manager of the Logistics
and Production Division of Kirin Business System
Co., Ltd., as director and East Japan Branch president of Kirin Logistics Co., Ltd., president and representative director of Kirin Group Logistics Co., Ltd.
and executive officer of Kirin Brewery Co., Ltd. from
December 2019 he became vice president and executive officer of SBS Flec Co., Ltd., and since March
2020 has served as representative director, president
and executive officer of SBS Flex Co., Ltd. and as adirector of SBS Holdings.

Masato Taiji

Hiroaki Sato

Director, Managing Executive Officer

Director

Number of Shares Held: 13,100

Number of Shares Held: -He has served as General Manager of the Human
Resources Division of Tokyu Logistics Co., Ltd. and
TL LOGICOM Co., Ltd., both of which are currently
SBS Logicom Co., Ltd., and has been a director of
SBS Holdings since March 2017. Since March 2019he has also served as a managing executive officer.

After working as manager of the Toshiba Corporation
Fuchu Office and president of Toshiba International
Corporation in the U.S., he assumed the post of representative director and president of Toshiba Logistics Co., Ltd. (now SBS Toshiba Logistics Co., Ltd.)in June 2017. He has also served as a director of
SBS Holdings since March 2021.

Yasuhito Tanaka
Director, Executive Officer
Number of Shares Held: After working at The Sumitomo Bank, Ltd. (now Sumitomo Mitsui Banking Corporation Group), he assumed
the post of Assistant General Manager of the Corporate Planning Office of SBS Holdings in November
2010. He has served as an executive officer (General
Manager of Corporate Planning Dept.) since December 2018 and as a director since March 2021. He also
serves as a director of SBS Asset Management Co.,
Ltd., L-MAX Co., Ltd., SBS Ricoh Logistics Co., Ltd.
and SBS Toshiba Logistics Co., Ltd.

Supervisory Committee

Jiro Iwasaki

Yasuhiro Yamashita

Outside Directors

Director (Full-time Audit & Supervisory
Committee Member)

Number of Shares Held: 200
Mr. Iwasaki serves as a director and senior executive
officer at TDK Corporation and as a director andmanaging executive officer at JVCKenwood Corporation (General Manager of Corporate Strategy). He hasserved as an outside audit & supervisory board
member and now outside director of GCA Corporation, and also serves as an outside director of Renesas Electronics Corporation. At SBS Holdings, he
was appointed outside audit & supervisory board
member from March 2011, and has served as an
outside director since March 2015.

Number of Shares Held: 24,500
After working as general manager of the Finance Division of The Daiei, Inc., he has worked as manager of
the Finance Department, executive officer and audit &supervisory board member of SBS Co., Ltd. (nowSBS Holdings Co., Ltd.). While serving as audit & supervisory board member for major SBS Group companies, in March 2021 he assumed the post of SBS
Holdings director (Audit & Supervisory Committee
member).

Tetsuya Sekimoto

Masato Matsumoto

Outside Directors
Number of Shares Held: -Outside Director (Audit & Supervisory
Committee Member)

In April 1991 Mr. Sekimoto established Sakurasogo
Law Offices (now Del Sole Sakura Law Office). In November 2012 he assumed the post of representative
director of Del Sole Consulting Corporation. He
serves as an audit & supervisory board member ofKoyo Chemical K.K., outside audit & supervisoryboard member of Premium Value Bank K.K., and as
an outside director of Mitsumi Electric Co., Ltd., Samantha Thavasa Japan Limited and IBJ Inc. He hasserved as an outside director of SBS Holdings since
March 2014.

Mr. Matsumoto has been engaged in management at
KOKUSAI Securities Co., Ltd., Mitsubishi Securities
Co., Ltd. (now Mitsubishi UFJ Securities Holdings
Co., Ltd.), Mitsubishi UFJ Morgan Stanley Securities
Co., Ltd., Mitsubishi UFJ Financial Group, Inc. and
MUS Business Service Co., Ltd. Since March 2019,he has served as an outside audit & supervisoryboard member of SBS Holdings, and as an outside
director (Audit & Supervisory Committee member)since March 2021.

Number of Shares Held: -Shuichi Hoshi

Sachie Tsuji

Outside Directors

Outside Director (Audit & Supervisory Board
Member)Number of Shares Held: 2,000
After working as general manager and executive officer of the Food Products Marketing & Distribution
Department of Itochu Corporation and as President
and Representative Director of Itochu-Shokuhin Co.
Ltd., Mr. Hoshi assumed the role of outside directorof SBS Holdings from March 2019. Since June 2020
he has also served as an outside director of Morinaga& Company, Ltd.

Number of Shares Held: As a certified public accounting, Ms. Tsuji has served
as a representative director of SPLUS Corporation,
director of Tsuji Sachie Public Accounting Office, Director of the Association of Certified Fraud Examiners, and as an outside audit & supervisory board,
member of C BON COSMETICS Co.,Ltd. Since
March 2021, she has served as an outside director(Audit & Supervisory Committee member) of SBS
Holdings.

Male / Female Ratio

Male:

12

Female:1(Male: 92%, Female: 8%)

For more detailed information on the biographies of each director,
please refer to the "Company Officers" section in SBS Holdings' securities report.

SBS GROUP BUSINESS & CSR REPORT 2021

45 46

Governance Ensuring EffectivenessAppointment of Directors

Outside Directors

As directors of SBS Holdings, the President nominates
individuals who possess a vast array of knowledge and expertise concerning SBS Group management, financial strategy,
risk management and legal compliance, are of outstanding
character, and who possess the knowledge, experience andskills to fulfill their responsibilities. After seeking feedback fromoutside directors, the Board of Directors is consulting on draft
nominations, which are then approved by the General Meetingof Shareholders.
In addition, in the appointment of the representative directorsof Group companies and other top management, the president
nominates individuals of outstanding character who possess
the knowledge, experience and skills to fulfill their responsibilities. After receiving approval by the SBS Holdings Board of Directors, the nominations are approved by the General Meetingof Shareholders of the Group company concerned.
Also note that SBS Holdings lists the individual reasons fornomination for all candidate directors in the Convocation
Notice for the General Meeting of Shareholders.

SBS Holdings has been working to expand its ranks ofoutside officers to bolster management supervisory functions.
These efforts are also expected to achieve highly independentand transparent monitoring functions and play a part in theformation of new ideas and principles that are not beholden
to customary practices. Standards on the independence ofoutside directors are set forth in the Corporate Governance
Guidelines to prevent conflicts of interest with regular shareholders.
To encourage lively discussions at Board of Directors meetings, meeting materials are sent to members in advance, andat the request of outside directors, the departments raising
agenda items may provide prior briefings to outside directors
on the matters to be discussed, as part of efforts to minimize
information disparities with internal directors. In addition, one
member of staff is appointed to assist the duties of outside
audit & supervisory board members, and the Auditing Department, the internal auditing organization of the Company, also
provides assistance as needed.

Restrictions on Concurrent Positions Held by Company
Directors

Number of Board of Directors Meetings and Status of
Attendance
Meetings

16
All Directors (13 members)

Attendance Rate (%)

Outside Directors (5)99.25%
98%

An internal director of SBS Holdings shall only serve
concurrently as an officer at another publicly listed company
when there are clear reasons for doing so, such as helping tostrengthen the business relationship with that company, and theofficer concerned shall focus on their duties at SBS Holdings asmuch as possible. In addition, the number of such concurrent
positions held shall be kept to a reasonable amount, and as well
as focusing on their duties at SBS Holdings as much as possible, such officers are required to disclose business reports on
the status of their concurrent responsibilities on a yearly basis.

Appointment of Outside Directors
NameAudit &
Supervisory
Committee
Members

Independent
Officer

Reason for Appointment

Concurrent Posts

Jiro Iwasaki○

Jiro Iwasaki brings a wealth of experience and broad insight concerning
management from many years as a company officer, and was
appointed on the expectation that his experience and knowledge as an
outside officer can be reflected in the management of SBS Holdings.

Outside director (full-time audit & supervisorycommittee member) of GCA Corporation
Outside director of Renesas Electronics
Corporation

Tetsuya
Sekimoto○

Tetsuya Sekimoto possesses extensive experience and expert
knowledge as an attorney as well as experience and knowledge as an
outside officer, and was appointed on the expectation that theseexperience and knowledge can be utilized for the compliancemanagement of SBS Holdings.

Outside director of IBJ Inc.

Shuichi Hoshi○

Shuichi Hoshi worked for many years as the head of the food logistics
department for a general trading company and was appointed on the
expectation that the business experience he accumulated there andmanagerial acumen he has cultivated as a company officer can beutilized as a director of SBS Holdings.

MasatoMatsumoto

Sachie Tsuji

Director of Itochu-Shokuhin Co. Ltd.
Outside director of Morinaga & Company, Ltd.

○

Masato Matsumoto possesses extensive experience as a corporate
manager at a financial institution along with considerable knowledge
regarding finance and accounting. He was appointed on the
expectation that his broad knowledge in these areas can be reflected in
the auditing of SBS Holdings.

Outside director of Sundrug Co., Ltd.

○

Sachie Tsuji posses many years of experience working on internal
control, internal auditing and compliance in addition to her specialized
knowledge and experience as a certified public accountant, and was
appointed on the expectation that her specialized knowledge in theseareas can be reflected in the auditing of SBS Holdings.

Representative director of SPLUS Corporation
Director of Tsuji Sachie Public Accounting OfficeDirector of the Association of Certified Fraud
Examiners
Outside audit & supervisory board member of
C’BON COSMETICS Co.,Ltd.

○

Effectiveness of the Board of Directors
Since fiscal 2016, SBS Holdings has conducted questionnaires to self-evaluate the effectiveness of the Board of Directors. The same questions have been kept since the first questionnaire to enable comparative verification through fixed-point
observation.
While the average evaluation score across all questions in
the questionnaire was 4.17, a 0.07-point decline from the 4.24score of the previous year, our general conclusion is that theboard of directors is functioning at a generally satisfactory level.
The Board of Directors exchanged opinions regarding thequestionnaire results and feedback submitted, shared issues
for the future and discussed matters including the roles ofvarious initiatives. In order to further enhance the effectivenessof the Board of Directors in light of the latest evaluation results,
the SBS Holdings Board of Directors will carry out the initiatives
deemed necessary following extensive discussions and strive
to make continual improvements.
Format of the Survey(each question graded on a five-point scale)(1) Composition of the Board of Directors (two questions)(2) Operation of the Board of Directors (five questions)(3) Matters taken up by the Board of Directors (eight questions)(4) Systems supporting the Board of Directors (four questions)
19 questions in total* The survey included a space for respondents to supplement their assessments and describe
other opinions.

Operation of the Audit & Supervisory Committee
The Audit & Supervisory Committee members of SBS Holdings attend important internal meetings and are able to provide
advice as necessary. They are also given the right to freely viewthe minutes of various meetings and other documents.
To facilitate the smooth operation of the Audit & Supervisory
Committee, the company has assigned one individual as afull-time staff member of the Board to assist with its duties, andthe Company's Auditing Department also assists with tasks
as needed. Matters concerning authority of personnel matterssuch as the appointment or transfer of Audit & Supervisory
Committee staff are decided after obtaining consent from the
Audit & Supervisory Committee in advance.
Audit & Supervisory Committee members, the SBS Holdings
Auditing Department and the accounting auditor appointed by
SBS Holdings coordinate with the internal control departmentsof SBS Holdings and SBS Group companies to formulate andexecute auditing plans and to report the results to the Board of
Directors.

Board of Directors Meetings Held

16
Average Score Obtained in the Evaluation of theEffectiveness of the Board of Directors

4.24

points

4.17

points * five-point scale

Improving the Skills of Directors
To ensure that directors fulfill their expected roles, theCompany describes their obligations and responsibilities as directors when they assume their posts. In conjunction with this,outside directors receive briefings on the management policyof the SBS Group and other matters related to its businessactvities.
As ongoing training for directors, SBS Holdings invites outside instructions to conduct training sessions around twice ayear, and also provides the necessary support for directors to
improve themselves.

Status of Accounting Audits
The Company's accounting audits are handled by Ernst &Young ShinNihon LLC. This auditing firm has been selectedbased on a comprehensive evaluation, including that it
possesses a certain size and global network enabling effective
auditing consistent with the Company's business activities, thatit has developed review systems, as well as its auditing trackrecord.
Two certified public accountants carried out the auditing
work for fiscal 2020, designated limited liability partners andmanaging partners Yoichi Tsukimoto and Katsuya Ishida. They
were assisted by eight certified public accountings and 16
other personnel.
Note that the Company has been continually audited by thesame auditing organization for 20 years.

SBS GROUP BUSINESS & CSR REPORT 2021

47 48

Governance Ensuring Effectiveness

Officer Remuneration
To coincide with the shift to a company with an Audit &Supervisory Committee, the Company resolved a policy at a
Board of Directors meeting concerning decisions related to theamount and calculation methods of remuneration for directors(excluding directors who are Audit & Supervisory Committee
members).
With the aim of incentivizing sustained growth and enhanced
corporate value, in accordance with the Internal Regulations
on Director Remuneration the remuneration of the Company's
executive directors comprises base remuneration determinedon a positional basis, and performance remuneration linked
to the Company's business results. As the subsidiaries concerned conduct the performance evaluations of directors who
concurrently service as the representative directors of subsidiaries, the remuneration of those directors at SBS Holdings
comprises only the base remuneration, pursuant to the Internal
Regulations on Director Remuneration. The remuneration ofoutside directors (excluding directors who are Audit & Supervisory Committee members) comprises only base remuneration,
pursuant to the Internal Regulations on Director Remuneration.
To better link with Company business performance withremuneration and to enhance objectivity and transparency,
performance remuneration uses consolidated operating
income as a measure for evaluation. Amounts for performancecompensation are calculated by taking the sum of quantitative
points based on the achievement of consolidated operating
income targets and qualitative points that assess each officer's
required roles, functions, responsibilities and achievements,and multiplying it by a base amount determined for each
officer.
The remuneration of directors (excluding directors who are
Audit & Supervisory Committee members) is determined by
the President, having been entrusted to do so by the Board of

Directors, by formulating remuneration plans for each directorin accordance with internal regulations and seeking feedback
from directors who are Audit & Supervisory Committee members and outside directors. Directors who are Audit & Supervisory Committee members discuss and determine their own
remuneration.
Upper limits on the total remuneration of the directors of
SBS Holdings were approved by the 35th General Meeting of
Shareholders held on March 25, 2021. Remuneration for directors who are not Audit & Supervisory Committee members islimited to 200 million yen annually (of which up to 40 million
yen is allocated to outside directors), and remuneration for
directors who are Audit & Supervisory Committee member islimited to 50 million yen annually.

Corporate Governance CodeSBS Holdings values and respects the basic principles
expressed in the Corporate Governance Code establishedand published by the Tokyo Stock Exchange, Inc. in conjunction with the Financial Services Agency. In the Corporate
Governance Report of SBS Holdings, we report on the stateof disclosure based on each of the principles of the Corporate
Governance Code, and clearly state our views on the fact that
the Company has not implemented some of the principles set
forth in the Code.

Consolidated Operating Income Associated With
Performance-Linked Remuneration in the Fiscal Year
Under Review
Target:

7,895
7,655

million yen

Results:

million yen* Excluding gains from the saleof real estate

Remuneration for Each Officer Category (Fiscal 2020 Results*)
Officer Category

Total Amount of Remuneration, etc.

Total Amount of Remuneration, etc. by Type (million yen)

Number of Eligible Officers(million yen)

Base Compensation

Performance Compensation

79

69

10

6

Audit & Supervisory
Committee Members

25

25

-

2

Outside Officers

30

30

-

5

Directors (excluding outside
directors)(excluding outside Audit &Supervisory Committee Members)* This includes the remuneration, etc. of one director who stepped down at the end of the 34th General Meeting of Shareholders held on March 26, 2020 (excluding outside directors) related to the term of their
appointment during the fiscal year under review.

ComplianceManagement
The SBS Group has established the SBS Group Code of
Behavior and SBS Group Compliance Regulations, andis committed to developing and promoting its compliancesystems. Playing a central role in this effort is the SBS Group
Compliance Meeting, which comprises members appointed
from SBS Group companies. In addition to playing a pivotal
role in awareness-raising activities, the Compliance Meeting
also monitors, confirms and investigates compliance violations
and drives improvements. In addition, by distributing a range ofawareness-raising materials including the SBS Group Compliance Manual to all Group employees and thoroughly ensuring
the observance of compliance requirements, the SBS Groupmakes every effort to promote fair and ethical behavior andactivities.

Awareness-raising materials distributed to all
employees

Number of Times the Compliance Meeting Was
Convened2
Number of Compliance-Related Training Sessions

10* Tiered training + specialist training (harassment)

Number of Consultations Fielded by Compliance
Consultation Hotlines

154

Compliance Card
Compliance ManualCompliance Rulebook

Initiatives to Increase Awareness
The SBS Group tries to increase awareness of complianceby providing regular training and disseminating information toemployees. In tiered training, we provide instruction on compliance in a broad sense, while in specialist training, we provide
guidance to managers under the theme of harassment. We
also regularly distribute educational materials to the persons
in charge and conduct follow-ups to ensure they can provide
on-site guidance. “Compliance Newsletter” is issued to all
employees to communicate compliance-related paradigms andnews, and we also produce original compliance training videos
to be screened during training and on-site.

Establishment of Consultation and Internal Reporting
Hotlines
The SBS Group has established and operates hotlines
through which all employees working in the SBS Group canseek consultation or make reports when they become awareof an issue with the workplace environment or business operations, or of conduct that violates laws, internal regulations or
corporate ethics. There are three types of hotline, the “General
Workplace Consultation Office (staffed by compliance personnel), the Auditor Hotline (staffed by Audit & Supervisory Committee members) and the Outside Reporting Hotline (staffed byattorneys). The General Workplace Consultation Office allows
an employee to select the contact details (direct dial) of theconsultant (male or female) they will speak to.

Compliance Awareness Survey
The SBS Group periodically conducts compliance awareness surveys to ascertain the extent of compliance awarenessamong employees and to monitor changes in the environment
surrounding employees. The survey results are used to roll out
new measures, and when issues come to light in the consultation or reporting hotlines, corrective measures are implemented.

"General Workplace
Consultation OfficeCounseling room for all
workplace concerns"
posters

Reporting and Consultation Flow
SBS Group Employees
ReportingConsultation

SBS Group Internal Reporting Hotline
Internal Reporting Hotline

Outside Reporting Hotline

General Workplace Consultation Office
Auditor Hotline

Attorney hotline

Reporting

Request for investigation

SBS Group Compliance Meeting(Chairperson: CSR Officer, Administrative Office:
CSR Promotion Department)
Reporting

Request forinvestigation
Reporting

Reporting Instruction

SBS Holdings Board of Directors

Internal
Investigation
Committee* Established when it
is determined that amatter seriously
impacts
management

SBS Group CSR Promotion Committee

SBS GROUP BUSINESS & CSR REPORT 2021

49 50

Governance Risk management

Crisis Management Framework
With the SBS Group Risk Management Meeting playing acentral role, information is shared on crisis management matters under the jurisdiction of each meeting body. When a determination is made that a crisis has occurred, a company-wide
response is initiated in accordance with the Crisis Management
Manual.

Main Crisis Matters
Information Security Promotion Meeting
Major security incidents, cyber-attacks, system failures
Transportation Safety Promotion Meeting
Vehicle and industrial accidents that involve human life
Compliance Meeting
Corporate scandals such as inappropriate labor management,
fraudulent accounting or inadequate information management
Disaster Response Management (Business Continuity Plan)
Natural disasters such as major earthquakes

Risk Management
Meeting

Transportation Safety Promotion Meeting
Compliance Meeting
Information Security Promotion Meeting

BCP and BCM
The SBS Group recognizes that in the interest of safeguarding people’s lives, it has a social responsibility to continue toperform business activities with a focus on logistics as a partof social infrastructure in the event of a major disaster, andhas formulated a business continuity plan (BCP) accordingly.
The BCP clearly stipulates matters such as conditions forcountermeasures, advance preparation, initial response andrestoration efforts. We also focus on business continuity management (BCM), to ensure that the BCP we have formulated
functions properly.

Emergency Response Drills
The SBS Group periodically conducts emergency response
drills to prepare for major disasters and other emergencies.
The drills focus on setting up an emergency headquarters andalternate sites during an emergency, coordinating informationsuch as the state of damage and safety at each Group company and site, and sharing all related information. The specificscenario is changed for each drill.

Development of an Intra-Group Emergency Contact Network
An emergency contact structure and emergency contact network is maintained and managed to confirm the safety of employees and share site damage reports as quickly as possible in
the event of an emergency, facilitating business continuity.

Developing Site Information and Sharing Hazard Risks
As part of BCM initiatives, site information including hazard
risks* is centrally managed and shared throughout the Group.
Sharing information allows the SBS Group to standardize themeasures taken to address issues and facilitates coordination
with nearby business sites.
* Government-issued hazard maps are used.

Ensuring Driver Safety
To ensure driver safety, all Group-operated vehicles areprovided with emergency supplies (water, emergency toilets,
thermal sheets for protection against cold). Additionally, mutual
acceptance arrangements have been made so that certain
locations can be used as driver evacuation locations during an
emergency.

Dedicated Disaster Information Portal Site for Employees
The SBS Group has set up the SBS Group Disaster Information Portal Site as a dedicated site for employees to sharebusiness continuity-related information such as the state ofdamage in the Group in the event of an emergency. At regulartimes the site provides useful disaster prevention information.

Certified by the Tokyo Metropolitan Government as a
Company Discouraging the Simultaneous Return Homeof Employees during a Disaster
In December 2018, SBS Holdings, Inc. was certified by the
Tokyo Metropolitan Government as a Company Discouraging
the Simultaneous Return Home of Employees during a
Disaster. The certification recognizes the steps taken by SBS
Holdings to stockpile food and supplies for a disaster and thestatus of various facilities and intra-Group coordination allowing
employees to take refuge in the offices. Going forward, SBS
Holdings will continue to pursue these initiatives as a certified
company.
SBS Holdings is also part of disaster prevention cooperative
agreements with Sumida-ku and non-governmental organizations.

Information Security

The SBS Group recognizes that appropriately protecting andmanaging all kinds of information on customers and otherstakeholders is an important social responsibility. Based on thisbelief, we have established an information security policy andvarious standards, and have established an effective management structure to deal with various information risks.

Information Security Policy
We have established the SBS Group Basic Policy on Information Security and declared a Group-wide commitment to tackling information security.
SBS Group Basic Policy on Information Security

Information Security Governance
The SBS Group has established an information security
governance framework through which it strives to maintaina standard Group-wide infrastructure and share information.
We have also set up internal systems enabling us to effectively
respond to security incidents and issues. Incident response organizations not only respond when an incident occurs, but alsoplan and implement prevention, education and awareness-raising efforts during normal times to control security management
across the Group.

SBS Group Information Security Governance

1. We will observe laws, government-issued guidelines andother norms related to information security.

CSR Promotion Committee(Chairperson: President of the SBS Group)

2. We will clarify responsibilities related to information security and establish systems to implement information security
measures.

Periodic reporting

3. We will identify information security risks and take appropriate personal, organizational, technical and physicalmeasures.

SBS Group Information Security Promotion Meeting

4. We will conduct training and raise awareness concerning
information security, and ensure that all employees areable to carry out their work with an awareness of information security.

Planning of measures

5. We will carry out inspections of our information security-related management systems and initiatives, and conductongoing reviews and make continual improvements.

Auditing and monitoring

Information Security Management
The SBS Group has established the SBS Group Information
Security Policy. In accordance with the policy we strive to firmly
maintain security levels, with the Information Security Promotion
Meeting playing a central role in monitoring the status of security measures on a Group-wide basis while promoting education
and awareness-raising related to information security.

Protection from Threats
We have installed anti-virus tools that use artificial intelligence(AI) to prepare against unknown threats. We have also put inplace next-generation firewalls in an effort to reinforce defenses
against attacks from the inside and outside alike.

Responding to Vulnerabilities
By introducing a security operation center (SOC) service, wehave enhanced monitoring and checking functions. We also
perform inspections of public server vulnerabilities and perform
vulnerability tests on the necessary servers in an effort to maintain safety.

Third-Party Verification
We periodically commission management reviews by specialist information security firms to improve the level and quality of
our information security management.

Information sharing(Chairperson: CIO)
Proposals

Determination

Planning Subcommittee
ReportingExecution

Group Companies* Formulation and promotion of information security infrastructure within the Group/ disseminating the latest security information throughout the Group / Measuresto quickly establish control when an incident occurs / education andawareness-raising / development of information security policies and standards
for various measures

Education and Awareness-Raising●

Seminars

We offer purpose-built curricula
for information security personnel at various organizational
levels and Group companies.

●

e-Learning

We conduct regular awareness-raising activities, including
requiring employees across theGroup to undergo e-learning
training once a year.

Employees
Undergoing Training
in Fiscal 2020

159
Employees
Undergoing Training
in Fiscal 2020

5,058

● Investigating Actual Conditions Using Simulated Emails ofTargeted Attacks
Follow-ups (targeted training, etc.) will be conducted based on
the results in an effort to raise literacy levels regarding thesethreats.

SBS GROUP BUSINESS & CSR REPORT 2021

51 52

CSR Data

CO2 Emissions

Water Usage
Emissions per unit of net sales

CO2 (t)120,000■Facilities

100,000■Vehicles■Emissions per unit of net sales

80,00060,00040,00020,000
0

2016

2017

2018

2019

2020

Facilities

17,412

16,47522,22326,09032,782

Vehicles

60,20461,026

68,572

65,15766,088

Total

77,61677,50190,79591,247

98,869

55.73

52.09

47.77

38.095

40.77

Emissions perunit of net sales

Water Resource Usage (t)Consumption per Unit (per person: m³)

100

160,00080

140,000

8.0

60

120,000

7.0

40

100,000

6.0

20

80,0005.0

060,000■ Usage

9.0■ Consumption per Unit

2015

2016

2017

2018

2019

2020

Usage

73,828

101,642

111,175

127,524

149,681

147,097

Consumption
per Unit

5.20

7.01

7.45

6.71

7.72

6.32

4.0

* Emissions per unit of net sales are figures for every 100 million yen in sales

Power Consumption

Copy Paper Usage

Electricity Usage (thousand kWh)

70,000■ Usage

4.0■ Consumption per Unit

60,00090,00080,000

3.5

50,000

2015

2016

2017

2018

2019

2020

Usage

32,42433,40532,75444,74052,264

66,386

Consumption
per Unit

2.28

2.30

2.19

2.35

2.70

2.85

4,000

■ Consumption per Unit

3,700
3,400

60,000

3,100

50,0002.5

30,000■ Usage

Consumption per Unit (per person: sheets)

70,0003.0

40,00020,000

Copy Paper Usage (thousand sheets)

Consumption per Unit (per person: thousand kWh)

2,800

40,00030,000

2.0

2015

2016

2017

2018

2019

2020

Usage

41,29546,04944,20559,25153,68583,747

Consumption
per Unit

2,909

3,173

2,964

3,116

2,770

3,598

2,500

Status of Environmental Certifications Acquired (as of the end of fiscal 2020)
Certification

Company Name (number of business sites with certification)

ISO14001(environmental management systems)

SBS Toshiba Logistics, SBS Ricoh Logistics, SBS San-Ai Logistics, SBS Logicom
SBS Flec, SBS Freight Service, SBS Zentsu, SBS Sokuhai Support

Green Management Certification

SBS Logicom

GPN Certification(Green Purchasing Network)

SBS Logicom * Certified as a delivery service for the Eco Product Net

Investment in the Environment
Investment
Vehicle-related investments(Unit: million yen)

2015

2016

2017

2018

2019

2020

CNG vehicles, LPG vehicles, hybrid vehicles, vehicles
2,830
that meet heavy vehicle fuel efficiency standards, etc.

3,250

3,616

3,791

3,055

4,379

Details

Improved fuel efficiency (eco and safe-driving training,
etc.)

2

2

1

1

19

Investments related to improved
energy savings at facilities

Demand monitoring and energy-efficient lighting, etc.

72

9

35

131

26

Investments in global environmental
conservation

Solar power generation, etc.

223

0

13

6

6

Environmental management

Environmental management registration andmanagement activities, etc.

3

8

6

3

4

Environmental communication

Internal and external awareness-raising, creation ofreporting materials, etc.

5

5

6

6

10

3,135

3,274

3,677

3,202

4,444

Total

SBS Sokuhai Support Waste Processing Logistics
Handling Volume (fiscal 2020)

Quantity of Renewable Energy Delivered (as of the end of fiscal 2020)
Power
Generating
Capacity(kW)

Facility Name

Amount Handledwithinthe SBS Group(t)

Item Name

519

514

Takasaki Sales Office161

Waste plastics

2,826

Odawara Sales Branch

210

Recycled plastics

7

Nagatsuta Logistics Center

935

Scrap metal

32

Toyohashi Logistics Center

221

Waste wood69

Shin-Sugita Logistics Center

1,072

Noda Yoshiharu Logistics Center
Shibayama Solar Power Plant

Power
Generating
Capacity(kW)

Facility Name

Kawagoe Logistics Center

830

Nishinihon Logistics Center(Kyotanabe)

617

Shibayama No. 2 Solar Power Plant

710

Shin-Tokorozawa Logistics Facility

Kimitsu Branch

268

Nanko Logistics Center

1,490

Yoshikawa Branch

223

Total

11,017940

Paper and other waste

10

Total

637

G-Mark Certification Status (as of the end of fiscal 2020)
Company Name

Number of Newly
Certified Business Sites

Number of BusinessSites with Existing
Certification

Total Number of
G-Mark-Certified
Business Sites

Number of G-MarkEligible Business Sites

G-MarkCertification RateSBS Ricoh Logistics

-

21

21

24

87.50%SBS Logicom

-

34

34

36

94.40%SBS Freight Service

-

14

14

14

100%

SBS Flecnet

1

23

23

25

92.00%SBS Zentsu

6

61

67

81

82.70%SBS Sokuhai Support

-

8

8

10

80%

SBS Group Total

7

161

167

190

87.90%* Certification rate of nationwide truck transportation business sites: 31.3% (figure as of December 14, 2020) from the website of the Japan Trucking Association)* 2: Applicable business sites includes newly established business sites (business sites under three years old that do not meet the requirements for G-mark application).

Status of Human Resource Development Initiatives: SBS Group Training Results (as of the end of fiscal 2020)
Tiered Training
Departmental Manager Training
Basic Training for Managers
S2 (Formerly Advanced Manager Training)

Theme-Specific Training

37

Basic Training for Managers S1 35(Formerly Basic Training for Managers)

Basic Training for Supervisors S2 18(Formerly Advanced Training for Supervisors)

Open Seminars
Training for Mid-Career Hires
Mid-Career Hire Follow-up
Training
On-site Leader Development
Training S1(Formerly OJT Leader Development Training)(Unit: number of employees)

Specialist Theme Training

74
19

Support for Self-Improvement

Harassment Training-(for Managers and Supervisors)-

Eco and Safe-driving Training
Safe Driving Training Sessions (Truck)
Safe Operation Training
Sessions (Forklift)-

Truck Driver Contests-

Correspondence Courses

224

e-Learning

12

TOEIC Test

1

Business Career Certification-

Basic Training for Supervisors S1 97

Site Manager Development
Training S1

37

Forklift Operator Contests-

Site Manager Development
Training S-

Operation Manager
Examination Preparation143

All 37 Subjects

English Skills Improvement-

Operational Manager Basic Classes

70

Actual Participants: 6,824

English Skills Improvement

118-

Operational Manager
General Classes
First-Aid Classes

10

Business Career Certification
Exam Preparation-

Health Officer Examination
Preparation

33(Formerly Basic Training for Supervisors)

Mid-Career Employees
Third-Year Employees

One-And-A-Half-Year Training 55
for New Employees
Follow-Up Training for New
Employees
New Employee Training

88(Group Training)(e-Learning)* "-" denotes activities cancelled due to the
COVID-19 pandemic

Information Security (Group Training) 159
Information Security (e-Learning)
Information Security (e-Learning 2)

Status of Quality-Related Certifications Acquired(as of the end of fiscal 2020)

Certification
ISO9001
ISO27001* Jointly with the International Electrotechnical Commission (IEC)

Company Name (number of business sites with certification)
SBS Toshiba Logistics, SBS Flec, SBS Flecnet
SBS Freight Service, SBS Zentsu, SBS San-ai Logistics
SBS Ricoh Logistics, SBS San-ai Logistics
SBS Logicom, SBS Sokuhai Support

ISO/IEC27001*

SBS Toshiba Logistics

ISO/IEC17025*

SBS Toshiba Logistics

Privacy MarkSBS Freight Service, SBS Staff, Marketing Partner
SBS Logicom

JAS Organic Agricultural ProductSubdivider Certification
Relocation Safety MarkSBS Zentsu

5058
536

Number of Consultations Fielded by theConsultation Hotline* (as of the end of fiscal 2020)
Details ofConsultations

Number ofConsultations

Consultations regarding laws,
regulations and internal rules

71

Consultations regarding interpersonal
relationships in the workplace

70

Others
Total

13
154

* Total consultations fielded by hotlines set up inside and outside thecompany from which employees are able to seek direct consultation

SBS Logicom

ISO 9001 (Quality Management Systems), ISO 27001 (Information Management Systems), ISO/IEC 17025 (Testing and Calibration
Organization Management Systems)

SBS GROUP BUSINESS & CSR REPORT 2021

53 54

Financial Data

PeriodYear of Financial Results

26thfiscal period

27thfiscal period

28thfiscal period

29thfiscal period

FY2011FY2012FY2013

FY2014

Net sales

million yen

121,148

127,935

132,205

141,535

Ordinary income

million yen

1,633

2,746

3,779

3,648

Net income attributable to owners of parent

million yen

2,502

1,626

1,549

2,725

Comprehensive income

million yen

2,605

1,788

1,817

3,702

Net assets

million yen

25,137

27,78029,21835,091

Total assets

million yen

100,819

104,496

108,354

131,120

Net assets per shareyen

667.70716.61742.68811.23

Net income per share

yen

67.81

43.56

40.26

69,77

Diluted net income per share

yen

-

-

40.09

69.65

Shareholders’ equity ratio

%

24.6

26.3

26.7

24.3

Return on equity

%

10.6

6.2

5.5

9.0

times

3.2

7.7

13.0

14.4

Cash flows from operating activities

million yen

3,728

7,329

6,257

6,603

Cash flows from investing activities

million yen-3,765-5,520-6,214-15,101

Cash fows from financing activities

million yen

1,867

-829

80

8,893

Balance of cash and cash equivalents

million yen

9,212

10,175

10,306

11,037

Stock price to earnings ratio

Number of employees (additionally,

4,624

4,645

4,662

5,572

average number of temporary employees)(7,756)(7,999)(7,906)(8,512)

Consolidated subsidiaries
Capital investment

million yen

Notes
Net sales do not include consumption taxes.
Diluted net income per share in the 26th and 27th fiscal periods is not listed as there are no potential shares that have a dilutive effect.
Diluted net income per share in the 30th fiscal period is not listed because of a net loss in that period despite there being potential shares that have a dilutive effect.
Diluted net income per share for the 31st to 35th fiscal periods is not listed as there are no potential shares that have a dilutive effect.
For the 31st fiscal period, figures after retrospective application are listed due to the early application of "Current Handling of Accounting for Foreign Subsidiaries in the Preparation of Consolidated
Financial Statements" (Practical Report No. 18, March 29, 2017) and "Current Handling of Accounting for Equity Method Affiliates" (Practical Report No. 24, March 29, 2017) from the 32nd fiscal
period onwards.
"Partial amendments to the Accounting Standards for Tax Effect Accounting, etc." (Accounting Standards Board of Japan Statement No. 28, February 26, 2018) has been applied since thebeginning of the 34th fiscal period, and for the 33rd fiscal period figures after retrospective application are listed.
The number of employees indicates the number of full-time employees.

30thfiscal period

31stfiscal period

32ndfiscal period

33rdfiscal period

34thfiscal period

35thfiscal period

FY2015FY2016FY2017FY2018FY2019FY2020157,996

149,054

152,870

203,516

255,548

257,192

5,772

7,832

6,475

7,607

10,172

10,883-3,815

5,111

4,446

4,409

6,079

6,826

-4,693

5,346

4,702

4,494

6,923

7,181

29,94734,53338,51048,17354,077

68,146

124,817

122,330

127,802

171,796

180,047

254,550706.32818.55916.501,001.05

1,136.22

1,277.92-96.84128.69111.94111.01153.06171.88

-

-

-

-

-

-

22.5

26.6

28.5

23.1

25.1

19.9

-12.7

16.9

12.9

11.6

14.3

14.2

-9.8

6.3

10.1

12.8

12.4

15.2

7,728

12,201

11,671

12,39816,872

17,262-7,081-10,043-8,127-22,433-12,579-30,480-2,685-1,733-1,42014,815-2,08422,726

8,984

9,383

11,53416,303

18,49527,537

5,555

5,189

5,515

6,979

7,124

9,742

(8,636)(8,652)(8,911)(10,575)(10,674)(12,098)
28
11,507

Contact for Inquiries
CSR Promotion Department, SBS Holdings, Inc.
4-1-3 Taihei, Sumida-ku, Tokyo 130-0012, Japan
Tel: +81-3-3829-2367

Fax: +81-3-3829-2822

https://www.sbs-group.co.jp

SBS GROUP BUSINESS & CSR REPORT 2021

55 56

Corporate Profile and Stock Information

Corporate Profile* As of December 31, 2020

Company Name
Representative Director
FoundedPaid-in Capital
Net Sales

SBS Holdings, Inc.
Masahiko Kamata
December 16, 1987
3,920.75 million yen
257.1 billion yen (consolidated)

Head Office

4-1-3 Taihei, Sumida-ku, Tokyo 130-0012, Japan
Tel: +81-3-3829-2222 (main switchboard)
Fax: +81-3-3829-2822
Logistics business, property management business,marketing business, human resources business, etc.
Tokyo Stock Exchange 1st Section (Securities Code: 2384)* For the year ended December 31, 2020

Lines of Business
Listed Exchange

Officers* As of March 25, 2021

Representative Director
Director
Director
Director
Director
Director
Director
Outside Director
Outside Directors
Outside Directors
Director (Full-time Audit & Supervisory Committee Member)
Outside Director (Audit & Supervisory Committee Member)
Outside Director (Audit & Supervisory Committee Member)

Masahiko Kamata
Kenichi Iriyama
Masato Taiji
Yasuhito Tanaka
Katsuhisa Wakamatsu
Gen Kato
Hiroaki Sato
Jiro Iwasaki
Tetsuya Sekimoto
Shuichi Hoshi
Yasuhiro Yamashita
Masato Matsumoto
Sachie Tsuji

Consolidated Subsidiaries
SBS Toshiba Logistics Corporation
TL Logi Service Co., Ltd.
Toshiba Logistics (Shanghai) Co., Ltd.
Toshiba Logistics (Hangzhou) Co., Ltd.
Toshiba Logistics (Dalian) Co.,Ltd.
Toshiba Logistics Hong Kong Co., Ltd.
Toshiba Logistics Thailand Co., Ltd.
Toshiba Logistics Vietnam Co., Ltd.
Toshiba Logistics America, Inc.
Toshiba Logistics Europe Gmbh
SBS Ricoh Logistics System Co., Ltd.
SBS San-Ai Logistics co., Ltd.
RICOH LOGISTICS CORPORATIONRICOH INTERNATIONAL LOGISTICS (H.K) Ltd
RICOH INTERNATIONAL FREIGHTFORWARDING (SHENZHEN) CO., LTD.
SBS Logicom Co., Ltd.
SBS Freight Service Co., Ltd.
SBS Global Network Co., Ltd.
SBS Logicom Kanto Co., Ltd.
SBS Flec Co., Ltd
SBS Flecnet Co., Ltd.
SBS Zentsu Co., Ltd.
SBS Sokuhai Support Co., Ltd.
SBS Staff Co., Ltd.
SBS Finance Co., Ltd
SBS Asset Management Co., Ltd.
LMAX Co., Ltd.

Stock Information
Number of shares authorized

154,705,200 shares

Number of shares issued

39,718,200 shares

Unit stock system

Yes (100 shares)

Number of shareholders

3,911

Marketing Partner, Inc.

Including 2,590 fractional shares

Key Challenges
This report is structured around the key challenges that have a significant impact on the SBS Group's ability to create value in the
short-, mid- and long-term.

1

Changes to the structureof the logistics market

2

Human Resources
Securing and developing a diverse
range of human resources supporting
the growth of the SBS Group andJapanese logistics

3

8

Working styles andproductivity
Taking on the challenge of new working styles and pursuing ongoing improvements to business productivity

3PL
Strengthening the expanding services
to comprehensively handle andoptimize corporate logistics operations

M&A activities as the core of our
growth strategy, and the processes
to maximize those effects

We analyze rapid changes to thestructure of the logistics market,
which facilitates a strategic response

7

M&A and group synergy

9Energy and climate change
Addressing the energy demand-supply gap and climate change risks
from a long-term perspective

Major Shareholders
Name

Number of Shares Held

Shareholding Ratio (%)

Masahiko Kamata

14,388,400

36.22%

Custody Bank of Japan, Ltd. (Trust account)

5,156,200

12.98%The Master Trust Bank of Japan, Ltd. (trust account)

1,575,700

3.96%

SBS Holdings Employee Share Ownership Association

1,354,100

3.40%

SMBC TRUST BANK Designated Securities Trust

1,200,000

3.02%

Sumitomo Mitsui Trust Bank, Limited (Trust Account A-13)

1,000,000

2.51%

TOBU Properties Co., Ltd.

986,000

2.48%

Junichi Ouchi

800,000

2.01%

Masaru Wasami

576,700

1.45%

Hiroshi Date

449,800

1.13%* The ratio of shares held against the number of shares issued is truncated after the third decimal place.

Distribution of Shares by Shareholder Type (number of shares issued: 39,718,200 shares)■ Individuals and others

21,531,011 shares(54.21%)■ Financial institutions

10,802,800 shares(27.20%)■ Non-Japanese corporations

3,892,373 shares(9.80%)■ Japanese corporations

2,513,120 shares(6.33%)■ Securities firms

978,321 shares(2.46%)

Treasury stock

575 shares(0.00%)

Rounded to the nearest three decimal places

Logistics Facility
Development

4

Systematic expansion of floor space
as a core of increasing logistics infrastructure and the foundation of 3PL

10

Crisis management

Preparedness for natural disasters
and other crises for management

5

Technology
Strategically utilizing LT* and IT to link
value creation with improved competitiveness6

Quality and safety
Ensuring the quality and safety oftransportation and service that form
the basis of our business activities* Logistics Technology

11

Relationship with society

Coexistence rooted in dialogue with adiverse range of stakeholders

12

Governance

Ensuring corporate governance systems that represent the basis of value
creation

SBS GROUP BUSINESS & CSR REPORT 2021

57 58

Contact for Inquiries
CSR Promotion Department, SBS Holdings, Inc.
4-1-3 Taihei, Sumida-ku, Tokyo 130-0012, Japan
Tel: +81-3-3829-2367

Fax: +81-3-3829-2822

https://www.sbs-group.co.jp