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Take a Look at the COMSYS GroupOur uniqueness
Nationwide
one-stop
serviceComprehensive engineering corporate groupengaged in construction of telecommunications and social infrastructure
About the COMSYS GroupP03-04

Net sales

Operating proﬁt

589,028

42,963(Millions of yen)

FY2017FY2017FY2018FY2018FY2019FY2019FY2020

FY2021(Millions of yen)

FY2017FY2018FY2019FY2020

FY2021

Total shareholder return

ROE

67.5%

8.8%

FY2020

FY2021FY2017FY2018FY2019FY2020

FY2021

CONTENTS
outlinestrategy

Take a Look at the COMSYS Group ………… 01

Progress on the Medium-Term
Management Plan … …………………………… 07

Sustainability and Mate

Message from Top Management… ………… 09

Corporate Governance

About the COMSYS Group… ………………… 03
Strengths and Business Model… …………… 05

Financial Strategy………………………………… 13
DX Strategy………………………………………… 14
Segment Business Strategy… ………………… 15

01

COMSYS GROUP REPORT 2022

ES

Disclosure Based on TCFD

Promoting Safety and Q

Respect for Human Righ

Cultivating Human Resooutline

strategy

ESG

Our strengths

1. Positioning

data

about us3.
2. Abundant resources 4. Robust corporate culture
Strong trust relationships
with customers

Business Model
P05-06

GHG emissions（Scope 1+2）

GHG emissions（Scope 3）

Scope2

110

1,812（kt-CO2e/y）（kt-CO2e/y）Carbonneutrality

Scope1

FY2021

FY2020

FY2030FY2050TargetTargetFY2020

FY2021

FY2030TargetSustainability and Materiality
P19

New graduate turnoverin ﬁrst three years

31.2%

University graduate average*1

33.3%

6.4%

COMSYS Group*2

FY2017

Percentage ofoutside directors

FY2018FY2019FY2020

FY2021FY2017FY2018FY2019FY2020

FY2021*1 Source: Ministry of Health, Labour and Welfare, “New graduate turnover by duration of employment”*2 Data for March 2020, March 2019, and March 2018 do not include NDS, SYSKEN, and Hokuriku Denwa Kouji

SGeriality… ……………… 19

D Recommendations… 20

data

about us

11-Year Financial and Non-Financial Data… 33

Status of Company’s Shares…………………… 35
Corporate Information/Editorial Policy … … 36

e… ……………………… 23

Quality………………… 29

hts……………………… 30

ources… ……………… 31

Take a Look at the COMSYS Group02

About the COMSYS GroupThe COMSYS Group’s Management Philosophy
At the COMSYS Group, we are united as a Group and strive for strong partnershipand collaboration with diverse external players in achieving our management philosophy.
We will build a company that customers continue to choose through theconstruction of diverse infrastructure that carries our era forward.
● We will contribute to our country and local communities by building social
infrastructure that supports affluent lifestyles.
● We will continue with unrelenting reform in our aim to further increase corporate value.
●◆ As a Comprehensive Engineering Company
The COMSYS Group has evolved with telecommunications technologies and grown with the telecommunications industry as a telecommunications construction
company that supports Japan’s telecommunications
infrastructures. Using the skills and experience that it
has cultivated over nearly 70 years through the construction of these infrastructures, along with resources that it has expanded nationwide through mergers
with telecommunications construction companies invarious regions, today’s COMSYS Group undertakes
business as a comprehensive engineering company,
securing orders in all aspects of telecommunications
and social infrastructures with a particular focus onfour business segments: the NTT Engineering Business,
the NCC* Engineering Business, the IT Solutions Business, and the Social System-Related Business. In the
NTT Engineering Business, the COMSYS Group is oneof only three companies that are permitted to participate as NTT-certified telecommunications construction companies, and with the largest market share, it
has an unshakeable position in the market.
The current telecommunications industry is seeing a
trend in which telecommunications carriers (the COMSYS Group’s customers) are expanding their operationsas providers, going beyond simply telecommunications
services to handle contents, financial services, and oth-Market Share of Sales Related to NTT Telecommunications Construction（FY2021）B

26%

COMSYS Group

38%

A

36%
er functions as well. To continue responding to theneeds of its customers, the COMSYS Group must also
undergo a business transformation, expanding its operations beyond the scope of its current business fields.
The company will further increase its competitiveness through activities aimed at overall optimization of
the Group and increasing the added value of the services it provides. Based on the management philosophy of “Being united as a Group and striving for strong
partnership and collaboration with diverse external
players,” we will contribute to three main stakeholders: customers, society, and shareholders and Group
employees.
*NCC: New common carrier

Even after the deregulation of telecommunications in 1985, amid the entry of new players in the telecommunications field and the reorganization of the NTT Group, the COMSYS Group has expanded its business over the past 20 years, through mergers with telecommunications
construction companies in various regions.
In the past, each company maintained its own full set of functions and bases, and promoted individual company optimization. This individual
optimization will now be transformed into overall optimization for the COMSYS Group as a whole. To switch to optimum business structures
and approaches from a Groupwide perspective, COMSYS will centralize sales functions and other shared functions. The various business companies will leverage regional brands and further refine construction capabilities to specialize in construction suited to each region.

●1951: Nippon COMSYS established●1947: SANWA COMSYS Engineering Corporation (formerly SANWA ELEC) established●1960: TOSYS (formerly HIGASHI NIHON System Construction) established

1950

1960

1970

1980

Telecommunications industry developments

03

COMSYS GROUP REPORT 2022

1990

2000

●1985: Telecommunications liberalization, NTT group restructuri●1987: Mobile phone service begins after changes
to the Radio Act in 1986●20

outline

strategy

ESG

In order to leverage the sales base and brandstrength cultivated by business companies in each region while optimizing resources throughout the Group
as a whole, the company is strengthening Group collaborations across companies in each business segment. In the IT Solutions and Social System-Related
Segment

about us

Businesses in particular, which are growth businesses,
the Group has adopted a “virtual company” system forvirtual supervision of each company’s business. It has
shifted to management oriented toward overall Group
optimization, in pursuit of increased sales and greater
productivity.

Telecommunications Carrier Business
NTT Engineering Business

data

NCC Engineering Business

Construction for Telecommunications Carriers

IT Solutions BusinessSocial System-Related
Business

Total Solution Service
in the IT Segment

Urban Infrastructure
Construction, IncludingElectrical and Civil
Engineering

Equipment wiring, LAN/WAN, NW/
cloud, audio systems, servers/storage, application development, IT
solutions operation & maintenanceElectrical facility construction, solar/
wind power facility construction, civilengineering for telecommunications,gas and water supply pipe construction

Access construction

Description of Business

Main BusinessCompany Groups
Nippon COMSYS Group

Network construction

Mobile facilities construction

COMSYS undertakes telecommunications construction to build
wired and wireless networks for
the NTT Group. In recent years,
COMSYS has also handled facility operations (maintenance andtroubleshooting) in some areas.

COMSYS undertakes telecommunications construction to build
wired and wireless networks fortelecommunications carriers outside of the NTT Group, as well as
construction involving cable TV
and related facilities.

With a nationwide execution structure and many highly skilled engineers, COMSYS provides total IT
solution services that are ideallysuited to the customers’ operations,from project proposals to construction, development, maintenance,and operations.

COMSYS undertakes business related
to the environment and ecosystems,
including water supply and sewerage
construction and the design and construction of electrical and telecommunications facilities, as well as theconstruction of gas-related facilities
and solar power / biomass power
generation facilities.

Group collaboration

Group collaboration

Virtual company system

Virtual company system

●

●

●
●

SANWA COMSYS Engineering Group

●

●

●

●

●

●

●

●

●

●

●

●

●

●

TOSYS Group●TSUKEN Group●NDS Group●●

SYSKEN Group●

Hokuriku Denwa Kouji Group●●COMSYS JOHO SYSTEM Group

Corporate History●2010: Consolidation with TSUKEN●2018: NDS
Consolidation

Consolidation SYSKEN
Hokuriku Denwa Kouji●2003: COMSYS Holdings established●2009: COMSYS JOHO SYSTEM established (Information systems business spun oﬀ from Nippon COMSYS)
Share transfer among
three companies

ing, beginning of new entries to the market

001: NTT Docomo, Inc. launches 3G service

2010

2020

●2020: NTT Docomo, Inc.
launches 5G service●2010: NTT Docomo, Inc. launches LTE Xi service ●2015: NTT Docomo, Inc. launches LTE-Advanced
Premium4G service

About the COMSYS Group04

Strengths and Business Model
The COMSYS Group got its start in information and communications construction work, but it is now a general engineering firm that provides comprehensive telecommunications infrastructure and social infrastructure engineering
services. It operates a Telecommunications Carrier Business, an IT Solutions Business, and a Social System-Related
Business. Building a unique business model for each business helps create and enhance enterprise value.
Business Model of Telecommunications Carrier Business
Performs engineering work in both the NTT Engineering Business, the Group’s ancestral business,
and also for the new common carriers (NCC) that entered the market as it was being liberalized in the 1980s.

Prime construction contractor

Partnercompanies(Construction Business Act)

Customers

COMSYS Group

NTT/NCC

Responsible for
onsite work

Project management (creating construction plans, preparing designs and quotes, securing the resources required for work, legal and regulatory compliance, assigning specialized engineers,
supervising construction work and managing progress, ensuringsafety and quality, and creating drawings and other documents)

Contributes to greater efficiency
and added value

Benefits to customers

Benefits to partner companies

Outsourcing project management reduces the amount of administrativeand contract work, and ensures consistent quality and the availability of
manpower when needed

The prime contractor negotiates with the communications carrierthat is placing the order; formulates sales strategy and engages insales activities; secures specialized engineers; provides the construction vehicles, contract systems, and progress management
systems and other elements needed to execute the project; andsecures the cash needed to pay for material costs and labor costs◆ The COMSYS Group’s Strengths and Challenges

05

Strength 1
Positioning

Strength 2Abundant resources

Strength 3
Strong trust relationships

Each time telecommunications technologies evolve, telecommunications
construction companies enjoy thebenefits of advanced telecommunications technologies in the form of
increased demand for the installation
and replacement of communications
devices, and for the installation andexpansion of mobile phone base stations, and for upgrades to these facilities. Additionally, there are significant
barriers to entry in the telecommunications construction industry in termsof legal compliance, resource maintenance, and construction technology,
so the COMSYS Group’s positioning
is a strength in and of itself.

COMSYS Group employees include
technical supervisors in addition to
many employees with advanced
qualifications as professionals in the
IT Solutions Business. The Groupleverages a nationwide network tohandle projects on a national scale,and provides one-stop response toprojects cutting across multiple
engineering fields, from civil engineering to electrical construction,
including the construction of solar
power plants.

The COMSYS Group has built up
strong trust relationships with the
NTT Group and other telecommunications carriers, through continued
transactions lasting for many years.
Its extensive track record of meeting the needs and expectations of
its customers, along with its quality
standards and engineering proficiency in the field of telecommunications infrastructures, has led toeven greater trust from customers.

COMSYS GROUP REPORT 2022

outline

strategy

ESG

data

about us

Business Model of IT Solutions Business
The COMSYS Group has achieved above-average growth thanks to its strong alliances with leading systems integrators andvendors inside and outside of Japan. By taking advantage of the COMSYS Group’s nationwide deployment capabilities andits technological prowess, systems integrators and vendors can quickly expand their operations throughout Japan.

COMSYS Group
Government
agencies/corporations
SIers

Reliable execution & delivery thanks
to nationwide deployment capabilities and technological prowess.
Prime business is also growing

Strong partner alliances

Customers

Rapid growth

NTT Group

NTT Group, leading
systems integrators& vendors

Win projects thanks to their exceptional name recognition and trackrecords, and their growth rates arewell above the industry average

Business Model of Social System-Related Business
Through the Social System-Related Business, COMYSYS Group offers one-stop comprehensive engineering services
in three sub-segments (Electric and Telecommunications Facilities, Renewable Energy, and Infrastructure and Other), mainly to government agencies and local government bodies.

One-Stop Comprehensive Engineering
Business Nationwide

Sanitation
HVAC

Construction

Telecommunications

Customers

Electrical

Diverse needs

Government agencies/ corporations

Civil
engineering

Water supply
pipingRoadpavingInfrastructure
and Other

Renewable Energy

Electric and Telecommunications Facilities

COMSYS GroupGas
pipingStrength 4
Robust corporate culture
One other strength is the determination of COMSYS Group employees to “follow through to completion.” Amid a corporate culture that
could be seen as either “serious”
or “stubborn,” depending on how
you look at it, the stance of commitment to safety, quality, delivery
schedules, and costs forms thefoundations of trust relationships
with customers and business partners that have lasted for many
years. Furthermore, a sound management stance of avoiding excessive risk has contributed to stable afinancial structure.

Challenge 1: A business structure that tends to be influenced by trends
in telecommunications carriers’ capital expenditures
Amid expectations that capex at telecommunications carriers will decreasesteadily in the medium to long term, customers continue to pressure the
COMSYS Group to reduce costs. By increasing the ratio of business targeting customers other than telecommunications carriers, the COMSYS Groupis breaking away from its dependency on these customers, and at the sametime introducing new systems to increase work efficiency.
Challenge 2: A corporate culture that lacks flexibility and speed
A sound management stance of avoiding excessive risk contributes to a stablefinancial structure, but at the same time, it can also result in a slow response
to discontinuous changes in society. Moving forward, through initiatives designed to promote diversity and expand activities targeting new business, wewill gradually bring about a transformation in the Group’s corporate culture.

Strengths and Business Model

06

Progress on the Medium-Term Management Plan
The fiscal year ending March 2024 (FY2023) marks the final
year of the medium-term vision, which is titled “COMSYS VISION NEXT STAGE 2023,” so the company is now past the halfway point on this plan. In FY2022, backed by initiatives aimed
at achieving the full-year targets, we will strive to become thecompany we envision for ourselves in the medium-term vision.

Aim to achieve the initial targets by fu

Steady growth in prev
year despite COV
FY 2021 Results◆ FY2021 Progress Benchmarks+
Operating Proﬁt +Net Sales

Achieved all-time high net sales andoperating profit● Net sales increased significantly both year on year andcompared with the target due to steady completion of contract backlogs.
● Operating profit increased year on year and basically met
the target due to the growth in sales.

Net Sales(Billions of yen)

560.8

IT Solutions Business

98.1

Social System-Related
Business

168.5

Telecommunications Carrier Business
The COMSYS Group worked to increase productivity by optimizing Group resources and ensuring rigorous operational
management in order to respond to nationwide projects amid
the accelerating construction of digital communications infrastructure.

Telecommunications
Carrier Business

294.2

IT Solutions Business and Social System-Related Business
The Group strengthened Group-wide sales collaboration utilizing the virtual company structure to increase orders and expanded business domains through M&A (FUJIKI Corporation
became a consolidated subsidiary in November 2021), andincreased productivity through area optimization.

5

Key initiatives

FY 2019

FY

Operating Proﬁt¥38.9 billion¥41

Operating Margin

6.9%

Fiscal Year

ResultsR

7◆ FY2022 Business Plan
Aim to achieve the full-year plan through business expansion
and higher productivity
Telecommunications Carrier Business
Earnings are expected to decline significantly as high level ofhigh-speed wireless-related projects falls back and as 5G construction work for NTT Docomo decreases. Nevertheless, thecompany aims to meet its targets for this segment by effectively using group resources to boost productivity and by increasing orders in the NCC business.
IT Solutions Business and Social System-Related BusinessIn the IT Solutions Business, the company aims to increase
educational and public sector orders, and in the Social System-Related Business — although there is uncertainty about
the environment for renewable energy business — the company plans to carry out its initiatives in the telecommunications
and infrastructure businesses. Through these efforts the company aims to meet its targets in the plan.
M&A
Fujiki-tekkou Corp. became a subsidiary in November 2021, as
did Sun Group (Nagano Prefecture) in July 2022. The COMSYSGroup aims to achieve further growth by expanding its construction capacity.

07

COMSYS GROUP REPORT 2022

1

2
Net Sales
Targets: ¥290.0 billion
Results: ¥307.4 billion
Operating Proﬁt
Targets: ¥14.0 billion
Results: ¥16.3 billion(Billions of yen)600

Net Sales
Targets: ¥3
Results: ¥3
OperatingTargets: ¥1
Results: ¥1

500

400

300

200

100

0

FY2003

FY2004

1

FY2005First Medium-Term
Management Plan

FY20062

FY2007

Second Medium-Term
Management Plan

FY200

Third MManag

strategy

outlineESG

data

about usProgress of COMSYS VISION NEXT STAGE 2023

urther growing sales and increasing proﬁtability

COMSYS VISION NEXT STAGE 2023

Aim to expand orders despite
a projected decline
in proﬁt this ﬁscal year

vious ﬁscal
VID-19YoY

NEXT STAGE 2023
Net Sales¥600.0 billion or more

FY 2022 Targets

+4.6％
+3.3％

Operating Proﬁt-1.5％
Operating Proﬁt - 11.6％¥50.0 billion or more

Net Sales

589.0

563.2

101.3

105.5

+12.5%

302.9

289.4

Maintain 70% target

580.0

184.7

168.2

Total Return Ratio¥600.0 billion
or more114.0¥120.0 billion
or moreGrowth Businesses

Balance sales and proﬁt growth

+1.2%

50%
¥190.0 billion or more

Expand existing and new domains, promote M&As
Promote virtual company system

187.0

or moreTelecommunications Carrier Business-7.9%

Maintain50%¥290.0 billion or less

Reduce costs and improveproductivity throughstructural reform and IT system integration

279.0

in net sales

Create synergies from consolidation
Ensure capture of business opportunities

Y 2020FY 2021

FY 2022

1.5 billion¥42.9 billion¥38.0 billion

7.4%

7.3%

6.6%

Results

Results

FY 2023

Targets

Targets+¥12.0 billion¥50.0 billion or more
8.0%

Medium-Term Management Plan & Business Performance3320.0 billion
331.9 billion
Proﬁt
17.5 billion
16.2 billion

Smart Infrastructure
for the Future

4
Net Sales
Targets: ¥400.0 billion
Results: ¥481.7 billion
Operating Proﬁt
Targets: ¥30.0 billion
Results: ¥35.2 billion

Net Sales
Targets: ¥365.0 billion
Results: ¥315.4 billion
Operating Proﬁt
Targets: ¥19.5 billion
Results: ¥11.7 billion(Billions of yen)
60

Achieved one year ahead of schedule

50

40

30

20

10

08

3

FY2009Medium-Termgement Plan

FY2010FY2011COMSYSWAY

FY2012FY2013

FY2014COMSYSWAY α

FY2015FY20164FY2017FY2018COMSYSVISION 2020

FY20195

FY2020

FY2021

FY2022

FY2023COMSYS VISIONNEXT STAGE 2023

Progress on the Medium-Term Management Plan

08

Message from Top Management◆ Review of FY2021

Business performance overview
and our understanding of changes inthe business environment

Takashi Kagaya

President and Representative Director
COMSYS Holdings Corporation

Through our ceaseless businessand structural reforms, alongwith contributing to thedevelopment of social andeconomic activities, we aim toenhance our enterprise value
to the benefit of all of our
stakeholders.

09

COMSYS GROUP REPORT 2022

For the fiscal year ended March 31, 2022 (FY2021),
COMSYS Holdings (“COMSYS Group”) posted orders
received of ¥557.0 billion (down ¥29.4 billion year onyear), net sales of ¥589.0 billion (up ¥25.7 billion year
on year), and operating profit of ¥42.9 billion (up ¥1.3
billion year on year). Orders were affected by the lack of
the special demand for advanced wireless environment
and GIGA School projects that was seen in the previous year, and also by a reactionary drop in large solar
power generation projects. Nevertheless, net sales andoperating profit both reached new record highs.
Although more people have become vaccinatedagainst COVID-19, FY2021 was a year in which the effects of the pandemic continued to be felt as variants
emerged. However, because the concept of “livingwith corona” has penetrated all social and economic
activities, the delays on construction work for sometelecommunications carrier projects due to entry restrictions were virtually eliminated, and we were able
to make steady progress on the projects at hand.
On the other hand, the economy was weak and customer investment in IT slumped due to the pandemic;
and, moreover, projects were cut or postponed due
to semiconductor shortages. As a result, although weview the IT Solutions Business as a growth business,orders received and net sales were down from a year
earlier and fell short of our forecast. In the Social System-Related Business, another growth business, gas
equipment sales were affected by product delivery
delays. As we reflect on FY2021, we are taking theseissues seriously as matters to be addressed.
As mentioned at the outset, in the end we were able
to turn in a solid performance for FY2021. Going forward, however, we believe that a temporary decline insales in the NTT Engineering Business is inevitable dueto the end of the special demand for advanced wireless-related work and the changes that NTT Docomo
has made to its 5G rollout plans. Furthermore, theoutlook for the business environment is expected toremain uncertain as materials prices surge due to the
supply chain risk arising from shortages and delivery
delays for items such as semiconductors, and also due
to geopolitical risks such as the situation in Ukraine.
Changes in the business of telecommunications carriers, which are the COMSYS Group’s main customers,
are another external development that warrants close
attention. Now that NTT Docomo has become a wholly
owned subsidiary of the NTT holding company, they are
expected to proceed with integrating their telecommunications networks and systems such as order systems,
so we believe that the COMSYS Group must also build

strategy

outlineESG

data

about us

Business Strategy of The COMSYS GroupNEXT STAGE 2023
Net Sales: At least ¥600 billion
Operating Profit: At least ¥50 billion

Increase
Profitability (P)S: 5G/smart energy-related businesses
P: Promote use of IT, consolidate operations
within Group, shift personnel

Telecommunications
Carrier Business
Maintain¥290 billion

S: M&A
S: Expand business (renewable energy,
data centers, undergrounding of utility
poles, expressways, and flood control)
P: i-Construction

SocialSystem-Related
Business
At least¥190 billion
SocialSystem-Related
Business¥187 billion

S, P:
Decrease from highlevel of high-speed
wireless-related
projects, MTT-MB
investment control

FY2021
Performance
Telecommunications
Carrier Business¥279 billion

FY2022goals(Figures in circles areapproximate)more efficient systems for sales and construction work.
At the end of 2021 the Ministry of Internal Affairs andCommunications announced that it was pushing up its
targets for 5G population coverage and the number of
5G base stations, including the use of 4G frequencies,
and as a result telecommunications carriers moved therollout of 5G base stations into high gear.
In any case, the reality is that the telecommunications carriers are actively stimulating demand by offering a variety of services for corporate customers thattake advantage of 5G. As these corporate services
become more powerful, customer needs are also expected to change significantly. As I said in last year’s
report, in the midst of major changes in our businessenvironment, the COMSYS Group’s survival will be dependent on its ability to take the lead in transforming
itself, meet the needs of customers, and continue tofulfill its role in society as a corporate citizen. There
has been no change in that view.

◆ Toward Achieving Medium-Term Vision

Progress report and plans for futurebusiness development
In this fourth year of our NEXT STAGE 2023 medium-term vision, we expect growth to stall as the NTTEngineering Business reaches a plateau. However, we
are aiming to increase orders significantly so that we
can achieve dramatic growth in the final year of the

S: Expand partnering
S: Expand businesses(cloud computing, local 5G,
servicing and maintenance)
P: Centralize Tokyo metropolitan
area sales

FY2023goals

IT Solutions
Business
At least¥120 billion

IT Solutions
Business¥114 billion

Expand Sales(S)(Figures in circles areapproximate)medium-term vision. Our KPIs remain unchanged, andwe are aiming for net sales of at least ¥600.0 billion,
operating profit of at least ¥50.0 billion, and a total
return ratio of 70%.
As for main future strategies by business and prospects for achieving the above KPIs, which are company-wide goals, 5G rollout is expected to continue
in the telecommunications carrier business, and new
NTT smart energy-related businesses are expected toget off the ground. By leveraging all of the COMSYSGroup’s mobile-related resources in an integrated andnimble way, we aim to address requests from telecommunications carriers to the maximum extent possible while expanding sales in the final year. At thesame time, we will realize further cost reductions andproductivity improvements by building the optimal operational organization for the group through measures
such as reassigning personnel, and also by further promoting the use of integrated IT systems.
In the IT Solutions Business and Social System-Related
Business, we will continue to pursue organic growth,
but by proactively engaging in M&A and partneringwith other companies, we aim to continue our business expansion with an eye to medium to longer termbusiness development beyond the medium-term vision.
In the IT Solutions Business, although the pandemic
and semiconductor shortages continue to have an effect, we aim to increase sales and profits in all sub-segments (software development/solutions/maintenance)by seizing demand for business and government DX.
Specific measures include expanding capital and busi-

Message from Top Management

10Message from Top Management
ness alliances and partnerships with companies thathave advanced solutions, with a focus on increasingorders received in the areas of education, public services, smart cities, and medical care. We would also
like to connect to new business opportunities by tapping local business-related needs in collaboration with
the COMSYS Group’s carrier-related resources, which
are deeply rooted in local communities. We plan tostrengthen the foundation for our growth by developing personnel in high value added fields so that we canoffer a “Full Layer x Full Life Cycle” response to our customers’ needs, from building networks to developing
software, and from proposing solutions to maintaining
and operating facilities. The COMSYS Group establishes
the priority areas for each field and formulates the human resources development plans. In especially highvalue added areas, such as the IT Solutions Business,
we will make full use of recruiting, training, and M&A.
In the Social System-Related Business, we hope toachieve our goals thanks to a full-year contribution
from Fujiki-tekkou Corp., which became part of thegroup last fiscal year through M&A, and also by making steady progress on the abundant projects alreadyin hand in sub-segments such as infrastructure andelectric and telecommunications facilities. In the infrastructure field, we will focus on the areas of utility undergrounding and public water and sewer systems, and work to tap opportunities in PFI and flood
control projects. In the renewable energy field, alongwith focusing on after-FIT solar, we will also work to
win biomass and wind power projects. In the electricand telecommunications facilities field, along with expanding in our areas of expertise such as highways
and defense, we also aim to acquire new data center customers. I would like to add that in the Social
System-Related Business, in parallel with these topline expansion measures, we are also making steadyprogress toward improving profit margins. Measures
to improve profit margins, such as consolidating thegroup’s cost estimation and management know-how,
is improving our bidding accuracy, and also helping us
distinguish among projects based on common profit
management metrics, and these efforts are strengthening our ability to win orders.
Our digital transformation is bringing the results ofthese efforts to an even higher level. The COMSYS Groupis pursuing DX from three points: group optimization, diverse workstyle accommodation, and data utilization.
With regard to group optimization, we have largely
completed the development of a common IT platform
for the entire COMSYS Group, and we are now entering a stage in which we are accelerating the consolidation of operations and further improving productivity.
With respect to diverse workstyle accommodation,
remote work, which began as a pandemic response
measure, is becoming firmly established. By even further accommodating diverse work styles, we aim to

11

COMSYS GROUP REPORT 2022

boost employee motivation and take advantage of adiverse pool of human resources. In data utilization,
we are making steady progress on benchmarking thatuses various forms data visualization obtained thanks
to DX. We believe that we will be able to use this tobring specific issues to light, driving yet further operational improvements.
Through these efforts, the aim is not only to achieve
the goals of our medium-term vision, which has only
one and a half years remaining, but also to broaden
our outlook so as not to miss new business opportunities arising from social change, and as a result lift
enterprise value over the longer term.

◆ Sustainability

ESG initiatives, support for TCFD,
and the carbon neutral challenge
The COMSYS Group’s business is essential to society.
We understand that in this new normal, which is characterized by the shift to online and digital, there area growing number of areas in which we can contribute to creating a sustainable society. Our ability tomake this contribution is basically premised on oursustainability initiatives, which could also be called abusiness continuity plan (BCP) to maintain our business environment and continue our operations in perpetuity.
COMSYS Holdings moved to the Prime Market in
conjunction with the realignment of the Tokyo Stock
Exchange in April 2022. The highest tier Prime Market
requires that companies adhere to higher standardsof governance. More than ever before, the COMSYSGroup will redouble our sustainability efforts so that
we can contribute to society by building telecommu-

Medium- and Long-term Opportunities

Mobile Telecommunications system Developments

Long term:“Beyond 5G” next-generation mobile telecommunications system is expected to
be introduced around 2030
Medium term:
Carriers are accelerating full-scale rolloutof 5G

Realization of a Smart
Energy SocietyWith the use of ICT, the smart energy concept advances further efficiencies in energy
usage

Strengthening theInfrastructure Base

In keeping with the plan to develop national resilience, strengthening the infrastructure base to prepare for increasingly
severe disasters has become urgent

Cloud Services

Under Japan’s Digital Garden City Nation vision, the cloud will be available to not only
major companies in urban areas, but all sortsof companies and educational institutions

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strategy

nications and social infrastructure; and by adhering tohigher governance standards, we will strive to achievesustainable growth and enhance enterprise value. In
the environmental arena, we will strive to reduce theenvironmental impact of our business operations while
growing our renewable energy business. And when it
comes to society, based on the belief that the active
participation by diverse people is necessary for sustainable growth, we are working to promote diversity. For
example, we are working to increase the share of women hired, to consider the appointment of female directors, and to promote the employment of people withdisabilities. In the area of governance, we are working
to strengthen corporate governance, improving compliance systems and enhancing training, and working tochange the mindset of all of our employees.
In November 2021, the COMSYS Group announced
its support for the Task Force on Climate-related Financial Disclosures (TCFD). In May 2022, based on theconcept of Science-based Targets (SBT), we set Scope
1 (greenhouse gas emissions (GHG) made directly by
the business itself), Scope 2 (indirect emissions fromthe use of electricity, heat, and steam supplied by other companies), and Scope 3 (indirect emissions fromthe supply chain) GHG reduction targets for FY2030
and FY2050.
The COMSYS Group believes that in an environment
in which society is facing a crisis caused by rapid climate change, it is essential to reduce environmental impact and achieve carbon neutrality so that we can continue to carry out our business activities in the future.
Going forward, while taking further advantage of thetechnology and know-how that we have accumulated in building social infrastructure such as telecommunications facilities, electric power facilities, andcivil engineering projects, we are pursuing initiatives
to cut GHG under Scope 1 (88,178 tons CO2 emitCOMSYS Group Opportunities and Responses
COMSYS Group Responses

Contribute to the building of new telecommunications infrastructure
by further promoting multi-skilling and utilizing engineers across theentire group

Utilize the skill sets accumulated through building and maintaining
telecommunications facilities and in the renewable energy businessacross the entire groupContinue to propel projects on addressing aging infrastructure, enhancing flood control measures, and undergrounding utilities

Utilize the Group’s nationwide pool of human resources—a COMSYS strength—in broadening the deployment of on-premises/cloud
hybrid environments

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data

about usted in FY2020) and Scope 2 (15,626 tons) by 42% by
FY2030 (from the FY2020 baseline), and to becomecarbon neutral by FY2050. Under Scope 3 (1.86m
tons in FY2020) we are pursuing efforts to cut GHG by
25% by FY2030 (from the FY2020 baseline).
We are pleased to inform our stakeholders that in
July 2022 we established a Sustainability Committee,
chaired by the president of COMSYS Holdings, as the
body responsible for formulating strategies and resolving issues related to sustainability, including climatechange. Following the TCFD recommendations, the
COMSYS Group will disclose appropriate informationon the risks and opportunities that climate change
poses to the Group’s business, and along with helping
to realize the kind of society envisioned under SDGs,
we will strive to achieve sustainable growth.

◆ Realizing the Management Philosophy

Enhancing enterprise value throughceaseless reforms, building theunderpinnings of social and economic
activities
Up to the present, the COMSYS Group has been involvedin the construction of various types of infrastructure thatserve as the underpinnings of social and economic activities and lay the groundwork for the next generation. This
fundamental direction will remain unchanged.
Since the pandemic, people have come to question
how companies can continue to demonstrate their inherent characteristics and strengths under any circumstances, providing value without change. The COMSYSGroup has made a commitment to our stakeholders to
help solve an array of society’s issues by continuing tobuild the infrastructure that will support future prosperity. Through ceaseless business and structural reforms, we aim to enhance our enterprise value. Moreover, we will strive to achieve the goals spelled out
in our medium-term vision, “COMSYS VISIOIN NEXT
STAGE 2023.”
Looking to the future, with no end in sight to the pandemic and an uncertain world situation, especially inEurope, it is hard to be optimistic about the businessenvironment. But even in such an environment, the
COMSYS Group will keep forging ahead to carry out
these initiatives. In pursuit of an even higher level of results from these initiatives, to realize our medium-term
vision we are working to strengthen the foundationof our business by building the optimal operationalorganization for the group, making structural reforms
pivoting around DX, and expanding our sphere of operations through M&A activity. We look forward to
the valued support and encouragement of shareholders and investors in the years to come. The COMSYSGroup will endeavor to meet your expectations.

Message from Top Management

12Financial Strategy
While maintaining a solid financial position, the COMSYS Group
continues to return profits to shareholders, with a target total
return of 70%.
Hidehiko Ozaki

Director, General Manager of Finance & Accounting Department
COMSYS Holdings Corporation◆ Financial Position
As a company that supports Japan’s telecommunications
infrastructure and social infrastructure, maintaining a solid
financial position is important. Furthermore, to enhance enterprise value through sustainable growth, and to serve theinterests of all stakeholders, the COMSYS Group consistently
manages its funds in an appropriate manner.
The Telecommunications Carrier Business accounts forabout half of the COMSYS Group’s revenue. This is a domestic
industry with projects that are small in scale, that are short induration, and that carry little credit risk. Compared to largescale projects undertaken by major general contractors, thepayment cycle is also consistent. Borrowing has grown in recent years due to an increase in large projects such as solar
power plant construction, but borrowing is within the scopeof what is needed for working capital, and the company policy is use short-term borrowing to secure only the amountneeded when it is needed. As a result, in the fiscal year ended
March 2022, the equity ratio was 64.5%.
COMSYS has an obligation to society to protect Japan’s
telecommunications infrastructure and social infrastructureeven in the face of unpredictable events such as natural disasters (e.g., earthquakes and tsunamis) and pandemics. In
order to strike a balance between the need to maintain asolid financial position so that it can fulfill this obligation andcapital efficiency, the COMSYS Group intends to keep its equity ratio at 60% or higher.

◆ Future Growth Investments
In terms of growth businesses, we undertake business with fullconsideration not only to growth potential, but also to profitability and safety. In the Social System-Related Business, there
are also many large-scale projects with long construction periods, as in the case of mega solar power plant construction,
so there is a tendency for cash expenditures to come first. In
addition, in growth segments with customers other than telecommunications carriers, such as private companies and government agencies, the need to procure equipment such asservers and routers, as well as materials, means that surging
component prices represent a risk. We will mitigate this risk
to the extent possible by entering into appropriate contracts
with vendors and customers. In addition, we are considering participating in business through investments in SPCs as aform of growth investment, as well as M&A or capital tieups
through investments in other companies. Whenever we makeinvestments or receive orders for these large-scale projects,
we are conducting extensive and careful studies to prevent
damage to corporate value, for example by comparing capitalcosts with expected returns.
Companies targeted for M&A are those that demonstrate a stable management base with net sales on ascale of several billion to several tens of billions of yen
in the IT Solutions Business and the Social System-Relat-

13

COMSYS GROUP REPORT 2022

ed Business, which are considered growth businesses,
and which can expect to see growth as a result of synergy with the COMSYS Group. We do not expect to makeany risky acquisitions of foreign companies, or to undertake high valuation projects with little likelihood of returns. In addition, to the extent possible, M&A deals will
be executed with stock swaps that use treasury stock.
Even if cash is required, we will rely first on borrowing,
and refrain from issuing new stock or convertible bonds,
which would dilute the value of our stock.
In the Telecommunications Carrier Business, we are planning to invest in building integrated IT platforms and the liquidation and integration of business bases in order to build
an optimum business operation structure for the COMSYSGroup. Although we anticipate land and building acquisition
costs and system construction costs, capital investment was¥11.1 billion in the fiscal year ended March 2022 (87.2% yearon-year), and we expect to keep it at roughly the same levelgoing forward. Of course, capital investments are being undertaken based on the judgment that cost reductions or the
impact of increased productivity will exceed expenditures.
From the perspective of strengthening governance, at the
COMSYS Group we regularly review the significance of positions held in individual companies and the effectiveness ofcross-shareholdings, in light of capital costs. We seek to reduce our holdings of stocks that are deemed to be no longer meaningful or appropriate. As a rule, the COMSYS Groupmakes investments to expand business, and does not makeinvestments for the purpose of financial returns alone.

◆ Policies for Returns and Message
to Investors
Regarding our Medium-Term Vision, which has only
one and a half years remaining, we have promised
shareholders that we will aim for a total return of 70%
during the period that it covers. Profits are returned
to shareholders in the form of dividends and stockbuybacks. The COMSYS Group has increased our dividend every year for the past nine years. The timing
and monetary value of stock buybacks are determined in an appropriate manner, taking into accountour performance and the business environment. We
are also examining the possibility of using treasury
shares as consideration for M&A deals. We aim tohold about 10% of our stock as treasury shares, anddepending on the circumstances, we cancel shares.
Through conversations with our investors, we havereceived a great deal of useful advice on how to improve the long-term enterprise value of the COMSYSGroup. Going forward, we will continue to engage indiscussions with stakeholders. We will build relationships of trust by ensuring that what we learn throughthese discussions is reflected in the management of
the company.

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about usDX Strategy
The COMSYS Group will further refine our project execution
capabilities by taking advantage of DX to enhance productivity
and by normalizing diverse work styles, and in doing so we aim
to contribute to a sustainable society.
Takaya Kitaguchi

Director, General Manager of DX Promotion Department
COMSYS Holdings Corporation◆ COMSYS Group’s DX Objectives
Through our many years of experience in building telecommunications infrastructure, the COMSYS Grouphas developed the capabilities needed to executehigh-quality projects in a safe and secure way on anational scale. We see it as our mission to continue
contributing to the entire nation as well as local communities by taking full advantage of these capabilities
to build the infrastructure for society, such as telecommunications infrastructure and social infrastructure. We will continue to refine these capabilities byworking to enhance productivity through our digitaltransformation. By normalizing diverse work styles,
such as remote work, to address labor shortages in
the construction industry while also improving job satisfaction, we would like to play a role in efficiently andsustainably maintaining and upgrading communication
infrastructure and social infrastructure for the future.

◆ Enhancing Productivity
Structural reform that optimizes the operational structure of the entire group is a necessary measure to lift
the productivity of the Telecommunications Carrier
Business. Specifically, in furtherance of the more efficient deployment of our human resources, we are
eliminating overlap among companies by consolidating the construction work performed by area, and weare also consolidating work that is not tied to a specific area at the national level. This type of consolidation is made possible by standardizing work acrosscompany boundaries and by introducing a common IT
platform that unifies company-wide systems.
With respect to our backbone systems, the migration to a common IT platform for the entire group islargely complete, and the operations-related systems
used in executing projects should be complete within
the fiscal year. Going forward, we will realize productivity improvements ahead of schedule by accelerating
the consolidation of operations. We will also pursue
operational improvements by visualizing and benchmarking the nationwide data accumulated on thecommon IT platform.

◆ Normalizing Diverse Work Styles
Remote work, which was introduced as part of work
style reform, is becoming firmly established in response to the COVID-19 pandemic. Many employees
perform their tasks by choosing the most comfortableand productive place for that day’s work. In fact, theremote work rate has remained high, and holding web
meetings instead of traditional meetings in the officehas become routine. Furthermore, online chat tools
are increasingly being used as a means of casual com-munication in place of in-person conversations andtelephone calls.
To minimize the need to go into the office to review
documents, circulate written proposals, or perform administrative work, we will keep working to shift internal
documents to paperless formats, digitize workflows,
and digitize the back-and-forth with our customers. By
reconsidering workflows that were based on the premise that people go to the workplace and reimagining
these workflows based on the assumption that work
can be performed remotely, we aim to make new way
of working the norm, rather than something that is only
temporary. This will not only boost employee productivity and motivation, but it will also allow us to takebroad advantage of a diverse pool of human resources,
including those who would have found it difficult to perform work by coming into a workplace.

◆ Supporting Customer DX
We are helping our customers make the digital transformation by taking full advantage of the experience that
we have gained through our own digital transformationand our project execution capabilities. With skills andexpertise in every element necessary for DX (networking, terminals, servers, applications, and security), weare helping businesses, government bodies, and educational institutions throughout Japan shift to digital.
Additionally, we are developing skills in local 5G by involving in a pilot program and in equipment installation
at universities and other locations for local 5G service.
Furthermore, to address the growing need for cloud/on-premises hybrid environments for our customers’internal systems, we are offering managed services forconstruction, maintenance, and operation, ranging fromthe cloud to onsite, in cooperation with JIG-SAW Inc.
Going forward we will continue to expand into new
business areas in order to address our customers’
emerging needs.

◆ Further Advances in DX
In June 2022 we were selected as a DX-Certified Operator by the Minister of Economy, Trade and Industry.
The evaluation for the certification found that our DX
efforts satisfies METI’s “Digital Governance Code,” andthat we properly disclose information to stakeholders.
As shown here, the COMSYS Group is moving steadily
ahead on our DX-driven business reforms. Nevertheless, there are still many issues that we will continue
to tackle, such as data visualization, benchmarking,and reconsidering workflows that were based on thepremise of in-person work. By tackling these issues, wewill further enhance productivity and normalize diverse
work styles, and also fulfill our mission of contributing
to the entire nation as well as local communities bybuilding infrastructure for society going into the future.

Financial Strategy / DX Strategy

14

Segment Business Strategy: Telecommunications Carrier Business(NTT Engineering Business / NCC Engineering Business)

SWOT Analysis
NTT Engineering Business

NCC Engineering Business●One of 3 telecommunications construction companies●With offices over a wide area, from
Hokkaido to Okinawa, can addressneeds throughout the country●High-quality construction without accident or disaster, and rapid disaster
response

S

Strength

NCC Engineering Business
Potential to expand market share against
numerous competitors, including NCC affiliOpportunity
ates, power company-affiliated construction
companies, and manufacturer-affiliated construction companies, by collaborating withGroup companies to complete construction
work within the construction period without accidents andat low cost, while maintaining a high level of quality

O

W

WeaknessT

ThreatSANWA COMSYS accounts for approximately 80% share of NCC work (orders& sales) for the entire COMSYS Group.
The challenge is for the entire Group tocontribute to the expansion of the NCC
business

NTT Engineering BusinessIn addition to the fixed-line businessfor access and networks, capital investment continues to gradually decline in
the mobile business, and raising productivity is a challenge.

◆ Business Outline
The NTT Engineering Business, which comprises theAccess business, the Network business, and the Mobile business, is the most important business in termsof revenues, and handles the construction work for
NTT facilities nationwide. The main customers for theAccess and Network businesses are the NTT East and
NTT West Groups, and the NTT Docomo Group (including the former NTT Communications Group), andthe work mainly comprises construction and maintenance related to those customers’ fixed-line communication networks. In the Access business, we install,
replace, and remove communications cables (bothmetal and optic fiber) installed on utility poles and inunderground pipes, handle the new installation andreplacement of utility poles for communications, andrespond to breakdowns. In the Network business, ourwork mainly involves the installation, relocation, andremoval of communication and information processing equipment in communication stations and data
centers, as well as wiring installations and the construction of electric power facilities. We also handle
configuration settings and troubleshooting for com-munications equipment. Work in the Mobile businessmainly comprises the installation of mobile phonebase stations for the NTT DoCoMo Group, our biggest customer in this field, as well as negotiations andconsultations leading up to those projects (including
negotiations with landowners), design work, and network construction related to mobile communications
facilities. Following the deregulation of communications in the 1980s, new telecommunication vendors
entering the field came to be known as “new common
carriers” (NCCs), and SANWA COMSYS Engineering
has played a central role in the construction of facilities for these NCC companies. Work in the NCC Engineering Business is almost the same as in the NTTEngineering Business; we handle the construction ofAccess, Network, and Mobile facilities for telecommunications carriers such as KDDI, SoftBank, Rakuten Mobile, and other customers such as CATV companies,
and electric power companies. Compared to the NTT
equipment business, the NCC equipment business ischaracterized by a large share of mobile-related work.

◆ Medium- to Long-term Market Trends
There are numerous new business opportunities, suchas work related to data centers to accommodate increases in communication traffic, electric power business related to the “smart energy business” announced
by NTT, and business involving the installation andmaintenance of optic fiber networks in keeping withongoing initiatives at the Ministry of Internal Affairs
and Communications supporting the implementationof high-speed wireless environments. Nevertheless,
we predict that the NTT East and NTT West Groups’
capital investments in fixed-line communication networks will continue to taper off, and we expect to see
a similar decline in the COMSYS Group’s revenue in

15

COMSYS GROUP REPORT 2022

NTT’s fixed-line business. On the other hand, the Mobile business and the NCC Engineering business are
expected to perform to a certain degree as telecommunication carriers roll out 5G. There are concernsthat the number of new base station construction
projects will decline as the carriers continue to utilize
4G frequencies, and that smaller construction projects
will be made possible by the miniaturization and simplification of telecommunications facilities. However,there are tailwinds such as the government’s request
to accelerate 5G base station development plans inline with the Digital Garden City Nation vision and theinstitutionalization of local 5G.

strategy

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data

about us◆ Topics for This Fiscal Year
KDDI is preparing for the termination of its 3G service(CDMA 1X WIN) at the end of March 2022. This fiscal
year, it is accelerating the work of dismantling the oldequipment for the service to be discontinued (which
consumes large amounts of electricity) as part of its efforts to decarbonize and reduce energy consumption.
Similarly, SoftBank will end its PHS service at the end of

March 2023, and its 3G service in late January 2024. It
also plans to remove old equipment as part of decarbonization, and by taking advantage of the expertise
we have accumulated through our construction andmaintenance work, the COMSYS Group aims to be actively engaged in this removal work in parallel with theconstruction of 5G base stations.

◆ Strategies and Initiatives
Based on an awareness of the market environment
outlined above, the forecast for the period of the medium-term vision (up to March 2024) is that net sales
in the Telecommunications Carrier Business will remain unchanged, at around ¥290 billion. We plan tocompensate for the decrease in earnings arising fromvarious factors by expanding our share in the NCC
business and shifting resources to growth areas within
the Group, promoting digital transformation (consolidating design work and developing next-generation
systems), and improving productivity through centralized progress management. We are also seeing slow
but trending growth in the Maintenance business formobile base stations and network facilities from thevarious telecommunications carriers. The biggest issue
in the telecommunications carrier business is maintaining sales while at the same time increasing productivity and improving profit ratios by streamlining
business operations. To increase profits, we will needto demonstrate synergies from the consolidation and

Net Sales (Consolidated) in the Telecommunications Carrier Business*build optimum business operation structures throughout the Group as a whole, so in the NTT Engineering
Business, we are integrating construction systems andreorganizing business structures in each region.
Amid the ongoing integration of IT systems basedon DX strategies, we are at the same time promoting
structural reforms. Up to now, each Group company
maintained its own full set of functions and bases, andpromoted individual company optimization, but thisindividual optimization will be transformed into overall optimization for the COMSYS Group to respond tothese changes in the market. To switch to optimum
business structures and approaches from a groupwide
perspective, COMSYS has eliminated overlap in areasof operation and consolidated its subsidiaries, butmoving forward, it will also centralize sales functions
and other shared functions. The various business companies will leverage regional brands and further refine
construction capabilities to specialize in construction
suited to each region.
〈Value Co-Creation Topic〉
Collaboration with the Project on Promoting
Advanced Radio Environment Improvements(Billions of yen)

294.2

289.4

302.9

Approx.

279.0

290.0

NTT
Fixed-Line

In response to the COVID-19 pandemic,
developing the telecommunications infrastructure needed to realize educational
ICT environments has become an urgent
task. The Ministry of Internal Affairs andCommunications is moving ahead on its Project on Promoting Advanced Radio Environment Improvements in underserved areas bysubsidizing some of the project costs for installing optic fiber, which
is a prerequisite for high-speed, large-capacity wireless communication such as 5G, by entities including local governments and telecommunications carriers. As a partner company of the NTT Group,
which has received orders for such projects, the COMSYS Group islaying optic fiber cable.

NTT
MobileNCC
FY2019FY2020

FY2021

FY2022(forecast)

FY2023(target)*The breakdown of the graph shows the ratio of the simple sum of
non-consolidated figures of supervisory business companies.

Laying optic fiber cable

Segment Business Strategy: Telecommunications Carrier Business (NTT Engineering Business / NCC Engineering Business)

16Segment Business Strategy: IT Solutions Business

SWOT Analysis◆ Business Outline
The IT Solutions Business comprises three sub-segments: Solutions, Software Development, andMaintenance. Two notable drivers for growth in
the Solutions segment have been the “AllianceBusiness” and corporate projects undertaken as apartner of the NTT Group. “Software Development”
is mainly undertaken under contract, with most of
the company’s efforts focused on seeking out newcustomers and developing solutions. Maintenance
operations include server and network, cloud monitoring, customer reception, on-site response, andoperational support.

●Extensive track record in nationwide multi-site deployment work
●Relationships of trust with a wide range of alliance partners●Offers “Full Layer x Full Life Cycle” from application
development and IT infrastructure construction tomaintenance and operation●Provides operation and maintenance services for on-premises and cloud environments 24 hours a day, 365 days a year
●Multi-vendor support●Diverse engineer baseS

●To expand in business areas focused on IT
infrastructure construction and software development, the lack of resources such as engineers and sales force is a challenge.
・Response:Strengthen new graduate/mid-career recruitment, collaborate withGroup companies to establish
programs, consider M&A deals
・Response:
Create service-oriented businesses

W

Strength Weakness

0●Creation of new business areas thattake advantage of AI, IoT, and local 5G●Public institutions, local governments, andprivate companies are accelerating DX●Increase in clean energy construction-related business due to SDGs
●Participation in business related to the Osaka/
Kansai Expo
●Increase in business related with urban redevelopment projects

Opportunity

T

Threat●Urgent need to train engineers
to handle the rapid shift fromon-premises to cloud systems●Delivery delays due to global
semiconductor shortage, decline
in profits due to rapid appreciation of the yen◆ Strategies and Initiatives
As part of efforts to achieve the goals of the COMSYS
Vision, Next Stage 2023, we will undertake the following three activities in the IT Solutions business. (1)Expanding high added value business: We will expand
managed services and other stock businesses in thecloud market, where robust growth continues, andin the AI/IoT and local 5G markets, where growth isexpected in the future. We will also provide high added value solutions that leverage AI/IoT and local 5G,
and work toward achieving DX for customer companies and society. (2) Securing manpower capable ofhandling cutting-edge technologies: In order to secure
outstanding manpower, in addition to strengthening
new graduate and midcareer hiring, we will strengthen

Net Sales (Consolidated) in the IT Solutions Business(Billions of yen)

120.0

98.1
27.1
SoftwareDevelopment

27.7

101.3
30.7

〈Value Co-Creation Topic〉
Contributing to Government Network
Infrastructure Development
By building networks forthe unified managementof administrative data thathas traditionally been separately managed by various ministries and local governments,
we are helping to make administrative
services more user-friendly.

114.0
105.5

the training of engineers in the key engineering fields
that will be required to expand business in the future(skills shifting and multi-skilling). (3) Strengthening unified operations throughout the COMSYS Group as awhole: While clearly identifying “Business fields to be
optimized and maximized in individual areas leveraging the strength of supervisory business companies,”and “Business fields to be targeted for overall optimization throughout the COMSYS Group as a whole,” wewill strive to expand business and increase productivity, for example through the unification of sales andconstruction structures based on the “one management” approach and overall optimization leveraging
maintenance and operation platforms.

32.4〈Value Co-Creation Topic〉
Participating in Urban Redevelopment Smart City Projects
Solutions

65.9

71.1

63.8

For smart city projects in urban redevelopment zones, inaddition to conventional technologies such as LAN/WAN/
voice, we will also participate in building state-of-the-art
systems, such as data-linked robots and elevator controls.

74.5〈Value Co-Creation Topic〉
Installing EV/PHEV Charging Stations
Maintenance

17

5.1

6.6

6.7

7.0

FY2019FY2020

FY2021

FY2022(forecast)

COMSYS GROUP REPORT 2022

FY2023(target)In addition to installing charging stations, we offer total support, ranging from the high voltage substation
improvements needed for installation to assistance insecuring subsidies.

strategy

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about us

Segment Business Strategy: Social System-Related Business◆ Business Outline
The Social System-Related Business comprises threesub-segments: “Electric and Telecommunications
Facilities,” “Renewable Energy,” and “Infrastructure
and Other.” In “Electric and Telecommunications
Facilities,” we undertake electrical construction andtelecommunications construction for expressways
and for Ministry of Defense projects. The Renewable Energy sub-segment revolves mainly aroundthe construction of solar power plants, and in recent
years we have expanded into the biomass power
generation and wind power generation businesses.
In “Infrastructure and Other,” our main business includes undergrounding of utility poles and civil engineering construction related to water supply andsewerage based on orders placed by regional municipalities and the national government.

SWOT Analysis●Nationwide construction and maintenancecapabilities●Outstanding estimate and supervision
capabilities●Extensive track record andcertified engineers●An unparalleled construction
lineup●The government has declared a policyof achieving “net zero greenhouse gas
emissions by 2050,” further accelerating
the deployment of renewable energy●Weak sales capabilities in the private sector●Shallow base of technicians in such areas
as electric power and air-conditioning

S W
Strength Weakness
0

Opportunity●Government ministries and agencies
are developing various infrastructure
projects to address aging social infrastructure andincreasingly severe natural disasters

T

ThreatAim is to shore up these areas,
including possibility of M&A
deals⃝End of the feed-in tariff (FIT)
system for solar power. Solar
power business will continue
thanks to growing demand
for solar self-consumption
installations●There are several large-scale private sector
redevelopment projects in the works◆ Strategies and Initiatives
Amid increasing activities among various ministries
aimed at putting in place and maintaining social infrastructures, we expect that the Social System-Related business will be the segment demonstrating
the highest level of growth during the period of theMedium-Term Vision. While we will engage in M&A
activity, internal growth will be the pillar of our business growth. In the field of renewable energy, solar
self-consumption installations using storage batteries will be promoted as a pathway to a carbon-freesociety, and we will take advantage of our wealth ofexperience and expertise to tackle this opportunity.
We are also focusing our efforts on seizing demand for
updates to solar and wind power generation facilities,

Net Sales (Consolidated) in the Social System-Related Business(Billions of yen)
At least

168.5

168.2

90.9

86.7

184.7

187.0

102.9

118.7

190.0

〈Value Co-Creation Topic〉
Renewable Energy Initiatives
A wholly owned power generation subsidiary (COMSYS Create)
is building a solar power business.
With 19 sites across the country, it generates 85,624,542KWhof electricity to serve 23,785 households (as of
FY2020). In addition to solar power, we are also
developing biomass and wind power projects.
Floating mega-solar power plant (Hyogo Prefecture)

Infrastructure
and Other

Renewable
Energyand on winning orders for biomass generation projects. In the field of electric and telecommunications
facilities, we will use our comprehensive capabilities
to grow the data center business. In the Infrastructure
field, we are working to acquire utility undergrounding
projects and to participate in river basin flood control
projects.
The biggest issue in the expansion of business is thelack of construction resources. We are strengthening
both new graduate and midcareer recruiting to secureengineers, and we are also utilizing flexible resources within the Group that leverage “virtual company”
frameworks.

〈Value Co-Creation Topic〉
Disaster Recovery Work

29.3

38.3

46.9

48.3
Electric andTelecommunications
Facilities

43.2

34.8

FY2019FY2020

FY2021

As part of our contributions to social infrastructure, we
are working with others on reconstruction projects inareas affected by the Great East Japan Earthquake.

26.9

41.2
FY2022(forecast)

FY2023(target)“Reconstruction Town Development” project in Rikuzentakata City, Iwate Prefecture(multipurpose underground utility conduit, lighting, sidewalks, roadways)

Segment Business Strategy: IT Solutions Business / Social System-Related Business18

Sustainability and Materiality◆ Sustainability at the COMSYS GroupThe COMSYS Group will help build a sustainable society byfocusing on its core businesses such as telecommunications
infrastructure and social infrastructure that come with high level of social responsibility.
Our efforts to constantly enhance enterprise value are indispensable for this, and we are further strengthening our sustainability initiatives and working even harder to advance them,
led mainly by the Sustainability Committee, which was formedin July 2022.

Board of Directors
ReportingApproval,
supervision

Sustainability Committee
Chairperson: President of COMSYS Holdings
Sustainability Promotion Oﬃce
Sustainability promotion division at each Group company◆ The COMSYS Group’s Four Material Issues and its Initiatives
Material
issuesMajor initiatives for FY2021*

Issues for FY2022 and points for improvement

Pursuing more efficientand sincere corporate
activities● Integrated group management through virtual companies● Standardized workflows through IT platform integration● Optimized overall resource allocation and increased
business consolidation● Improved productivity through the use of ICT● Strengthened foundation for growth through M&A(Fujiki-tekkou Corp.)● Maximize sales and construction capabilities by further
advancing the Business Company system● Run the IT platform at all Group companies● Optimize business formation according to the businessenvironment● Advance DX● Further pursue M&A● Take advantage of regional bases to tackle new
business areas

Cultivating human resources
for success and growth● Moved ahead on training highly skilled engineers sothey can acquire new technologies● Introduced group HR management system and training
management system● Realized diverse work styles (introduction of satellite offices,
promotion of teleworking)● Improved productivity through the use of ICT● Promoted diversity
・Increased the share of women among new graduates hired(19.6% (18 persons, +0.8pt))
・Increased the share of women in managerial positions(3.1% (24 persons, +1.0pt))
・Increased the share of employees with disabilities(2.7% (49 persons, +0.6pt))● Have engineers become multi-skilled● Share training curriculum within the Group andexchange personnel● Continue to promote remote work and remote meetings● Raise share of female employees and cultivate
managerial candidates(By FY2024, aim to increase (1) the share of womenamong new graduates hired to more than 30% and(2) the number of female managers by more than 30%
from April 2021 (an increase of at least 15 persons)● Promote hiring of people with disabilities● Consider appointing female executives

Pursuing safety and security● Prevented personal injuries, equipment accidents,
traffic accidents, and information-related incidents
・Number of personal injury accidents: 17 (4 in FY2020)
・Number of equipment accidents/human-caused failures:
13 (13 in FY2020)
・Number of serious information-related incidents:
0 (1 in FY2020)● Rolled out safety measures
・Eliminated unsafe elements by installing remote cameras
at work sites
・Conducted hazard simulation training using VR technology
・Added vehicle safety equipment
・Provided safe driving advice based on information
recorded by company cameras● Strengthen safety management through Group
collaboration (disaster preparedness, etc.)● Strengthen use of video (AI detection of unsafe
elements, etc.)● Review safety management systems in conjunction withthe transformation of our operational structure

Helping to build
a sustainable society● Endorsed TCFD and set greenhouse gas reduction targets
・FY2030 target: 42% reduction (Scope 1, 2) and
25% reduction (Scope 3) compared to FY2020
・Goal: become carbon-free by FY2050● Advanced renewable energy and social infrastructure projects
・Operated solar power plants(19 sites nationwide
generated 85,624MWh of electricity to serve
23,785 households)
・Developed EPC business for solar, biomass, and wind
power projects
・Installed optic fiber in underserved areas under the
Ministry of Internal Affairs and Communications’Project on Promoting Advanced Radio Environment
Improvements
・Installed charging stations, helping the transition to
an EV-based society● Study and implement greenhouse gas reduction
measures targeting FY2030 and FY2050● Further advance renewable energy and social
infrastructure projects*Including non-consolidated figures of Nippon COMSYS19

COMSYS GROUP REPORT 2022

outline

strategy

ESG

data

about usDisclosure Based on TCFD Recommendations◆ Endorsement of TCFD Recommendations◆ Strategies

The COMSYS Group announced its support for the
TCFD recommendations in November 2021. Basedon the TCFD recommendations, the Group will proactively disclose information about the risks and opportunities that climate change presents to the Group’sbusiness.

The Group analyzed potential risks and opportunities
related to climate change, using the below 2°
C (1.5°C)
and 4°
C scenarios as references.
As a result, we determined that the impacts of theconceivable future events associated with the transition to a carbon-free society (policy and legal, markets,and reputation) and the physical impacts of climatechange (acute and chronic) will become apparent in
the future. In relation to our business, the Group has
identified possible opportunities in the growing demand for renewable energy projects and also in theneed for utility undergrounding and the renovationand seismic retrofitting of social infrastructure.
We will examine how to address these risks andopportunities in the future and look at how to incorporate these responses into our business strategy.

◆ Governance
The Group has identified four material issues based on
its management philosophy, and among these, we regard climate change as a critical issue that the Group
must tackle.
In addition, in order to help achieve the SDGs andsustainably increase enterprise value, the Group isbuilding management systems to promote sustainability. The Group established the Sustainability Committee, chaired by the president of COMSYS Holdings, as
the body within the Group that is responsible for formulating strategy and resolving issues related to sustainability, including climate change.
The committee meets as needed to review issues
and set the direction of our initiatives. Among these,
critical themes concerning management are decided
based on discussions carried out within the Management Committee and the Board of Directors. In
FY2021, in furtherance of the objective of realizing acarbon-free society, the committee established greenhouse gas emission reduction goals for FY2030, andthese were announced in May 2022. Going forward,
we will further promote efforts to address climatechange issues by examining and formulating specificreduction measures and KPIs, and strengthening thesystems needed to monitor progress.

◆ Risk Management
The Risk Management Committee, chaired by thepresident and with the directors and the presidents
of supervisory business companies as its members,
meets as needed to identify business risks throughout
the Group and address them according to the level of
their impact. Each COMSYS Group company similarly
addresses risks through its appropriate body.
The Sustainability Committee oversees climate-relatedrisks and opportunities. It monitors changes in external
and internal environments arising from climate change,
and it identifies climate-related risks and opportunities
that may affect our business. The identified risks andopportunities are evaluated and analyzed based on
the level of impact on our company and other factors
in order to determine which presents the highest levelof risk or opportunity. Going forward, critical matterswill be reported to the Board of Directors.

【Scenarios】
The following scenarios were set in order to identify
and evaluate climate-related risks and opportunities.
Scenario

Reference scenario

Below 2°C (incl. 1.5°C) scenario

IEA World Energy Outlook 2018
Sustainable Development Scenario (SDS),etc.

Scenario for transition to a carbon-freesociety (Transition Scenario)• IPCC Fifth Assessment Report
RCP2.6, RCP8.5• IPCC Special Report on Global
Warming of 1.5°
C, etc.

4°
C scenario

Scenario in which physical impacts
become apparent【Change in Global Average Surface Temperature】
6.0（℃）

3-4°
C world

4.0

Conceivableglobal range

2.0

1.5-2°
C world

0.0
Timeframe
-2.0
2000

2050

2100

（year）【Conceivable Scenarios】
Below 2°C (incl. 1.5°C) scenario● Introduction of carbon tax● Significant decrease in fossil fuel power generation● Increase in demand related with renewable energy business● Growing demand for facilities with a high level of environmental performance4°
C scenario● Widening damage caused by increasingly severe natural disasters● Increased need for disaster preparedness and mitigation● Reduced productivity due to heat stress● Summer labor constraints due to more extremely hot days

Sustainability and Materiality / Disclosure Based on TCFD Recommendations

20

Disclosure Based on TCFD Recommendations【Potential Risks and Opportunities】
Below 2°C (incl. 1.5°C) scenario: Scenario for transition to a carbon-free society (Transition Scenario)
Classification

Timeline*

Risks and opportunities

Responses & initiatives

Opportunities

Medium/long term● Higher procurement costs for materials andfuels due to carbon tax

Policy &regulation

Short/
medium/long term● Higher electricity costs due to switch to powerfrom renewable energy sources● Reduce electricity costs through diligent
energy-saving practices● Install solar power generation systems at officebuildings

Markets/
Reputation

Short/
medium/long term● Customer defections and damage to corporate
image if customers believe environmental
initiatives are inadequate● Pursue growth strategies in areas such asenvironmental IT solutions and social systems● Set greenhouse gas reduction targets and workto obtain SBT validation

Products &services/
Energy sources

Short/
medium/long term● Growing renewable energy business(solar, wind, etc.) demand●Growing demand for facilities with a high levelof environmental performance● Expand renewable energy businesses(solar, wind, biomass, etc.)● Win orders for EPC projects covering everythingfrom design to procurement and construction● Address the need to build facilities with a highlevel of environmental performance

Transition

Risks

Policy &regulation● Use bulk purchasing to make procurement more
efficient, obtain best prices by accumulating/analyzing data
●Review activities to reduce energy consumption
and improve energy efficiency●Install solar power generation systems at officebuildings

4°
C scenario: Scenario in which physical impacts become apparent
Classification

Timeline*

Risks and opportunities

Responses & initiatives

Short/
medium/long term● Damage to buildings we are located,
construction sites, and our own facilities due tonatural disasters, and increased restoration costs● Longer construction periods due to frequent
natural disasters● Strengthen BCP measures in preparation forabnormal weather and changing weather
patterns● Implement measures to recover quickly in theevent of damage

Short/
medium/long term● Discontinuation of products and services due
to value chain disruptions● Building group-wide risk management systems
and implement continuous monitoring

Chronic

Short/
medium/long term● Decreased productivity as more
telecommunications equipment constructionengineers suffer from health hazards such asheat stroke, and they avoid working in extremely
hot hours of the day● Enhancements to create a safe work
environment, including equipment and facilities
to prevent heatstroke● Rigorous accident prevention practices
throughout the Group, including partnercompanies

Markets/
Resilience

Short/
medium/long term● Growing need for undergrounding utilities as ameasure to address frequent and increasingly
severe natural disasters● Pursue utility undergrounding businessMedium/long term● Growing demand for construction work toenhance disaster preparedness and mitigation
for telecommunications facilities and basestations due to frequent and increasingly severe
natural disasters● Growing demand for social infrastructure repair
and seismic retrofitting due to growing demand
related to national resilience efforts● Build highly resilient telecommunications
facilities and base stations● Actively participate in social infrastructure
projects (utility undergrounding, water andsewer systems, etc.)

Acute
Physical

Risks
Opportunities

Markets*Short term: 1 to less than 3 years; medium term: 3 to less than 5 years; long-term: 5 or more years

21

COMSYS GROUP REPORT 2022

outline

ESG

strategydata

about us◆ Metrics and Targets
In May 2022, the Group set greenhouse gas reduction
targets for fiscal 2030 and fiscal 2050.
These goals are based on the concept of Science-based Targets (SBTs)*. Going forward, we will
forge ahead with initiatives aimed at achieving thesetargets.
*Based on the Near-term SBT concept

Reduction goal

Scope 1

Greenhouse gas emissions (GHG)
made directly by the business itself● By FY2030, reduce 42% fromFY2020 baseline● Become carbon neutral in
FY2050

Scope 2

Indirect emissions from the use ofelectricity, heat, and steam supplied byother companies

Scope 3By FY2030, reduce 25% fromFY2020 baseline

Indirect emissions from the supply chain(emissions from other companies
related to the activities of the business)

Track Record of Reducing Greenhouse Gas (GHG) Emissions and Targets

GHG emissions

GHG emissions（Scope 3）（Scope 1+2）25％
reduction

42

Scope2(from FY2020 baseline)％
reduction(from FY2020 baseline)

110

1,812

（kt CO2 e/y）

（kt CO2 e/y）CarbonneutralScope1

FY2020

FY2021

FY2030Target

FY2050TargetFY2020

FY2021

FY2030TargetBreakdown of Greenhouse Gas (GHG) Emissions
Scope, category

Calculation boundary and method

FY2020 emissions FY2021 emissions（t-CO2）（t-CO2）*1

Scope 1+2

103,804

109,801

Scope 1
（Direct emissions）

88,17894,329

Scope 2
（Indirect emissions）

15,626

15,472

Scope 3
（Value chain total）

1,860,451*2

1,812,447
306,059

Category 1（Purchased goods & services）

For the main suppliers, emissions are calculated from the value-based
emissions intensity unit determined from the values published by eachcompany, and the weighted average is applied for other suppliers

293,231

Category ２（Capital goods）

Calculated from the capital investment amount

43,72037,727

Category ３（Fuel and energy related activities）

Calculated from annual consumption by energy type

14,994

15,986

Category ４（Transportation, distribution (upstream)） （Distribution is included in Category 1 and not subject to calculation）−−

Category ５（Waste generated in operations）

Calculated from the volume of waste by type

8,654

12,446

Category ６（Business travel）

Calculated from the number of employees (consolidated-basis)

2,219

2,278

Category ７（Employee commuting）

Calculated from the number of employees (consolidated-basis)

4,034

4,142

Category ８（Leased assets (upstream)）（Emissions from leased buildings, etc. are calculated in Scopes 1 & 2）−−

Category ９（Transportation, distribution (downstream)） （Not subject to calculation）−−

Category 10（Processing of sold products） （Not subject to calculation）−−

Category 11（Use of sold products）

Telecommunications is calculated from the Scope 2 figures published by major
customers. Non-telecommunications is calculated by multiplying the sales volume by the assumed standard unit during use and the number of years of use

1,490,000

1,429,710

Category 12（Disposal of sold products）

Calculated from the volume of waste of products that are not removed by us

3,195

3,709

Category 13（Leased assets (downstream)）Calculated from the total floor area of rental condominiums

404

390

Category 14（Franchises）（Not subject to calculation）−−（Not subject to calculation）−−

Category 15（Investments）*1: Figures for Fujiki-tekkou Corp., which became a subsidiary of Nippon COMSYS Corporation in November 2021, are calculated for one year.
*2: Revised due to improved calculation accuracy

Disclosure Based on TCFD Recommendations

22

Corporate Governance◆ Key Corporate Governance Initiatives

Share of outside directors
increased to 36%
In order to facilitate strategic and flexible decision-making at the Board of Directors, the number of in-housedirectors (directors who are not members of the Audit

and Supervisory Committee), whose terms were expiring, was reduced from nine to eight persons, at theregular general meeting of shareholders held on June29, 2022. As a result, five of the 14 directors are now
outside directors, and the share of outside directors
has increased from 33% to 36%.

◆ Basic Approach to Corporate Governance
The COMSYS Group supports the foundations of community life through the execution of its core business—the construction of telecommunications and social infrastructures. Through the growing Renewable Energy
and IT Solutions businesses as well, we contribute to
reducing environmental impact and improving productivity in both private- and public-sector services. As
such, the COMSYS Group’s business in and of itself
contributes to and plays an important role in society,but we are also aware of the great responsibility thatcomes with this role. To continue to earn the trustof, and be selected by, a variety of stakeholders in
the future—including customers, employees, business
partners, and regional society—we must ensure appropriate management in accordance with laws andregulations, and at the same time make optimum management judgments that lead to increased corporate
value. We are aware that strengthening corporate
governance, which is the foundation for “legal” and“appropriate” management, is of paramount importance for the COMSYS Group.

◆ Corporate Governance Structure

Accounting auditors

a Nomination and Remuneration Advisory Committee
In June 2017, the COMSYS Group made a transition tothat includes outside directors, as an advisory function
a company with an Audit and Supervisory Committee,
for the Board of Directors, to guarantee transparency
to strengthen transparency and accountability in thein nomination and remuneration decision processes.
company’s management. The COMSYS Group’s Boardof Directors comprises 14 directors, six of whom areon the Audit and Supervisory Committee, which inCorporate Governance Structure
cludes five outside directors (as of June 29,2022).
General Meeting of Shareholders
The Audit and Supervisory Committee auAppointment/dismissal Appointment/dismissal
Appointment/dismissal
dits the execution of operations by directors
not only from the perspective of legal compliDirectors
ance, but also from the perspective of approDirectors(Audit and Supervisory
Committee members)
priateness for corporate management. This
Comprising members
Comprising members / participationcommittee also has the authority to express
Collaboration
Consultations
Nomination andopinions on matters such as the appointment,
Audit and Supervisory
Directors
Remuneration Advisory
Committee
Auditing /dismissal, and compensation of directors
ReportingCommittee
supervision
who are not a part of the committee. The AuAuditing / supervision
Collaboration
Appointment/dismissal and supervision
dit and Supervisory Committee comprises six
directors, five of whom are outside directors
Instructions, reporting
Internal Control
President
whose status as independent directors has(management meetings)
Auditing Department
Instructions,
been notified to the Tokyo Stock Exchange,
reportingInternal
to guarantee more objective direction andauditsmonitoring of management. Through theThorough dissemination
Business execution
transition to a company with an Audit andCommittees
of information
divisionsSupervisory Committee, we have established
Overview of Governance Structures

Management,
monitoring

Board of Directors
ChairmanPresident and Representative Director

Number of members (Tenure: 1 or 2 years)

14

Outside directors (Independent directors)

5（5）

Audit and Supervisory Committee
Chairman
Number of members
Full-time Committee members

In-house Director
6 (1 In-house director + 5 outside directors)
1(As of June 29, 2022)

23

COMSYS GROUP REPORT 2022

Accounting
auditsInternal audits
reporting

Reviews /reporting

COMSYS Group
Nippon COMSYSGroup

SANWA COMSYSEngineeringGroup

SYSKEN GroupTOSYS Group

Hokuriku
Denwa Kouji GroupTSUKEN GroupCOMSYSJOHO SYSTEM GroupNDS Group

COMSYS
Shared Services

outline

ESG

strategydata

about us(As of June 29, 2022)◆ Board of Directors

Number of owned shares on March 31, 2022

Takashi Kagaya

Kenichi Sato

Yoshihisa Omura

Satoshi Tamamura

President, Representative Director

Director

Director

Director

Hidehiko Ozaki
Director(President, Representative Directorof Nippon COMSYS Corporation;
Chairman of the Nomination andRemuneration Advisory Committee)(President, Representative Directorof SANWA COMSYS Engineering
Corporation)(President, Representative Directorof TSUKEN Corporation; in chargeof Hokkaido Block)(President & CEO of NDS Co., Ltd.)

Number of the Company’s shares
owned 35,600
Tenure as Director 7 years
Attendance at Board of Directors
Meetings 10/10 (100%)

Number of the Company’s shares
owned 21,800
Tenure as Director 7 years
Attendance at Board of Directors
Meetings 10/10 (100%)

Number of the Company’s shares
owned 14,500
Tenure as Director 6 years
Attendance at Board of Directors
Meetings 10/10 (100%)

Number of the Company’s shares
owned 10,000
Tenure as Director 3 years
Attendance at Board of Directors
Meetings 10/10 (100%)(General Manager of Finance & Accounting Department and Manager ofBusiness Expansion Strategy Office; incharge of IR, Internal Control and Audit,
General Affairs, HR, Compliance, andCOMSYS Shared Services Corporation)

Hideyuki Noike

Kunihiko Uchide

Takaya Kitaguchi

Atsushi Yasunaga

Director

Director

Director

Director(In charge of Carrier Business
Promotion, TOSYS CORPORATION,
SYSKEN Corporation, Hokuriku Denwa
Kouji Co., Ltd.)(In charge of Consumer Demandand COMSYS JOHO SYSTEM
Corporation)(General Manager of DX Promotion
Department; in charge of Corporate Planning Department)(Full Time Audit and Supervisory
Committee Member)

Number of the Company’s shares
owned 6,500
Tenure as Director 2 years
Attendance at Board of Directors
Meetings 10/10 (100%)

Number of the Company’s shares
owned 7,900
Tenure as Director 2 years
Attendance at Board of Directors
Meetings 10/10 (100%)

Number of the Company’s shares
owned 4,900
Tenure as Director 1 year
Attendance at Board of Directors
Meetings 8/8 (100%)

Number of the Company’s shares
owned 3,800
Tenure as Director 1 year
Attendance at Board of Directors
Meetings 8/8 (100%)
Attendance at Audit and Supervisory
Committee meetings 7/7 (100%)

Masahiko Miyashita

Kenichi Nakatogawa

Koichi Kawana

Hiroyuki Asai

Outside Director

Outside Director

Outside Director

Outside Director

Outside Director(Audit and Supervisory Committee
member, Nomination and Remuneration
Advisory Committee member)(Audit and Supervisory Committee
member)(Audit and Supervisory Committee
member)(Audit and Supervisory Committee
member, Nomination and Remuneration
Advisory Committee member)(Audit and Supervisory Committee
member)Number of the Company’s shares
owned 0Tenure as Director 5 years
Attendance at Board of Directors
Meetings 10/10 (100%)
Attendance at Audit and Supervisory
Committee meetings 11/11 (100%)

Number of the Company’s shares
owned 0Tenure as Director 3 years
Attendance at Board of Directors
Meetings 10/10 (100%)
Attendance at Audit and Supervisory
Committee meetings 11/11 (100%)

Number of the Company’s shares
owned 0Tenure as Director 3 years
Attendance at Board of Directors
Meetings 10/10 (100%)
Attendance at Audit and Supervisory
Committee meetings 11/11 (100%)

Number of the Company’s shares
owned 0Tenure as Director 1 year
Attendance at Board of Directors
Meetings 8/8 (100%)
Attendance at Audit and Supervisory
Committee meetings 7/7 (100%)

Number of the Company’s shares
owned 0Tenure as Director 1 year
Attendance at Board of Directors
Meetings 8/8 (100%)
Attendance at Audit and Supervisory
Committee meetings 7/7 (100%)

Number of the Company’s shares
owned 14,400
Tenure as Director 7 years
Attendance at Board of Directors
Meetings 10/10 (100%)

Hideo Yamamoto

Corporate Governance24

Corporate GovernanceCorporate Governance Transformation Over TimeIn-house directors

20

Outside directors

Auditors

16

16

15

15

15

12

12

10

10

10

4

4

5

5

5

2017

2018

2019

2020

2021

Outside auditors

14

15

10

10

12

12

12

12

11

11

11

10

10

9
5
2

5
2

5
2

3

1 3

1 3

4
2
1 2

2011

2012

2013

2014

5

0

12
10

4
2
2 2

4
2
2 2

2015

2016

Company with Board of Auditors

5
2022

Company with Audit and Supervisory Committee

Initiatives to Ensure Diversity Within the Board of Directors

We are aware that COMSYS needs to ensure diversity in the Board of Directors, and especially to appoint female directors, but wehave as yet been unable to secure a suitable candidate. We will continue to put forth our utmost efforts to secure diversity in COMSYS’s Board of Directors, from the perspectives of both gender and nationality.

Skills Matrix/Attendance Record (Board of Directors, Audit and Supervisory Committee)
Skill
Name

Businessmanagement

Facilities
New business
Digitalconstruction &development, transformation(DX),
operation,business
technologicalproject management
expansiondevelopment●

Attendance
Legal, risk
management●

HR, labor,
diversity

Finance

Audit andSupervisory
Committee(times)In-house directors

Takashi Kagaya

●

●

10/10
（100％）−

Kenichi Sato

●

●

10/10
（100％）−

Yoshihisa Omura

●

●

10/10
（100％）−

Satoshi Tamamura●●

Hidehiko Ozaki●

Hideyuki Noike●●

Kunihiko Uchide●●

Takaya Kitagichi●●

Atsushi Yasunaga

●

10/10
（100％）−

10/10（100％）−●

10/10（100％）−●

10/10（100％）−●●●

Board of Directors(times)●●●

Outside directors●●

Masahiko Miyashita●●

Kenichi Nakatogawa●

Koichi Kawana●

Hiroyuki Asai

●

●

●

●

●
●
●

Hideo Yamamoto●

8/8（100％）−

8/8（100％）

7/7（100％）

10/10（100％）

11/11（100％）

10/10（100％）

11/11（100％）

10/10（100％）

11/11（100％）

8/8（100％）

7/7（100％）

8/8（100％）

7/7（100％）

Note: Indicates up to five areas in which each director is expected to particularly contribute.
The above skills matrix does not necessarily present the entire scope of each director’s expertise and experience.

◆ Director Remuneration
An overview of director remuneration is presented below.
● Method for determining remuneration for directors who are not members of the Audit and Supervisory Committee

25

Nomination and Remuneration
Advisory Committee→

Board of Directors

Deliberation

Presentation

Decision

COMSYS GROUP REPORT 2022

outline

ESG

strategydata

about us

● Remuneration structure for directors who are not members of the Audit and Supervisory Committee
Fixed remuneration(Basic remuneration)

Performance-linked
remuneration (Bonuses)

Non-monetary remuneration(Long-term incentive compensation)

Representative Director

50％

20％

30％

Directors who are not members of the Audit
and Supervisory Committee

60％

20％

20％

● Method for determining remuneration for directors who are members of the Audit and Supervisory Committee
Decided by the Audit and Supervisory Committee, within limits approved by the shareholders● Remuneration structure for directors who are members of the Audit and Supervisory Committee
Fixed remuneration only
Total Director Remuneration
Total by type of remuneration
Classification

Total
remuneration

Directors(excluding Audit and Supervisory
Committee members)¥172 million¥87 million¥31 million¥53 million

１2

Directors(Audit and Supervisory
Committee members)(Outside directors)¥55 million(¥40 million)¥55 million(¥40 million)

－

－

9
（7）

Total
(Outside directors)¥227 million(¥40 million)¥143 million(¥40 million)¥31 million(－)¥53 million
(－)

21
（7）

Fixed remuneration(Basic remuneration)

Performance-linked Long-term incentive compensation(Restricted stock compensation andremuneration
ordinary stock options)(Bonuses)

Number of
eligible directors

Notes:
1. The above table includes two directors (not Audit and Supervisory Committee members) who retired upon the completion of the 17th regular general meeting of shareholders
held on June 26, 2020, one director (not an Audit and Supervisory Committee member) who retired as of March 31, 2021, and three directors (Audit and Supervisory Committee
members) who retired upon the completion of the 18th regular general meeting of shareholders held on June 29, 2021.
2. The amounts of compensation tied to performance for the above directors (excluding Audit and Supervisory Committee members) include expected amounts of payments for
director bonuses for the business year in question.
3. The long-term incentive compensation amounts for the above directors (excluding Audit and Supervisory Committee members) include the amount recorded as expenses in thefiscal year in connection with the restricted stock compensation plan, and the amount recorded as expenses during the fiscal year related to share subscription rights granted
as stock options.

◆ Cross-Shareholdings Policy
In order to increase the Group’s corporate value froma medium- to long-term perspective, the COMSYSGroup holds shares in cases where it deems that suchownership offers advantages in terms of maintaining and strengthening trust-based relationships withcustomers and business partners, as well as throughcollaboration and expanding business transactions.
Shares owned for the purpose of cross-shareholding
are inspected by the Board of Directors to verify thesignificance of ownership for each individual stock,and to ensure that profits and risks accompanying
ownership are in line with capital costs.
In FY2021, the Board of Directors held a meetingon March 24, 2022, verified these holdings as of December 31, 2021, and approved a policy to proceedwith reducing or eliminating holdings that have been
deemed to be no longer meaningful or appropriate.

◆ Evaluation of the Board of Directors’ Effectiveness
COMSYS conducts a survey of our board members as
one means of evaluating the effectiveness of the Boardof Directors. In FY2021, this survey for the evaluationof the Board of Director’s effectiveness covered the
topics described below.
Survey topics:●Ensuring appropriate composition and diversity, including the size of and overall balance within the
Board of Directors●Ensuring effective deliberations, including appropriate risk-taking in management decisions●Support for the directors, such as ensuring that there
is a framework for liaising with management, the independent auditor, and internal audit departments
The results of the analysis of the survey were referredto the Board of Directors, and based on the analysis of
the current situation, the effectiveness of the COMSYSBoard of Directors was confirmed. Meetings are also
held to exchange views, in order to strengthen thefunctioning of the Board of Directors.

Corporate Governance26

Corporate Governance◆ Maintaining Internal Control Systems
Basic Policies for Internal Controls
COMSYS created basic policies for internal controls
at a meeting of the Board of Directors in May 2006.
At a meeting of the Board of Directors in April 2015,
it decided on partial revisions to the details of thosebasic policies, in keeping with amendments to theCompanies Act and the Ordinance for Enforcementof the Companies Act. At a meeting of the Board of
Directors in June 2017, it decided on further partial
revisions to the details of the basic policies, in keepingwith the transition to a Company with an Audit andSupervisory Committee. Based on these policies, we
strive to maintain a structure that ensures appropriate
internal control operations, such as strengthening corporate governance, maintaining compliant structures,and strengthening risk management.
Specific details related to the structure of internal
control systems and an outline of their operational
status can be found on the COMSYS Holdings website (https://www.comsys-hd.co.jp/company/outline/
outline4.html) (in Japanese). These internal control
systems are decided and created to be in compliancewith COMSYS Holdings, and improvements are madeas deemed necessary in keeping with the subsequent
implementation and monitoring of those systems. Auditing methods are recognized as being appropriate,
covering the effectiveness of operations and the utility of system maintenance status in accordance withthe “Auditing standards related to internal control systems” created by the Audit and Supervisory Committee in conformance with auditing standards stipulatedby the Japan Audit & Supervisory Board Members Association.
Status of Audit and Supervisory Committee Meetings
As a rule, meetings of the Audit and Supervisory Committee are held on the same day as meetings of theBoard of Directors. Resolution items at Audit and Supervisory Committee meetings include: The creation ofauditing plans and auditing reports; deciding opinions
on the naming and remuneration of directors who are
not members of the Audit and Supervisory Committee;
the appointment and dismissal of accounting auditors;
and agreement on auditor remuneration. Deliberation
items include remuneration amounts for Audit and Supervisory Committee members. Report items include
information sharing on important meetings attended
by full-time Audit and Supervisory Committee members (e.g., management meetings and COMSYS Groupauditor contact meetings); and the results of site audits
by full-time Audit and Supervisory Committee members. In FY2021, there were five outside Audit and Supervisory Committee members. These outside Audit
and Supervisory Committee members have attended
all ten meetings of the Board of Directors and all 11
Audit and Supervisory Committee meetings, making
statements from the perspective and position of an
outside Audit and Supervisory Committee member.
Full-time auditors at supervisory business companies (seven auditors at seven main companies) regularly hold COMSYS Group Full-time Auditor Contact
Meetings (five in FY2021) to report on management
conditions for the COMSYS Group as a whole, andalso request reports, mutually exchange opinions, andshare information on management conditions and in-

27

COMSYS GROUP REPORT 2022

ternal controls at the supervisory business companies.
Twice each year, they also receive explanations on all
aspects of management from the presidents of the supervisory business companies.
The Group’s Internal Controls
As part of audits targeting “Status of execution of
duty to build internal controls for directors,” the Audit and Supervisory Committee members are involvedin checking and expressing opinions on the results ofinternal control audits based on the Financial Instruments and Exchange Act. The scope of internal control evaluations is decided through deliberations withaccounting auditors. During FY2021, out of a total of
73 consolidated subsidiaries and COMSYS Holdings,
evaluations covered seven supervisory business companies and 24 subsidiaries.
Furthermore, to ensure the appropriateness of the
COMSYS Group’s operations, 13 members* of the
COMSYS Holdings Internal Auditing Office conduct internal audits for the Group as a whole.
[*Full-time staff (Division Manager; Seconded employees): 13; Concurrent duties as heads of supervisorybusiness company organizations: 6; Concurrent duties
in the Internal Control Office: 1; Total: 20]*As of June 30, 2022. 22 persons from July 1, 2022 onward.

Internal Controls Related to Financial Reporting
The Audit and Supervisory Committee receives explanations from the company and accounting auditors
regarding audit results. Consequently, up to now,there have been no reports of “serious omissions indisclosure,” and we recognize that internal controls
related to financial reporting are effective. The Audit
and Supervisory Committee also receives reports fromaccounting auditors on the status and progress of internal control audits in accordance with the Financial
Instruments and Exchange Act. In this case as well,there have been no reports of “serious omissions indisclosure,” and we recognize that internal controls
based on the Financial Instruments and Exchange Act
are effective.
Internal Audits
The COMSYS internal audit organization comprises
the Internal Auditing Office and the Internal Control
Office, which have been established as internal organizations within the Internal Control Auditing Department. These offices are staffed by 20 and 3 persons,respectively, as of June 29, 2022.
The Internal Auditing Office formulates internal audit
policies based on policy set by top management, andit strives to minimize various business risks and contribute to the quality of the company by conducting
internal audits of COMSYS and the COMSYS Group
companies to ensure that business is executed in a
lawful and appropriate manner.
The Internal Control Office formulates internal control policies related to financial reporting, and it provides guidance on, and evaluates the effectiveness of,internal controls at COMSYS and the COMSYS Group
companies.

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about usCompliance Promotion Structure◆ Basic Compliance Policies
The COMSYS Group positions the establishment oflegal compliance and other areas of corporate ethics as important management issues. Based on the“Compliance Program” created in January 2004, wehave instituted the “COMSYS Group Code of Conduct” describing the conduct to be demonstrated byeach and every director and employee. Compliance
Committee meetings are also held on a regular basis.
The Code of Conduct clearly lays out guidelines forfair and transparent business transactions placing toppriority on compliance with laws and social norms,
prohibiting bribery and relationships with anti-social
forces, emphasizing respect for individual humanrights, and abolishing discrimination, and we have apolicy that strictly prohibits harassment in any form.
The Compliance Committee, which is chaired by thepresident of COMSYS Holdings, includes COMSYS’s
executive officers, presidents of supervisory businesscompanies, and members of the Audit and Supervisory Committee, including outside members. It oversees
and deliberates on compliance structures for COMSYS
Holdings Corporation and the COMSYS Group, in aneffort to improve and cultivate a “compliance mindset”
throughout the entire COMSYS Group. Specifically,
cases arising at supervisory business companies andincidents reported to consultation contact points are

COMSYS Holdings
Management meetings
Instructions

Reporting / suggestion*Important cases

Compliance Committee
Chairman: President of COMSYS HoldingsGroupwide notiﬁcation

Reporting on activities

Compliance Committees at supervisory business companies

Groupwide notiﬁcationand guidance

Reporting on activities

Groupwide notiﬁcationand guidance

Reporting on activities

Supervisory business companies
Business companies【Outline of Compliance Committee Meetings】
Main items reviewed:
Compliance issues at Group companies; recurrence prevention
measures; status of educational activities
Status of recent meetings: Four meetings held during FY2021

reviewed by the Compliance Committee at the company in question, and the results of those reviews arethen reported to the Compliance Committee at COMSYS Holdings. All Group companies are notified andthoroughly briefed regarding important cases, as partof Group-wide measures to prevent recurrence.

◆ Internal Reporting System
The COMSYS Group positions compliance with theWhistle- Blower Protection Act as an important partof building the Internal Control System, and has enacted Whistle-Blower Protection regulations that
stipulate strict compliance with the intent of the law,and rules for submitting and receiving whistleblower
reports within the COMSYS Group. Internal reporting
systems are one effective way of preventing scandals

in the company, and we believe that by identifying andweeding out the “seeds of problems” early on fromamong many consultations and reports, we are able
to prevent serious scandals before they occur. The total number of internal reports, including consultations,for the Group as a whole was 66 in FY2021 (19 violations) and 83 in FY2020 (18 violations).

◆ Prevention of Bribery
Bribery and corruption are in opposition to the business of the COMSYS Group, which contributes to society and plays an important role in society. Such behaviors are strictly prohibited and controlled, regardlessof the business situation. We have an ironclad rulethat under no circumstances will we engage in bidding
collusion or other corrupt practices in Japan. In glob-

al business, because it is essential to enter contracts
with subcontractors in various countries, there could
be an increased risk of bribery or corruption in contract relationships, for example in emerging countries,
but because our business activities are currently centered in Japan, in our view, there is little risk of bribery
incidents involving the COMSYS Group.

◆ Prevention of Collusive Bidding
As part of measures to prevent the recurrence of corruption and scandal, we are working to strengthen
compliance through systematic training for all employees. To prevent the recurrence of bidding collusionin particular, we hold seminars every year, mainly for
managers and employees handling government agencies, welcoming experts as instructors, to ensure compliance with the Antimonopoly Law and the Construc-tion Business Act.
We hold training sessions where the Group’s newly appointed executive officers receive guidance fromlawyers and CPAs, and we have introduced a compliance curriculum into the level-specific training for newly appointed managers, middle level employees, andnew employees to prevent corruption and scandals.

Corporate Governance28

Promoting Safety and Quality◆ Basic Approaches to Safety
Safety, quality, and trust are top priority items in the
COMSYS Group’s business operations. The COMSYSGroup emphasizes three key points in terms of ensuring safety: (1) Entrenching and carrying on a corporate
culture in which securing safety and quality are the top
priority, regardless of the situation or environment; (2)Actively introducing tools and safety equipment to ensure a safe work environment; and (3) Continually operating tools and equipment correctly. To ensure thatthese three activities do not become mere formalities,
we review them as required so that they evolve, andare subject to a continuous PDCA process.
In terms of specific accident prevention measures,in addition to day-to-day meetings before starting
work and safety patrols, we have introduced vehicles

equipped with automatic brake systems and other safety equipment, provide traffic safety guidance
based on information recorded by onboard cameras,
provide training that incorporates “hazard experiences” using VR technology, conduct safety conferences
and accident prevention campaigns that include partner companies, and draw attention to accident prevention using case studies of past accidents both in
the COMSYS Group and at other companies. Whenan accident occurs, the background factors are thoroughly investigated based on fundamental principles
for operating rules, prevention measures are studied,and the various workplaces are advised of key points
requiring attention and rules to be followed in the future.

◆ Work-Related Accidents
The COMSYS Group is committed to its efforts toeliminate workplace accidents. Both the work-related
accident frequency rate*1 and the work-related accident severity rate*2 at supervisory business company
Nippon COMSYS are below the industry averages. To
ensure that tragic accidents are not repeated, we endeavor to rigorously analyze the causes of accidents
and implement measures to prevent recurrence.
Frequency Rate of Work-Related Accidents (Yearly Base)Severity Rate of Work-Related Accidents (Yearly Base)

1.00

1.00

0.80

Construction industry*

0.80

0.81

0.85

0.80

0.60

0.60
Nippon COMSYS

0.40

0.20

0.28

0.11

0.40

0.20

0.06

0

0
Dec. 2019

Dec. 2020

Dec. 2021

Source: Ministry of Health, Labour and Welfare; 2019/2021 Trends in Workplace
Accidents; March values

29*1 Frequency rate: Expresses the frequency of work-related accidents based on thenumber of work-related injuries or deaths recorded for every 1 million work hours
Calculation method: (number of work-related injuries or deaths / total number ofwork hours) × 1,000,000*2 Severity rate: Expresses the severity of work-related accidents based on the numberof workdays lost due to workplace accidents, recorded for every 1,000 work hours
Calculation method: (Total number of workdays lost / total number of work
hours) × 1,000

COMSYS GROUP REPORT 2022

0.18

Construction industry*

0.24

0.21

0.00

0.00

Dec. 2019

Dec. 2020

Nippon COMSYS

0.01

Dec. 2021(both in NTT Engineering Business)outline

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about us

◆ Activities Aimed at Ensuring Quality
Multiple workplaces have obtained ISO 9001 certification, and quality management systems are in operation to meet goals and enable continuous improvements on various themes set by Group companies.
Employees participate in kaizen activities and skill
competitions, construction systems have been put inplace for work process management, and photographic inspection systems have been introduced in the

NTT Engineering Business as part of efforts to improve
quality and prevent human-initiated failures.

Facility Accidents and Human-Initiated Failures
FY2019FY202022

FY2021
13

13◆ Information Security and Personal Information Protection
The COMSYS Group receives facility information,technical information, and personal information from
customers, and conducts its business based on that
information. Preventing information leaks is extremely
important in securing the customers’ trust. To strengthen information security, we have obtained PrivacyMark and information security management system(ISMS) certification at each company, always working
to protect personal information and business information, and to respond appropriately to cyber-attacks.

Each year, we conduct information security training
for all employees, including contract employees andemployees of partner companies, as part of unflagging
efforts to protect customer information.
Serious Information-Related Incidents
FY2019FY20201

FY2021
10(Number of information-related incidents involving leaks of customer
information or personal information as defined by COMSYS Holdings)

Respect for Human Rights◆ Stance on Respect for Human Rights and Training Initiatives
COMSYS Holdings respects fundamental human rights
as a matter of basic ethics under the “CHD Compliance Regulations.” In the course of our business we
do not discriminate for reasons including race, religion, creed, nationality, sex (gender identity), disability(physical disability), and age.
To instill awareness about human rights in groupcompany employees, we provide human rights education in our training for new employees and in hierarchical training sessions.
Human rights training session (image above is shown for illustrative purposes only)

Promoting Safety and Quality / Respect for Human Rights

30

Cultivating Human Resources◆ Basic Approach to Human Resources
The COMSYS Group’s greatest management resource
is its people. The Group’s business could not exist
without engineers who have national certifications
and advanced knowledge and experience, and thestaff who support them. Amid drastic changes in theenvironment surrounding the telecommunications industry, securing, training, and utilizing human resources who can respond to these changes in the businessenvironment is an extremely important management
theme. In Japanese society, however, where the labor
shortage is a growing concern, it is becoming increasingly difficult to secure outstanding labor. For this reason, the COMSYS Group is strengthening recruitmentof both new graduates and mid-career hires, making
optimum use of human resources by increasing theflexibility of staff within the Group. In addition, we are
actively promoting diversity and undertaking workstyleinnovations with a view toward creating an attractive
workplace environment, so that we are able to recruit
more outstanding individuals from among a diverse
range of candidates. We are revising personnel systems at Group companies, and encouraging personnel
exchanges of executive employees within the Group.
Our training policies are designed to foster individuals who can respond to new business environments;
this includes level-specific training with a focus ondeveloping management skills, “multi-skilling” of engi-

neers, and implementing various systems to support
employees in acquiring certifications. As the COMSYSGroup’s business domains expand, in addition to project management as a primary construction contractor,
our work demands comprehensive management skills
ranging from project planning to building systems, collaboration with parties inside and outside of the Group,and studies of financing schemes. Meanwhile, on thefront lines, as telecommunications carriers gradually
reduce their capital investments and undergo a fullscale shift toward outsourcing, including maintenanceand operations, the key to improving productivity willbe “multi-skilling” that is not limited by conventionalframeworks. In order to strengthen business foundations in the future, it will be essential to expand thepool of engineers and employees with certifications inboth IT and construction, who are vital to the COMSYS Group’s business, so we will adopt a systematic
approach to fostering this type of labor.
Through the mutual use of training items and otherassets put in place at COMSYS Group companies, we
provide training to diverse human resources. At thesame time, we have created a “CHD human resource
training platform” with the goal of fostering talent thatcan undertake the business operations of the future,
to provide human resource training through a Groupwide operational system.

◆ Recruiting Plan
In April 2022, the COMSYS Group’s nine companies(eight supervisory business companies and COMSYS
Shared Services Corporation) hired a total of 260 new
graduate employees, mostly in the Group’s core businesses: The Telecommunications Carrier Business, theIT Solutions Business, and the Social System-Related
Business. In terms of hiring activities for new employees entering the company in April 2023, remote explanation meetings and remote interviews are being
conducted as part of measures to prevent the spreadof the COVID-19 infection, and we are planning tohire approximately 260 new employees at nine companies, most of whom will be engineers required tostrengthen the Group’s businesses. In order to securea broader range of diverse and outstanding personnel, rather than hiring all new graduates at once, as

has been the common practice in Japan, we will continue hiring through the year; for example, targeting
students returning to Japan from overseas studies inthe summer onward, as well as mid-career hires andrecent graduates with one to three years of work experience.
In particular, when hiring new graduates, we strive toprevent employment mismatches, which is the biggest
factor in early turnover, by ensuring that employees
fully understand job duties at the hiring stage. The
turnover rate for new graduates within three years of
joining the company is 6.4%, while the turnover rate
for new graduates (university graduates) in the general
workforce is 31.2% (Ministry of Health, Labor and Welfare data on job turnover: March 2018 graduates), so
the COMSYS Group has a high retention rate.

◆ Mid-career Hiring and Re-employment System
The COMSYS Group actively undertakes mid-career
hiring of qualified and experienced candidates who
can contribute to business immediately, in order tomake up for the labor shortfall resulting from businessexpansion. In order to respond to technology innovations and the telecommunications technologies, which
are evolving at a dizzying pace, each year, we hire acertain number of skilled engineers with knowledge
and experience in advanced and specialized technologies, as well as managers with managerial experience.
We also conduct re-hiring after retirement, to best utilize the experience and expertise of senior employees.
In addition, with a view toward the aging societyof the future, we are considering the possibility of

31

COMSYS GROUP REPORT 2022

increasing the retirement age and the upper limit on
the rehiring system. At the same time, we will examine
a variety of related issues; for example, the handlingof pensions and wages in keeping with those changes; health issues surrounding rehiring employees; andinequity in work assignments and possible loss of motivation that could result from a breakdown in the balance of age configurations within the company.
To maintain and increase corporate competitivenessin the future as well, we will strive to make maximum
use of in-house manpower, including rehired employees, increase the motivation to work even after retirement age, and form an in-house environment where all
employees can actively participate.

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about us

◆ Promoting Diversity
The COMSYS Group promotes diversity based on the
belief that a diverse workforce is essential to continued growth. Specifically, we feel that we can (1) Discover skilled labor; (2) Cultivate a corporate culture inwhich all employees can generate novel ideas regardless of their background or gender; and (3) Respond tothe changes and needs of society.
Because the construction industry has typically
been a male-centric society, the COMSYS Group first
focused on promoting active participation by women; for example: (1) Reforms in the corporate culture
through president’s messages and training (employee
awareness reforms regarding diversity); (2) Supporting
career development for women (strengthening recruiting, career training for female employees, and training
for managers with female subordinates); and (3) Promoting work/life balance (providing support in childraising, including short working hours and encouraging
male employees to take childcare leave (in line withchanges to the law, in April 2022 the COMSYS Groupmade adjustments to our own program and how it
operates; for example, supervisors are required tohave individual interviews with employees who havenotified the company about their own childbearingor that of their spouses); establishing satellite offices
for teleworking; and introducing flex-time and working
from home systems). As a result of these activities, anenvironment has been put in place to enable diverse
workstyles, and employees better understand themeaning of diversity within the company.
Issues still remain, however; for example, in the low
number of female hires, the small number of female

candidates for managerial positions, and the low ratio of female managers. Regarding the hiring of female
employees, the number of female students in the sciences has always been smaller, and as many companies compete to recruit these women, we will takemeasures to expand the scope of hiring regardless ofacademic field, recruiting outstanding students in thehumanities as well. In this way, we will increase the ratio of female new graduate hires (19.6% of new graduates in April 2022, target is 30% by March 2025),
at the same time actively recruiting women in midcareer as well, in order to increase the ratio overall. In
terms of appointing female managers as well, we will
increase the number of female managerial candidates
and put in place appropriate human resource training
and workplace environments to increase the ratio of
women in managerial positions (2.4% as of May 2022).
We are also promoting the hiring of non-Japaneseemployees; nine have already been hired at the ninesupervisory business companies (as of June 2022). In
terms of hiring persons with disabilities, we take into
consideration the status of each person’s disability to
put in place workplace environments where all employees can participate actively and energetically, forexample by collaborating with companies that support workers with disabilities (2.1% in March 2022).
The number of male employees taking childcare
leave is gradually increasing, and we will strive to bea Group in which diverse employees can be actively
involved, regardless of gender, life stage, disabilities,
or nationality.

◆ Workstyle Innovations
The COMSYS Group is promoting workstyle innovations as part of efforts to achieve diverse workstyles
and increase productivity. Up to now, we have institutionalized telework and flextime systems, andallowed employees to wear more comfortable
clothes in the workplace. In the future, based on
telework initiatives that have been encouraged toprevent the spread of COVID-19 infection, we will
begin to re-examine new workstyles and ideal officeenvironments to accommodate the “new normal.”
We are also reducing total annual working hours
from the perspective of health management for

employees and reducing labor costs, and a variety of other initiatives are being rolled out at all
Group entities. Specifically, we are taking steps to
optimize work hours. For example, we are using
robotics process automation (RPA) robots to automate routine tasks and reduce working hours.
Additionally, in anticipation of the March 2024 expiration of the exemption on overtime limits in theconstruction industry, we are strengthening labor
management, including using an automated system
to check work hours.

◆ Strategic HR Training and Retention
The telecommunications industry is experiencing rapid technological innovation, and by actively working totrain and retain engineers, our goal is to evolve into a
company that can provide a one-stop response to thevaried needs of our customers. To prevent accidents
and improve quality, these training initiatives include
strengthening the training for workplace representatives and promoting technical training through participation in skills competitions; offering skills training toemployees, including partner companies, at our own
educational and training facilities; and encouraging
senior employees to share their expert skills with
their juniors. We are also considering expanding per-formance-based remuneration to increase employee
motivation. In addition to distributing bonuses thatare tied into individual performance evaluations, we
are working to increase motivation by introducing incentives linked to team performance, and teams that
demonstrate particularly notable results receive acommendation in the form of the President’s Award.
We recognize that in the future it may be necessary toestablish a more involved incentive structure, especially to retain the outstanding talent needed to pursue
the expansion of the IT Solutions Business and the Social System-Related Business.

Cultivating Human Resources32

11-Year Financial and Non-Financial Data
FY2011FY2012FY2013

FY2014ended
March 31, 2012

ended
March 31, 2013

ended
March 31, 2014

ended
March 31, 2015

(millions of yen)Orders received

297,769

335,632

327,981

336,973

Net sales

295,851

316,092

331,341

328,631

Gross profits

31,11741,22645,77047,938

SG&A expenses

18,525

18,67918,20020,264

Operating profit

12,592

22,547

27,57027,674

Operating margin

12,96922,91428,07828,121

Profit before income taxes

12,26721,09327,07627,283

Profit attributable to owners of parent

7,173

13,284

16,38916,767

Cash and cash equivalents at end of year

33,454

23,46930,91533,435

Total net assets

164,574

173,411

179,414

194,038

Total assets

228,135

240,602250,561

264,019

Capital expenditure

6,330

8,360

8,200

7,820

Depreciation and amortization

4,640

4,486

4,426

4,672

Interest-bearing liabilities – (short-term borrowings + long-term borrowings)

1,520

1,660

1,270

100

Gross profit margin on net sales

10.5

13.0

13.8

14.6

Operating profit margin on net sales

4.3

7.1

8.3

8.4

Ordinary profit margin on net sales

4.4

7.2

8.5

8.6

Primary earnings margin on net sales

2.4

4.2

4.9

5.1

Return on equity (ROE)

4.4

7.9

9.4

9.0

Return on assets (ROA)

5.6

9.8

11.4

10.9

Return on invested capital (ROIC)

4.3

8.4

9.2

8.9

Equity ratio

71.7

71.6

71.1

73.0

Dividends per share (yen)

20.00

20.00

25.00

30.00

Consolidated payout ratio (%)

36.0

18.7

18.4

21.0

Total return ratio (%)

77.7

48.7

66.9

66.2

Price-to-book ratio (PBR) (multiples)

0.7

0.8

1.1

0.9

16.14

10.69

11.89

10.41

Total shareholder return (TSR) (%)

−

−

−

−

Closing price at end of period (yen)

896

1,142

1,618

1,485

Total number of issued shares (thousands of shares)

145,977

145,977

145,977

145,977

Number of treasury shares at end of period (thousands of shares)

18,90822,74528,04431,324Market capitalization (billions of yen)

1,307

1,667

2,361

2,167

9,758

9,798

9,625

9,931

Ratio of new female hires (%); 9 main companies

−

−

−

−

Ratio of female managers (%); 9 main companies

−

−

−

−

Ratio of employees with disabilities (%); 9 main companies

−

−

−

−

Avg. number of annual paid holidays used (unit: days)

−

−

−

−

Financial Indicators (%)

Stock Information

Price-to-earnings ratio (PER) (multiples)

Non-Financial Information*
Number of employees (consolidated)

Notes: *Figures for US dollars shown in the table are converted based on the exchange rate as of March 31, 2022: ¥121.66 / US$1.00. *Formulas for calculating ROA and ROIC
have been changed. *Total number of issued shares for the year ended March 31, 2016, shows a decrease due to the cancellation of 4,977,000 treasury shares, which resulted
from a resolution at a meeting of the Board of Directors held on November 6, 2015. *Total return ratio = (Total Dividends + Total amount for treasury shares purchased) ÷ Profit*Total return ratio (TSR) is for the last five fiscal years presented in the 19th Securities Report. *Non-financial information is provided as reference information, including averagevalues for major companies.

33

COMSYS GROUP REPORT 2022

outline

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FY2021FY2015FY2016FY2017FY2018FY2019FY2020

FY2021

ended
March 31, 2016

ended
March 31, 2017

ended
March 31, 2018

ended
March 31, 2019

ended
March 31, 2020

ended
March 31, 2021

ended
March 31, 2022

ended
March 31, 2022
(unit: US$ 1,000)

331,986

370,198402,229505,558

590,718

586,512557,085

4,579,040

320,654334,163

380,024

481,783

560,882

563,252

589,028

4,841,591

43,38945,72353,43365,25373,61275,98978,427644,641

19,54020,68623,08529,98534,65834,41735,463

291,493

23,84925,03630,34735,267

38,953

41,57242,963353,140

24,22325,34130,70636,07140,06442,941

44,036

361,960

24,04022,80730,861

39,60039,47843,264

43,484357,422

15,42014,485

20,39028,01825,99429,36929,208240,079

28,81820,87928,957

27,77835,50332,93634,033279,739

196,543

202,943

231,767

301,459

310,694

330,807343,489

2,823,352

266,066

284,367

325,042439,926

450,043

479,419524,062

4,307,595

6,200

9,620

14,43010,653

11,73012,764

11,12991,476

5,009

5,723

5,866

7,444

9,150

9,279

9,974

81,983

114

113

106

11,756

8,145

5,605

32,331

265,749

13.5

13.7

14.1

13.5

13.1

13.5

13.3

−

7.4

7.5

8.0

7.3

6.9

7.4

7.3

−

7.6

7.6

8.1

7.5

7.1

7.6

7.5

−

4.8

4.3

5.4

5.8

4.6

5.2

5.0

−

7.9

7.3

9.4

10.6

8.6

9.2

8.8

−

9.1

9.2

10.0

9.4

9.0

9.2

8.8

−

7.7

8.2

9.0

8.6

8.0

8.4

8.2

−

73.4

70.9

70.8

67.8

68.3

68.3

64.5

−

35.00

40.00

50.00

60.00

75.00

85.00

95

−

25.6

30.8

28.0

26.1

37.0

36.5

40.3

−

77.2

85.6

67.5

54.5

67.5

60.2

67.5

−

1.0

1.1

1.4

1.3

1.1

1.3

1.0

−

12.71

15.30

15.90

13.12

13.71

14.65

11.33

−

−

−

145.3

157.4

149.2

185.0

152.5

−

1,738

1,989

2,840

3,020

2,783

3,410

2,668

−

141,000

141,000

141,000

141,000

141,000

141,000

141,000−

30,15931,825

26,382

12,29914,165

15,961

18,575

−

2,450

2,804

4,004

4,258

3,924

4,264

3,266

−

9,994

10,224

11,581

16,70016,844

17,066

17,520

−

−

14.7

18.5

18.9

18.7

18.7

20.6

−

−

1.6

1.5

1.4

1.4

2.1

2.4

−

−

1.4

1.9

2.0

2.1

2.1

2.1

−

−

11.2

11.2

12.6

13.0

13.2

13.9

−

11-Year Financial and Non-Financial Data

34

Status of Company’s Shares◆ Investor Information
Fiscal Year:
April 1 to March 31 of the following year

（as of September 30, 2022）

Major Shareholders
Number of
Shares Held Percentage(Thousands)

Name of Shareholder

Regular General Meeting of Shareholders:June of each year

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

31,928

22.64

Custody Bank of Japan, Ltd. (Trust Account)

14,209

10.07

Total Number of Issuable Shares:
580,000,000

ＮＯＲＴＨＥＲＮ TＲＵＳＴ ＣＯ．
(ＡＶＦＣ) ＲＥＳＩＬＣＨＥＳＴＥＲＩＮＴＥＲＮＡＴＩＯＮＡＬＩＮＶＥＳＴＯＲＳＩＮＴＥＲＮＡＴＩＯＮＡＬＶＡＬＵＥＥＱＵＩＴＹ ＴＲＵＳＴ

3,520

2.49

Total Number of Issued Shares:
141,000,000

Nippon Life Insurance Company

3,247

2.30

JP MORGAN CHASE BANK 380055

2,508

1.77

COMSYS Holdings Employee Shareholder Association

2,207

1.56

Number of Shareholders:
21,361ＮＯＲＴＨＥＲＮ TＲＵＳＴ ＣＯ．
(ＡＶＦＣ) ＲＥ U.S.
TAX EXEMPTED PENSION FUNDS

1,773

1.25

HSBC HONGKONG-TREASURY SERVICES
A/C ASIAN EQUITIES DERIVATIVES

1,670

1.18

Sumitomo Realty & Development Co., Ltd.

1,661

1.17

Meiji Yasuda Life Insurance Co.

1,554

1.10

Date of Listing:
September 29, 2003
Listed Exchange:
Tokyo Stock Exchange (Prime Market)(TSE Code: 1721)*As of September 30, 2022, COMSYS Holdings held 19,185,000 treasury shares (13.6%),
but COMSYS Holdings is not included among the “major shareholders” above.
（as of September 30, 2022）

Shares by Shareholder Category

Shareholder Registry Administrator:
Mitsubishi UFJ Trust and Banking Corporation
Shareholder Registry Administrator Contact Address:
1-1 Nikko-cho, Fuchu, Tokyo
Accounting Auditor:
Gyosei & Co.

Component ratio ofshares held(number of shareholders)

43.0%
3.6%
5.5%
19.0%
15.3%
13.6%

Financial institutions (80)Securities companies (44)Other corporate entities (330)Foreign corporate entities (296)Individuals (21,523)
Treasury shares (1)Share Price and Trading Volume（Yen）（Thousands of shares）

4,000

50,00040,0003,000

30,0002,000
20,0001,000
10,000

0
Aug

. ʻ1
9
Sep
. ʻ1
9
Oc
t. ʻ1
9
No
v. ʻ1
9
Dec
. ʻ1
9
Jan
. ʻ2
0
Feb
. ʻ2
0
Ma
r. ʻ2
0
Apr
. ʻ2
0
Ma
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Jun
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Jul.
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Aug
. ʻ2
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Sep
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Dec
. ʻ2
0
Jan
. ʻ2
1
Feb
. ʻ2
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Ma
r. ʻ2
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Apr
. ʻ2
1
Ma
y ʻ2
1
Jun
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1
Jul.
ʻ21
Aug
. ʻ2
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Sep
. ʻ2
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t. ʻ2
1
No
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Dec
. ʻ2
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. ʻ2
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Feb
. ʻ2
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9

ʻ19

Jul.

9

. ʻ1

Jun

. ʻ1

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Apr

35

y ʻ1

9

0

COMSYS GROUP REPORT 2022

outline

strategy

ESG

about usdata

Corporate Information（as of March 31, 2022）（as of June 29, 2022）◆ Company Outline◆ Directors

Company Name:COMSYS Holdings Corporation
Head Office:2-17-1 Higashi-Gotanda, Shinagawa-ku, Tokyo 141-8647
Tel: +81-3-3448-7100 (switchboard)
Website:https://www.comsys-hd.co.jp/english
Description of Business:
Corporate management of subsidiaries involvedin the telecommunications construction business,
electrical facilities construction business, and information processing related business
Established:
September 29, 2003
Share Capital:¥10.0 billion
Number of Employees:
17,520President and Representative Director
Directors

Director(Full-Time Member of the Audit
and Supervisory Committee)
Outside Directors(Members of the Audit andSupervisory Committee)

Takashi Kagaya
Kenichi Sato
Yoshihisa Omura
Satoshi Tamamura
Hidehiko Ozaki
Hideyuki Noike
Kunihiko Uchide
Takaya Kitaguchi
Atsushi Yasunaga
Masahiko Miyashita
Kenichi Nakatogawa
Koichi Kawana
Hiroyuki Asai
Hideo Yamamoto

Organizational Chart
Board of Directors

Nomination and Remuneration Advisory Committee

Audit and Supervisory Committee
President

Audit and Supervisory Committee’s OfficeSenior Management Committee

Sustainability Committee
Risk Management and Compliance Committee
Personal Information Protection Committee

Management
Planning
Department

Business
Expansion
OfficeDX Promotion
Department

IR Department

Financial
Department

General Affairs
Department

HR
Department

Internal Control
Auditing
Department

Management
Planning Division

General Affairs
DivisionInternal Control
OfficeManagement
Strategy Division

Legal Affairs
DivisionInternal Audit
OfficeGroup Strategy
Division

PR Division

Sustainability
Promotion Office(As of July 1, 2022)

Editorial Policy
The embodiment of the Group’s basic philosophy and business philosophy requires
an integrated approach that utilizes both financial and non-financial capital, as wellas integrated corporate activities based on rapid and accurate decision-making.
Furthermore, to gain the understanding of stakeholders, we feel that it is important
to ensure sincere disclosure of information related to those integrated approaches andcorporate activities. This Group Report has been subject to multi-faceted and integrated editing covering all aspects of the COMSYS Group’s business activities, including not only financial information but also environmental, social, and governance(ESG) aspects, based on the assumption that investors are the main readers. We will
fulfill our obligations for accountability by disclosing appropriate information at theappropriate time through this Report, as well as other media, including the Group’s
corporate website, Annual Securities Report, and business reports.
【Scope of Report】
To the greatest extent possible, this report covers the COMSYS Group companies inJapan included in consolidated settlements of accounts, but the scope of the report
differs depending on the items in question.

【Period Covered】
April 1, 2021 to March 31, 2022 (FY2021) (In some cases, information related
to activities in FY2022 is also included)【Reference Guidelines】●GRI Sustainability Reporting Standards (2016)●Value Reporting Foundation (VRF); International Integrated Reporting Framework●Ministry of Economy, Trade and Industry; Guidance for Collaborative Value
Creation【Cautionary Statement Regarding Forecasts】
This report includes plans and strategies related to the future of COMSYS
Holdings and its affiliate companies, as well as information on expectations
and forecasts of business performance. These descriptions or predictions
are based not on past facts but on the company’s beliefs and hypotheses,
formed from information that is available when the report was written. They
also include risks and uncertainties with regard to economic trends, personal
consumption, market demand, taxation systems, and other systems. As such,actual future performance may differ from the forecasts contained herein.

Status of Company’s Shares / Corporate Information / Editorial Policy

36

IR Department
2-17-1 Higashi-Gotanda, Shinagawa-ku, Tokyo
141-8647

TEL: +81-3-3448-7000 FAX: +81-3-3448-7001
Mail to: chd-ir@comsys.co.jp
URL: https://www.comsys-hd.co.jp/english