Corporate Report2021Corporate Philosophy

An infrastructure building company thathelps create affluent communities

CONTEN TS
Introduction
1 Corporate Philosophy/Editing Policy/Guidelines

Where We Should Be in 2030

2 Contents/Scope of Information
Introduction

A truly strong corporate group that pursues personal and corporate growth in tandem andhelps realize a sustainable society

About Seikitokyu Kogyo Group
3 History of Seikitokyu Kogyo Group

Action Guidelines

5 Financial and Non-Financial Highlights

To e a r n t r u s t

About Seikitokyu Kogyo Group

7 Value Creation Process

To r i s e t o t h e c h a l l e n g e f o r c h a n g e
To t a k e t h e l e a d a n d t a k e a c t i o n

Growth Strategy

To s h a r e o u r k n o w l e d g e a n d t e c h n o l o g i e s

9 Message from the President
12 Capital Policy and Financial Strategies

Seikitokyu Kogyo Group Compliance Code of Conduct
1.
2.

13 Long-term Vision

To recognize that safety always comes first when executing our business.
To conduct fair and transparent business activities that not only naturally comply with all laws and regulations but also conform with internal rules.

15 New Medium-term Management Plan

Growth Strategy

3. To conduct fair and transparent decision making.
4. To conduct timely disclosure in an appropriate and fair manner.
5. To conduct appropriate accounting and reporting.
6. To focus on the market and provide products that customers trust.
7. To comply with environmental laws and regulations and conduct environment-conscious corporate activities.
8. To have absolutely no dealings with anti-social forces and to resolutely refuse any improper demands.
9. To provide and preserve fine, healthy workplace environments.
10. To seek to use electronic information fairly, maintain trust, and ensure confidentiality.
11. To recognize the importance of intellectual property and trade secrets and ensure they are both handled appropriately.
12. To always distinguish between public and private needs and never act in a way that would be detrimental to the Company’s interests.
13. To never engage in insider trading or the sale of stocks or other items that could be considered suspect.

ESG Section
17 Materiality of
Seikitokyu Kogyo Group
19 Environmental
21 Social
27 Governance

ESG Section

Data Section
31 Financial Information
33 Segment Information and Business Description
34 Company Profile and Stock Information

Our aim in publishing this report is todisclose initiatives designed to improve
Seikitokyu Kogyo’s medium- to long-term
corporate value to our shareholders,investors, and all other stakeholders, and toencourage opportunities for dialogue. The
report includes not only financial information,
but also non-financial information on topics
such as our long-term corporate vision, theenvironment, society, and governance.
We hope this report will help deepen yourunderstanding of our corporate goals andapproach.

1

SEIKITOKYU KOGYO CO., LTD.

Report Scope and Timeframe
Timeframe: April 2020 to March 2021
(includes some activities that falloutside this period)
Scope: The whole Seikitokyu Kogyo Group However,some of the non-financial information refers
to SEIKITOKYU KOGYO CO., LTD. only.

Scope of Information

Financial Information
Overview

Non-Financial Information

Website (https://www.seikitokyu.co.jp/)

Corporate Reports (in Japanese and English)

Reference Guidelines
Environmental Reporting Guidelines, Japan’s Ministryof the Environment
Guidance for Collaborative Value Creation, Japan’s
Ministry of Economy, Trade and Industry

Data Section

Editing Policy

Financial Results Presentation Materials
Securities Report

Financial Results

Reports

Corporate Governance
Reports

Details

Corporate Report 2021

2

A bo u t Se ik ito kyu Kogyo Group

History of Seikitokyu Kogyo Group

Major events in society

1956 Establishment of the Japan Highway Public Corporation

1973 The Yom Kippur War (the first oil crisis)

1964 Tokyo Olympics(1) Asphalt pavement construction work

(2) Asphalt mixture plant

1991–1993 Collapse of bubble economy(3) Emulsion plant in Myanmar

2008 The global financial crisis

1979 The Iranian Revolution (the second oil crisis)2011 The Great East Japan Earthquake

1985 The Plaza Accord

1982–

1990–

2011–

Establishment of “Seiki of technology”
Worked on the frontline of road construction during thepostwar reconstruction and rapid economic growth period

Expanded business fields beyond road construction
Made a full-fledged foray into the fields of leisure, construction works,
and overseas works, and received orders of 100 billion yen in fiscal 1989

Returned to the core business in Japan after the collapse of the bubble economy
Diversification of pavement technologies, such as pavement that drains water,reflects solar radiation, or resists freezing, as well as ICT construction

Help to achieve a sustainable society on the basisof our expertise in road construction Geared towardmedium- to long-term increase in corporate value

After the collapse of the bubble economy, the Company concentrated its
management resources on the core business. A wide range of pavement
technologies were established, including pavement that drains water,which prevents water from staying on the surface and has becomecommon in today’s expressways; pavement that reflects solar radiation,
which curbs the heat-island phenomenon; and pavement that resists
freezing, which prevents car accidents caused by slippery road conditions
in winter. In addition, the Company has satisfied the diversifying needs ofsociety by using its technologies. For example, research and development,
as well as actual use, of ICT construction has been under way, which canaddress various issues, including safety of construction works, productivity
at construction sites, stabilization of quality, and future labor shortage.

In addition to committing to the core business centered around road
construction, the Company supports disaster restoration andreconstruction through a wide range of business activities. As thefrequency and severity of large earthquakes, typhoons, torrential rains,
and other natural disasters increase, the opportunity to engage indisaster restoration and reconstruction increases as well. Specifically,
the Company eliminates road obstacles in expressways and othermajor roads, which is the first step of restoration; removes and takes inrubbles; works on full-fledged restoration of roads; constructs new,alternative routes; engages in bank protection works; decontaminatesradioactively contaminated areas; and engages in works related tointerim storage facilities that store soil removed in the course of
decontamination and contaminated waste.
As global warming and other environmental problems have become
increasingly serious, the Company works on research and developmentof environmentally friendly products and construction methods, as wellas introduces facilities to reduce environmental impact. In addition,
initiatives are under way to shape the overall picture of environmentallyfriendly business activities.
The Group will continue to give consideration to the global environmentand help achieve a sustainable society, aiming for a medium- to longterm increase in corporate value.

Seikitokyu Kogyo

In response to an increasing demand for road pavement, theRoad Construction Unit of Tokyu Construction Co., Ltd. wasseparated from the company in January 1967 to establish Tokyu
Road KK. While constantly delivering results as a company
specialized in road construction, Tokyu Road was committed tobuilding asphalt material plants. The material plants establishedin Asaka and Yokohama in the 1960s form the basis of the material
network in the Kanto area, which constitutes our strength today.
The 1970s saw the start of the urban court business. Environment
and landscape technologies that originate here are used today
for many sports facilities and parks, such as tennis courts,
athletic fields, and promenades.

As Japan saw the end of rapid economic growth and atransition to low growth, SEIKl KENSETSU KOGYO CO.,LTD. and Tokyu Road KK merged on May 1, 1982, to establish
SEIKITOKYU KOGYO CO., LTD.
The first large-scale merger in the road industry strengthened
the business foundation and resulted in the gradualexpansion into the golf course development and resort
facility construction businesses in later years. In the fiscal
year ended March 1990, the Company received orders of
100 billion yen, which was the target set at the time of themerger.

(The first president of Tokyu Road KK)

Masaaki Seto
Anti-freezing pavement (Type G Zapeck method)(The first president of SEIKl KENSETSU KOGYO CO., LTD.)

SEIKI KENSETSU (1950–1982)

Masaaki Seto was the central figure of SEIKl
KENSETSU KOGYO CO., LTD., both as thepresident and as an engineer. Although theCompany was a relative latecomer to thebusiness, he made its name known nationwide
within a few years after the establishment andexpanded the business scale.

The origin of the Company name of
SEIKl KENSETSU KOGYOThe Company was established in the first yearof the second half of the 20th century, and theroad pavement works by the founders wererecognized by a chief engineer of U.S. militaryas the best work humans have done in the
century (seiki). The Company name derives
from these events, expressing the ambition tocontinue to produce business achievementsof the century.

Urban Cool (solar radiation reflective type)(Shibuya Crossing, Tokyo)
ICT construction technology

In 1999 and 2001, the Company received an order for the first pavement
construction work on performance based contract and an order for the
first pavement construction work based on the comprehensive
evaluation contract respectively from the Ministr y of Land,
Infrastructure, Transport and Tourism. These once again showedinternally and externally the ambitions and advanced technologies
passed on since the establishment of the Company.

Data Section

SEIKl KENSETSU KOGYO CO., LTD. was established in January 1950 by Masaaki
Seto, Hidenobu Oshima, and others, who played a central role in urban planningand road construction in Manchuria. The Company worked on the frontline of road
construction in postwar Japan and provided a foundation for reconstruction andrapid economic growth. Shortly after the establishment, the Company started toshow its presence with great ambitions for road construction and advanced
technologies, receiving an order for the first pavement construction work on
service contract from the Ministry of Construction in 1955 and an order for the firstpavement construction work from the Japan Highway Public Corporation in thefollowing year. A laboratory was established in 1959,
where research on asphalt pavement was conducted
while concrete pavement was the mainstream at thetime. This laid the foundation for what will later becalled “Seiki of technology.” The first asphalt plant wasestablished in 1951, and the first recycling plant wasestablished at Myokenjima, Edogawa-ku in 1977, withan eye to changes of the times.
Pavement construction work at the

ESG Section

Kenzaburo Kondo played a central role in urban and road planning in Hsinking, the capitalof Manchuria, and led road construction projects. He served as secretary general of theJapan Highway Users Conference after WorldWar II and was known as a traffic policymakerand road theorist since early days.

Today

Growth Strategy

Tokyu Road (1967–1982)

About Seikitok yu Kogyo Group

1950–

Kenzaburo Kondo
History or Seikitokyu Kogyo

Introduction

We were established in January 1950 as SEIKl KENSETSU KOGYO CO., LTD. The Company changed its name to SEIKI
KENSETSU CO., LTD. in April 1962, and later merged with Tokyu Road KK to establish SEIKITOKYU KOGYO CO., LTD. Today,
our business encompasses (1) pavement construction works for expressways and other roads, airports, bridges, regulating
reservoirs, and station platforms and maintenance of sports parks and athletic fields, as well as (2) pavement materials
manufacturing and sales and acceptance of construction waste. The Seikitokyu Kogyo Group, which includes 12 subsidiaries,
operates across Japan and in (3) Myanmar and Guam.

Minamisoma Mixture plant established after the Great East Japan Earthquake(Fukushima)time of the Company’s foundation

TOPICS

January 1950
October 1955

3

SEIKl KENSETSU KOGYO CO., LTD. established
Received an order for the first pavement construction work from the Ministry of Construction
November 1956 Received an order for the first pavement construction work from the Japan Highway Public Corporation
September 1973 Listed shares on the Second Section of the Tokyo
Stock Exchange
May 1976
Established the equipment centerMay 1977
Installed the first recycling plant
April 1980
New technology research laboratory established

SEIKITOKYU KOGYO CO., LTD.

January 1967
1967

Tokyu Road KK established
Hakone Turnpike pavement construction work
October 1967
Established Asaka bitumen plant
December 1968 Established Yokohama bitumen
plant
1970
Launched Tokyu Mix cold construction mixture
September 1975 Acquired the urban court business

May 1982

SEIKI KENSETSU CO., LTD. and Tokyu
Road KK merged and changed corporatename to SEIKITOKYU KOGYO CO., LTD.
November 1982 Changed listing to the First Section of theTokyo Stock Exchange
Tohoku Expressway Ichinohe pavement construction work
Honshu-Shikoku Bridge (Kojima–Sakaide route) pavement
construction work
New Chitose Airport runway pavement construction work,
etc.

September 1996 Established the action guidelines
March 1999
Received an order for the first pavement construction work on performance based
contract from the Ministry of Construction
March 2001
Made a successful bid for two construction projects out of the three for construction
projects for the first pavement construction work based on the comprehensive evaluation contract ordered by the Ministry of Land, Infrastructure, Transport and Tourism
September 2002 Established the Compliance Code of Conduct
Trans-Tokyo Bay Highway bridge pavement construction work
Central Japan International Airport apron pavement construction work
New Transit Waterfront Line track construction work, etc.

December 2015 Established the Seikitokyu Kogyo Corporate
Governance Guidelines
April 2016
Established the training center (TTC)
January 2020 Celebrated the 70th anniversary of the Company’s founding
May 2021
Formulated Where We Should Be in 2030
Shin-Tomei Expressway Shimizunishi pavement construction work
Tokyo-Gaikan Expressway Ichikawa pavement construction work
Naha Airport runway expansion and pavement construction
Training center (TTC)
work, etc.

Corporate Report 2021

4A bo u t Se ik ito kyu Kogyo Group

Financial and Non-Financial Highlights

Financial Highlights (as of and for the years ended March 31)
63rd fiscal year

64th fiscal year

65th fiscal year

66th fiscal year

67th fiscal year

68th fiscal year

69th fiscal year

70th fiscal year

71st fiscal year

72nd fiscal year

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

Introduction

62nd fiscal year
Unit

Operating Results
61,01070,32968,90073,321

71,08375,72471,42780,57278,81786,88989,611(Millions of yen)

59,365

61,106

71,091

71,69163,542

74,63470,07581,65974,03678,63190,025

Operating income(Millions of yen)

2,109

2,294

3,731

4,779

4,528

6,291

6,412

6,235

5,564

5,961

8,470

Ordinary profit(Millions of yen)

1,943

2,178

3,551

4,730

4,487

6,261

6,338

6,239

5,584

6,009

8,395

Net profit attributable to owners of parent(Millions of yen)

1,715

1,886

3,705

3,793

4,365

5,682

5,621

2,274

3,480

6,544

5,180

Cash flows from operating activities(Millions of yen)

1,217

2,945

4,796

5,433

2,862

6,679

6,949

6,303

4,781

4,461

1,138

Cash flows from investing activities(Millions of yen)

(361)

(130)

(608)

(1,407)(1,234)(1,658)(4,896)(2,231)(1,777)(3,808)(3,622)

Cash flows from financing activities(Millions of yen)

(2,525)(2,610)(4,828)(1,551)(1,604)(1,603)

1,815(1,684)(2,005)(2,919)2,343

Cash and cash equivalents at end of year

(Millions of yen)

3,006

3,206

2,566

5,041

5,064

8,482

12,35014,737

15,735

14,16914,035

About Seikitok yu Kogyo Group(Millions of yen)

Net sales

Orders received

Cash Flows

Financial Position
8,544

8,801

11,344

12,791

17,083

21,231

26,07228,09831,54336,63240,790(Millions of yen)

47,33949,597

48,10650,80956,07957,544

66,444

72,19270,90674,656

79,409Interest-bearing debt

(Millions of yen)

9,650

8,659

5,009

4,508

3,508

2,508

5,008

4,008

2,404

772

5,007

Growth Strategy(Millions of yen)

Total assets

Net assets

Amount Per Share (after adjustments for the reverse stock split) *A one-for-five reverse stock split was conducted in October 2014. Figures as of and for the years ended March 31 after fiscal year 2014 reflect the effects of the reverse stock split.
Net income

(Yen)

11.85

10.54

19.36

95.48

108.13140.78139.26

56.35

86.16

162.40128.45

Net assets

(Yen)

8.77

31.50

51.34

316.84423.19525.96645.90696.09780.73909.13

1,010.99

Dividends

(Yen)

—

—

—

15

15

17

17

10

27

47

43

Stock price at end of year

(Yen)

89

66

82

615

518

471

531

688

589

816

931

Equity ratio

(%)

18.1

17.7

23.6

25.2

30.5

36.9

39.2

38.9

44.5

49.1

51.4

Return on equity

(%)

20.3

21.7

36.8

31.4

29.2

29.7

23.8

8.4

11.7

19.2

13.4

(Times)

7.51

6.26

4.24

6.14

4.79

3.35

3.81

12.21

6.84

5.02

7.25

(Times)

1.1

1.0

0.4

0.4

0.2

0.1

0.2

0.1

0.1

0.0

0.1

Financial Indicators

D/E ratio

ESG Section

Price-earnings ratio

Non-Financial Highlights (as of and for the years ended March 31)
Number of employees (consolidated)(persons)

Number of employees (non-consolidated)

1,031

70th fiscal year 71st fiscal year 72nd fiscal year

5

SEIKITOKYU KOGYO CO., LTD.

2021

Research and development expenses (Millions of yen)Non-engineering position

841

869

766

755

773

80

86

96

70th fiscal year 71st fiscal year 72nd fiscal year
2019

2020

2021

846

841

641

649

205

217

220

70th fiscal year 71st fiscal year 72nd fiscal year
2019

2020

379

382

2021

CO² emissions (non-consolidated, Scope 1, approximation)(Kilotons)

Pending

37

38

55

58

55

32

869

624

Number of patents held (including utility models and design
registrations)(cases)Holding

389
846

2020

Engineering position(persons)

1,043

907

2019

FemaleNumber of employees (non-consolidated)

Data SectionMale(persons)

27

29

10

9

27

5
70th fiscal year 71st fiscal year 72nd fiscal year
2019

2020

2021

70th fiscal year 71st fiscal year 72nd fiscal year
2019

2020

2021

70th fiscal year 71st fiscal year 72nd fiscal year
2019

2020

2021

Corporate Report 2021

6

A bo u t Se ik ito kyu Kogyo Group

Value Creation Process

Remaining conscious of the global environment as we
help create affluent communities
Improving medium- to long-term corporate value

Value
Provision

As an infrastructure building company that helps create affluent communities, we aim to provide
lasting value to society and improve our own corporate value over the medium- to long-term.
Where We Should Be in 2030
Securing leaders

Public-works expenditure trends

Improving productivity

More frequent and severe natural disasters

Increased awareness of disaster prevention and mitigation

Deteriorating infrastructure

Greater national resilience

The soundness of central and local government financial situations

Infrastructure lifecycle costs

Immature infrastructure in some Asian and developing countries
Global environment protection and climate change issues

Vigorous infrastructure demand
Low carbon, zero carbon Zero fossil fuels, energy saving

Compact cities

Private construction demand trends

Less construction of new roads

Fluctuation in crude oil priceHigher demand for maintenance/updating

More efficient upkeep management
Concerns over reduced straight asphalt supply volumes, and price fluctuation

Input

Renewable energy

A truly strong corporate group that pursues
personal and corporate growth in tandem
and helps realize a sustainable society

Business Processes
Construction business

Pavement materials manufacturing and sales businessSound financial platform
Shareholder’s equity (40.7
billion yen)Interest-bearing debt (5.0billion yen)

Pavementmaterials
manufacturing

Sales/
transportation

Procurement

Construction

Raw materials
miningService/management

Asphalt composites

Diverse andhighly talented
human resources

Co-creation
opportunities with
Tokyu Group

Initiatives on Key Material Issues
E

Net sales

S

Contribution to disasterrecovery and restoration

Our business partners

Initiatives to reduce
environmental
impactEnvironmental protection

Infrastructure

Natural disasters

Local residents Job satisfaction(FY2021–2023)

Financial capital

Working capital, capital
expenditure
Strengthening financialbase (investment andprocurement reserves)

Physical capital

Manufacturing investment,
renewal of construction
machinery
Expanding base sites

New Medium-termManagement Plan
P15-16

Human capital

Improving and maintaining workplaceenvironment and work-life balance
Human resource training,
talent development
Securing leaders

CO2

Data Section

Fair and equal businessdealings
Co-creation based on
mutual trustP19-20
Waste

Natural capital

SEIKITOKYU KOGYO CO., LTD.

Safe and secure basis fordaily living

Operating income

G

Medium-term Management Plan

7

Local communities

Environmental contribution

P17-18

1st Phase

Fossil fuels, water, air

Safe and secure basis fordaily living
Kindness, sense ofconnection, self-fulfillment

Recycling scrap materials

Social capital
Customers
Partner companies
Permits and licenses
History, corporate performance,completed projects
Brand, corporate culture,rules, standards

Job satisfaction

Key performance indicators (KPI)

Materiality of Seikitokyu
Kogyo Group

Technical capability, expertise,patents

Our employees

100 billion yen 8.0 billion yen

Maintenanceand repair

Intellectual capital

Irrigation infrastructure construction

Pavement materials manufacturing and sales business

Recycling
Renewal(disposal)

Civil engineering works

ESG Section

Number of employees(consolidated: 1,043)
Qualified personnel
Experience, knowledge,
technical skills
Engagement

R&D, construction
and products
backed by hightechnologicalprowess
Full network ofmaterial plants in
the Kanto area

Seikitokyu Kogyo
Value Chain

Human capital

Pavement construction

Improving medium- tolong-term shareholder value
Stable and consistentshareholder returns

Growth Strategy

Sales/
transportation

construction and products

Our shareholders and investors

Construction business

Strengths
Synergies fromconstruction businessand pavement
materials manufacturing
and sales business

Procurement

Physical capital
Head office, branch offices (13),business offices (55), material plants (49)Technological research laboratory,
testing laboratories (8)Equipment center, construction
machinery
Training center

Outside the Group’s business sphere

Our customers
Needs-focused services
Providing high-quality

OutputGovernance and compliance2nd Phase

3rd Phase

Medium-term Management Plan

Medium-term Management Plan

(FY2024–2026)(FY2027–2029)

Intellectual capital

R&D, joint research
Systems renewal
Promoting digitaltransformation (DX)Social capitalStrengthening compliance management
Implementing ESG- and SDGs-focused management,
promoting sustainability transformation (SX)Strengthening cooperation andmutual trust with partner companies

Natural capital

Promoting recycling andenergy saving
Efforts to reduce carbon
and fossil fuel use
Further environmental considerations

Our environment
Global environment
protection

Reinvestment

Financial capital

OUTCOME

Long-term Vision P13–14

About Seikitok yu Kogyo Group

Declining working-age population due to shrinking population, aging society, and low birth rate
Uncertain future political, economic, and international situations

Introduction

Social Issues (Risks and opportunities)

Reducing environmental
impactCorporate Report 2021

8

G ro wth Stra t egy

Message from the President

Human Resourcefulness Is What Expands Regional Bases

Director, President

Yoshikazu TairaSEIKITOKYU KOGYO CO., LTD.

Actual Performance During Previous Medium-term Management Plan and 2030 Plans/Targets
Operating income

Net profit attributable to owners of parent

90.0
74.0

78.6

5.6

6.0 6.5(Billions of yen)

91.6

8.5

100.0

8.0
5.2

5.8

5.0
3.7

3.5

FY2018Net sales

Data Section

9

The five basic policies for our Where We Should Be
in 2030 strategy are connected at a fundamental level byenvironmental, social, and governance (ESG) initiatives
designed to meet the stakeholder expectations.
The first basic policy of expanding stable earnings
requires us to strength our two main businesses of road
construction and pavement materials manufacturing andsales. We absolutely cannot do that without considering
the environment.
In terms of the manufacturing of materials, we continue
to strive to develop products with low environmental
impact. For example, conventional asphalt composites
are manufactured at high temperatures of roughly 160°C.
However, we have perfected our own inhouse foaming
technology which enables the composites to be
manufactured at lower temperatures of roughly 130°C andstill maintain quality. The 30°C difference is significant andis expected to help reduce CO2 emissions.

ESG Section

Seikitokyu Kogyo celebrated our 70th anniversary in 2020.
We are extremely gratefully and delighted to have reachedthis major milestone thanks to the efforts of successive
presidents and senior colleagues since our founding in
1950, as well as the help and support of multiple relatedparties and the sincere determination of each and every
one of our employees.
In addition, in fiscal 2020, the final year of our previous
Medium-term Management Plan which focused on taking
on the challenge of sustainable growth and putting ourbusiness on solid footing for the next stage, net sales
exceeded 90 billion yen for the first time in 19 years. We
also achieved a record level of operating income, which
illustrates the true power of our core businesses. We wereable to execute our investment plans and capital policy asplanned and steadily paved the way for future growth.
Furthermore, we announced our long-term vision which
focuses on the next 10 years entitled: Where We Should Be
in 2030. This is truly an opportune moment, and I feel that
we have been steadily gathering and ordering the tasks
that we need to fulfill without delay to secure that future.
Our corporate philosophy forms the backbone of ourmanagement strategy and the basis of our Where We
Should Be in 2030 goals.
In 1982, SEIKI KENSETSU CO., LTD. and Tokyu Road KK
merged and embarked on a new journey as SEIKITOKYUKOGYO CO., LTD. 10 years after the merger in 1992, wewere trying ascertain what Seikitokyu Kogyo needed to do

as we approached the 21st century, and that was when we
determined our corporate philosophy to serve as an
infrastructure building company that helps create affluent
communities.
However, at the time, we had been focusing on diversified
management, such as golf course development, during
Japan’s bubble economy. When the bubble burst, theCompany was hit hard, we reported huge losses, determined
to restructure, and experienced 19 years of unrelenting decline
as a non-dividend paying company. It was truly a trial todetermine our survival or extinction.
Our corporate philosophy has always been a greatsource of strength even during such difficult times. Not
only in regular times, but also in times of disaster, we seek
to sincerely fulfil the responsibility expected of us by local
communities as an infrastructure building company. We
survived in order to help local communities and to serveas an unassuming backseat player. Our corporate
philosophy serves as bedrock of our corporate managementthat will never falter, whatever the circumstances.
Based on this philosophy, the goal of our WhereWe Should Be in 2030 strategy is to become a truly strong
corporate group that pursues personal and corporate
growth in tandem and helps realize a sustainable society.
Given our firm foothold in the road construction industry,
we seek to help create sustainable local communities as awidely trusted infrastructure building company. That is thegoal behind our high growth ambitions.

The Path to Growth Starts with Information Disclosure

Growth Strategy

Looking Ahead to Where We Should Be in 2030

About Seikitokyu Kogyo Group

based on a clear awareness ofcurrent circumstances and acommitment to full disclosure.

So, how will we move forward over the next 1 0 years as
Japanese society is currently experiencing a period ofmajor change? The construction business environment
presents various challenges. We do expect to see firm
underlying demand flowing from disaster prevention andmitigation and national resilience measures. However,public works projects are also expected to decline overthe medium to long term as Japan’s declining and aging
population results in falling tax revenues.
Recognizing the current situation, we have establishedthe following basic policies for realizing our Where We
Should Be in 2030 strategy: (1) Expand stable earnings,(2) Diversify revenue sources, (3) Execute people-centricmanagement, (4) Establish new ways of working, and (5)Enhance management and financial base. We intend toformulate strategies and measures based on these fivebasic policies and implement them reliably within ourcurrent Medium-term Management Plan of which fiscal
2021 is the first year.
We will progress all five basic policies simultaneously.
However, I believe that a company is only able to growwhen its employees are also growing individually, and viceversa. For that reason, we are placing particular emphasison policy (3) Execute people-centric management.
We boast over 100 bases across Japan and our employees
are dedicated to helping enrich the local community
surrounding each of those bases. We need 100 managers
for those 100 offices, so we have to nurture employees withresourcefulness and strong leadership skills if our businessis to be successful. They are the very lifeline of theCompany.
The branches that manage individual regions holdmonthly managers meetings. These meetings areimportant pillar support venues for the Company, andhead office executives, including myself, always attend
them and work to synchronize the different vectors ofIntroduction

We intend to work toward 2030 as
an infrastructure building company
that contributes to communities

the Company, branches, and offices. Amid the COVID-19
pandemic, we are seeing a rise in teleworking and remote
working. However, we still need opportunities to get
together in person and talk directly, and smoothcommunication is essential for nur turing sharedawareness.
We re g a rd h u m a n re s o u rc e s e d u c a t i o n a s a n
investment rather than an expense, and we are pursuing
various initiatives to make that happen, including inviting
external lecturers to help foster next-generation leaders.
We want to instill a personal training approach thatenables all employees to develop an awareness of their
desired career path and encourages depar tment
managers to fully grasp potential, personality, andmotivation of each of the employees in their care andinteract directly with them.

FY2019FY2020

FY2023(plan)

FY2030(targets)

Corporate Report 2021

10

G ro wth Stra t egy

POINT

Capital Policy and Financial Strategies

2. Rise to the challenge for change
3. Take the lead and take action

POINT Improving Shareholder Value
When it comes to improving shareholder value, we focus
on total shareholder return (TSR) as an important progress
indicator. We achieved a TSR of 3 0% in our previous threeyear Medium-term Management Plan (2018–2020), and,based on our achievements to date, we raised the TSR
target to a minimum of 5 0% in our new Medium-termManagement Plan (2021–2023).
As mentioned above, while dividend yields are
expected to decline to a certain extent due to declining
EPS, we will continue to improve shareholder value by
working on management and financial strategies toensure TSR exceeds shareholders’ equity costs.

ESG Section

1. Earn trust

Capital Efficiency and Shareholders’ Equity Costs
With regard to capital efficiency, we have set a planned
ROE of 10% in our 2030 strategy. At present, we recognizethat our shareholders’ equity costs stands at roughly 7–8%
and so we believe it is necessary to maintain an ROE levelof at least 8% from 2021 onward.
Regarding past extraordinary losses, to date the tax
burden has been reduced by tax losses carried forward.
However, the carry-forward period for these losses ended
in fiscal 2021, so from fiscal 2022 onward, we will no longer
be able to make such deductions, and the level of aftertax profit and EPS is expected to decline somewhat. As aresult, we recognize that ROE, which has remained high
POINT

POINT Cash Position
In addition to securing stable working capital, we need toconsider capital investment, strategic investment, andmeasures required to respond to natural disasters andany other unforeseen circumstances. As such, we believethat our cash position needs to be roughly twice the sizeof our average monthly sales.
The monthly funds figure will fluctuate owing to the factthat payments for sales tend to come in primarily in thelatter part of the month while the settlement date forpurchase obligations falls in the middle of the month.
Therefore, the current cash balance on the balance sheet
corresponds broadly to the maximum amount of funds
recorded in the account during a particular month.
We need to consider our funding efficiency improvement
and flexible financing, so we intend to maintain a stable
cash position by utilizing commitment lines and otherchannels.

Growth Strategy

4. Share our knowledge and technologies
Even after a quarter of a century, these four declarations
guide our future path as clearly as ever. These four action
guidelines are written in our employee handbook andserve as the gospel to which all of our executives andemployees should always adhere.
Our executives and employees are proud of ourcorporate philosophy, and we will strive to realize asustainable society by following our action guidelines withgreat ambition and will and always seek to contribute to
local communities.

Data Section

SEIKITOKYU KOGYO CO., LTD.

Back in 1996 when our company management was facing adifficult predicament, we created four action guidelines.

POINT Maintain and Improve Financial Soundness
In terms of financial soundness, we have indicated thatobtaining an A credit rating is one of the targets of ourWhere We Should Be in 2030 strategy. If we take into accountbusiness evaluations in the construction industry, we do notconsider our current equity or equity ratio to be excessive.
In order to create an optimal capital structure that offers
both stability and efficiency, we believe it is necessary tomaintain a sound financial base with a target equity ratioof roughly 50%.

level to date, will also inevitably decline to a certain
extent. However, as mentioned above, we will review ourcapital structure in terms of increased dividends andacquisition of treasury stock with a view to financial
soundness and strive to ensure ROE exceeds shareholders’equity costs.

About Seikitokyu Kogyo Group11

Take the Lead, Take Action, and Rise to the Challenge of Change

Fundamental Approach
The Seikitokyu Kogyo Corporate Governance Guidelines
describe our basic capital policy-related approach as:“The Company considers the securing of continued
growth investment and a strong financial base to be
essential for achieving sustainable growth and improving
medium- to long-term corporate value and shareholder
value. As such, the Company shall endeavor to maintainthe necessary level of shareholder equity and consider anappropriate balance with capital efficiency.” Financial
soundness, safety, and stability are key to a company
involved in public works projects, and capital efficiency isimportant as a listed company. We recognize theimportance of balancing these two aspects at a highlevel.
POINT

Introduction

In addition, while we have acquired ISO14001 certification
to date, we are currently preparing to pursue SBT
certification based on the international Science Based
Targets initiative (SBTi). In the meantime, we intend to
gain a clear grasp of the volumes of CO2 emissions thatour business operations generate, set reduction targets,and confirm more detailed initiatives.
The fourth basic policy of establishing new ways ofworking links to the social part of our ESG commitments.
We regard the full participation of women to be anespecially important issue and so, in 2020, we appointed
Rena Shimizu, an expert on women’s empowerment and acorporate manager, as an outside director of Seikitokyu
Kogyo. We want to use the Ms. Shimizu’s advice tostrengthen our efforts to nurture female executive
candidates and acquire “Eruboshi” certification as an
excellent company in terms of women’s participation andadvancement. The women who work in the Company right
now are sincere and highly talented, and I very muchhope to see women becoming branch general managers
and department heads in the future.
In terms of employing foreign nationals, we continue torecruit several students from Myanmar every year. In 2020,
we set up a subsidiary firm in Myanmar to manufactureand sell pavement materials. We are unsure when we will
be able to start operations due to the unstable local
political situation, but our relationship with Myanmar is notfor a short-term business. The road system in Myanmar
remains underdeveloped and we want to work with our
employees from Myanmar and use our own technology tohelp improve and maintain road infrastructure in thatcountry as a long-term commitment.
Our fifth basic policy to enhance our management andfinancial base, along with our first policy to expand stableearnings, is directly linked to the governance element of
ESG.
We have set a target for net sales of 100 billion yen as
part of our Where We Should Be in 2030 strategy. We arealso aiming to maintain a high operating profit margin,
and to generate operating income of 8.0 billion yen andnet profit attributable to owners of parent of 5.0 billion yen.
Our target equity ratio is 50.0% and target ROE is 10.0%.
To fulfil the targets, we plan to achieve net sales of

91.6 billion yen in fiscal 2023, along with ordinary profit of
5.8 billion yen and net profit attributable to owners of parentof 3.7 billion yen, in our current Medium-term Management
Plan. As part of our capital policy, we are targeting
a dividend payout ratio of approximately 30% and a total
shareholders return of 50% or above.
Having said that, we will never forget the lessons learned
from the punitive measures we incurred in previous fiscal
years in relation to violations of the Antimonopoly Act andprice cartels for composite materials, and we won’t let it
fade into a forgotten past event. We are keenly aware thatfraud will crush a company, and we are determined topromote thorough awareness and establish thoroughcompliance frameworks across the Company.
Seikitokyu Kogyo develops our business as part of theroad construction industry, but we are also always asking
ourselves what value we can offer as a member of the Tokyu
Group. Here, we are determined to adhere to the Tokyu
Group slogan of Toward a Beautiful Age, and we continue topursue creating beautiful living environments with almost
tactless frankness following our own corporate philosophy
that is centered around contributing to local communities.
Our approach to governance focuses on disclosing
management information in a timely, appropriate, and fairmanner and carefully explaining our thinking in order toimprove our corporate value over the medium to longterm. I am aware of my responsibility as company
president to thoroughly instill and strengthen thisawareness across every inch of the Company. I also
believe we can grow the Company by clarifying
information on actual management situations and further
considering what we could do by promoting dialogue withmany different stakeholders.

What Is a Business Evaluation?
A business evaluation is an examination that all construction contractors looking to take on work directly from anissuer of public works contracts must undergo. Each institution that issues public works orders is meant to examine
the qualifications of all construction companies intending to participate in competitive bidding. The institutions thenassign a score to the objective and subjective elements of the examination, rank contractors in score order, andassign a rating. The business evaluation is part of the objective elements, which involves quantifying and evaluating
a company’s financial condition, business scale, technological capabilities, and other elements, such as sociability,
etc. The analysis of financial conditions is conducted by a financial conditions analysis institution registered by the
Minister of Land, Infrastructure, Transport and Tourism.

Web

Management with a strong awareness of cost of capital
https://www.seikitokyu.co.jp/company/corporate-governanceCorporate Report 2021

12

G ro wth Stra t egy

Long-term Vision

A truly strong corporate group that pursues
personal and corporate growth in tandem
and helps realize a sustainable society

Medium-term Management Plan

2nd Phase

3rd Phase

Medium-termManagement Plan

Medium-termManagement Plan

Medium-termManagement Plan

(FY2021–2023)(FY2024–2026)(FY2027–2029)

Net sales

100 billion yen

Operating income

8.0 billion yen

Net profit attributableto owners of parent

5.0 billion yen
10.0%

ROE
Equity50.0 billion yen

Total assets

100 billion yen

Equity ratio

50.0%

Net sales: 100 billion yen

Our net sales target of 100 billion yen in our 2030 strategy is based on the idea that 100
billion in sales is the optimum scale of our business that would maximize profits, while
having secured the necessary human resources for our current business divisions andcapping the rise in management costs linked to an expansion of our current
organizational structure and an increase in management personnel.

Operating income: 8.0 billion yen (operating margin 8.0%), net profit attributable to owners of parent: 5.0 billion yen

In recent years, our operating profit margin has been one of the highest among those of
so-called major paving companies. We intend to maintain this high operating margin andto record a stable operating profit total of 8.0 billion yen by expanding sales to 100 billion
yen, and to expand our presence as a profitable company in the road constructionindustry. Our target figure for net profit attributable to owners of parent is set at 5.0 billion
yen due to the fact that our corporate tax burden will return to normal levels after
measures to reduce the tax burden using carry-forward losses ended in fiscal 2020.

ROE: 10.0%, equity: 50.0 billion yen

During our revitalization phase that began in the early 2000s when our equity had sufferedsignificant damage, ROE has remained consistently high at an average of 20% or above.
However, as we have developed greater financial soundness and shifted into the renewed
growth phase, ROE is expected to decline somewhat as our tax burden returns to regularlevels. We aim to achieve ROE of 1 0.0% in the future while also ensuring ROE exceeds
shareholders’ equity costs over the medium to long term.

Cash Flow Allocations
Approximately 28.0 billion yen capital expenditure
over 10 years
We also plan large-scale investments through fiscal
2025, including the rebuilding of some asphalt plants.
From fiscal 2026, we expect to be investing in regular
maintenance and updates, but will continue making
necessary investments with due consideration of theenvironment and energy saving factors.
Approximately 5.0 billion yen strategic investment
over 10 years
We intend to continue making strategic investmentswith additional investment being channeled into
overseas subsidiaries and M&A projects in Japan.
Free cash flow use after dividend payments
We will consider fresh cash allocations dependingon the immediate situation. This could include
increased shareholder returns, strengthening ourfinancial position, and additional investment.

Operating cash flow (10 years)
Approx.

65.0 billion yen(Profit before income taxes: Approx. 64.0 billion yen)
(Income taxes paid: Approx. 22.0 billion yen)
(Depreciation: Approx. 23.0 billion yen)

Capital expenditure/
strategic investment

Shareholder
returns (TSR 50%)

Free cash flow after
dividend payments

Approx. 33.0
billion yen

Approx. 21.0

Approx. 11.0
billion yen

billion yen

ESG Section

1st Phase

FY2030 target

Growth Strategy

Our people are the Company’s most important management resource.
Based on our corporate culture that promotes high employee engagement, we are determined to
grow the Company further by encouraging employees who have polished their skills through our
substantial training system to demonstrate their abilities without reserve.
We intend to become a sustainable presence in the face of frequent unpredictable situations, suchas the COVID-19 pandemic and natural disasters not by preparing for them, but by improving ourfundamental strengths and crisis response capabilities and achieving true strength.
We intend to help realize a sustainable society by sincerely fulfilling our responsibilities as an
infrastructure building company in both regular and emergency times.

Indicator

About Seikitokyu Kogyo Group

Where We Should Be in 2030

Key Performance Indicators (KPI,
consolidated)
Introduction

We have recently formulated a new long-term vision for the Group in the spirit of our Where We Should Be
in 2030 strategy as: A truly strong corporate group that pursues personal and corporate growth in tandem
and helps realize a sustainable society. We intend to promote ourselves as a truly strong corporate groupthat sincerely addresses various measures and can respond to any future environmental changes, and, as
an infrastructure building company that helps create affluent communities, we will provide lasting value tosociety and enhance our corporate value over the medium to long term.

Important Sustainability Themes (Materiality)
When considering our Where We Should Be in 2030 strategy, we reorganized the important issues for realizing a sustainable
Data Sectionsociety and sustainable growth for the Company into important sustainability themes (materiality). The Group will continue towork to resolve important issues because we recognize that promoting materiality is a requisite for value creation.
Important sustainability themes

Five basic policies

Our way to 2030

Infrastructure

Helping develop infrastructure that can be used safety, securely, and comfortably by all people

1

2

3

4

5

Natural disasters

Helping restore regional economic activity and livelihoods through restoration and reconstruction work in the event of a natural disaster

Expand stableearnings

Diversify revenue
sources

Execute people-centricmanagement

Establish new ways
of working

Enhance management
and financial baseLocal residents

Helping create a better living environment as a good corporate citizen and local community member

Job satisfaction

Creating working environments with which everyone feels satisfied and transforming into a company that attracts leaders

Relevant SDGs

Environmental protection Contributing to the environment by reducing the environmental impact through our business activities and that of our own business activities
Governance andcompliance
13

SEIKITOKYU KOGYO CO., LTD.

Pursuing the best governance for the Group
Regaining trust by promoting compliance management
Corporate Report 2021

14

G ro wth Stra t egy

New Medium-term Management Plan

We formulated our Medium-term Management Plan (FY2021–2023) to serve as the first phase of our new
Where We Should Be in 2030 long-term vision.

Capital Policy

External Environment

Basic Strategy

Internal Resources

One of our key differentiating strengths is our ability
to tap into the Tokyu brand power and having cocreation opportunities with Tokyu Group.
With a thriving network of material plants in the Tokyo
metropolitan area, we have secured certain businessscales in both construction and product businesses
in the Kanto area. In addition, continued orders from
the Ministry of Land, Infrastructure, Transport andTourism and expressway companies have supported
our strong corporate performance in recent years.
On the other hand, a shortage of onsite engineers
has caused a bottleneck that is suppressing further
sales growth.

Over three-year plan

Annual average

15.0 billion yen

5.0 billion yen

1.5 billion yen

0.5 billion yen

16.5 billion yen

5.5 billion yen

Maintenance, renewal, acquisition of factories,
offices, construction machinery, etc.
Strategic investment(M&A, etc.)
Total

In addition to strengthening our managementbase to support future sustainable growthand maintaining and impro ving our
profitability, we will also strive to provide
stable and consistent shareholder returns
while also considering comprehensive factors
such as performance trends, financial
conditions, and our future businessenvironment.
Dividend Per Share, Dividend Payout Ratio,
Total Shareholders Return(Yen)
Dividend per share

47

Financial Plan

Individual Strategies

1 Expand stable earnings by further strengthening the competitiveness of our core businesses

End FY2023

End FY2020

40.8 billion yen Approx. 43.0 billion yen

13.4%

30.5%

33.5%

31.3%

28.9%

33.5%

FY2019FY202039.0%

FY2021(Est.)

Stable, consistent shareholder
returns with a targeted dividend
payout ratio of roughly 30% and total
shareholders return of 50% or more

End FY2023
Approx.

30

31.3%

FY2018Return on Equity (ROE)End FY2020

116.3%

43

Growth Strategy

EquityTotal shareholders return27

In fiscal 2020, a multitude of special factors served to boost profits and helped
us record an outstanding level of operating income including the figures inpast records (over 2.0 billion yen, or 32%, higher than our previous recordhigh profit). Given that the lower tax burden generated by carry-forward
losses came to an end in fiscal 2020, our plan had to incorporate a year-onyear decline in profits and ROE. However, we do plan to keep ROE above
shareholders’ equity costs, while maintaining financial soundness.

Becoming a truly strong corporate group

Dividend payout ratio

About Seikitokyu Kogyo GroupRegarding the road construction industry, while we
expect some solid public sector demand relating todisaster prevention and mitigation and generalmeasures to boost national resilience, we are concernedthat the market will shrink in the wake of the COVID-19
pandemic. In addition, it is hard to predict the futurebusiness environment over the medium to long term inview of the expected downward trend in public works
spending as Japan’s shrinking and aging population
results in declines in national and regional tax revenues.
The declining working-age population caused by afalling birthrate and aging population could make it
increasingly difficult to secure the engineers, technicalworkers, and other human resources we would needto maintain and expand the scale of our business.

Shareholder Returns

Introduction

Investment Plans

Consistent, strategic capital expenditure and technological development are
essential for achieving future sustainable growth. We are currently orchestrating
a qualitative turning point in our business assets designed to reduce
environmental impact and improve productivity, and we intend to continue annual
capital expenditure of approximately 5.0 billion yen for the duration of the plan.

8.6%

2 Rise to the challenge of expanding business areas and developing new business fields
Pursuing Further Improvements in Corporate Value

4 Establish new ways of working that help improve productivity

In order to enhance our corporate sustainability while proactively utilizing digital tools to respond to the post-COVID new
normal, we are launching internal initiatives designed to promote digital transformation (DX) and sustainability

5 Build a strong and sound management and financial basetransformation (SX) as means of further improving our corporate value.

Establish new ways of working

Key Performance Indicators (consolidated)(final year of the plan)
Indicator

FY2019 Actual

FY2020 Actual

FY2023 Plan

Net sales

74.0 billion yen

78.6 billion yen

90.0 billion yen

91.6 billion yen

Operating income

5.6 billion yen

6.0 billion yen

8.5 billion yen

5.8 billion yen

15

3.7 billion yen

Work-life balance

Achieve sustainable management

Eliminate long working hours

Stakeholder dialogue

Further increasein corporate value

Personal growth

Economic
value

Corporate growthSocialvalue

New business

Sustainable society

3.5 billion yen

6.5 billion yen

5.2 billion yen

ROE

11.7%

19.2%

13.4%

Equity31.5 billion yen

36.6 billion yen

40.8 billion yen

Approx.

43.0 billion yen

Optimized business operation efficiency

Improved customer service

Stronger governance

Carbon-neutral business operation

Total assets

70.9 billion yen

74.6 billion yen

79.4 billion yen

86.0 billion yen

Digitalization of business operation

ICT

ESG

SDGs

Equity ratio

44.5%

49.1%

51.4%

SEIKITOKYU KOGYO CO., LTD.

Approx.

Data Section

FY2018 Actual

Net profit attributable toowners of parent

ESG Section

3 Create a virtuous cycle in the recruitment, retention, and development of human resources

8.6%

Approx.

50%

Digital transformation

Sustainability transformation

Corporate Report 2021

16

E SG Se c tio nMateriality of Seikitokyu Kogyo Group

Our Stance on Sustainability

Important Themes and the Group’s Goals
Group. The relevance of our contribution to sustainability to the SDGs is shown below.
ESG Initiatives
Important sustainability themeE

Environmental
protection

Sustainability of society

Infrastructure

Initiatives to address ESG issues = Materiality

Natural disasters

STEP 2

STEP 3

STEP 4Creation of a list of prospective issues(Extraction of issues)

Prioritization

Confirmation of
appropriatenessApproval by the
Board of Directors

Helping create a better living environment as a good corporate
citizen and local community member

We set priorities to the extracted

The long-term vision development

After multiple discussions, theitems of social issues the Groupissues in light of impact on society

project COMPASS2030 confirmed

Board of Directors approved

should work on and take intoand management; restructured

the alignment with issues to workand determined the materiality

consideration, in relation to boththem based on relevance to eachon to realize our Where We

along with the long-term vision,

input to and output from businessother; and brought them together

Should Be in 2030 strategy.

regarding it as a prerequisite foractivities.

into six themes.

Reduce noise, vibration, dust, smoke, accidents, etc.; engage
in social contribution activities
P22
Creating working environments with which everyone feels
satisfied and transforming into a company that attracts leaders

Job satisfaction

Be a healthy, strong, and considerate company friendly toemployees and their families
Correct long working hours, achieve gender equality, etc.
Establish an environment where employees can choose how
close they live from the workplace and achieve work-lifebalanceP23,24,25,26

Data Section

We extracted 33 types and 56

Helping restore regional economic activity and livelihoods
through restoration and reconstruction work in the event of anatural disasterBe a disaster-resistant company and ensure contribution intimes of emergency
P20,21,22

S

Local residents

STEP 1

Helping develop infrastructure that can be used safety, securely,
and comfortably by all people
Leverage our technologies in a wide range of fields, such as
disaster prevention and mitigation, deterioration of
infrastructure, traffic safety, environment, and water use
P3,4,21,33

ESG Section

Based on the 1 7 SDGs and 1 6 9 targets, etc., we extracted social issues the Group should address, responsibilities theGroup should fulfill in addressing them, and what the Group should develop (work on) to address them. What have been
extracted were systematically organized into six items to constitute materiality, in light of various factors including a
medium- to long-term picture of society, our business model, our strengths, and importance to the Company and society.
After discussing the matter in relation to medium- to long-term management policies and management plans, the Board of
Directors finalized the items as important sustainability themes that set directions for the Group to realize our Where We
Should Be in 2030 strategy.

Relevant SDGs

Growth Strategy

Process to Identify Materiality

Our way to 2030
Contributing to the environment by reducing the environmental impact
through our business activities and that of our own business activities
Contribute to the development of infrastructure related torenewable energy
Contribute to the establishment of a recycling-oriented society
by recycling and efficiently using resources and reducing waste
Contribute to climate change mitigation by promoting low
carbon and zero carbon
P19,20

About Seikitokyu Kogyo Group

Sustainability of the Company

The Group has identified materiality for the achievement of both a sustainable society and a sustainable growth of theIntroduction

The corporate philosophy, “A life infrastructure building company that helps to create affluent local communities,” forms thebasis of Seikitokyu Kogyo Group’s business activities. For more than 7 0 years since the founding, the Group has beenoffering high quality services for social capital development, which resulted in a steady growth of its business. While road
construction constitutes the main line of its business, the Group also engages in civil engineering works, works related towater use and environment, and pavement materials manufacturing and sales.
Due to the recent acceleration of changes in the social environment, businesses today face diverse expectations andchallenges. Nevertheless, our mission remains unchanged, which is to sincerely fulfill its responsibilities as a company thatplays a part in social capital development and to keep supporting the foundations of people’s lives and business activities.
In the long-term vision, we have set “A truly strong corporate group that pursues personal and corporate growth in tandem
and helps realize a sustainable society” as Where We Should Be in 2030. The vision illustrates our intention to secure anddevelop human resources; strengthen our business foundation while valuing engagement with a wide range of stakeholders,such as customers, business partners, and local communities; and constantly address social issues.
We will continue to strive for fair business administration, as well as creation of a healthy and satisfying workplace, where
employees and other actors in our business can fully demonstrate their abilities. In addition, we will work on further
improvement of quality and safety, as well as reduction in the environmental burden, to contribute to the achievement of asustainable society through our business activities.

and an integral par t of theachievement of the vision.

G

17

SEIKITOKYU KOGYO CO., LTD.

Governance andcompliancePursue the best governance for the Group
Regain trust by promoting compliance management
P27,28,29,30

Corporate Report 2021

18

E SG Se c tio nEnvironmental

Environmental Policy

Reduction of CO2 Emissions

Seikitokyu Kogyo has implemented an environmental management system covering the head office and all branches, businessoffices, and mixture plants. Following the PDCA cycle, we strive for a constant improvement of environmental protection activities.
Organizational Structure
Environmental Quality Committee

Corporate manager: PresidentManager (branches and business departments): Branch General Manager; General Manager, Construction Department

Major Facility Upgrade in FY2020
Plant upgrade works at the Sakura material plant in Sakura,
Chiba were completed. The ignition ceremony took place on
December 24, 2020.
CO2 emissions decreased due to the improvement of fuelefficiency. Building a concrete silo for the material stockyard
reduced dust and heavy equipment works and made thematerial plant environmentally friendly.

Business Department; General Manager, General Affairs and Personnel
Department; General Manager, Safety, Environment, and Quality

Each department and office

2018

2019

2020

55,000 t

58,000 t

55,000 t

Based on the recognition that protection of the global environment constitutes an important business challenge, we take various
measures to reduce the environmental impact and contribute to environmental protection. Specific measures include improvementof manufacturing facility functions, which takes place simultaneously with facility upgrade; replacement of fuels; and introductionof solar power generators. They are taken in the process of promoting growth strategies, with an eye on long-term prospects.

General Manager, Technology Department; General Manager, ProductManager (head office): General Manager, Safety, Environment, and Quality Department

FY
CO2 emissions (approximation)

Global Environmental Protection and Climate Change

Members: President; officers in charge; General Manager, Engineering Department;

General manager: General Manager, Business Promotion Division

CO2 Emissions (Non-consolidated, Scope 1, Approximation)

Department; other persons designated by the Commit ee Chair
After the upgrade

Before the upgrade

Rebuilding the Head Office Building
As announced on July 1 6, 2 0 2 0, we arerebuilding our half a century old head
office building.
The new head office building will offera secure and comfortable workplaceenvironment for employees and, with
reduced environmental impact andenergy consumption, be certified as “ZEB
Ready.” Furthermore, we plan to reduce
actual energy use to the level of “Nearly
ZEB,” possibly by using unaccredited
technologies. In addition, the building will
demonstrate excellent earthquake-proof
per for mance and be equipped withfacilities to tackle flood, supply electricity,and secure water supply and drainage.
We will thus strengthen our BCP functions
with an eye on natural disasters.

Growth Strategy

Meets twice a year

travelling. In the environmental management system, eachdepartment sets out their policies and works on the control
and reduction of CO2 emissions.

About Seikitokyu Kogyo Group

Environmental Management System

As environmental problems have worsened on a global scale
and addressing them has become a common important
challenge across the world, we consider it natural as abusiness operator to work on the reduction of CO2 emissions.
While asphalt material plants are the main source of CO2
emissions at the Company, other sources include heavyequipment for construction works, offices, and vehicles for

Introduction

1. SEIKITOKYU KOGYO CO., LTD. (the “Company”) engages in design and construction of pavement and civilengineering works, research and development of technologies, and manufacturing and sales of pavement
materials as its main lines of business. The Company works to reduce the environmental impact in all businessactivities, protect the global environment, and establish a recycling-oriented society.
2. The Company takes the following actions to strive for constant improvement of its environmental management
system and prevention of environmental pollution.
(1) Promote appropriate disposal of industrial waste (2) Reduce CO2 emissions(3) Promote resource saving, energy saving, and recycling(4) Engage in research and development of environmentally friendly technologies
3. The Company complies with relevant legal regulations on the environment and other requirements it agreed on.
4. To attain the environmental policy, the Company sets environmental goals within the scope that is technologicallyand economically possible, strives to achieve them, and reviews them on a periodic basis.

Perspective illustration of the completed building

Acquisition of ISO 14001 Certification
Results of the Most Recent External Audit

SX Promotion Project

The 5-1st surveillance audit in 2020

To realize our Where We Should Be in 2030 strategy and further increase corporate value, the SX promotion project was
launched in April 2021.
As the first step, we are currently working to calculate the volume of greenhouse gas emissions in the entire supply
chain, in accordance with the global GHG Protocol standards for the calculation and reporting. We hope to start reporting
the Scope 3 figures from the next fiscal year.
To achieve carbon-neutral business operation, our Group will consider and promote specific initiatives led by this project. To begin
with, we will set reduction targets that meet SBT* standards and aim to obtain the SBT certification in fiscal 2022. In addition, we will
accelerate the preparation for the information disclosure in line with the Task Force on Climate-related Financial Disclosures (TCFD).

Category Good practiceNo. of cases
Web

Improvement
opportunity

1

Observation2

Improvement needed(Nonconformity)00ISO14001
https://www.seikitokyu.co.jp/company/iso

ESG Section

Since April 2004, we have an environmental management
system based on ISO 14001 in place. Periodic audits by external
auditors and internal audits by internal auditors facilitate theappropriate implementation and sophistication of the system.
As of March 31, 2021, we have acquired the ISO 14001:2015
certification for the head office, branches, and offices(excluding some departments) in Japan.

*Science Based Targets (SBT): Targets to reduce greenhouse gas emissions that are aligned with the level required in the Paris Agreement and are set by businesses for a 5- to 15-year timeframe.

Permission to Engage in the Industrial Waste Disposal Business*Excellent Industrial Waste Disposal Operator Certification System: A system where prefectural governors and designated city mayors accredit industrial waste
disposal operators that conform to the Criteria for Industrial Waste Disposal Businesses with Excellent Capabilities and Track Record (Excellency Criteria)

Measures to Reduce Waste
To reduce the final disposal volume of waste, we
proactively take the measures listed below.
1 Recycle all concrete and asphalt waste
2 Simplify the packaging of procuring materials
3 Prevent reworking and returning
4 Promote sorting activities

19

SEIKITOKYU KOGYO CO., LTD.

Waste Volume (Non-consolidated)
FY

2018

2019

2020

Volume of industrial waste

125,401t

212,884t

288,214t

Volume of general waste

480t

416t

454t

Rate of recycling

97.6%

98.3%

97.9%

Our Technologies

Data Section

We have the permission to engage in intermediate processing of industrial waste at 21 facilities in 16 administrative districts, whereconstruction waste, etc. is recycled. Of the facilities, 14 in 11 administrative districts have been certified as excellent industrial waste
disposal operators.

We have a large number of environmentally friendly products and construction methods, including those that help reduce CO2 emissions,mitigate the heat-island phenomenon, and recycle resources. Below are examples of such products and construction methods.
Recycled Mixture
Full-fledged research and development has
been in progress since the 1970s to recycle asphalt
pavement materials for roads, aiming for the
standardization of recycling technologies to use themas construction materials. We established our firstrecycling plant at Myokenjima, Edogawa-ku in 1977.
Today, our material plants across Japan engage
in the manufacturing and sales of recycled mixture.

Web

Cold Asphalt Mixture “Ecomix”
The Ecomix is an environmentally friendly coldasphalt mixture, which contains 50% or moreaggregate recycled from asphalt. It is an Eco
Mark certified product that ensures a certain
level of workability and demonstrates a highlevel of strength.

List of our technologies
https://www.seikitokyu.co.jp/product/products/list.php?category_id=93
Corporate Report 2021

20

E SG Se c tio nSocialQuality Policy“Satisfy customers and win trust from them”
1. We think from customers’ perspectives and offer products that satisfy them.
2. We constantly improve the effectiveness of the quality management system.

As a construction company that plays a part in developing roads and other social infrastructure, Seikitokyu Kogyo has
established and implemented a quality management system covering head office departments, branches, and businessoffices engaging in the construction business, to continue offering the stable quality and services that meet customers’
expectations. Following the PDCA cycle, we constantly improve the system.
Organizational Structure
Corporate manager: President
General manager: General Manager, Business Promotion Division
Manager (head office): General Manager, Safety, Environment, and Quality Department

Manager (branches and business departments): Branch General Manager; General Manager, Construction Department

Results of the Most Recent External Audit
The 7-1st surveillance audit in 2020
Category
No. of cases

Good Improvement
Improvement needed
Observation
practice opportunity(Nonconformity)
1

2

0

0

ISO9001https://www.seikitokyu.co.jp/company/iso

Response to Natural Disasters, Etc.
Business Continuity Plan
We have had a business continuity plan (BCP) since the past, based on the recognition that continuing with our business even in thecase of natural disasters or other contingencies and fulfilling the social responsibility as a company links directly to the reason we exist.

Web

ISO55001
https://www.seikitokyu.co.jp/dev/wp-content/themes/twentysixteen/pdf/info/20210412.pdf

Certificate (The review in 2021 was in progress when this report was being compiled and is scheduled to be completed in October 2021.)

Measures Against Infectious Diseases
We have developed and implemented a manual of measures against new strains of influenza. Based on the manual, we havetaken equivalent measures to prevent the spread of infections* and continued business operations under the COVID-19 pandemic.
We will continue our business operations while ensuring the safety of employees and partner companies, and fulfill our social
responsibility as a corporate group that plays a part in infrastructure development.
*We put into practice gargling, hand washing, alcohol disinfection, and coughing manners. We also take measure to ensure the health of
employees and relevant parties and reduce human traffic, including checking body temperature and state of health before starting work, social
distancing, installing partitions between office seats and at reception counters, promoting remote work and staggered working hours, andimposing restrictions on business travels and dining with people from within and outside the Company.

Collaboration with Partner Companies
Partner companies are vital to our business. They are suppliers of materials and equipment, and also provide us withtechnology and skilled labor. Collaboration with partner companies is essential in particular to ensure health and safety inour business activities. We engage in a range of activities, including joint safety patrols and technical training at our
training center (training for mastering basic skills, obtaining qualifications related to civil engineering construction methods,
and acquiring ICT construction and other cutting-edge skills), with member companies of the Seikitokyu Kogyo Accident
Prevention Association established in 1994. A mutual aid society established in 1976 was the predecessor organization of
the Accident Prevention Association. As of March 31, 2021, the Association consists of 809 member companies.
Revision of Payment Terms
To improve the financial standing of partner companies and enhance their trust with us, we revised our payment terms infiscal 2020. Specifically, bill maturities for payments were shortened from 95 days to 60 days.

Local Communities
Site Visits
To facilitate understanding of infrastructure and our business, we invite
residents in the neighborhood, children, and students to site visits andother activities during and after construction works. Such activities not
only help us secure and develop next-generation supporters but also
spread understanding of infrastructure development, thereby
contributing to the achievement of a sustainable society.
Locally Rooted Activities
As we declare to be “an infrastructure building company that helps create affluent
communities,” each office engages in locally rooted business activities at each site.
As a member of local community, they conclude agreements on disaster
restoration, organize site visits and cleaning activities, and participate in and offer
support to community activities, not to mention engage in emergency disaster
restoration works. A wide range of recent initiatives include painting a picture of a
local mascot character on the renewed plant wall. Each office thus uses theiringenuity to be favorably accepted by local communities.

November 5, 2020
We received a letter of appreciationfrom Niigata Prefectural Joetsu
General Technical High School forour assistance to the training ofEnvironmental and Civil Engineering
Course students in developing
engineers and enhancing the
educational environment.

Data Section

External Evaluation
In 2 0 0 9, we received the Certificate for Basic Business Continuity Capabilities from the Kanto
Regional Development Bureau, Ministry of Land, Infrastructure, Transport and Tourism (MLIT).
Since then, we have undergone reviews for renewal every other year up to 2021. We have also
concluded agreements on emergency response to disasters with National Highway Offices of
MLIT and other entities in charge of road management.

SEIKITOKYU KOGYO CO., LTD.

Certified organizations: Engineering Department, Business Promotion Division; Technology Department, Technology Division
Scope of certification: Comprehensive maintenance and proposal with regard to roads (pavement and structures)*Obtained certification as a non-asset owner (service provider)

ESG Section

Web

21

In March 2021, we obtained the ISO 55001:2014 certification for our asset management system. The asset management
system has already been adopted in the bidding conditions for the maintenance of sewage systems. In the future, theapplication is expected to expand to the comprehensive management of roads and other infrastructure.
By proposing maintenance and repair plans and VE for assets owned by the ordering party, we will contribute to the
reduction of life cycle costs of the assets and increase in asset value, and offer the value appropriate to the times ofinfrastructure maintenance.

Supply Chain

Acquisition of ISO 9001 Certification
Since March 1998, we have a quality management system
based on ISO 9001 in place. Periodic audits by external auditors
and internal audits by internal auditors facilitate theappropriate implementation and sophistication of the system.
As of March 31, 2021, we have acquired the ISO 9001:2015
certification for the head office, branches, and offices (excluding
some departments) engaging in the construction business.

Acquisition of ISO 55001 Asset Management System Certification

Growth Strategy

Each department and officeEnvironmental Quality Committee
Meets twice a year
Members: President; officers in charge; General Manager,
Engineering Department; General Manager,
Technology Department; General Manager,
Product Business Department; General
Manager, General Affairs and Personnel
Department; General Manager, Safety,
Environment, and Quality Department; otherpersons designated by the Committee Chair

April 1, 2021
We received a letter ofappreciation from Central
Nippon Expressway Company
Limited for emergency
restoration works after the July
2020 sediment runoff from aslope in the Chuo Expressway.

About Seikitokyu Kogyo Group

Quality Management System

Introduction

Support to Disaster Restoration and Reconstruction
Construction companies are expected to support restoration and reconstruction after natural
disasters, such as earthquakes, torrential rains, and heavy snowfalls. Through businessactivities, our Group has eliminated road obstacles, removed and taken in rubbles, and offeredother types of support in many disaster-affected areas.
In addition, we directly and indirectly help the restoration and reconstruction of disasteraffected areas by donating aid money and essential supplies through the Tokyu Group,industry groups, etc.
Not only the Company but also our subsidiaries based in areas such as Kumamoto, Miyagi,
and Iwate play an important role in such activities. The Seikitokyu Kogyo Group will remain to
be a healthy corporate group that plays a part in infrastructure development and continue tosincerely meet the expectations from society.

Initiatives for Infrastructure Development

Yamato material plant (Kumamoto)Corporate Report 2021

22

E SG Se c tio n

Initiatives for Traffic Safety

Employees

Safety Indicators
Number of Accidents (Non-consolidated)

Ensuring Occupational Safety and Health2018

Occupational Safety and Health Policy
1. We strive to prevent accidents by eliminating occupational safety and health hazards and utilizing risk assessments to mitigate risks.
2. We comply with laws and regulations, as well as internal rules, related to occupational safety and health.
4. All our officers, employees, temporary employees, and contract employees, as well as employees of partner

2020

11

8

7

Public accidents

51

56

46

Traffic accidents

70

63

63

2018

2019

2020

Construction departments

1.65

0.97

0.65

Products departments

—

2.80

—

Frequency rate (non-consolidated)

Growth Strategy

companies who work under our supervision, will work to ensure occupational safety and health.

2019

Occupational accidents (absence from work for four or more days)

3. We establish an occupational safety and health management system and constantly improve the system.

Creating a Satisfying Workplace

Occupational Safety and Health Management System
Seikitokyu Kogyo Group Compliance Code of Conduct states that the Company strives “(1) To recognize that safety always
comes first when executing our business” and “(9) To provide and preserve fine, healthy workplace environment.”
To prevent occupational accidents, we have established and implemented an occupational safety and healthmanagement system covering the head office and all branches, business offices, and material plants. Following the PDCA
cycle, we constantly improve the system.

Corporate manager: President
General manager: General Manager, Business Promotion Division
Manager (branches and business departments): Branch General Manager; General Manager, Construction Department

Each department and office

Occupational Safety and Health Management Committee
Meets twice a year
Members: President; officers in charge; General Manager,
Engineering Department; General Manager,
Technology Department; General Manager,
Product Business Department; General
Manager, General Affairs and Personnel
Department; General Manager, Safety,
Environment, and Quality Department; otherpersons designated by the Committee Chair

Acquisition of ISO 45001 Certification

Workstyle Reform and Work-Life Balance
The workstyle reform project, launched in May 2017, has introduced a range of systems and policies, focusing on the correction oflong working hours and the realization of a five-day workweek. Specific initiatives include those directly linked to the shortening ofworking hours, such as commuting to construction sites directly from home, introducing mobile personal computers, strictly managing
working hours through personal computer log management, and discussing reform together with partner companies. In addition, theproject engages in activities that look ahead to diverse workstyles of the future, such as staggered working hours and remote working.
In fiscal 2020, the COVID-19 pandemic unexpectedly drove us to adopt workstyles that are flexible in terms of time andlocation, including remote working and online meetings. Taking such changes in a positive way, we would like to accelerate
the reform, without missing the opportunity.
Achievement Rate of Overtime Hour Targets (Non-consolidated)

Products departments

2019

2020

FY2021 (plan)

Target

840 hours/year

780 hours/year

720 hours/year

Achievement rate

90.3%

85.8%

—

Target

720 hours/year

720 hours/year

720 hours/year

Achievement rate

100.0%

100.0%—

Data Section

Construction departments

Since June 2018, we have an occupational safety and health management system based on ISO 45001 in place. Periodic audits byexternal auditors and internal audits by internal auditors facilitate the appropriate implementation and sophistication of the system.
As of March 31, 2021, we have acquired the ISO 45001:2018 certification for the head office, branches, and offices (excluding somedepartments).

ESG Section

Organizational StructureManager (head office): General Manager, Safety, Environment, and Quality Department

About Seikitokyu Kogyo GroupIn presenting Where We Should Be in 2 0 3 0, we sent a clear message within and outside the Company that the most importantmanagement resource for us is people, and that the Company will grow further when there is a corporate culture of high employee
engagement and each employee fully demonstrates their abilities honed through an extensive education system. Putting peoplecentered management into practice and enhancing capabilities of the entire organization will be the key to increase corporate value.
Based on the recognition that the growth of individual employees leads to the development of the Company, we listen to
the voice of employees, create systems to place the right people in the right jobs and let them fully demonstrate theirabilities, and take other measures to encourage self-sustaining growth of employees.

To eradicate traffic accidents that ruin the lives of employees, their families, and relevant parties, we take various measures
for traffic safety.
All company cars are equipped with in-vehicle devices that record driving data and footage of inside and outside thecar. We have also introduced equipment that allows easy online tracking of vehicle operation and driving status, especiallyto prevent accidents caused by young, inexperienced drivers. In addition, new employees take an aptitude test in the
induction training. In accordance with their driving skills, we offer driving lessons, dual instruction in assigned departments,and other types of training to prevent the occurrence and recurrence of traffic accidents.

Introduction

Putting People-Centered Management into Practice

Achievement Rate of a five-day workweek (Non-consolidated)

Results of the Most Recent External Audit
The 2nd surveillance audit in 2020
Category

Good practice

Improvement opportunity

Observation

Improvement needed (Nonconformity)

No. of cases

1

3

1

0

2019

2020

FY2021 (plan)

Target6 days off in 4 weeks

6 days off in 4 weeks

7 days off in 4 weeks

Achievement rate

96.0%

94.8%

—

2018

2019

2020

5.2

7.4

12.0

Number of Days of Paid Leave Taken (Non-consolidated)
Web

23

ISO45001
https://www.seikitokyu.co.jp/company/iso

SEIKITOKYU KOGYO CO., LTD.

No. of days taken

Corporate Report 2021

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E SG Se c tio n

We recognize that promoting the employment of people with diverse backgrounds is essential in continuing to secure humanresources and create value. Since several years ago, we have been actively hiring women, foreign nationals, and people with work
experience. In addition, we strive to foster a culture where employees accept and respect each other’s differences, regardless ofgender, age, or nationality, and to create an environment where each employee can demonstrate their abilities to the fullest.
Specific initiatives in fiscal 2020 included training for the corporate manager and senior executives that let them become awareof unconscious bias hindering the empowerment of women and discussion between senior executives and all Myanmarese
employees. They took place as part of initiatives to change the mindset in the Company.

For a company to secure human resources and maintain competitiveness, it is essential to create an employee-friendly
workplace environment.
We strive to create a satisfying workplace environment by establishing and implementing an occupational safety andhealth management system and introducing relevant systems and policies, such as the Occupational Safety and HealthCommittee, health checkups, mental health care, and support for childcare and nursing care.
Improving the workplace environment in terms of safety, health, and comfort is also imperative in the tangible aspects
that support our business. Over the past few years, we have been proactively working on the rebuilding and upgrading of
not only manufacturing facilities but also office buildings and other facilities.
As announced in July 2020, our head office building is being rebuilt. If the works progress as planned, the new officebuilding will be completed in summer 2022.

Number of Women, Foreign Nationals, and Mid-career Employees Who Joined the Company (Non-consolidated)

Status of Female Managers (Non-consolidated)

2018

2019

2020

FY

Women (technicians)

11 (3)

14 (2)

17 (5)

Number of female managers (percentage)

Foreign nationals (technicians)

2 (2)

—

7 (6)

Mid-career employees (technicians)

2018

2019

2020

2 (0.9%) 2 (0.9%) 2 (0.9%)

27 (17) 24 (14) 44 (29)Note: Employees who fall under more than one category are included in all applicable categories. (There is some overlapping.)

Fair Evaluation

2019

2020

2

4

5

No. of employees who took childcare leave

7

4

4

Rate of taking childcare leave

24.1%

14.8%

13.3%

Osaka Business Office

Average Years of Service and Turnover Rate (Non-consolidated)
2018

2019

2020

Average years of service

15.6

15.7

15.2

Turnover rate (voluntary resignation)

3.5%

3.2%

3.7%

Final presentation bycorporate manager
training participants

Before the upgrade

After the upgrade

Before the upgrade

Employment of Persons with Disabilities
While persons with disabilities work at the head office andbranches, the employment rate stands below the statutory
2.3% because it is difficult for them to work at construction
sites or plants.
We will continue to strive for the employment of a larger
number of persons with disabilities, in collaboration withexternal institutions.

Employment Rate of Persons with Disabilities (Non-consolidated, including Contract Employees)
2018

2019

2020

Employment rate of persons with disabilities 2.07%

1.96%

1.78%

18

17

No. of employees with disabilities

19

ESG Section

We encourage self-sustaining growth and career development of employees by offering various education and training
opportunities to selected personnel and employees eager to learn, in addition to job- and rank-specific education, so that
employees can develop management skills, obtain qualifications, and gain expertise.
In the corporate manager training and next-generation leader development training for branch general managers and corporate
manager candidates, we offer the opportunity to gain a broad, future-oriented corporate view from the corporate manager
perspective, as well as to enhance strategic thinking and insight into business and build the foundation as a corporate manager.
A number of support systems for obtaining qualifications are also in place to enhance employees’ expertise and skills,
such as relevant training, opportunities to take correspondence courses, and payment of subsidies.

Iwate Business Office

Growth Strategy

After the upgrade

Education and Training

Discussion by nextgeneration leader
development training
participants

As the basic policy concerning the statement, “(9) To provide and preserve fine, healthy workplace environment,” in ourCompliance Code of Conduct, we clearly state, “We respect each person’s human rights, aim to create a healthy andpositive workplace environment, and strive to constantly improve the environment,” “Under any circumstances, we will not
tolerate discrimination or harassment on the basis of age, gender, place of origin, belief, religion, or disability,” and “We will
prevent and eliminate sexual harassment through actions based on the correct understanding of gender difference.” Wethus strive to prevent direct and indirect violation of human rights.
Specifically, our employees undergo education to prevent human rights violation in the induction training and rank-based
training. Compliance and sexual harassment hotlines offer a system where anyone can feel secure to consult about such
issues. We thus strive to create and maintain a healthy workplace environment.

Initiatives Outside Japan
Data Section

Respect for Human Rights

SEIKITOKYU KOGYO CO., LTD.

No. of employees who took maternity leave

2018

Recent Office Building Upgrades

To achieve the management plan of the Company, our management by objectives system sets specific and clear goals forindividual employees, after linking them to organizational goals. To evaluate employees fairly, we strive to implement thesystem in an impartial and reasonable manner by properly taking into consideration not only the results against the goals
but also the process and actions that led to the results.
In addition, an employee engagement survey will be conducted twice a year from fiscal 2021, as a way to understandhow employees see the Company. The results will be used to resolve specific issues in the following fiscal years.

25

Employees Who Took Maternity Leave and Childcare Leave (Non-consolidated, including Contract Employees)

About Seikitokyu Kogyo Group

Creating a Safe and Satisfying Workplace Environment
Introduction

Diversity & Inclusion and Empowerment of Women

Infrastructure Development in Myanmar
To expand the Group’s business fields, we opened a field office in the Republic of the Union of Myanmar in 2015 and have beenoffering technical guidance and support in road construction, although business activities in the country are currently suspended
due to the political instability and COVID-19 pandemic. In July 2018, we founded SEIKITOKYU MYANMAR ROAD COMPANY
LIMITED, a subsidiary in Myanmar that engages mainly in the manufacturing and sales of pavement materials, and proceededwith plant construction and procedures for the start of operation. In addition, we have constantly hired employees from Myanmar,
mainly as technicians. As of March 31, 2021, 17 employees (including contract employees) work in Japan and Myanmar.
At the moment, we have no prospect of resuming business in Myanmar. Nevertheless, we intend to continue with the hiring andmake other preparations for the resumption of business activities, so that when the activities resume, we can contribute to theinfrastructure development in Myanmar as a road development professional and become the bridge between the two countries.
Corporate Report 2021

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E SG Se c tio n

Governance

Officers (As of September 30, 2021)

Corporate GovernanceIntroduction

Basic Stance on Corporate Governance

Seikitokyu Kogyo Corporate Governance Guidelines Web
https://www.seikitokyu.co.jp/dev/wp-content/themes/twentysixteen/pdf/company/2019070102.pdf

Organizational Structure for Corporate Governance(13) (12) (9)

(8)

(5)

(10) (11)

Number of Nomination and Compensation
Committee members(Number of Outside Directors)

Positions, responsibilities, and significant concurrent positions

Affiliated companies

Empowerment of women

Name

Finance/accounting

in each department

Human resources/labor affairs

Seek advice, Report

ReportEmployee in charge of compliance

Administrative experience

Employees, etc.

Give guidanceAreas where officers have particular expertise and experience
Legal affairs/compliance

Give guidanceCompliance promotion department

Products

Seek advice

ReportESG Section(Departments for execution of duties) Executive Officers, Heads of departments

3 Outside Directors

Officer in charge of compliance promotion department

Management experience

Legal Advisor
ReportInternal audit department

5

Engineering field

Submit topics fordiscussion, Report

3 Outside Directors(4)Construction(3)

Business administration(2)

Non-engineering field

Keep incheck

Keep in check

Oversee(1)

ReportManagement Meeting
Give instructions,
Oversee(6)

Independent Officer

ReportAdvise, Give guidance

Seek advice,
ReportGive instructions,
Oversee(7)

Audit
Report9

Accounting Auditor

Audit & Supervisory Board Member
Outside Audit & Supervisory Board Members

Advise, Give
guidance

Representative Director, President

Oversee
Submit topics fordiscussion, Report

Audit & Supervisory Board

Audit

Directors
Outside Directors

Collaborate

Oversee

Board of Directors

Collaborate

Consult

Collaborate

Nomination andIndependent andoutside (female)

Number of Directors(Number of Outside Directors)

Execute duties

Compensation Committee

Independentand outside

Growth Strategy

General Meeting of Shareholders

Other than independentand outside

Nomination and Compensation Committee

Web

About Seikitokyu Kogyo GroupTo sincerely fulfill our responsibility as “an infrastructure building company that helps create affluent communities (ourcorporate philosophy),” live up to expectations from society, and achieve a sustainable growth of the Company and a
medium- to long-term increase in corporate value, we recognize that enhancing corporate governance to ensure thefundamental fairness, health, and efficiency of management is one of the top priorities in management. We strive toenhance corporate governance in accordance with the following basic stance.
(1) We ensure substantial equality among shareholders, respect the rights and interests of shareholders and all otherstakeholders, and build harmonious relationships with them.
(2) Directors and Audit & Supervisory Board Members recognize their fiduciary responsibilities and fulfill expected roles
and responsibilities.
(3) We disclose corporate information in an appropriate manner and ensure transparency.
(4) We engage in constructive dialogues with stakeholders.
We have compiled basic matters on corporate governance as Seikitokyu Kogyo Corporate Governance Guidelines,
which can be found on our website.

(1) Toshiaki Sato Representative Director, Chairman

Evaluation of the Effectiveness of Board of Directors
To ensure an effective and appropriate oversight over corporate management by the Board of Directors and enhance its(3) Tsukasa Furukawa Representative Director; Senior Managing Executive Officer; General Manager, Business Promotion Division(4) Kazushi Ishida Director; Managing Executive Officer; General Manager, Business Administration Division; General Manager, Corporate Planning Department

consideration self-evaluation by each Director and other indicators. An overview of the results is disclosed.

(5) Yuji Ooteki

meeting held on May 25, 2021, based on the evaluation by and opinions of all Directors and Audit & Supervisory Board Memberson the composition of the Board of Directors, its administration, and other factors. The Board of Directors considers that although
there is room for further improvement in terms of free and open-minded discussions, oversight of the status of compliance, andindependence of the composition of the Nomination and Compensation Committee, the Board is functional enough to ensure
effectiveness, with steady improvements in the matters recognized as issues in the previous evaluation.
The shared awareness of issues is reflected in the composition of the Nomination and Compensation Committee after the
Annual General Meeting of Shareholders held on June 23, 2021. Outside Directors, who are highly independent, now consistof more than half of the Committee members.
External evaluation is also conducted every three to five years (the last evaluation was in fiscal 2018). We will further enhance thefunctions of the Board of Directors by constantly analyzing and evaluating the effectiveness of the Board and making improvements.
SEIKITOKYU KOGYO CO., LTD.

Data Section

functions, we analyze and evaluate the effectiveness of the Board of Directors as a whole every year, by taking into
For fiscal 2020, the effectiveness of the Board of Directors as a whole was analyzed and evaluated at the Board of Directors

27(2) Yoshikazu Taira Representative Director, President; President, Executive Officer

Director; Managing Executive Officer; Deputy General Manager, Business Promotion Division; General Manager, Engineering Department, Business Promotion Division(6) Tsuneo Iizuka Director; Director, Chairman, TOKYU CONSTRUCTION CO., LTD.
(7) Shinya Fukuda Director (Outside Director); Certified Public Accountant; Audit & Supervisory Board Member (Outside Audit & Supervisory Board Member), Kitoku Shinryo Co., Ltd.
(8) Masato Tamura Director (Outside Director); Director (Outside Director), NISSHIN GROUP HOLDINGS Company, Limited(9) Rena Shimizu Director (Outside Director); Representative Director, President, CHANCE for ONE Co., Ltd.
(10) Masayuki Koide Full-time Audit & Supervisory Board Member(11) Yoshihiko Suzuki Full-time Audit & Supervisory Board Member (Outside Audit & Supervisory Board Member)(12) Yoichi Saito Audit & Supervisory Board Member (Outside Audit & Supervisory Board Member); Lawyer; Audit & Supervisory Board Member (Outside Audit & Supervisory Board Member), TOKYU CONSTRUCTION CO., LTD.
(13) Yukio Ono Audit & Supervisory Board Member (Outside Audit & Supervisory Board Member); Certified Public Accountant; External Audit & Supervisory Board Member, TIS Inc.
Note: in the “Nomination and Remuneration Committee” column indicates that the person chairs the committee.
Corporate Report 2021

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E SG Se c tio n

Officer Compensation

Compliance(basic compensation + variable compensation) (cost incurred based on the restricted stock compensation plan)

Directors

Total amount of compensation

No. of eligible persons

168 million yen

21 million yen

189 million yen

9

Of which Outside
Directors

18 million yen—

18 million yen

3

Audit & Supervisory
Board Members

39 million yen—

39 million yen

5

Of which Outside Audit &Supervisory Board Members

25 million yen—

25 million yen

4

Reference: 1. In fiscal 2020, basic compensation, variable compensation, and stock compensation accounted for approximately 60%, 30%, and
10% respectively of the compensation for executive directors.
conclusion of the 71st Annual General Meeting of Shareholders held on June 23, 2020.

Internal Control and Risk Management

Systems to Ensure the Appropriateness of Operations and the Status of Implementation of the Systems (Fiscal year ended March 31, 2021)
https://www.seikitokyu.co.jp/dev/wp-content/themes/twentysixteen/pdf/info/202105312.pdf

Status of Compliance Training, Etc.

Status of Internal Audits

FY

2018

2019

2020

FY

2018

2019

2020

No. of participants (cumulative total)

1,068

1,154

619

No. of offices (cumulative total)

107

125

107

Compliance with the Anti-Monopoly Act
ESG Section

We recognize that the development of an internal control system is an important management issue to ensure compliance withlaws and regulations and the Articles of Incorporation in Directors’ execution of duties, as well as the appropriateness of operations.
To this end, we have developed a range of rules, manuals, etc. and established and implemented a whistle-blowing systemthat ensures anonymity of whistleblowers and protects them from disadvantageous treatment. In addition, we conductperiodic internal audits to monitor business execution from various perspectives, including legality. The audit results arereported to Directors and Audit & Supervisory Board Members as occasion arises, as well as to the Management Meeting
and Board of Directors twice a year.
In April 2007, the Internal Control Department was established in the head office to strengthen and promote internal control.
We constantly work on the review of existing systems and the establishment of systems to ensure the appropriate andefficient execution of duties and the appropriateness of financial reporting.

Compliance Promotion Officer
Our system to ensure compliance with laws and regulations, etc. includes a department in charge of compliance, whichcentrally handles issues related to the matter, and Compliance Promotion Officers appointed in each department. In fiscal
2020, 87 offices had Compliance Promotion Officers, for whom a dedicated training program was in place.
Compliance Hotline (Whistle-blowing System)
A compliance hotline has been set up in the department in charge of compliance, so that employees, etc. of theCompany and its Group companies can directly seek advice on or report possible violations of laws and regulations, etc.
The system contributes to the prevention, early detection, and correction of such violations. What is discussed or reported,
as well as results of investigations, will be reported to the Management Meeting and the Board of Directors.
Systems to Ensure Compliance with the Anti-Monopoly Act
We have developed internal systems to eliminate any violation of the Anti-Monopoly Act. Specifically, we update the AntiMonopoly Act compliance manual as necessary, take strict disciplinary actions against violations, have set up a hotline
dedicated to Anti-Monopoly Act violations, ensure thorough education and training, carry out appropriate job rotation, andconduct internal audits.

Growth Strategy

2. The above amounts include the amount of compensation for one Outside Audit & Supervisory Board Member who left office at theWeb

About Seikitokyu Kogyo Group

Stock compensation

To promote compliance management, we have established the Seikitokyu Kogyo Group Compliance Code of Conduct.
We strive to ensure the effectiveness of the Code of Conduct by developing and implementing a whistle-blowing system,
etc., offering periodic training by the department in charge, and taking other relevant measures.
For enhanced compliance, we constantly took action in fiscal 2020 to raise awareness of officers and employees of
the Company and its subsidiaries, which includes thorough education to that end. We also take thorough measures toprevent the recurrence of the Anti-Monopoly Act violation. The Board of Directors constantly monitors the state of affairs.

Systems to Ensure ComplianceTotal Amount of Compensation, Etc. for Directors and Audit & Supervisory Board Members (FY2020)
Basic compensation

Initiatives to Enhance Compliance

Introduction

At the 57th Annual General Meeting of Shareholders held on June 29, 2006, it was resolved that the total amount of annualcompensation for Directors and Audit & Supervisory Board Members shall be not more than 324 million yen (excluding employee’ssalary for Directors who also serve as employees) and not more than 60 million yen respectively. The actual amounts of compensation
for Directors and Audit & Supervisory Board Members are determined based on the resolution of the Board of Directors
and discussion by the Audit & Supervisory Board Members respectively, within the range of the total amount, in
accordance with the position, and taking performance and other factors into consideration.
At the 69th Annual General Meeting of Shareholders held on June 22, 2018, it was resolved that a restricted stock compensation
plan shall be introduced for Directors (excluding Outside Directors), that the amount of monetary compensation
receivables provided from the total amount of compensation for Directors shall be not more than 60 million yen per year,
and that the number of common shares issued or disposed of as restricted stock shall be not more than 50,000 per year.

Between September 6, 2016 and July 30, 2019, the Japan Fair Trade Commission took multiple measures against our
violations of the Anti-Monopoly Act, which had taken place in the period up to January 27, 2015. After recognizing that
violations had taken place, the Group has constantly carried out measures to prevent recurrence, which we laid out withthe help of external experts. We will remember past mistakes, make sure to implement measures to prevent recurrence,
promote compliance management across the entire Company, and strive to eliminate any illegal activities.
Measures to Prevent Recurrence
Announced on March 25, 2016Measures to Prevent the Recurrence of Anti-Monopoly Act Violations (Mainly includes measures

Dialogue with Shareholders and Investors

against violations in bidding for construction works)

Dialogue with Shareholders and Investors

Announced on January 24, 2020 Specific Measures to Prevent Recurrence Compiled in Response to the Recommendations in

We strive to promote constructive dialogues with shareholders and investors to pay attention to management-related
analysis, opinions, etc. offered by capital providers, including shareholders, and in turn achieve sustainable growth andmedium- to long-term increase in corporate value.
In the process of formulating our Where We Should Be in 2030 strategy and the Medium-term Management Plan (FY2021–
FY2023) announced on May 12, 2021, we took into consideration a lot of feedback received in the dialogues, which is partly
reflected in the final vision and plan.
Dialogue in FY2020
Financial results presentation

IR meeting (individual)

SR meeting (individual)

Other meeting

June, November

15 times

18 times

7 times

SEIKITOKYU KOGYO CO., LTD.

the Investigation Report (Additional measures against violations in deciding mixture prices)Web

https://www.seikitokyu.co.jp/dev/wp-content/uploads/2020/01/20200124.pdf

Progress of the Measures to Prevent Recurrence
The Group monitors the status of implementation of the measures to prevent recurrence and makes periodic reports to
the Board of Directors and the Management Meeting.

Note: To prevent the spread of COVID-19, the June 2020 financial results presentation was cancelled and replaced with the distribution of relevant documents.

29

https://www.seikitokyu.co.jp/wp-content/uploads/2016/03/20160325.pdf

Data SectionWeb

In addition, an overview of the monitoring results is disclosed on our website to help regain trust from stakeholders.
Web

https://www.seikitokyu.co.jp/company/complianceCorporate Report 2021

30

D a t a Se c tio n

Financial Information

Consolidated Balance Sheets for the Years Ended March 31
71st fiscal year 72nd fiscal year

2020

Current assets

30,877

23,632

21,767

Short-term loans payable472

734,150

Income taxes payable

558

1,147

6,007

2,565

Advances received on uncompleted
construction contracts

5,216

2,070

310

386

Provision for warranties forcompleted construction

15

0

—

Provision for loss on construction
contracts

2,559

2,683

53,821

Current liabilities
Total trade payables

Cash and deposits
Trade receivables
Cost on uncompleted
construction contracts
Raw materials and supplies
Short-term loans receivables
Other current assets

Property, plant and equipment
Buildings and structures
Machinery, equipment, vehicles,
tools, furniture and fixtures

26,004

14,03525,60425,58822,80523,655

8,774

19,3589,220

20,681

44

15

1,267

1,645

Other current liabilities

2,701

4,216

4,114

7,742

300

5,000

Long-term loans payable

3,742

2,597

Other long-term liabilities

72

144

38,02338,61914,195

14,32737,91941,246

Share capital

2,000

2,000

Capital surplus

510

519

35,48038,767(71)(40)(1,286)

(455)

751

245

Accumulated depreciation(20,275)(20,820)

463

263

Other intangible assets

463

263

Accumulated other comprehensive income

Investments and other assets

2,335

1,669

Unrealized gain (loss) on
investment securities

(2)

21

Foreign currency translation
adjustment

(16)

(15)

Remeasurements of defined
benefit plans(1,267)(461)

Total net assets

36,63240,790Total liabilities and net assets

74,656

79,409Retained earnings

263

288

Deferred tax assets

1,434

847

Other investments and other assets
Total assets

31

SEIKITOKYU KOGYO CO., LTD.

637
74,65675,914Gross profit

11,003

14,111

Selling, general and administrative expenses

5,042

5,640

Operating income

5,961

8,470

Other income

111

108

Other expenses

63

183

Ordinary profit

6,009

8,395

Extraordinary income

1,558

94

Extraordinary losses

203

1,389

activities

Cash flows from investing
activities

Cash flows from financing
activities

Effect of exchange rate change
on cash and cash equivalents

Net increase (decrease) incash and cash equivalents

7,363

7,100

Income taxes - current

891

1,332

Income taxes - deferred

(73)

586

6,544

5,180

Net income

owners of parent

at beginning of year

Increase in cash and cash equivalents resulting
from inclusion of subsidiaries in consolidation

Net profit attributable to non-Net profit attributable to

Cash and cash equivalents

—

—

6,544

5,180

Cash and cash equivalents
at end of year

4,461

1,138

(3,808)(3,622)(2,919)

2,343

3

6

(2,262)(133)

15,735

14,169696—

14,16914,035

Consolidated Statements of Comprehensive Income for the Years Ended March 31 (Millions of Yen)
71st fiscal year 72nd fiscal year
2020

533
79,40967,627

Data Section

Investment securities

Treasury stock

Cost of sales

Cash flows from operating

2021

ESG Section

Shareholders’ equity

Construction in progress

Intangible assets

90,025

controlling interests

Net assets
Land

78,631

Profit before income taxes

Net defined benefit liability

Total liabilities

Net sales

71st fiscal year 72nd fiscal year
2020

7Provision for bonuses

Non-current liabilities

2021

Growth Strategy

Non-current assets

14,169Consolidated Statements of Cash Flows for the Years Ended March 31 (Millions of Yen)

About Seikitokyu Kogyo Group

33,90849,0512020

2021

Liabilities and net assets(Millions of Yen)

71st fiscal year 72nd fiscal year

71st fiscal year 72nd fiscal year

2021

AssetsConsolidated Statements of Income for the Years Ended March 31

Introduction

2020(Millions of Yen)

2021

Net income

6,544

5,180

Other comprehensive income (loss)

(300)

830

Comprehensive income

6,243

6,010

Corporate Report 2021

32

D a t a Se c tio n

Segment Information and Business Description

Company Profile and Stock Information (as of March 31, 2021)

Other current assets

0.1%

Net sales 107million yen

Construction Business

Pavement Materials Manufacturing and Sales Business82.6%
Net sales

Corporate name

SEIKITOKYU KOGYO CO., LTD.

Total number of shares authorized

17.3%

Established

January 16, 1950

Total number of shares issued

15,559million yen

Share capital

Net sales composition rate

Net sales

90,025million yen
Fiscal year ended March 31, 2021

74,357million yen

Net sales(Millions of yen)

Pavement Materials Manufacturing and Sales Business
778
28,57062,83658,49670th fiscal year

Adjustments(13,553)

71st fiscal year

Other

Operating income
Construction Business(Millions of yen)

Pavement Materials Manufacturing and Sales Business

90,02578,631696
25,880Adjustments (11,036)

8,010

Number of shareholders

2.0 billion yen

Major Shareholders

Number of employees 869

Number of shares held Shareholding ratio(Thousand of shares)(%)

765
28,721

72nd fiscal year

Fiscal year ended March 31, 2019 Fiscal year ended March 31, 2020 Fiscal year ended March 31, 2021

Branches

8,470
5,564

136
2,937

74,357
Adjustments (13,819)

Other

Sites

5,961

166
2,586

Adjustments(2,632)70th fiscal year

8,428

6,173

5,122
Adjustments

154
3,163

(2,964)71st fiscal year

Adjustments(3,275)72nd fiscal year

Fiscal year ended March 31, 2019 Fiscal year ended March 31, 2020 Fiscal year ended March 31, 2021

Pavement Materials Manufacturing and Sales BusinessBusiness offices and others 55 sites
Technology research laboratory Tochigi
Testing laboratories 8 sites
Equipment center Tochigi

Environment and LandscapePavement Materials Manufacturing and Sales

Road construction and pavement
needs technologies and construction
methods that suit different conditions
and characteristics, such as theapplication, environment, scale, traffic
volume, and construction period. Since
its founding, we have been involved in
the development and implementationof a multitude of technologies andconstruction methods, which we haveused for the betterment of wide
range of infrastructure such as
expressways, runways, and port
facilities for more than 70 years. Our
paving technologies cover asphalt
pavements and cement concrete
pavements and meet diverse
needs in the optimal way.

Our expertise in civilengineering technology,
which we have cultivatedsince our founding, has beenused in various fields, ranging
from general earthworks,
such as residential landdevelopment, to special fields
such as improvements ofreservoirs, embankments, andrivers. Today, we also apply
our technologies to works
related to disaster prevention
and mitigation, including thedevelopment of infrastructure
for renewable energy, andcontribute to safe and secure
future urban development.

A variety of our pavement
technologies are used forsports facilities, such as
athletic tracks, baseball parks,
and tennis courts; shrines;
temples; and park facilities, inaddition to roads in general.
We also engage in a wide
range of landscape
pavement works to create acomfortable and beautiful life
environment in harmony withthe surrounding environment
and nature by adding beauty
and accents to the inorganic
pavement surface.

We manufacture and sellasphalt mixtures on anationwide scale and supply
a variety of high-quality
pavement materials to themarket in a timely manner.
We are also actively working
to reduce the environmental
burden by contributing to theachievement of a recyclingoriented society through100% reuse of asphalt waste
and by improving theefficiency of facilities andchanging fuels used to saveenergy and reduce CO 2
emissions.

Technological Development
We will seek to secure the quality and improve the productivity in the entire process at the
production site, from the basic stage of construction work to the management andmaintenance of roads, by developing products and construction methods geared toenergy efficiency, such as an earth conscious low-carbon asphalt mixture, the full
introduction of ICT, and the use of drones and 3D data.

Training center

Tochigi

Hokuriku Branch
Nagoya Branch
Kansai Branch

Chugoku Shikoku
BranchKyushu Branch

7.38

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

2,186

5.42

STATE STREET BANK AND TRUST CLIENTOMNIBUS ACCOUNT OM02 505002

1,650

4.09

TOKYU CORPORATION

1,533

3.80

INTERTRUST TRUSTEES (CAYMAN)
LIMITED SOLELY IN ITS CAPACITY AS
TRUSTEE OF JAPAN-UP

1,416

3.51

INTERTRUST TRUSTEES (CAYMAN)
LIMITED AS TRUSTEE OF JAPAN-UP
UNIT TRUST

1,400

3.47

Custody Bank of Japan, Ltd. (trust account)

1,050

2.60

Seikitokyu Employees’ Shareholding
Association

764

1.90

BBH FOR FIDELITY PURITAN TR: FIDELITYSR INTRINSIC OPPORTUNITIES FUND

600

1.49

Note: The shareholding ratio was calculated after deducting 67,641 sharesof treasury stock.

Distribution of Shares by Types of Ownership
Tohoku Branch

Individuals and others 19.9%

North Kanto Branch
Kanto
Product Sales& Marketing
Branch OfficeForeign investors 26.2%
Total

40,414,407 shares

Kanto BranchTokyo Branch

Financial institutions 14.8%
Other domestic corporations 37.0%
Securities companies

1.9%

Treasury stock

0.2%

East Kanto Branch
Data Section

Civil Engineering

49 sites

22.14

2,978

ESG Section

Pavement

Material plants
and others

Hokkaido
Branch8,931

Hikari Tsushin K.K.

Growth Strategy

Construction BusinessHokkaido Branch (Hokkaido)
Tohoku Branch (Miyagi)
Hokuriku Branch (Niigata)
Kanto Branch (Tokyo)
North Kanto Branch (Saitama)
East Kanto Branch (Chiba)
Tokyo Branch (Tokyo)
Yokohama Branch (Kanagawa)
Kanto Product Sales & Marketing Branch Office (Tokyo)
Nagoya Branch (Aichi)
Kansai Branch (Osaka)
Chugoku Shikoku Branch (Hiroshima)
Kyushu Branch (Fukuoka)

TOKYU CONSTRUCTION CO., LTD.

About Seikitokyu Kogyo GroupNet sales

74,036

40,414,407 shares

Names of shareholders

Segment Information
Construction Business

Head office location 3-13-16 Mita, Minato-ku, Tokyo, Japan

150,000,000 shares
Introduction

Net sales composition rate

Stock Information

Company Profile

Yokohama BranchGroup Companies
Subsidiaries HODOU KOGYO CO., LTD.
HOEI KENSETSU KOGYO CO., LTD.
MICHINOKU KOGYO CO., LTD.
YAMABIKO KOGYO CO., LTD.
CHUGAI ENGINEERING CO., LTD.
ST SERVICE CO., LTD.
NITTOU ROAD CO., LTD.
TAKAMATSU KOUMUTEN CO., LTD.

SHINSEIKI KOGYO CO., LTD.
ST KENZAI CO., LTD.
KUMAREKI KOGYO CO., LTD.
SEIKITOKYU MYANMAR ROAD COMPANY LIMITEDSTK PACIFIC CORPORATION
Affiliates

GULF-SEAL KOGYO CORPORATIONNOTO ASCON CORPORATION

Note: Effective July 1, 2021, all shares of ST KENZAI CORPORATION were transferred outside the Group.

33

SEIKITOKYU KOGYO CO., LTD.

Corporate Report 2021

34

ST and K(Seikitokyu Kogyo’s mascot characters)
ST and K, our mascot characters, were bornin January 2020 on the occasion of our 70th

SEIKITOKYU KOGYO CO., LTD.
9F, Mita 43 MT Building, 3-13-16, Mita, Minato-ku, Tokyo, 108-8309, Japan
Inquiries: https://www.seikitokyu.co.jp/contact (in Japanese)
Issued in December 2021

anniversary. They will help promote safety atconstruction sites and asphalt plants acrossthe country, improve the industry’s image,and conduct public relations activities.