Integrated Report

2023

NITTOC CONSTRUCTION CO., LTD.
Daiwa Higashi-Nihonbashi Bldg., 3-10-6, Higashi-Nihonbashi,
Chuo-ku, Tokyo 103-0004, Japan
TEL: +81-3-5645-5080

NITTOC CONSTRUCTION CO., LTD.

Our Motto
Continuing to be a company needed by society by sincerely providing
technology, precisely in the areas that cannot be seen

CONTENTS

Brand Message

What is NITTOC?

Our pride comes from what we achieve,

Missionprecisely in the areas that cannot be seen

We are the company
that provides safe andsecure society andcontributes to countries

MissionManagement
Philosophy

ValueWith efficient management andcomprehensive technicalValue

capabilities in foundation work

VisionVisionNITTOC CONSTRUCTION CO., LTD. Integrated Report 202３

Integrated Report

2023

NITTOC CONSTRUCTION CO., LTD.

Editorial Policy

Notes on Future Outlook

This report was published to share information
with shareholders, investors, and other stakeholders regarding the Group’s initiatives for improving
corporate value over the medium- to long-term,with the hope that this information could provide
opportunities for dialogue with our stakeholders.
It contains not only financial information but also
our Medium-Term Management Plan and non-financial information such as environmental, social,and governance information.
We hope it provides readers with a better understanding of the Company.

Business results forecasts, future outlook, strategies,
targets, etc., contained in this report that do notconcern past or current facts are future forecasts
based on the Company’s future plans, expectations, and decisions, which are predicated on information available to the Company as of the current
time and certain assumptions deemed reasonable
by the Company. Please note that due to various
changing factors, actual targets, etc., may differ
from the forecasts provided in this report.

1 │ NITTOC CONSTRUCTION CO., LTD.

Integrated Report 2023 │To lead disaster prevention andenvironmental conservation as
the expert of foundation work
accumulated by our reliable
technical ability

Guidelines
International Integrated Reporting Council (IIRC)
International <IR> Framework

Period Covered by This Report
April 1, 2022 to March 31, 2023
(The report also includes some activities before andafter this period.)

Scope of This Report
NITTOC CONSTRUCTION CO., LTD. and
its Group companies

Management Philosophy and Contents

1

History of Value Creation

3

At a Glance

5

Financial and Non-Financial Highlights

7

Value Creation Process

9

Growth Strategy
Message from the President

11

Review of the Previous Medium-Term Management Plan

17

Medium-Term Management Plan 2023
(Fiscal 2023 to Fiscal 2025)

19

Business Segment-Specific Strategies

21

Main Construction Projects Completed in Fiscal 2022

29

ESG Section
Sustainability Management

31

Environment

35

Social39

Governance

45

Management Members

47

Corporate Governance49

Risk Management

53

Compliance

54

Data Section
11-Year Financial Summary

55

Consolidated Balance Sheets

57

Consolidated Statements of Income andConsolidated Statements of Comprehensive Income

58

Consolidated Statements of Changes in Net Assets

59

Consolidated Statements of Cash Flows

60

Corporate Overview and Stock Information

61

Tool Map
Financial Information

Non-Financial Information

Integrated Report 2023
Annual Securities Report
Reports
Summary of Consolidated Financial Results

Corporate Governance Report

Website (https://www.nittoc.co.jp/english/index.html)│ NITTOC CONSTRUCTION CO., LTD. Integrated Report 2023 │ 2

What is NITTOC?

History of Value Creation

1972

Growth Period

The Early Days
●The foundation of Yachiyo Shisui Kogyosho

In April 1950, NITTOC’s predecessor, Yachiyo Shisui Kogyosho was founded in Sapporo-shi, Hokkaido, for the purposeof undertaking a geological survey and civil engineeringfoundation work for power development projects. The firstdam project that we took on was a survey and foundation
construction work for the Horonai River Dam and its power
plant. We worked on thisproject from September 1951
to November 1955. Following
the Horonai River Dam project, we drew upon our uniquefoundation grouting technologies to perform grouting
works, thereby refining ourtechniques and building up a
Horonai River Dam chemical grouting
solid track record.

Becoming a comprehensive construction company
with distinctive strengths in foundation technology

Transformation Period●Changed trade name to Nippon Tokushu
Doboku Kogyo K.K.

The late 1950s and early 1960s, when we expanded into central
Japan, was a period of rapid economic growth in Japan, and theamount of construction work performed by the construction industry grew tremendously. We were a comprehensive civil engineering foundation work expert, focusing primarily on geologicalsurveying and foundation grouting for large-scale dam construction. As such, we earned society’s recognition as a civil engineering company with special technologies and techniques.
Therefore, in December 1959, we changed our trade name to
Nippon Tokushu Doboku Kogyo K.K. We took the opportunityof this trade name change to diversify the construction work wewere involved in, and started engaging in new fields such as
slope protection, landslide prevention, and pile foundation work.

work for temporary coffering

1953●Establishment of Yachiyo
Chika Kogyo Co., Ltd.

●Changed trade name to NITTOC CONSTRUCTION
CO., LTD., as we pursued greater success

Since the Company’s foundation, we have built up one of Japan’sfinest track records as a specialist in dam foundation construction.
We then expanded our business scope to encompass the full rangeof civil engineering works. Our core business was grouting fordams and other structures, as well as chemical grouting for ground
improvement, slope protection and landslide prevention, spray-on
greening for slope protection, reinforced concrete pile work as
foundation pile for high-rise buildings, geological survey, andmore. During Japan’s era of rapid economic growth, we built up
our track record and earned even greater trust from our customers,
rapidly growing into a comprehensive foundation work company.
Under such circumstances, in March 1972, the Ministry of Construction enacted the revised Construction Business Act. The previous registration system switched to an industry-specific permit
system, which was broken down into 28 industries, such as civilengineering work, building construction work, and other specialized industries. The goal of these changes was to improve the quality of construction enterprises and promote the healthy
development of the industry as a whole.
We realized that this industry trend presented us with a favorable
opportunity to expand our business in the fields of general civil engineering and construction (foundation).
On May 29, 1972, we changed our trade name from Nippon
Tokushu Doboku Kogyo K.K. to NITTOC CONSTRUCTION CO., LTD.

Yachiyo Chika Kogyo head office●New Medium-Term Management Plan for a“Newborn NITTOC”

With the liquidation of subsidiary NITTOC Real Estate Co.,
Ltd. in 2001 and the improper accounting incident at subsidiary High-Tech Lease Co., Ltd. in 2007, NITTOC entered aperiod in which it was sorely tested.
Under such circumstances, we strove to further reduce ourinterest-bearing debt and to continue to develop our businessbased on a stable financial foundation. As such, on January 18,
2008, we raised ¥6.0 billion in capital through third-party allotment to the Phoenix Capital Partners Six Investment Partnership and Fudo Tetra Corporation. Furthermore, to create a“Newborn NITTOC,” we formulated a new three-year Medium-Term Management Plan [Step I], beginning in fiscal 2008.

2023●Formulation of Medium-Term Management Plan
2023 (fiscal 2023 to fiscal 2025)

In the past 15 years since 2008, the Company formulated fivemedium-term management plans, implemented the measures
outlined in these plans during each period, and achieved results that exceeded key operational targets, such as net sales
and operating profit targets, while also actively making capital
investments and providing shareholder returns. In May 2023,
we announced a new Medium-Term Management Plan (fiscal
2023 to fiscal 2025) with fiscal 2023 (fiscal year ending March
31, 2024) as its first year, setting our sights on further growth.

Kansai Electric Power’s Kurobe 4th Dam (the so-called Kuro-yon dam)
- began foundation construction work in 1960

In April 1953, we reorganized as Yachiyo Chika Kogyo Co.,
Ltd. and prepared our future business lineup. Then, on December 24, 1962, we absorbed and merged with Hikari Shokai K.K.
at a ratio of 1 to 10 in order to reduce the par value of ourshares from ¥500 to ¥50. Hikari Shokai, which was headquartered in Chiyoda-ku, Tokyo, was established on December 17,
1947, and changed its trade name to Nippon Tokushu Doboku
Kogyo K.K. on October 15, 1962. Due to this, the date of theCompany’s foundation became December 17, 1947.

1957●Headquarters relocated to Azabu, Minato-ku,
Tokyo

In October 1953, the government formulated its Guidelines
on Forest Conservation and Flood Control Measures. Basedon these guidelines, in September 1955, the Ministry of Construction (currently the Ministry of Land, Infrastructure,
Transport and Tourism) formulated its Five-Year Flood Control Program and promoted
comprehensive river development projects, primarily
for multipurpose dams.
Given these circumstances and our own success in
Hokkaido, in January 1957,
we relocated our headquarters to 3 Azabu Kasumi-cho,Minato-ku, Tokyo, with the
The Saso River Dam construction project,
aim of making greater in- the beginning of our advance into central Japan
Constructed between 1956 and 1958
roads in central Japan.

1965●Headquarters relocation and our great leap
forward in the mid-1960s

In the mid-1960s, we took a great leap forward. In conjunction with our dramatic advances, we reorganized our organization and relocated our headquarters in 1965. We moved
from Kanda Mitoshiro-cho, Chiyoda-ku, to 8-1, Ginza Higashi, Chuo-ku (which was renamed and renumbered as
8-14-14, Ginza in a later governmental address revision) andworked to reinforce our business management system.

ESG Section●Our foundation date changes to 1947

Kamiosu Dam foundation construction
work 1993
Site preparation for land readjustment
project in Ishiki, Kagoshima-shi 1997

Ando area, Otsuchi-cho reconstruction work 2019

●Liquidation of NITTOC Real Estate Co., Ltd.

On March 31, 2001, we liquidated NITTOC Real Estate Co.,
Ltd., a consolidated subsidiary. NITTOC Real Estate Co., Ltd.
was established in 1985 and was engaged in real estate business and residential and urban development. However, its
development operations in Niigata and Nagasaki were struggling, and it had posted a loss of almost ¥20.0 billion. Although we had provided support primarily in funding torestore its business, given the poor outlook for the real estatemarket at the time, we determined that the rehabilitation of
the business on its own was unlikely, and thus decided toliquidate NITTOC Real Estate Co., Ltd.

Aso Ohashi area slope protection work
(Aso-gun, Kumamoto) 2017

Senbon Dam foundation reinforcement
work 2020

Ginza headquarters
building■

140,000■

140,000■

120,000■

120,000■

100,000■

100,000■

80,000■80,000■60,000■60,000■40,000■40,000■20,000■20,000■0■

0

Net sales (Millions of yen)

1947

1950
1947

1950

3 │ NITTOC CONSTRUCTION CO., LTD.

1960

1960

Integrated Report 2023 │

1970

1970

1980

1980

1990

1990

2000

2000

2010

2010

2020

│ NITTOC CONSTRUCTION CO., LTD.

2020

Integrated Report 2023 │ 4Data Section

On April 10, 1953, we reorganized as a joint-stock corporation and changed our tradename to Yachiyo Chika Kogyo Co., Ltd.

2008

What is NITTOC?

1959

Growth Strategy

1950

What is NITTOC?

At a Glance

Maintenanceand renovation
9.1%

Company
name(Millions of yen)

1

Company A

33,391

NO.2

Civil
engineering
2.9%
Groundimprovement
29.8%

Ranking

industry
share in slope
protection
work

Slope
protection
46.7%

Net sales shareby work type(1.8)%NITTOC32,7990.7%

3Company B

10,580(5.3)%

4

Company C

8,193(11.3)%

Company D

6,711

Ground improvement

We use the high-level expertise we have developed
over the years regarding subterranean areas to propose optimal construction methods and provide
reliable construction technologies. This encompasses everything from general ground improvement construction methods to earthquake andliquefaction countermeasures. As such, we can provide wide-ranging, comprehensive plans and construction.

Maintenance and renovation

5.0%

Civil
engineering
2.9%

We provide high-quality diagnostic, renovation,and reinforcement technologies for all types of civil engineering structures, such as tunnels, bridges,
and water utilization facilities, with the aim of extending their service lives.

Net salesby market(ratios in completed
construction
contracts)

Domestic
95.7%

Currently, over 90% of our work consists of domestic construction projects. Overseas, we are building up a track record of construction work in growing Southeast Asianmarkets, primarily Indonesia.

Pile foundation

Segment
shareFoundation work such as slope protection and ground improvement work accounts for over 90% of the total work of
the Company.

Dam grouting

Public-private
proportion(ratios in net salesof completed
construction
contracts)

Government
and public
sector
77.7%

A large portion of our orders, almost 80%, come from thegovernment and public sector, including the national government and local governments. We are currently also dedicating ourselves to private-sector work such as projects forthe former Japan Highway Public Corporation and railway
operators.

5 │ NITTOC CONSTRUCTION CO., LTD.

Integrated Report 2023 │Breakdownof work
by order type

Subcontractor(central)
45.4%

Subcontractor(local)46.7%
As a foundation work specialist, a large share of the orders
we receive is slope protection and ground improvement
works subcontracted from central and local general contractors. This work makes up almost 90% of all orders we
receive.

34,0552021

2022 (Fiscal year)● Net sales(Millions of yen)

16,0002021

21,7432022 (Fiscal year)(Millions of yen)

5,952

6,605

2021

2022 (Fiscal year)(Millions of yen)

4,685

4,712

2021

2022 (Fiscal year)● Net sales
We have been engaging in dam foundation grouting work as the initial work type for our early days,
and have worked on over 75% of Japan’s largescale dams with heights of 100 meters or more.
This achievement is the top in the industry.

Prime
contractor
7.9%(Millions of yen)

33,517● Net sales
In addition to conventional construction methods,
we also have a lineup of piles that can be installedin confined spaces, so that we can meet various
needs everywhere from mountainous regions to urban areas.

Foundation
work
95.5%

● Net sales● Net sales

Others1.6%

Overseas
4.3%

Private sector
22.3%

YoY

2

5

Dam
grouting
3.4%

Pile
foundation
6.5%

Net sales

We offer slope-related technologies that are effective for environmental conservation, disaster prevention, and renovation and reinforcement of slopes.
We work to reduce our environmental impact inevery field, and restore high-quality vegetation inharmony with nature, thereby working to maintainecosystems and to protect the environment.

Growth Strategy

Others
1.6%

Slope protection work

ESG Section

Established in 1947, the Company took the initiative in leading the dam foundation works as the initial work type for its early days
during Japan’s heyday of constructing dam power stations associated with the development of power sources. In particular, NITTOC’stechnology, which boasted the collective strength deriving from the united efforts of civil engineers and geologists, was highly regarded by various related parties. Consequently, the Company undertook most of the foundation work of domestic large-scale dams including Kansai Electric Power’s Kurobe 4th Dam (the so-called Kuro-yon dam).
Moreover, the Company proactively engaged in various projects regarding the Shinkansen, expressways, building foundations andother projects with the aim of becoming a comprehensive foundation work company that appropriately adapts itself to an era of technological innovation, and has built an extensive track record. In 1972, we changed our trade name to our current name and took theopportunity to further expand our business scope. We have established a record of success in a wide range of fields, including not only
general civil engineering projects involving dams, rivers, roads, water and sewerage systems, and land development, but also building
construction work.

What is NITTOC?

Overview by type of work

Civil engineering(Millions of yen)

2,674

2,490

2021

2022 (Fiscal year)● Net sales
We handle the full range of civil engineering work
for water and sewerage systems such as pipe jacking, tunnels, bridges, and land development.
In recent years, we have also been building up a
track record of pipe-jacking construction projects
overseas.

(Millions of yen)

1,899

2,100

2021

2022 (Fiscal year)│ NITTOC CONSTRUCTION CO., LTD.

Integrated Report 2023 │ 6

Data Section

NITTOC’s position in the construction market

What is NITTOC?

72,918million¥(Millions of yen)

62,237

million65,52971,62567,84563,26465,516

67,955

Dividend payout ratio

ROIC

45.0

53.2

11.28

¥
72,91866,076

%

48.6

46.0

2019

2020

2021

2022

(Fiscal
year)

2018

2019

2020

2021

2022

(Fiscal
year)

2018

(%)

50.1

53.2

12.32

42.9

38.0

36.0

2019

2020

30.0

2018

%

■ Dividend per share (Yen)Dividend payout ratio (%)(Millions of yen)

75,003

Dividend per share

40.0

2021

45.0

2022

12.50

10.63

(Fiscal
year)

11.28
9.33

2018

2019

2020

2021

Operating profit(consolidated)

Ratio to net sales

Ordinary profit(consolidated)

Ratio to net sales

Number of employeesChildcare leave acquisition rate

5,451

7.5

¥

5,462

7.5

1,074

48.0

¥

million%■Operating proﬁt (consolidated) (Millions of yen)
Ratio to net sales (%)

7.5
6.3
4,903

7.9
6.8

7.5

7.4
6.3

4,523

3,970

%

■Ordinary proﬁt (consolidated) (Millions of yen)
Ratio to net sales (%)

5,451

5,358

million

4,004

4,880

7.5

7.0
5,419

915

(Fiscal
year)

%

(%)

(Persons)

8.0

2022

950

995

1,054

1,074

48.0

5,462

4,626

23.8

23.5

23.8

2020

2021

12.5

2018

2019

2020

2021

2022

(Fiscal
year)

2018

2019

2020

2021

2022

(Fiscal
year)

2018

2019

2020

2021

2022

(Fiscal
year)

2018

2019

2022

(Fiscalyear)

Profit(consolidated)

Ratio to net sales

Net assets(consolidated)

Equity ratio

Research and development expenses

Number of patents held

Number of patent applications

3,526

4.8

¥

32,127

60.3

¥

387

121

20

million%■Proﬁt (consolidated) (Millions of yen)
Ratio to net sales (%)

4.3
2,721

2018

3,258

2019

5.2

5.0

3,500

2020

7 │ NITTOC CONSTRUCTION CO., LTD.

%■Net assets (consolidated) (Millions of yen)
Equity ratio (%)

50.0
5.0

million

3,329

2021

4.8

24,67652.6
26,55055.1
28,80058.8
30,610

million(Millions of yen)

372

60.3
32,127391

Number of patents held (Cases)
Number of patent applications (Cases)

387

336
99

241

109

117

120

121

20

20

2021

2022

Data Section

¥

3,526

2022

Integrated Report 2023 │(Fiscal
year)

2018

2019

2020

2021

Growth Strategy

75,003¥

Net sales (consolidated)

ESG Section

Orders received (consolidated)

What is NITTOC?

Financial and Non-Financial Highlights

2022(Fiscal
year)

2018

2019

2020

2021

2022

(Fiscal
year)

6

10

2018

2019

5
2020

│ NITTOC CONSTRUCTION CO., LTD.

(Fiscalyear)

Integrated Report 2023 │ 8

What is NITTOC?

Value Creation Process

Visionsociety by sincerely providing technology,
precisely in the areas that cannot be seen

Brand Message: Our pride comes from what weachieve, precisely in the areas thatcannot be seen

OUTPUT

Fiscal 2022

Financial capital
Total assets････････ ¥52,809 million
Net assets･ ････････ ¥32,127 million
Free cash flows････････ ¥870 million

Slopeprotection

Strengths

Manufactured capital

Sales and proposals

Sales sites
Domestic････････････････ 54 sites
Overseas･ ･････････････････2 sites
Capital investment･･･････ ¥1,352 million

Intellectual capital
Number of patents held････････ 121
Number of patent applications･････ 20
Number of patent applications fordeveloped technologies･･･････････ 764

Extensive
track recordinconstruction

Business ﬂow

Human capitalSocial and related capital

34,055 million¥

Groundimprovement

Medium-Term
Management Plan 2023
Next Challenge Stage Ⅲ
Medium-Term Management Plan

Construction

page 19 to page 20

Net sales

21,743 million¥

Maintenanceand renovation
Net sales

Design6,605 million¥

Diversehuman
resources

Pile foundation
Net sales¥

4,712 million

Three-year performance targets(2023 to 2025 target)

Orders received･････････ ¥2,237 million
Net sales････････････････････ ¥2,187 million
Operating profit････････････ ¥161 million
Ordinary profit･･････････････ ¥162 million
Profit･････････････････････････････ ¥108 million

1. Sales targets (fiscal 2025)① Expand ground improvement work
➡ Orders received/net sales ofcompleted construction contracts:¥23.0 billion (30% or more of total)② Expand private-sector orders ➡
Orders received: ¥23.0 billion(30% or more of total)③ Expand structural renovation work
➡ Orders received: ¥10.0 billion④ Level out construction volume ➡
Construction work during the first
half: 50% of total (¥37.0 billion)

2. Performance targets① Operating profit ➡
3-year average: ¥5.4 billion or more
② Operating profit margin ➡
3-year average: 7.4% or more

3. Financial indicators (fiscal 2025)

Dam grouting● Key issues (materiality)
Sustainability Management

Number of Group companies･････ ６
Number of regular Nisshinkai members(Number of subcontractors)････････ 248
Number of cooperation agreements on
disaster management signed(Ministry of Land, Infrastructure,
Transport and Tourism national highway
offices, local governments, etc.)･･････ 39
Business transactions･ ････････････ 847 (current fiscal year)

Environmental
conservation

Net sales

2,490 million② ROIC (operating profit after taxes(operating profit x (1 - effective taxrate)) /invested capital (interestbearing debt + net assets))➡ 10% or more

Civil
engineering③ EBITDA(operating profit + depreciation)➡ 3-year average: ¥6.1 billion

page 31 to page 34

Local
community

Motivation

GovernanceManagement Philosophy

Corporate ethics
and Riskmanagement① PBR (share price/net assets per share)➡ 1.3 times or more¥

Net sales¥

2,100 million

Data Section

Number of employees (consolidated)(Total of 1,074 employees)
Domestic････････････････････ 999
Overseas･ ････････････････････ 75
First-Class Civil Engineering Managers･ ･･････････････････････････････ 648
Second-Class Civil Engineering Managers(Civil Engineering)････････････････ 513
Professional Engineers and AssistantProfessional Engineers･ ･･･････････ 299
Slope Protection Works Managing
Engineers･･･････････････････････ 172
Employee construction fields
Civil engineering････････････ 49％
Soil and geology････････････ 19％
Building construction････････ 14％
Agriculture and agricultural
engineering･･･････････････････ 8％
Other･････････････････････････3％

Net sales

Technical
capabilities
with highexpertise

OUTCOME

Growth Strategy● Business model

INPUT

ESG Section●Increasingly severe climate change issues●Acceleration of globalization●Increased importance of supply chain management●Logistics disruptions and interruptions caused by pandemics and conflicts●Uncertain global economic outlook●Low birthrates, longevity, and population decline●Advances in technologies such as AI and the IoT, the spread of COVID-19, and the progress of diversity

What is NITTOC?

Our Motto: C ontinue to be a company needed byExternal environment

4. Shareholder return goals① Pay dividends equal to or greater thanthose paid in the previous fiscal year.

Reinvestment
9 │ NITTOC CONSTRUCTION CO., LTD.

Integrated Report 2023 ││ NITTOC CONSTRUCTION CO., LTD.

Integrated Report 2023 │ 10

Growth Strategy

Yasuo Wada

President & Representative Director

ny needed by society by sincerely providing technology, precisely in the areas that cannot be seen, withthe aim of achieving sustainable growth together
with all of our stakeholders. We look forward to
your ongoing support.

The features and strengths of the NITTOC
Group and the challenges it faces
NITTOC was established in Hokkaido in 1947, 76
years ago in the post-war era, during Japan’s heyday
of constructing dam power stations associated withthe development of power sources. Since then, we
have developed numerous technological innovations that meet contemporary societal needs, rooted
in the grouting technologies used in dam foundation
construction, which are the origins of the Group.
We now possess over 200 technologies and construction methods. The lifeblood of the NITTOC

11 │ NITTOC CONSTRUCTION CO., LTD.

Integrated Report 2023 │these efforts, we are now actively sharing our successes with our sales force automation (SFA) system
for technical sales throughout the NITTOC Group,at the organization level. As a result, although thenumber of private-sector urban area projects is low,
it is steadily growing. In our previous Medium-Term
Management Plan 2020, our targets for fiscal 2020
were ¥66.4 billion in orders received, ¥64.4 billion
in net sales, and ¥4.0 billion in operating profit, andour actual results were ¥67.8 billion in orders received, ¥68.0 billion in net sales, and ¥5.4 billion in
operating profit. In fiscal 2021, our targets were¥70.5 billion in orders received, ¥69.4 billion in net
sales, and ¥4.5 billion in operating profit, and ouractual results were ¥71.6 billion in orders received,¥66.1 billion in net sales, and ¥4.5 billion in operating profit. In fiscal 2022, our targets were ¥77.2 billion in orders received, ¥71.5 billion in net sales, and¥4.8 billion in operating profit, and our actual results were ¥75.0 billion in orders received, ¥72.9
billion in net sales, and ¥5.5 billion in operating
profit. These results have been steadily rising, year
on year. Although we have only just begun withthese initiatives, we will efficiently share our successes within the Group going forward. To put it in
my own words, we will strive to “offer proposals thatstrike a chord with customers,” and bolster our ability to steadily and continuously take on new orders
for private-sector projects in urban areas.

│ NITTOC CONSTRUCTION CO., LTD.

Growth Strategy
ESG Section

We create working
environments in which our
employees feel pride in theirwork, staying true to whatmakes NITTOCʼs uniquenessand establishing a brand thatearns the trust of our customers.

I am Yasuo Wada, President & Representative Director of NITTOC CONSTRUCTION CO., LTD. I
would like to take this opportunity to extend my
gratitude to our shareholders, investors, clients, local communities, and other stakeholders for the understanding and support to the management of the
NITTOC Group. In recent years, dialogue withshareholders and investors and collaborative value
creation with diverse stakeholders are becoming
more important than ever. As such, we have createdand published this integrated report.
With the support of our stakeholders, we wereable to celebrate our 75th anniversary in Decemberof last year. The NITTOC Group has expanded its
operations, and has been involved in dam grouting
for 97 of the 169 dams nationwide managed by the
Ministry of Land, Infrastructure, Transport andTourism and the Japan Water Agency. We also haveone of the top market shares in Japan in the slope
protection field. At the Japan Federation of Construction Contractors Awards, which recognize excellence in social capital, the NITTOC Group has
won the Civil Engineering Award four years in a row,ever since the award was first presented in 2020.
This is evidence of the high acclaim that the NITTOC Group’s technologies and techniques have received within the industry.
The NITTOC Group will continue to be a compa-

Group consists of what makes NITTOC’s uniqueness, including its technical capabilities, establishedthrough the efforts of the NITTOC Group’s members over the past 75 years: (1) the diligence of ouremployees who are sincerely committed to theirwork, (2) our proposal and construction capabilities
for meeting our customers’ needs and requests, (3)our flexibility stemming from our nationwide sales
network, (4) our diverse customer base, and (5) ourconstruction experts with the management strengthsof a prime contractor.
At the same time, we have improved our own
technical capabilities to better meet the demands ofcustomers, progressively expanding our businessscope from dams to slope protection, environmental
conservation and disaster prevention, and urban regeneration. We are still in the process of dedicating
our efforts to increasing order volume from the private sector in urban areas and are working to growour business even further. To reinforce and bolster

Data Section

Opening

What is NITTOC?

Message from the President

Integrated Report 2023 │ 12

Growth Strategy

Backcasting from our vision for a decade
into the future to formulate the new
Medium-Term Management Plan 2023
The NITTOC Group has now set out on its new Medium-Term Management Plan 2023. There were
two key discussion points in formulating this plan.

13 │ NITTOC CONSTRUCTION CO., LTD.

Integrated Report 2023 │Tackling the key challenges of securing
and developing human capital, improving
productivity, reinforcing health, safety,
and quality management, promoting
sustainability management, and taking
up challenges in new fields
In Medium-Term Management Plan 2023, we are carrying on and expanding the initiatives of our previous
medium-term management plan by tackling five key

challenges to realize our newly defined credo andbrand message. These include “securing and develop-

To reiterate what I mentioned earlier, we anticipate a long-term trend going forward of expandedrenovation work, reinforcement work, and updating
work, as we fully enter an era of maintenance andrenovation of social infrastructure. It will be a business environment in which companies with theframeworks essential for engaging in such businesswill succeed. This will become a prerequisite for corporate growth when we also take into consideration
issues such as the so-called “2024 problem.” Led bythis belief, we have set securing and developing human capital as one of our top tasks in the new Medium-Term Management Plan. These efforts will befocused on recruiting exceptional personnel, having
them work with us for the long term, educating andtraining them, and developing them into engineersthat our customers trust and rely on.
Furthermore, as I mentioned earlier, we are also focusing our efforts on increasing the number of urban
civil engineering projects. As mechanized construc-tion has made tremendous strides in this field, andemployee efficiency is high, it has the potential tocontribute to work style reforms. Of course, it will also
serve as a stable revenue-generating platform. As
above, improving productivity can truly bring about
diverse benefits. Going forward, we plan to work
harder than ever to increase the share of our work in
the high-productivity construction field and to utilize
technology to mechanize our construction work.

In addition to these two challenges, our Medium-Term Management Plan will take on three otherchallenges: “reinforcing health, safety, and quality
management,” which is the foundation of creating
comfortable working environments, “promoting sustainability management” for meeting the needs ofthe times and the society, and “taking up challenges
in new fields” with M&As in mind as extensions of
our current business.

Outlook for fiscal 2023, the first fiscal
year of Medium-Term Management Plan
2023
During the previous fiscal year, several major projects, including an overseas project (a major ground
improvement project in Indonesia) progressed
steadily and our business performed strongly. Dueto this, at present, we expect orders received andmajor profit items to fall year on year in fiscal 2023,
the first year of Medium-Term Management Plan
2023. However, within Japan, we have started theyear with more in-process projects than we had at
the start of the previous fiscal year. Therefore, we
believe that we will be able to minimize the year-onyear decline.
Furthermore, in fiscal 2023, we are anticipating
the results of the benefits of introducing two coresystems. One will be the benefits from the operationof our sales force automation (SFA) system, which I
mentioned earlier. The second will be the benefits ofthe construction management system we are deploying as part of our onsite management operation
DX efforts. This construction management system,
which we will introduce this year, is a core systemthat was built by gathering feedback from the field
through close communication between the DX Promotion Department, Corporate Strategy Division
and worksites, and using them to reconstruct thesystem through cycles of trial runs.
The era in which all fieldwork can only be performed in the field is now of the past. At present,
remote technologies can be used to send data fromthe field to sales offices and branches, where office
staff can perform data processing and send the results back to the field. Through this approach, we
hope to minimize the burden placed on onsite personnel and raise efficiency as much as possible,
thereby improving work precision and achieving
work style reforms.

Growth Strategy

into the future and working back from them, insteadof forecasting by starting from the current situationand cumulatively adding up figures and strategies.
This is to say that the three years of Medium-Term
Management Plan 2023 are the first stage in achieving our vision for a decade from now. We have only
defined a broad vision for the NITTOC Group 10
years from now, and we have yet to narrow down its
details. However, I hope that our shareholders will
understand our dedication to continuing to supply
social infrastructure and protect the lives and property of the people who use it, without being affected byshort-term changes in the surrounding environment.
In addition, we are also engaging in research anddevelopment aligned with these efforts. Our Engineering and Development Division is working withseveral universities on the development themes wehave selected with an eye to the coming decade,such as AI utilization, XR technologies, and environment-friendly materials.

ing human capital” and “improving productivity.”

ESG Section

In conjunction with the launch of our current Medium-Term Management Plan 2023 (please see details
on page 19 and page 20), we formulated a new motto, “Continuing to play a vital, behind-the-scene rolein society through dependable construction technologies,” and a new brand message, “We have our
pride, just where you can’t see it.”
Due in part to the fact that we are a BtoB company, and that orders are placed with us by government agencies and core private-sector companies,
we can be described as a company that only people
in the know are familiar with, a quiet but powerfulpresence supporting social infrastructure from behind the scenes. Furthermore, the dam grouting
technologies that are the NITTOC Group’s pride aretechnologies that build a second underground dam
directly below massive dams full of water to prevent
water from leaking through below. This means thatthe sites where we engage in work look the same
before and after it is done, making it hard to understand what exactly we do.
However, these technologies are the source ofpride in our work, and they are the origin of all of
the technical services we currently offer. I would
even go a step further to say that they are the very
reason for the existence of the NITTOC Group.
Based on our reaffirmed understanding of these factors, we redefined our motto and brand message tobetter share with the world what it means to be the
NITTOC Group, where field personnel feel pride in
their work and produce results while staying true towhat makes NITTOC’s uniqueness. In the future,
we will further enhance our brand message communication strengths both inside and outside the Company, thereby improving employee engagement,
securing personnel, heightening society’s awarenessof the importance of the NITTOC Group, and bringing in new orders.

The first, with regard to our motto and brand message, was how to ensure that employees felt pride
while engaging in their work without losing sight ofwhat makes NITTOC’s uniqueness, establishing ourbrand, and earning the trust of our customers.
The second was what our vision for the NITTOC
Group should be a decade from now, under the prediction of long-term trends of shrinking public works
projects, the emergence of new business opportunities as we fully enter an age of maintenance andrenovation, and a reappraisal of dams in terms ofhydroelectric power as a source of clean energy.
We deliberated and discussed these matters froman integral perspective, and in formulating Medium-Term Management Plan 2023, we backcast bydefining our vision for the NITTOC Group 10 years

Our fundamental approach to capitalcost-conscious management
In the final year of Medium-Term Management Plan
2023, we have set not only sales and profit targets,but also the capital profitability-related KPI of PBR
of 1.3 times or more, ROIC of 10% or higher, and athree-year average EBITDA of ¥6.1 billion. Looking
back, there is no denying that to date, our management has been somewhat lacking in the attention it
has paid to capital profitability. This is a shortcoming that we take very seriously. As such, we havealso set capital profitability-related KPI in our medium-term management plan targets to respond to thecurrent demands of the market, such as from shareholders and investors, and improve our recognitionand positioning within the stock market.

│ NITTOC CONSTRUCTION CO., LTD.

Data Section

The spirit underlying our new motto andbrand message

What is NITTOC?

Message from the President

Integrated Report 2023 │ 14

Growth Strategy

In June 2023, the NITTOC Group formulated its Basic Policy on Sustainability. This policy clearly sets

forth the Group’s active efforts to assist with recovery and restoration efforts in the event of natural
disasters, and its promotion of the development ofenvironment-friendly and sustainable technologies
that contribute to the realization of a decarbonizedsociety. In addition, not to mention our policy for
respecting human rights, it states our commitment tocreating workplace environments where diverse personnel respect each other and thrive.
Based on this Basic Policy on Sustainability, the
NITTOC Group is implementing various initiatives
in each of the Environmental, Social, and Governance fields. However, in principle, the Group does
not intend to launch initiatives that merely follow orimitate leading ESG companies in an effort to surpass them. Instead, we will assess the current situation with respect to our human capital, accurately
grasp the contributions we can make in line with thebusiness of the NITTOC Group, and steadily

15 │ NITTOC CONSTRUCTION CO., LTD.

Integrated Report 2023 │Message to stakeholders
75 years have passed since the Company was firstfounded, and now we have set out on a new path forachieving our vision for the NITTOC Group 10 years
into the future, led by our new credo and brand message. The first stage of this process was the formulation and launch of the Medium-Term Management
Plan 2023. I believe that what is most important for
the NITTOC Group, not just for the three years of
this plan but throughout the 10 years, will be theemployees who support the NITTOC Group.
Again, the NITTOC Group is a quiet but powerfulpresence supporting societal infrastructure from behind the scenes. We do not ever stand out. However,
we are also a company that society constantly relies
on, both in the event of a disaster and also in everyday life. All of our employees, regardless of gender,
understand this and demonstrate what makes NITTOC unique, the engineering ethics, and a strong
sense of pride in their day-to-day work. I hope to beable to shine an even stronger spotlight on our

employees and the work they do. It is with this spirit
and this aim that we have decided to formulate abrand message and enhance our information communications. Due to the nature of the NITTOC
Group’s business, many of our projects are at small
worksites, and a large proportion of the approximately 2,000 projects we do each year are so-called“solo worksite” projects. Under such circumstances,
the NITTOC Group not only strives to improve healthand safety measures at worksites and provide physical care, but also places great importance on mental
care for onsite workers. This includes using businesschat to provide support to onsite employees.

In this manner, we create working environments
in which our employees feel pride in their work,
staying true to what makes NITTOC unique and establishing a brand that earns the trust of our customers. Furthermore, through our business, we will
always consider the significance of the Company’s
existence, envisioning the ideal future from a longterm perspective, so that both people and the Company can grow together. We appreciate your further
anticipation of what the future holds for the NITTOC Group.

Growth Strategy

ducts disaster prevention work.

ESG Section

Sustainability Management for
the NITTOC Group

implement initiatives that are achievable only by the
NITTOC Group.
One of these initiatives is our promotion of cooperation agreements on disaster management withNEXCO and local governments. Floods, typhoons,and other natural disasters have become increasingly common across Japan in recent years, and the occurrence and damage caused by these disasters
have also been growing year over year. As this stateof affairs is highly likely to continue in the future, wewill continue to improve our systems to enable us torapidly mobilize in the event of a disaster andpromptly engage in restoration efforts. This is one of
the major social contributions that the NITTOC
Group can make, and we consider it to be one of theGroup’s missions.
The environmental contributions through thecourse of our business are also a key point in oursustainability promotion efforts. We are already engaging in business activities that contribute to environmental conservation, such as using construction
methods that do not produce waste, conducting
greening in our slope protection work, and usingmaterials made from reused resources. In each of
our construction projects, the technology proposalsof the NITTOC Group have been highly praised andfrequently adopted. We plan to further increase thedevelopment and market deployment of these environmental technologies.
Since May 2022, the Sustainability Committee,
which I chair, has been assessing the risks and opportunities presented by changes in the surrounding
environment and engaging in discussions aimed at
identifying key issues (materiality) that affect ouroperations. The results of these efforts are shown on
page 31 to page 34. We do not consider materiality
as consisting solely of risks, but also of opportunities.
To combat climate change, we will reduce CO2
emissions through various measures we carry out inthe course of our business activities, and contributeto the realization of a decarbonized society. With
respect to biodiversity, we will work to conserve
biodiversity and engage in efforts to use it sustainably through our construction business, and contribute to the creation of a society in which humans livein harmony with nature. Through these initiatives toaddress the materiality, we will help protect ourplanet’s environment while also creating new business opportunities for us as a company that con-

Data Section

Furthermore, we have adopted ROIC as a financial
indicator as the clearest example of our operating
profit focus.
In the past 15 years, the Company formulated fivemedium-term management plans and positioned
them as follows: “Creation of a Newborn NITTOC,”“Establishment of Stable Management Foundations,”“Challenge for Growth,” “Next Challenge Stage I,”
and “Next Challenge Stage II.” We have implemented various measures through each of these stages.
During the first medium-term management plan,“Creation of a Newborn NITTOC,” we were facing afinancial crisis and were implementing a policy of“capital-free” management, spending as little moneyas possible. In the 15 years that have passed, we
have been able to recover financially to a considerable degree. In the next three years, we will therefore aim to achieve a consolidated operating profitof ¥16.1 billion (total of three years), which represents a 5% growth compared to the operating
profit recorded for the previous medium-term plan
period. We plan to actively and continuously invest
these profits in capital investment and to improve
employee compensation.

What is NITTOC?

Message from the President│ NITTOC CONSTRUCTION CO., LTD.

Integrated Report 2023 │ 16

Growth Strategy

Looking Back on the Previous Medium-Term Management Plan

Key measures │anticipate long-term changes in the construction market and strengthen technical and sales capabilities in themaintenance and renovation field, aiming to grow market share with superior technology development.

Improve productivity⃝Expand ground improvement volume(increase volume of business)⃝Improve productivity through mechanized spraying⃝Promote construction volume in the first half of the
fiscal year and level out construction volume⃝Increase hiring of field employees(including career hires)⃝Reduce turnover rate

Develop slope repair technology

Summary

In addition to the budget for enhancing national resilience, the volume of public works
projects remained at a high level due to the occurrence of large-scale natural disasters.
As a key measure in such an operating environment, we worked to receive orders forground improvement work with high productivity and unique construction methods
with high profit margins. As a result of this, we exceeded the performance plan andachieved an operating profit of 115% for the three-year period compared to the previous plan. The profits earned were allocated to improvements in employee salaries,
capital investments in machinery, and shareholder returns as we worked toward enhancing corporate value.

(Billions of yen)

Consolidated

Medium-Term
Management
Plan

Orders received

Fiscal 2021

Results

Medium-Term
Management
Plan

66.4

67.8

Net sales

64.4

Operating profit
ProfitFiscal 2022

Results

Medium-Term
Management
Plan

70.5

71.6

68.0

69.4

4.0

5.4

2.6

2020 to 2022 Total

Results

Medium-Term
Management
Plan

Results

Vs. targets

72.2

75.0

209.1

214.5

103%

66.1

71.5

72.9

205.3

206.9

101%

4.5

4.5

4.8

5.5

13.3

15.3

115%

3.5

2.9

3.3

3.2

3.5

8.8

10.4

118%

51.2％

55.1％

51.8％

58.8％

52.4％

60.3％

−

−

−

4.4

5.8

4.9

5.0

5.3

6.0

14.7

16.8

114％

Shareholder returns
The dividend payout ratio significantly exceeded the target of 40% or more.
2020

2021

2022

Three-year average

42.9%

50.1%

53.2%

48.7%

17 │ NITTOC CONSTRUCTION CO., LTD.

Evaluation

41△

Integrated Report 2023 │2

Improve productivity

Medium-Term Management Plan 2020 final year targets

Fiscal 2022 results

Evaluation

Ground improvement work
Net sales of completed construction contracts: ¥20.0 billion¥21.7 billion○

Construction volume in the first half of the fiscal year:
48% of the annual construction volume
First quarter construction volume: 22.5% of the annual construction volume

First half: 46%(¥30.9 billion)
1Q: 20%△Key measures │3

Develop slope repair technology

Medium-Term Management Plan 2020 final year targets

Fiscal 2022 results

Evaluation

Slope repair work
Net sales of completed construction contracts: ¥10.0 billion¥11.2 billion○

With regard to slope repair construction, stable orders were secured thanks to the expansion of established construction methods and the growing demand for recycling methods. Regarding the automation of the spraying method, research and development and demonstration construction have progressed smoothly, and it has reached the point ofmarket introduction, as we move further forward toward practical application in the future.

Key measures │Fiscal 2020

EBITDA

Results

As a productivity indicator, aiming for a 5% increase in PH construction volume, we shared and carried out the significance of key
measures throughout the Company such as expanding orders for ground improvement work and acquiring construction work fromcarried-over projects at the beginning of the fiscal year in order to increase construction volume in the first half of the fiscal year
when there is room in the construction system. As a result, we successfully achieved our targets. Although the ratio of construction
volume in the first half did not meet the target, the measures are beginning to take root.

⃝Expand business areas(overseas business expansion)⃝Expand types of works⃝Respond to local requirements

Performance plan

Equity ratio

Medium-Term Management Plan 2020 final year targets
Increase the number of engineers by 50 per year (target +23 for each fiscal year)

Key measures │Take on challenges in new fields⃝Create a slope repair market⃝Develop slope repair and reinforcement
technology and deploy it in the field

Secure and develop human capital

New graduates were hired almost as planned. However, due to some employees leaving, the increase in personnel fell
short of the plan.
Although the hiring of new graduates for the three years during the current Medium-Term Management Plan period
was challenging due to the COVID-19 pandemic, we have managed to meet the number of hires as planned. However,
the target of a 50-person increase over three years was not reached due to some turnover occurred.

Key measures
Secure and develop human resources

1

4

Growth Strategy

secure customer trust, meet the expectations of the market, and grow our business. At the same time, we will

ESG Section

We will aim to secure workers and improve productivity centered on the achievement of work style reforms,

What is NITTOC?

Outcomes of key measures

Take on challenges in new fields

Medium-Term Management Plan 2020 final year targets

Fiscal 2022 results

Evaluation○

Overseasbusiness
expansion

Independent operation of
the Indonesian subsidiary
Establishment of a second base

7th anniversary of the establishment of the local subsidiary
Preparation for the establishment of a representative
office in the Philippines (restrictions on activity due tothe COVID-19 pandemic)

Expand types
of works

Repair technology
Construction types that have an
advantage in niche markets

Technical information exchange with repair companies
and negotiations with material manufacturers△

Respond to
local
requirements

Establishment of local slope
contractor
Capital alliance with existingslope companies

Establishment of Fukui Earth Engineering Co., Ltd. as aregional subsidiary
Discussions with slope contractors, M&A efforts withground improvement work contractors○

Data Section

Business strategy

Despite the impact of the COVID-19 pandemic, we successfully built up a track record overseas, including orders forlarge-scale ground improvement projects in Indonesia. Going forward, we plan to further expand our business, considering the Philippines as a second base candidate. Fukui Earth Engineering Co., Ltd. was established in Fukui Prefecture
to address local requirements.

In order to improve productivity, we aim to further expand ground improvement workwith high construction efficiency.
We will also focus on promoting sustainability management.

New Medium-Term Management Plan

page 19 to page 20│ NITTOC CONSTRUCTION CO., LTD.

Integrated Report 2023 │ 18

Growth Strategy

Medium-Term Management Plan 2023 (Fiscal 2023 to Fiscal 2025)—Next Challenge Stage Ⅲ—

Performance plan

Challenges in achieving our business strategy
Challenges⃝ Decrease in personnel due toaging of key personnel and adeteriorating new hiring environment

Response to
the internal
environment⃝ Increase in workload for mid-level employees due to distortion ofage structure and a slowdown intraining plans⃝ Control of overtime work
⃝ Decrease in the direct-to-indirect
ratio⃝ Increase in administrative expenses⃝ Compliance with the revised
Labor Standards Act 2024

Response to
the external
environment⃝ Promotion of ESG management⃝ Support for DX⃝ Development of repair andreinforcement technologies⃝ Expansion of established businessdomains

1. Securing and developing human capital⃝ Expansion of ground improvement and structural
repair, stable orders for large projects, constructionleveling, and mechanization

192.6

214.5

223.7

104%

Net sales

191.7

206.9

218.7

106%

Operating profit

13.0

15.3

16.1

105%

Operating profit margin

6.8%

7.4%

7.4%

Ordinary profit

13.0

15.5

16.2

105%

Profit

8.7

10.4

10.8

104%

Depreciation

0.9

1.5

2.2

−

EBITDA

13.9

16.8

18.3

109%

Profit distribution
Cash in

3. S trengthening safety, health, and quality management⃝ Enhancement of temporary equipment plans, sincere construction, risk hedging in advance, multifaceted patrols

Item

4. Promoting sustainability management⃝ Development and promotion of environmental
impact reduction technology, control of greenhousegases, ESG policy and its implementation

5. Taking on challenges in new fields⃝ Promotion of research and development of new
construction methods, expansion of business domains, forming alliances with local companies

Depreciationfor 3 years

Profit for 3 years

Cash and deposits
at beginning of
the year
Total

AmountCash out
Depreciation for 3 years(billions ofyen)

Proﬁt for 3 years

2.2

32.5

Dividends
Fund management

10.8
19.5

M&A

Machinery andequipment, etc.

Cash and deposits
at beginning of
the yearManagement goals and target indicators

Operating funds

1 │Sales targets

3│Financial

indicators(Fiscal 2025)4│Shareholder
return goals

Orders received: ¥10.0 billion

E ◦Biodiversity

Orders received: ¥23.0 billion (more than 30% of total)❹ Construction levelingConstruction volume in the first half: 50% of total (¥37.0 billion)❶ Operating profit

Three-year average: ¥5.4 billion or more

❷ Operating profit margin

Three-year average: 7.4％ or more

❶ PBR (share price/net assets per share)

1.3 times or more

❷ ROIC (operating profit after tax (operating profit x (1 - effective tax rate)) /invested capital (interest-bearing debt + net assets))❸ EBITDA (operating profit + amortization)

10％ or moreThree-year average: ¥6.1 billion

Conservation activities
through business, achievement of society where humans and nature coexist◦Climate change

Development of contributing
construction methods, energy
conservation, and use ofrenewable energy◦Pollution and resources
Control of industrial waste
and pollutants◦Ensuring water security❶ Pay dividends equal to or greater than those paid in the previous fiscal year.

19 │ NITTOC CONSTRUCTION CO., LTD.

Integrated Report 2023 │

S

M&A

6.0

Fund management

2.5

Dividends

6.1
3.5

Operating funds

10.0

Total

32.5

Future investments

4.4G◦Occupational safety
and health

Improvement of safety andhealth environment, noise
control◦Human rights andlabor standards

Respect for the human rights
of all supply chain companies◦Stakeholders

Achieving a strong reputation
among all stakeholders

ｏｖｅｒｎａｎｃｅ

indicators❸ Expansion of structural repair work

Promotion of sustainability management
ｏｃｉａｌ

2│Performance❷ Expansion of private sector orders(billions ofyen)Cash out rders received and net sales of completed constructionO
contracts: ¥23.0 billion (more than 30% of total)

ｎｖｉｒｏｎｍｅｎｔ(Fiscal 2025)

Cash inAmountItem

Machinery andequipment, etc.

Future investments❶ Expansion of ground improvement work

Compared to theprevious plan period

Orders received⃝ Securing employees for hiring, diverse working styles,
improvement of workplace environment and compensation, training of employees and subcontractors

2. Improving productivity

2023 to 2025
plan

What is NITTOC?

Consolidated

2020 to 2022
results

Growth Strategy* “What makes NITTOC unique” refers to (1) the diligence of our employees who are sincerely committed to their work, (2) our proposal and construction capabilities
for meeting our customers’ needs and requests, (3) our flexibility stemming from our nationwide sales network, (4) our diverse customer base, and (5) our construction
experts with the management strengths of a prime contractor(Billions of yen)2017 to 2019
results

ESG Section

Create an environment in which workers can engage in business with pride without losing sight of what makes
NITTOC unique,* earn customer trust, and establish a brand. Through our business, we will always consider thesignificance of the Company’s existence, envisioning the ideal future from a long-term perspective, so that bothpeople and the Company can grow together.

◦Corporate ethics andcorruption prevention
Risk reduction by instilling aculture of ethics througheducation and internal
controls

Data Section

Business strategy◦Risk management

Establishment of a Compliance Committee and Risk
Management Committee
chaired by the President, andimprovement and guidance tomajor risks

Reduction of water used inconstruction, proper drainage│ NITTOC CONSTRUCTION CO., LTD.

Integrated Report 2023 │ 20

Growth Strategy

Business Segment-Specific Strategies(ground improvement work and slope protection work)

What is NITTOC?

Specialty Construction Department

Sales targets (fiscal 2025)
1 Expansion of ground improvement workOrders received and completion volume:¥23.0 billion (more than 30% of total)

2 Expansion of private sector orders

Orders received: ¥23.0 billion (more than 30% of total)

3 Expansion of structural repair work
Orders received: ¥10.0 billion

Recently, natural disasters such as earthquakes, typhoons, and heavy rains
have become more severe and frequent in Japan. Disaster mitigation andprevention measures are becoming increasingly important. Although the reconstruction work from the Great East Japan Earthquake has settled, disaster prevention and mitigation work for important structures continues to be
implemented based on the Five-Year Acceleration Plan for Disaster Prevention, Disaster Mitigation, and Building National Resilience. For private business operators including electricity and railways, where construction orders
had been postponed due to the impact of the spread of COVID-19, a recovery trend is gradually being seen.

Ground Improvement Work Department
In the previous fiscal year, we achieved a significant improvement in business results by receiving orders for large-scale construction such as reinforcement work for power plants and ground improvement work in social
infrastructure development projects as disaster prevention and mitigation
measures. Ground improvement work by private business operators is on
the rise. We have been improving business performance with the goal of
expanding ground improvement work. Although they were affected by the
spread of COVID-19, orders for ground improvement work have been on an
upward trend. Orders in the previous fiscal year exceeded ¥20.0 billion,
marking a record high, due in part to large-scale orders with our in-housedeveloped technology. We aim to increase orders for ground improvement
and improve productivity.

Slope Protection Work Department
In the previous fiscal year, we were able to maintain a performance similar
to the previous year by receiving orders for large-scale construction such as
slope protection work (frame work, rock bolts) and embankment reinforcement as disaster prevention and mitigation measures.
We aim to secure stable work volume in projects such as social infrastructure development projects and Shinkansen bullet train tunnel entrance protection construction.

Others23.5%

Groundimprovement
29.8%

Integrated Report 2023 │With the increasing severity and frequency of disasters such as heavy rains caused by global warming, renewable energy that does not emit greenhouse gases and that can be produced in Japan is gaining attention. An
increase in construction work for renewable energy facilities such as solar power, hydropower, wind power,
geothermal power, and biomass is expected. Maintenance and renovation work is also expected to increase forexisting hydropower generation facilities. In addition, the construction industry plays a significant role in enhancing national resilience. We will continue to be a company that contributes to building safe and secure societies and countries, actively incorporating ICT construction technology for quality management, quality
improvement, and construction efficiency improvement, as well as digital technologies in order to roll out construction systems that achieve automation and labor-saving. As such, we will develop the following two areas.

Slopeprotection
46.7%

Net sales for ground
improvement work

Ground Improvement Work Department(Millions of yen)

21,74317,00813,9832019

2020

16,0002021(Fiscal2022 year)

Net sales for slope
protection work
33,691

33,517

34,0552020

2021

2022 year)

29,256

In ground improvement work, there are expectations for ground strengthening works for structure foundations
and repair and reinforcement work for existing structure foundations. In particular, for works related to existing structures, ground
improvement work methods that can be done with small machines
are being adopted due to construction yard limitations. We will
increase orders for ground improvement work through technicalproposals that meet on-site needs. We will also actively incorporate ICT into construction to improve quality and construction efficiency. Moreover, we will enhance the application of position
guidance systems for the deep mixing method, etc., and the visualization technology for construction with chemical grouting methVisualization technology for the chemical grouting:
Grout Conductor
ods, and utilize ICT to improve productivity.

Slope Protection Work Department(Millions of yen)2019

21 │ NITTOC CONSTRUCTION CO., LTD.

Future measures for achieving the Medium-Term Management Plan

Sales composition ratioby types of works(FiscalWe will actively incorporate ICT construction
technology for quality management, quality im低解像度
低解像度
provement, and construction efficiency improvement, as well as digital technologies in order toroll out construction systems that achieve automaSlope surface photographed by drone
Creation of a 3D model from the phototion and labor-saving. We will thus develop thefollowing two areas.
⃝ Many slope structures, which were constructed in large numbers during the period of high economic growth
in Japan, are aging. We will develop slope repair and reinforcement technology to extend their service life.
⃝ We will also develop greening technology that utilizes forest topsoil and locally generated soil in consideration of the ecosystem.
│ NITTOC CONSTRUCTION CO., LTD.

ESG Section

Looking back on the previous fiscal year

Data Section

Construction volume in the first half: 50% of total (¥37.0 billion)

Growth Strategy

4 Construction leveling

Integrated Report 2023 │ 22

Growth Strategy

Business Segment-Specific Strategies

Achieved significant shortening of the schedule while ensuring high quality

2nd

Hokusatsu Tunnel Izumi Construction Area of Hokusatsu Odan Road

Development of the RPG (ring-post-grouting) method for reducing large amounts of springwater in mountain tunnels
3rd

Senbon Dam Seismic Reinforcement and Refurbishment Project

100 years of supporting the lives of citizens, maintaining infrastructure as cultural heritage foranother 100 years

Seismic reinforcement of a 100-year-old concrete dam for water supply
designated as a tangible cultural property while continuing to supply water
Types of works: Vertical PS anchor method
Senbon Dam, an overflow, rubble concrete gravity dam built in March 1918, did notmeet the current seismic standards for overturning prevention. Therefore, PS anchoring was carried out from the top of the dam toward the foundation bedrock toreinforce the earthquake resistance of the dam body.

Name of project

Chokai Dam cofferdam (diaphragm wall) construction

Construction
location

Chokaimachi Momoyake, Yurihonjo City, Akita
Prefecture

ClientChokai Dam Construction Office, Tohoku Regional
Development Bureau, Ministry of Land, Infrastructure,
Transport and Tourism

Orderer

Maeda Corporation

Construction period

October 25, 2021 to October 31, 2023

This grouting work was performed to create a cut-off wall as partof the cofferdam construction work for the Chokai Dam construction project. This cofferdam construction work aims to suppress
water intrusion for excavating approximately 40 meters of the riverbed gravel bed during the dam body construction.
Because there were more boulders than expected, it made deep
construction difficult with the planned construction method. Deep
construction using the double-tube double-packer method wasconsidered, and the work was performed using the new sleevegrouting method.

Slope protection

Provided by the Japan Federation of Construction Contractors

4th

Civil Works for Kita-osaka Kyuko Line Extension Project

Removal of obstructions and shield tunneling close to a 49-story high-rise apartment building,with the consensus of residents

The annual comprehensive catalog
NITTOC 2023 features a construction photo of the 3rd Senbon Dam
Seismic Reinforcement and Refurbishment Project on its cover.

23 │ NITTOC CONSTRUCTION CO., LTD.

Integrated Report 2023 │Growth Strategy

Yamba Dam main body construction work

Development technology:
construction with new sleeve grouting method

Large depth, large diameter anchors

Name of project

Takahara Tunnel Upper Slope Stabilization Work

Construction
location

Sako, Kawakami Village, Yoshino District, Nara
Prefecture, Japan

ClientKinokawa Dam General Management Office,Kinki Regional Development Bureau, Ministry ofLand, Infrastructure, Transport and Tourism

Orderer

HAZAMA ANDO CORPORATION

Construction period

March 1, 2021 to February 29, 2024

ESG Section

1stGround improvement work

The Takahara Tunnel on National Route 169 (in Sako, Kawakami
Village, Yoshino District, Nara Prefecture) was closed due to cracks
in the construction near the south entrance of the tunnel. (Currently reopened)
The survey confirmed that the deformation was caused by alandslide, and 798 restraining anchors were installed as a countermeasure.
These anchors have a large diameter, with 20 long anchors exceeding 80 meters, and the excavation machine used a large percussion drill to combine drilling and sending technologies for theconstruction. (Construction in progress)

Data Section

NITTOC has been awarded the Civil Engineering Award established by the Japan
Federation of Construction Contractors for four consecutive years since fiscal 2020 asa related party. We will introduce the award-winning construction projects here.

What is NITTOC?

TOPICS ─ Specialty Construction Department (ground improvement work and slope protection work)│ NITTOC CONSTRUCTION CO., LTD.

Integrated Report 2023 │ 24

Growth Strategy

Rebar
insertion
methodlabor-saving technologies for slope spraying

This is a mechanized and labor-saving technology for spraying work on slopes and supplying
materials from a plant. We have achieved significant labor-saving in work. We will aim for further automation and autonomous construction in the future.

■ New ReSP Method and Eco-BC Fiber

We developed and introduced Eco-BC Fiber containing 30% recycledmaterials for the reinforcing organic fiber used in the New ReSP Method,which repairs existing sprayed slopes without stripping.

Status of research and development

Initiatives to achieve the Medium-Term Management Plan 2023

Under the Medium-Term Management Plan 2020, we have been working on research and development with thegoals of expanding the volume of ground improvement, improving productivity through automation and labor-saving, and exploring the slope repair market. As a result, in the field of ground improvement, we have developed and improved the N-Jet Method and N-Roll Column Method, and are promoting their on-site
implementation. In the slope field, we have automated the slope spraying method and completed the Slope
Saver and Shot Saver to achieve significant labor savings. In slope repair, in addition to the New ReSP Method,which allows for the renewal without stripping the existing sprayed mortar, we have worked on improving anddeveloping technologies such as the Bite Off Method and EGN Anchor, and are preparing a menu of various
repair and reinforcement technologies that can respond to the deteriorated condition of slope structures.
In addition, we are improving and upgrading construction methods we developed, and also combining newtechnologies to make them more attractive. We combine our in-house developed technologies, such as the New
Sleeve Grouting Method, Ultra-Fine Particle Cement, and Grout Conductor, to offer technologies requested bycustomers, leading to orders and the construction of major projects.

We are working on research and development centered around two pillars: development of construction methods and technologies in our main fields, such as disaster prevention for slopes, ground improvement and maintenance and renovation, and exploration and development of new fields and technologies considering the stateof the Company in 10 years. For the former, we will continue to develop and improve our core construction
methods, promote mechanization and automation, and advance the development of construction methods, materials, and environmentally friendly technologies. For the latter, we will promptly incorporate social issues andtechnological information, aiming to develop innovative technologies in the new field or technologies that go
beyond existing frameworks based on our characteristics and strengths.

* For more information on each construction method, please visit our website.

https://www.nittoc.co.jp/technology/index.html (in Japanese)

Research and development structure
The Engineering and Development Division, Corporate Strategy Division,
Business Operation Division, and other relevant departments collaborate inresearch and development. At the Engineering and Development Division,
we have established the Geotechnical Technology Development Department, Slope Technology Development Department, and Materials and Environmental Technology Development Department at the Technology
Center, which serves as the core of development, to advance the developTechnology Center opened in 2018as a base for development
ment of geotechnical disaster prevention technologies, automation and labor-saving technologies, and technologies to reduce environmental impacts. In particular, at the Materials andEnvironmental Technology Development Department, which was newly established in fiscal 2023, we are advancing the development of technologies for achieving a carbonless society.

Strategy for securing and enhancing intellectual property

To maintain a competitive advantage through the differentiation of our technologies, its crucial to secure andenhance intellectual property and intangible assets and promote their use. NITTOC is strengthening its intellectual property strategy to increase patent applications, currently about 20 cases per year. Led by the Patent &Strategy Department, we are linking these intellectual properties with our value creation story, recognizing risks
of infringement or loss of competitiveness, and working to utilize them effectively.
25 │ NITTOC CONSTRUCTION CO., LTD.

Integrated Report 2023 │Medium-Term Management Plan 2023

The Medium-Term Management Plan 2023 states improving productivity, promoting sustainability management,
and taking on challenges in new fields as key measures for realizing business strategies. To achieve these key
measures, the Engineering and Development Division is working on research and development based on thefollowing four pillars.
Establishment and spread of competitive ground improvement methods
In addition to establishing and improving our main construction methods, we will pursue the establishment of a ground improvement system that includes construction management techniques and monitoring technologies.
Mechanization and automation of each method, introduction of high-precision management systems
We will promote further automation and autonomy along with the diffusion of completed automationand labor-saving construction methods in the field.
Development of technologies to reduce environmental impacts
We aim to reduce CO2 through recycling and ICT-based labor-saving technologies, and develop
low-carbon materials.
We will also improve the workability and functionality of greening technologies, which NITTOC excels
in, to contribute to environmental restoration and ecosystem conservation.

Data Section■ Slope Saver and Shot Saver mechanization and■ N-Roll Column Method

Developed using an easy-to-maneuver base machine,
combining mechanical mixing and high-pressure jet mixing (completed and implemented on-site in 2022).

Eco-BC Fiber

NITTOC aims to contribute to building safe and securesocieties and countries with comprehensive technical capabilities in foundation work. To realize this aspiration,
we are advancing research and development of technologies related to slope and ground disaster prevention, as
well as research and development of technologies toreduce environmental impacts. We are also advancing
labor-saving and automation at construction sites given
the worker shortage, aging of specialized engineers, andpromotion of work style reforms. We aim to contributeto the construction of a sustainable society by swiftly
implementing these developed technologies on-site.

Growth Strategy

Fiber-reinforced
mortar spraying

ESG Section

Technology development

What is NITTOC?

Business Segment-Specific Strategies

Promoting research and development in new fields and new construction methods

Initiatives for future markets

In addition to the development of technologies that are extensions of existing fields and technologies, we are also
working on the development of entirely new fields and technologies to prepare for the next generation of markets.
Along with advancing basic research on new technologies, we also take on the challenge of developing disruptive
technologies aimed at future commercialization. To incorporate technology information without delay and use it
for development, we are strengthening partnerships with universities, public institutions, and startup companies,
enhancing our development network to enable efficient development while incorporating the latest information.
│ NITTOC CONSTRUCTION CO., LTD.

Integrated Report 2023 │ 26

Growth Strategy

Business Segment-Specific Strategies

Recently, damage from slope disasters has been increasing and intensifying due to abnormal weather, earthquakes, and aging slope structures. For NITTOC, which aims to contribute to building safe
and secure societies and countries through specialized construction technology, this will be an opportunity to contribute to society through disaster prevention technology. On the other hand, thelabor shortage due to low birthrates and longevity poses a major risk to business continuity. The
Company is promoting dramatic automation and labor-saving in slope protection work to overcome
this risk and continue contributing to society through slope disaster prevention measures.

Slope spraying with Slope Saver.

Simultaneously monitor spraying
thickness using LiDAR.

As a leading company in the slope disaster prevention field, NITTOC has
contributed to building safe and secure societies and countries. Continuing forward, we aim to contribute to society through slope disaster prevention works based on our unique technology developed so far.
Considering the current social situation, the top priority for NITTOC incontinuing the slope disaster prevention business in the future is to improve the productivity of slope protection works, which have been carried out manually by specialized engineers under severe construction
conditions. Under the Medium-Term Management Plan 2020, we established an ICT Development Department within the Engineering and Development Division and intensively worked on the mechanization andlabor-saving of slope protection works.
As a result, we were able to significantly reduce manpower, shorten
construction periods, and save construction space by incorporating various technologies utilizing ICT to mechanize and save labor. The safety ofslope protection work, which used to be hazardous work, has also beensignificantly improved.
Development related to mechanization and automation tends to be
costly, often ending with the creation of “one expensive robot.” NITTOC
is proceeding with the development with the aim of utilizing general-purpose machines and existing machines as base machines as much as possible, considering deployment in the field after development. By quickly
deploying developed technologies in the field, we aim to improve theproductivity of slope protection work.
With mechanization, the construction know-how that was previously
supported by the senses and experience of veteran skilled workers, cannow be preserved as digital data. Based on these results, while keeping aneye on the future development of ICT, we plan to develop further automation and autonomy by incorporating XR, AI, and other technologies.

Growth Strategy

Dramatic automation and labor-saving
in disaster prevention construction

Aiming for labor-saving and automation oflabor-intensive slope protection works

ESG Section

Steps toward the future with development technology at its core

What is NITTOC?

TOPICS ─ Technology Development

Slope Saver remote spraying technology

Shot Saver automatic spraying plant

SGZAs drilling machine guidance

Slope 3D ICT application in slope protection

We have mechanized the slope spraying work that wasdone by people hanging from main ropes. Work is performed by attaching a specialized attachment to a general-purpose backhoe. As a real-time monitoring method forspraying thickness, we incorporate the measurement technology LiDAR and accurately manage the quality from a distance. We achieved a 40% to 70% reduction in construction
period and 50% to 80% labor-saving compared to conventional methods through the development of this construction method. In addition, the safety of the work has been
improved dramatically.

Spraying materials were supplied by the work of three tofour workers, mostly specialized and skilled technicians, atthe spraying plant. We promoted mechanization and labor-saving in this process. The entire plant can be controlled
by a single operator from a panel to provide a continuous
supply of high-quality materials. By utilizing sensors and delicate robot functions, we promoted mechanization, including areas that previously required experienced skills,
allowing for a stable supply of spraying materials with asmall number of people.

When setting up the drilling machine on scaffolding in thedesigned direction for work such as anchor work, it tooktime while performing processes such as surveying. We developed a technology that enabled the quick setup of drillingmachines by using RTK-GNSS positioning and inclinometers.
This successfully and significantly shortened the setup timecompared to traditional methods. We plan to further automate drilling based on this machine guidance technology.

Traditionally, completion management of slope protection
works was performed by people directly measuring dimensions while hanging on the slope. This has been replaced by
combining drone photography and photogrammetry technology to acquire high-density 3D point cloud data, enabling
the measurement of any dimensions on a computer monitor.
It is also applicable to slope frames with complex shapes. It
can also easily calculate the volume of excavated soil onslopes and the sprayed area. This technology brings a revolutionary improvement in productivity to the management ofslope protection works.

Spraying on rock slopes

27 │ NITTOC CONSTRUCTION CO., LTD.

Integrated Report 2023 │Plant overview and operation
by touch panel

Setting up the machine using amonitor that guides direction
and angle

Data Section● Mechanization and labor-saving technology for slope protection works for the future

Measuring any dimensions on high-density 3D point cloud data

│ NITTOC CONSTRUCTION CO., LTD.

Integrated Report 2023 │ 28

Growth Strategy

Main Construction Projects Completed in Fiscal 2022

L = 188 m
N = 471 units (average 22.7 m)
L = 158 m (H = 4.5 m)
V = 9,150 m²

Main types
of work

Construction length
Ground anchor method
Concrete retaining wall
Excavation or cutting

Construction
periodDecember 2019 to July 2022

The project was a recovery project for a prefectural road that wascompletely closed due to a slope and road failure caused by torrential
rain in western Japan in July 2018. The construction spanned 188 m
and included the installation of 471 ground anchors (a total of 10,700m) for slope stabilization.

Fiscal 2021 Disaster No. 1 to No. 4 River Disaster-related
Oita Prefecture
Construction Work
Main types
of work

Fiber-reinforced mortar spraying method
A = 6,250 m²
High-strength net method
A ＝ 6,250 m²
Rebar insertion method	N = 1,165 units(D19 × 2.5 m)

Construction
periodApril 2022 to March 2023

This project involved 6,250 m² of fiber reinforced mortar spraying
and high-strength netting as revetment protection work on the Kusu
River, which was damaged by torrential rains in July 2021.

Growth Strategy

31st Disaster No. 1-2 Prefectural Road Kawanoe-Otoyo Line Road
Kochi Prefecture
Disaster Recovery Work

Ground improvement work

Main types
of work

Deep mixing method
Epoch-making soil mixed method
N = 1,371 units (L = 14,124 m)
Φ1,600, Φ1,800

Construction
periodJuly 2022 to December 2022

This project was for the foundation ground improvement accompanying the construction of an intermediate waste treatment facility, using
the deep mixing method (epoch-making soil mixed method) to implement ground improvement for 14,124 m (1,371 units).

Fiscal 2021 Fukumitsu-Asari Road Kuromatsu Area No. 1
Shimane Prefecture
Improvement Work
Main types
of work

Deep mixing method
CDM-EXCEED Φ1,600 2-axis
N = 480 units Improvement length L = 3,078.8 m
ICT construction management device for as-built
management (figure on the right: 3D rendering)

Construction
periodMay 2022 to February 2023

ESG Section

Gosen Area Sanitation Facilities Association Intermediate Treatment
Niigata Prefecture
Facility Construction

What is NITTOC?

Disaster recovery work

This project was for the foundation ground treatment (countermeasures for circular slip and liquefaction) associated with the new construction of the Sanin Road (high-standard road) using the deep
mixing method (CDM-EXCEED), and implemented ICT management
compliant with the as-built management guidelines of the Ministry ofLand, Infrastructure, Transport and Tourism by introducing an ICT
construction management equipment.

Repair and reinforcement work

Main types
of workV = 270 m³
Structure excavation
Horizontal force dispersing structure method
N = 12 units
Carbon fiber jacketing method A = 3,489 m²
Steel plate fixing method
A = 25 m²
V = 46 m³
RC jacketing method

Construction
periodSeptember 2021 to September 2023

Data Section

Seismic Reinforcement Work Between Ikawa-Ikeda Interchange andKawanoe-Higashi Junction on the Tokushima Expressway Ehime PrefectureThis project was the seismic reinforcement of five bridges between
Ikawa-Ikeda Interchange and Kawanoe-Higashi Junction on theTokushima Expressway, mainly implementing a carbon fiber jacketing method for 3,479 m².

29 │ NITTOC CONSTRUCTION CO., LTD.

Integrated Report 2023 ││ NITTOC CONSTRUCTION CO., LTD.

Integrated Report 2023 │ 30

ESG Section

Sustainability Management

2 │ Analysis
3│

Identification of
key issues⃝The clarification of issues involves confirming
and understanding the items to the right･････････ ⑴ Purpose (significance of existence)⑵ Management issues⑶ Social issues affecting value creation⃝The analysis is performed according
to the flow shown on the right････････ ⑴ Set materiality⑵ Consider based on materiality set❶ Risks and opportunities❷ Identification and impact of stakeholders⃝Key issues are identified anddecided as follows････････････････････････ ⑴ Formulate based on 1 and 2⑵ Submit to the Management Meeting and
the Board of Directors

ESG themes and policies to deepen awareness of issues

Ｅｎｖｉｒｏｎｍｅｎｔ

In the midst of globalization and drastic social changes, the NITTOC Group will secure and train the next generationof human resources by accepting people with diverse personalities and values, including those from overseas.
In addition, we take into consideration the health and safety of employees, including those of Group companies.
Furthermore, we will comply with the fundamental rights described in the ILO Declaration on Fundamental Principles
ESG themes to deepen awareness of issues

Policy◦ Biodiversity
Environmental concerns or backlashes from local communities can lead to delays orcancellations of projects, affecting a company’s profitability and growth opportunities.

At the NITTOC Group, our mission is to maintain a rich environment and develop social infrastructure by utilizing our unique special technologies that can reduce environmental impact. Recognizing that the construction business and its associated material procurement depend on ecosystems, we understand that conserving biodiversity is a key issue
supporting our business foundation, and we will contribute to the achievement of a society where humans and nature coexist by working on the conservation of biodiversity
and its sustainable use through our construction business.
At the NITTOC Group, we recognize that climate change is both a significant issue in the global environment and a significant management issue affecting our business activities. We aim to contribute to a decarbonized society by reducing CO2 emissions in our business activities through means such as energy-saving efforts and the introduction ofrenewable energy, as well as through the research and development of construction methods, design and construction, and the promotion of environmentally friendly construction methods using recycled materials.
At the NITTOC Group, we understand that reducing and recycling by-products generated by our business activities, and suppressing the generation of pollutants are responsibilities demanded of construction contractors.
We will actively promote construction methods that control and reuse industrial waste and pollutants, and promote 4R (refuse, reduce, reuse, and recycle) activities across theCompany.
At the NITTOC Group, we conduct our construction work using finite water resources in all situations due to the nature of our business. Currently, against a backdrop of increasing global population, developing worlds, and the progression of climate change, we recognize that water resource issues are arising on a global scale, and water resource
conservation is an important issue. Accordingly at the NITTOC Group, we will actively work on conserving local water resources by reducing the amount of water used at sites
both in Japan and overseas, ensuring proper use, and conducting preliminary studies and their implementation to ensure appropriate treatment of water discharged during
construction in compliance with environmental laws.
At the NITTOC Group, we regard the prevention of occupational accidents and disasters involving the general public as one of the absolute conditions for the survival anddevelopment of our company.
With safety at the center of all our corporate activities, and under the motto “We will not allow injuries to workers or injuries that cannot be cured,” we will thoroughly instruct adherence tosafety rules, conduct integrated safety and health management activities with all employees, including the employees of subcontractors. In addition, we provide safety education to new hires
when they enter job sites and equip them with necessary equipment as part of considerations to ensure that workers involved in construction can work safely. Furthermore, we comply withstandards regarding noise from construction sites and properly dispose of industrial waste in accordance with the law.
At the NITTOC Group, we recognize human rights as the foundation of all business activities. To continue to be a company needed by society as stated in our credo, we will fulfill our
responsibility to respect human rights by not infringing on human rights in our business activities and minimizing any possible negative impacts on human rights. 1. In terms of positioning and scope of application, this policy applies to all persons working for the NITTOC Group, including officers and employees. We also expect all stakeholders, including subcontractors,
to understand and support this policy. 2. As a commitment to respecting human rights, we support the International Bill of Human Rights, the ILO Declaration on Fundamental Principles
and Rights at Work, and the Guiding Principles on Business and Human Rights. Specifically, we will implement initiatives for respecting basic human rights, prohibiting discriminationand harassment based on race, nationality, gender, religion, creed, etc., providing a healthy working environment, respecting freedom of association and the right to collective bargaining,and prohibiting child labor, forced labor, and human trafficking. 3. In terms of compliance with applicable laws and regulations, we will comply with laws and regulations in each country
and region where we conduct business activities. We will pursue methods that respect international human rights principles as much as possible if there is a contradiction between thelaws and regulations of the countries and regions where we conduct business activities and international human rights principles.

◦ Climate change
Evaluating and communicating risks and opportunities caused by climate change
can help evaluate the overall impact of climate change on our business.
◦ Pollution and resources
Clearing, leveling, and drilling activities may generate hazardous waste during construction activities for projects.

Ｓｏｃ
ｉ
ａ
ｌ

◦ Ensuring water security
Although there is potential for global and regional resource constraints and water
stress to have adverse effects, there are also new profit opportunities that can arise
from water efficiency improvements.

■ Action policy on biodiversity■A ction policy on the impact ofclimate change■ Action policy on waste reduction■A ction policy on ensuring water

security◦ Occupational safety and health
Health and safety accidents can cause project delays and interruptions, potentiallyleading to increased project costs and decreased profitability.

■A ction policy on occupational◦ Human rights and labor standards
Failure to address and provide oversight on human rights and labor standards canlead to human rights violations, one-time costs, legal action, and regulatory action.

■A ction policy on human rights◦ Stakeholders
Neglecting relationships with stakeholders such as customers, shareholders, and local
communities could affect orders and lead to damage to the reputation of the Company.

Ｇｏｖｅｒｎａｎｃｅand Rights at Work.
We will also achieve diverse and flexible working styles and a rewarding work environment, and establish a corporate culture that respects human rights.

◦ Corporate ethics and corruption prevention
Ethical violations can lead to investigations by authorities, significant fines, settlement costs, and reputational damage.
◦ Risk management
Errors and quality deficiencies in buildings or infrastructure in the construction phasecan cause serious personal injury, loss of property value, and economic damage.

safety and health management

and labor standards■ Action policy for stakeholders■A ction policy on corporate ethics

and prevention of corruption■ Action policy on risk management

We will strive to be valued and trusted by all stakeholders, including customers, business partners, shareholders, investors, local communities, and employees. By actively engaging with stakeholders, we will recognize our challenges and enhance our corporate value.
At the NITTOC Group, we are aware of our corporate social responsibility as a company and we have established a code of conduct (Basic Policy on Compliance) to act witha social conscience while complying with laws, internal and external rules, and their spirit. Against this backdrop, we strive to prevent bribery and corruption, build transparent,
fair, and healthy relationships with business partners, and conduct transactions considering mutual prosperity through continuous compliance education such as through e-learning and internal controls to instill a culture of ethics and reduce risks.
At the NITTOC Group, in response to various risks associated with the nature of our business, we have established a Compliance Committee and Risk Management Committee under the Board of
Directors, chaired by the President, to give guidance on major risks and make improvements to mitigate them while periodically reporting to the Board of Directors.
As information security risks have also increased, we regularly conduct assessments by specialized institutions, BCP training, and risk management plan formulation and management structure
reviews to implement risk management activities.

Key issues (materialities)

31 │ NITTOC CONSTRUCTION CO., LTD.

Integrated Report 2023 │Growth Strategy

1│Clarification ofissuesESG Section

The NITTOC Group, as an expert in foundation work focusing on environmental conservation and disaster prevention work developed through its trusted technical capabilities, has aimed to be a company that contributes
to building safe and secure societies and countries.
Meanwhile, the environment surrounding companies is significantly changing, as represented by climatechange and human rights issues, and we believe it is important to appropriately address risks and opportunities
related to sustainability in order to continue to be a company needed by society by sincerely providing technology, precisely in the areas that cannot be seen.
Accordingly, the NITTOC Group will actively engage in recovery and reconstruction during natural disasters
and develop and promote sustainable, environmentally friendly technologies toward a decarbonized society. In
addition, we will create an environment where diverse human resources can mutually accept each other andthrive, in addition to respecting human rights.
Based on this approach, the NITTOC Group aims to contribute to the achievement of a sustainable society
through its business activities and seeks to enhance its corporate value over the medium to long term.

What is NITTOC?

Process for identification of key issues (materiality analysis)

Data Section

Basic Policy on Sustainability

page 36 to page 37│ NITTOC CONSTRUCTION CO., LTD.

Integrated Report 2023 │ 32

ESG Section

Sustainability Management

Promotion of
decarbonization⃝Reduction of CO2
emissions⃝Promotion of CO2
absorption

E(Environment)

We aim to be a company
trusted by society andpromote various social
contribution activities.

S(Social)Promotion of research and development contributing to the reduction of CO2
emissions⃝Development of environmentally friendly materials⃝Development of ICT labor-saving technologies⃝Development of greening technology and construction methods using
recycled materials
Promotion of design and construction with construction methods that
contribute to the reduction of CO2 emissions⃝Promotion of design and construction with unique construction methods⃝Promotion of the introduction of environmentally friendly construction
machinery such as electric construction equipment and energy-efficientconstruction equipment

Promotion of green purchasing, use of ecolabel products⃝Ministry of the Environment: EcoLabel Database
https://www.env.go.jp/policy/hozen/green/ecolabel/touroku.html (in Japanese)

Usage rate: More than the previous year

Promotion of design and construction with topsoil-utilizing greening method
and greening without seeding* Select targeted construction methods and align their target values (Business Operation Division)
Example: Target value for native species revegetation method

Promotion of environmental conservation activities⃝Participation in satoyama (a mountain/forest (yama) that is located near an agricultural or mountain village (sato)) conservation, tree planting activities, etc.

Number of activities: More than the previous year

Ensuring water
security

Implementation of wastewater quality management

Implementation of wastewater quality management (within environmental standards): 100%

Construction ofsocial infrastructure

Signing of cooperation agreements on disaster management (emergency
disaster recovery work during a disaster)

Cooperation agreements on disaster management signed: More than 50

Contribution to local
communities

Participation in cleaning activities, cooperation in social welfare activities

Continuation of social contribution activities by all offices and branches (more than 25 per year)

Prevention of harassment

Workshop participation rate by targeted participants: 100%Strengthening of hiring

Hiring (technical positions): More than 40 people/year

Promotion of active participation of women

Targets set under the Act on the Promotion of Women’s Active Engagement in Professional Life in the Workplace (April 2022
to March 2025)
Ratio of female engineers hired: More than 15%
Number of business locations with female engineers: More than 9 locations

Employment of people with disabilities

More than the statutory employment rate

Human resource development through a job-level-specific education system

Participation rate of job-level-specific training by targeted participants: 100%

Operational reform for productivity improvement (promotion of DX)

Improvement of PH construction volume

Correction of long working hours, acquisition of 8 days off in 4 weeks

Achievement of 8 days off in 4 weeks for employees in the field: More than 100%
Overtime work hours within 360 hours annually: 100% (excluding unforeseen special circumstances)

Initiatives for diverse work styles

Targets set under the Act on the Promotion of Women’s Active Engagement in Professional Life in the Workplace (April 2022
to March 2025)
Childcare leave utilization rate: 100%

Management of the physical and mental health of employees

Implementation rate of periodic health checkups: 100%
High-stress individuals identified by stress check: No more than 13% (standard 10% to 15%)

Accurate operation of occupational health and safety management systems

Severity rate: 0.60 Frequency rate: 0.03

Risk management⃝Clarification of risk management system and process using a risk management program⃝Reinforcement of information security⃝Continuation and improvement of BCP response⃝Review of risk management program and management system: At least once a year
⃝Risk assessment evaluation of information security: Score of more than 4.0 (out of 5/3.5 in 2022, 3.3 in 2021)⃝Implementation of BCP training: At least once a year

Compliance⃝Continuation and strengthening of compliance education⃝Strengthening of support for the supply chain⃝Compliance education (e-learning participation): 100% of all employees⃝Disaster prevention cooperation association: 100% participation of Nisshinkai members

Promotion of the useof recycled materials

Motivation

Quality assurance
and enhancement oftechnical capabilities

Work style reform

Safety and healthG(Governance)

Corporate ethics,
risk management

We are building a sound, fair,and strong governance structure
while adhering to compliance.

33 │ NITTOC CONSTRUCTION CO., LTD.

Fiscal 2030
40% reduction in CO2 emissions compared to fiscal 2013

* Select targeted construction methods and align their target values (Business Operation Division)
Example: Target value for recycled greening construction method

Respect for humanrights and ensuring
and development of
human resources

We are promoting workplace environment improvement and work style reform
to create a comfortableworking environment for
employees.

Contributing SDGs

Promotion of design and construction with construction methods using
recycled materials

Conservation of
biodiversity

Local community

Target value

Promotion of energy conservation in offices and field offices⃝Power saving⃝Incandescent lamp ➡ LED⃝Work style reform (reduction of overtime hours)

Environmental
conservation

We aim for the realization ofa sustainable, environmentally friendly society.

Major initiatives

Integrated Report 2023 ││ NITTOC CONSTRUCTION CO., LTD.

Growth Strategy

Theme

ESG Section

Materiality

Data Section

Category

What is NITTOC?

Key issues (materiality)

Integrated Report 2023 │ 34

ESG Section

Environmental management system

NITTOC is working on the following measures to achieve a sustainable and environmentally conscious society.

The Engineering and Development Division of NITTOC CONSTRUCTION CO., LTD. has established an environmental management system based on the environmental policy and is engaged in environmental management activities.

Promotion of the use of recycled materials
We are working on the development and spread of construction methods utilizing recycled materials. In construction, we will pursue the design and construction with construction methods using recycled materials andaim to promote green purchasing and the use of ecolabel products in order to use environmentally friendly materials.
Conservation of biodiversity
For the conservation of the environment around construction sites, we are promoting the design and construction with topsoil-utilizing greening methods and greening without seeding, in addition to the construction methods we have developed. As part of promoting environmental conservation activities, we will also actively
participate in satoyama (a mountain/forest (yama) that is located near an agricultural or mountain village (sato))
conservation activities, tree planting activities, and other activities.
Ensuring water security
We will thoroughly manage the water quality of wastewater and actively work on conserving local water resources.

Initiatives in research and development
We believe that addressing environmental issues is one of the important corporate activities that lead to theenhancement of corporate value. In particular, we believe that the provision of technologies, products, and services that contribute to the conservation of the global environment in the specialized civil engineering field weare involved in, is our important social responsibility. The Engineering and Development Division, which is engaged in research and development operations to provide new technologies and products to society, has acquired the ISO 14001 international standard for environmental management systems, and is working to fulfill
those responsibilities.
The Engineering and Development Division is working on all research and development themes as themes thatcan contribute to the preservation of the global environment. We aim to develop and provide technologies andproducts that contribute to the conservation of the global environment by understanding the environmental
impact of the products and services we develop, reducing waste, improving recycling rates, conserving resources and energy, and protecting ecosystems. In addition, in performing development work, we are advancing energy saving, resource saving and recycling, waste management, and the promotion of using environmentallyfriendly products, striving for the effective use of resources and reducing environmental impact. Furthermore, we
are actively working on publishing our achievements externally and acquiring intellectual property, advancing
the social implementation of environmental conservation technologies we have developed, and working on environmental improvement and load reduction.
From fiscal 2023, the Materials and Environmental Technology Development Department was newly organized within the Engineering and Development Division. We will further promote the development of environmentally friendly technologies.

│

The Engineering and Development Division recognizes global environment conservation
as one of its business activities, and aims to reduce the burden on the global environment
by working to improve and continuously enhance the environmental management system.

2│
3

│

Promote effective research and development to establish a resource recycling society that
leads to the effective use of limited resources and reduced burden on the environment.
Promote activities aimed at reducing waste, increasing recycling rates, saving resourcesand energy, conserving the ecosystem and landscape, promoting the use of environmentally friendly products, and adapting to climate change.

1

4│
5│
6│

Comply with environment related laws and regulations, agreements, customer and industry requirements to actively fulfill social responsibility for environmental protection.
		Improve environmental conservation awareness by educating personnel of the Engineering and Development Division.
Disclose the implementation status of the environmental policy and environmental conservation activities as needed in order to cooperate with customers and the community.

ESG Section

fiscal 2023 and fiscal 2040 (compared to fiscal 2013), and for net zero Scope 1 and 2 emissions by fiscal 2050.

Environmental Policy

Based on the management philosophy, the Engineering and Development Division shall promote research anddevelopment for the establishment of a resource recycling society in order to make effective use of limited resources and reduce the burden on the environment. It shall also work to conserve the global environment, suchas by creating an optimal environment for realizing such a society, and contribute widely to society. Accordingly, we have defined the following items as the guiding principles for our business activities.

Environmental management system
ISO 14001 certification registration
Registration number

JSAE222

Initial registration date

March 24, 2000

Renewal date

March 24, 2021

Expiration date

March 23, 2024

Applicable standard

JIS Q 14001: 2015, ISO 14001: 2015

Scope of registration

Research and development and quality
testing of buildings and construction
methods related to environment,
disaster prevention, urban renewal,
and maintenanceRegistration certificate

Data Section

Promotion of decarbonization
We are working on the development and spread of technologies and construction methods that contribute to the
reduction of CO2 emissions and the promotion of design and construction with construction methods that contribute to CO2 emission reduction, as well as the promotion of energy saving in offices and field offices. We areaiming for a 40% reduction in CO2 emissions in the construction phase in the early part of the period between

Growth Strategy

Initiatives for the achievement of an environmentally friendly society

What is NITTOC?

Environment

In fiscal 2022, we promoted the development of four top-priority
themes and successfully achieved 100% of the annual plan.

35 │ NITTOC CONSTRUCTION CO., LTD.

Integrated Report 2023 ││ NITTOC CONSTRUCTION CO., LTD.

Integrated Report 2023 │ 36

ESG Section

Environment● Restoring the environment and preserving ecosystems
In slope protection, it is important not only to ensure the stability of the slope but also to harmonize theslope with the surrounding environment and ecosystems. We have developed and possess various greening methods with various functions.

We are developing construction methods and technologies that can reduce environmental impact and consider the environment within our specialty areas of ground improvement and slope protection. In addition
to developing construction methods that reduce the generation of waste and CO2, we are also working torationalize construction using ICT to reduce energy consumption and material use. For materials used, we
aim to develop materials that use recycled products and reduce CO2 emissions during manufacturing.

We have developed and are applying a method that reduces the generation of industrial waste by reinforcing andrepairing aging sprayed slopes without removing the existing sprayed mortar. We have reduced the amount of cement used by incorporating reinforcing fibers to increase
strength and reduce the thickness of the spraying. Furthermore, we are working to reduce our environmental impact
by using recycled materials for the reinforcing fibers used.

Rebar
insertion
methodReduction of cement usage — SBN Anchor

Reduce the generation ofindustrial waste
Repair without removing
existing mortar

Integrated Report 2023 │TSURU-KAME Soil Method
Plant-Leading Spraying Method
NEKKO Chip Method
KAERUDO-Green Method

Placement of growth base materials on slopes
according to conditions* In case of a sprayed depth of 5 cm for an area of 1,000 m2 * Inclusive of loss

Restoring vegetation in harmony with surrounding slopes

Efficiently achieving high-quality greening

Connecting historic landscapes to the future

We are also developing construction technologies that can support large-scale slope greening
works when high-speed construction is desired.
By using the Slope Saver developed for slope
spraying work, we aim to efficiently conduct
high-quality greening through the NEKKO Chip
Method and KAERUDO-Green Method.

The preservation of historic landscapes that havebeen protected and passed down through theyears is required in slope disaster prevention
works around cultural properties. NITTOC has
conducted slope disaster prevention measures
without damaging the historic landscapes at temples, shrines, castles, and ancient burial moundsites throughout Japan, including the World Heritage Site of Kiyomizu-dera Temple.

Greening work trial using Slope Saver at our construction yard
simulated slope

Conducting environmental disaster prevention work at cultural
heritage sites throughout Japan● Working on dream technologies toward the future

Improvement of construction efficiency— New Sleeve Grouting Method

37 │ NITTOC CONSTRUCTION CO., LTD.

Comparison of amounts used

Eco-BC Fiber containing 30% recycled materials

Rock bolts (rebar insertion) have been used for reinforcing embankment slopes,
where reinforcement is fixed in the ground using cement grout. We have developed screw fixed anchors that do not require fixation using cement grout byrotating and pressing in a reinforced material with screw-like ribs. Because theyeliminate the need for cement grout plants and grouting work, they can shorten
the construction period and reduce CO2 emissions as no cement is used.

In ground improvement work (chemical grouting work) to grout cement andchemicals in the ground aimed at preventing liquefaction during earthquakes and for water cut-off, we have improved grouting pipes used in existing methods and made efficient construction possible. The injection valves,
which were traditionally placed at 33 cm intervals, have been changed tocontinuous vertical slit valves to speed up the grouting process. In addition
to speeding up grouting, expanding the injection intervals can improve construction efficiency compared to the traditional method and reduce CO2
emissions during the construction phase.

Use of fallen trees and local soil generated fromslope disasters as base materials

Polygon pipe

Secondary injection valve

Sealing
materials（Ｌ=75cm）

Primary
injection
valve

GroundGrouting
material

Pipe cross-section
structure

100 cmper unit

Non-grouting
sectionPrimary
injection
Secondary
injection

Approx. 1 m

Polygon pipe

New sleeve grouting method

Grouting
section

It is essential not only to develop technologies that are an extensionof the past, but also to have innovative initiatives that have neverbeen seen before. While working together with universities and nurturing the seeds of new technologies, we are advancing the development of technologies that reduce environmental impact.
One of these technologies, bio-grout, is a ground solidification technology that takes advantage of the solidifying ability of microorganisms. We are verifying its application to ground improvement in joint
research with Hokkaido University. We are conducting research withthe aim to apply it as an environmentally friendly ground improvement method that does not use cement.

CO2 produced by microbial metabolism reacts with Ca2+ in the soil to precipitate calcium carbonate→ CaCO2 binds soil particles together andsolidifies the ground

Data Section

Waste reduction— New ReSP Method and Eco-BC Fiber

Fiber-reinforced
mortar spraying

We restore vegetation slopes harmonized with the surrounding slopes using local soil or wood chips generated
from construction or disasters as a growth base. Multiple
construction methods are available depending on the recycled materials used.

Wood chips● Achieving environmental impact reduction in construction

Greening methods that can be selectedaccording to recycled materials

Locally-generated
soil

NITTOC believes that it is essential not only to protect the lives of people from disasters, but also
to continue prosperous lives by conducting environmentally friendly disaster prevention construction. We also strive to contribute to building a society that aims for the conservation of local ecosystems by appropriately restoring environments damaged by construction or disasters using plants.
We have developed various unique environmentally friendly technologies and deployed them in thefield, working to reduce waste generation, energy consumption, and CO2 emissions. Based on thespecialized construction and greening technologies we have developed, we will continue to develop technologies that reduce environmental impact aimed at promoting decarbonization, promoting
the use of recycled materials, and conserving biodiversity, and apply them in the field to contributeto building a sustainable society.

Growth Strategy

Disaster prevention work that is friendly to people,
the environment, and the future

ESG Section

Steps toward the future with development technology at its core

What is NITTOC?

TOPICS ─ Technology Development

Solidification testingin natural ground│ NITTOC CONSTRUCTION CO., LTD.

Integrated Report 2023 │ 38

ESG Section

SocialSupporting Paralym Art activities (since September 2021)

We support the activities of Paralym Art (SHOUGAISHA JIRITSU SUISHIN KIKOU ASSOCIATION), which
undertakes an art project for people with disabilities based on the philosophy of “Creating a world where people
with disabilities can fulfill their dreams through art,” and have signed on as a Bronze Partner since this fiscal year.
We support Paralym Art’s activities through the display of artworks and cooperate with the organization to help
people with disabilities participate in society and become economically self-reliant. As one of such activities, wehave started to display the works of artists belonging to Paralym Art in temporary enclosures at each of ourbranch sites since January 2022.

1. Osaka Branch
Name of project:

Project location:
Exhibition start:

Seismic Reinforcement Work Between
Ikawa-Ikeda Interchange and KawanoeHigashi Junction on the Tokushima
Expressway (No. 1)
Shimokawa-cho, Shikokuchuo City,
Ehime Prefecture
March 2022

Initiatives as key issues in the Medium-Term Management Plan 2023

We are improving operational efficiency through DX to comply with labor time regulations from fiscal 2024 dueto the revision of the Labor Standards Act, promote diverse work styles, improve the workplace environment andemployee treatment, and develop engineers unique to NITTOC.
Before improving operational efficiency through DX, it was necessary to clarify the issues in our operations.
We needed to analyze which process of the operation could be improved for better efficiency.
The analysis of the collected information revealed that creating data for each operation was a stumbling blockto efficiency. Each system was centered around operations, data was created for each operation, and data foreach operation was scattered throughout systems, requiring input into various systems during operations, which
was causing a loss of productivity. The lack of integrated data capture and scalability were also issues.
In response to these issues, we decided to restructure the business system, aiming to create a system where all
operations are linked around data, eliminating inefficient input, making it possible to understand the situationfrom all angles, and strengthening coordination as an organization.
Because a cloud-based single-platform system was the best fit as a flexible system that can adapt to changes
in business, we adopted it and are currently building a new system.
Part of the new system has been completed and entered the operational phase. We will continue to improve
operational efficiency by adding and expanding functions. In addition, we will apply the centralized data tooperations, strengthen competitiveness, and aim for sustainable growth.

Current model
Sales data

Budget data

Cost data

Estimate

Budgetcreation

Construction
management

Accounting
data

Review
andapproval

New system model
Process
management

2. Osaka Branch
Name of project:

Project location:
Exhibition start:

Fiscal 2021 Slope Repair Construction
on the Tokushima Expressway under
the Jurisdiction of Tokushima Expressway Tokushima Highway Office715-1 Aza Omichi, Otsu-cho Oshiro,
Naruto City, Tokushima Prefecture
March 2022

3. Hiroshima Branch
Name of project:
Project location:

Exhibition start:

What is NITTOC?

DX initiatives

Review
andapproval

Growth Strategy

On Monday, April 25, the Tohoku Branch conducted maintenance activities for black pines and other trees
planted in 2014 at Millennium Hope Hills (Natori City, Miyagi Prefecture) by employees of the Tohoku Branch.
This year marks the ninth year of this activity.
On the day of the activity, nine employees of the Tohoku Branch, including the branch manager and four new
employees, cleared underbrush and cleaned up the forest in a 0.1-hectare (1,000 m2) planting area.
Millennium Hope Hills utilize land that became uninhabitable due tothe tsunami caused by the Great East Japan Earthquake in March 2011,and has six parks and park roads along about 10 km of the coast, including Ainokama Park, Fujisone Park, Ninokura Park, Hasegama Park,
Kabasaki Park, and Shinbama Park.
In April 2014, the Tohoku Branch applied for volunteer activities forthe maintenance of Millennium Hope Hills organized by the Tohoku
Regional Forest Office, planted 450 black pines and 30 mountain cherries in a seaside disaster-prevention forest regeneration area in Natori
City, Miyagi Prefecture, and continued maintenance activities every
year. However, we have decided to terminate our activities and transfer them to the Tohoku Regional Forest Office.

ESG Section

Tohoku Branch: Regeneration and Maintenance Activities for a Seaside Forest Reserve toPrevent Disasters (Miyagi Prefecture, April 2022)

Supporting C’s Athlete (since August 2019)

Since August 2019, we have joined as a corporate member of Disabled
Athletes Employment Center (C’s Athlete). C’s Athlete is an organization established by Aso Humaney Center Co., Ltd., a group company
of Aso Corporation, to develop new employment opportunities and topromote sports for people with disabilities. We also support athletes
aiming to compete in the Olympic and Paralympic Games. We endorse
its purpose, and support and sponsor the activities of C’s Athlete.

Construction
reportConstruction
reportSafetymanagement

Cloud

Construction
management

Order
management

Estimate

ExecutionbudgetData Section

Social contribution activities

Review andapproval

Fiscal 2021 San-in Expressway Ex.
Senzan Area Disaster Prevention Work
Senzan, Asayama-cho, Ota City to
Umaji, Yunotsu Town in Shimane
Prefecture
May 2022

39 │ NITTOC CONSTRUCTION CO., LTD.

Integrated Report 2023 ││ NITTOC CONSTRUCTION CO., LTD.

Integrated Report 2023 │ 40

ESG Section

SocialConsideration for safety and health

We are working to create a safe and secure workplace environment.
NITTOC recognizes that creating a safe and secure workplace environment for everyone involved in construction, including employees and subcontractors, is an important corporate responsibility and we are committed tomaintaining safety and health as well as education.

Safety and Health Management Activity Basic Plan

At NITTOC, the Safety, Environment, and Quality Control Division at the
Headquarters sets a basic plan for safety, and according to that plan, the Safety, Environment, and Quality Department at each branch provides safety activity guidance to site supervisors. In addition, within that plan, we have set
three basic policies for safety guidance and have selected five priority measures in response to relatively accident-prone areas, focusing particularly on
management to prevent accidents related to these areas.

年度 安全衛生管理活動基本計画

安
基
目

本

方

全

第

一

規則、規程、ルールを守り、危険ゼロの職場を確立する

全社統一スローガン

針 人命尊重を基本理念とし、設備と教育の充実を図り安全を確保する標

死亡、重大災害ゼロ

重点災害 防止項目●クレーン災害

法面・高所からの墜落・転落災害ゼロ●墜落・転落災害

安全指導の 基本方針 （1）『計画及び設備』 安全優先の計画を作成し、設備を整え安心して働ける職場とする
過去の失敗から学んだ日特ルールを災害事例とともに周知する（2）『教育』（3）『点検と是正』 現状と今後の作業を見据えた点検を行い、改善すべき点はその場で是正する
重 点 実 施 項 目（安全のルールを守る・守らせる）（１）安全指導強化 項目の推進

・・・・・・・・・・ ①クレーン作業のルール周知と厳守②法面、高所での墜落防止設備先行設置とルール厳守③ボーリングマシン作業手順の周知と厳守、安全な設備の確保④無足場工法作業手順の周知と厳守⑤圧力閉塞解除作業のルール周知と厳守（２）社員・作業員・職長・事業主教育の強化 ・・・・ ①過去の災害事例を使った日特ルールの教育の徹底②酸素欠乏危険作業主任者資格取得（３）パトロールによる改善指導の強化（４）長時間労働防止対策の強化

・・・・・・・・ ①各種パトロールの実施・継続（朝礼参加・電気・機械・乗込み 週間）②ルールで定められた保護具の点検と使用の確認 ③指差呼称の実施確認④施工体制の確認 ⑤ハンドリングマシンの移動時、動力遮断の確認
・・・・・・・・・・ ①週間工程を活用した時間外、休日労働削減への取組強化②適正な就労管理
日特建
設
日 特 建 設 日 進 会

What is NITTOC?

Information sharing on safety and health with employees andpartner companies
1. Nisshinkai News
Since June 2014, we have been publishing Nisshinkai News every monthwhich continues to this day, sharing disaster information and legal amendment information with our partner companies who work with us, aiming toeliminate disasters together.
2. Disaster and construction issues search system (SpectAKY-Tool)
We have introduced a system that creates a database based on past disasters and construction issues, allowing search via PC or smartphone. This
makes it possible for even younger site managers with insufficient experience or skills to consider safety measures above a certain level during
pre-construction planning meetings and when preparing work procedure
manuals. In addition, during onsite hazard prediction sessions, it becomes acommunication tool for visualizing risks to subcontractor workers, prevent-

Disaster and construction issues search system(SpectAKY-Tool)

ing routine-based hazard anticipation and establishing preventive measures.
Onsite hazard prediction

Implementation of safety training

Rope work at heights

New employees: Lecture

2. Safety education for employees
In addition, we also provide group safety
education for different job levels every
year including follow-up training, younger employee training, etc. In addition,
regular safety education is also provided
for employees at each branch.

New employees: How to tie the main rope

3. Safety education through videos
Since fiscal 2019, we have started safety
education using videos (YouTube). All
videos are short at no more than threeminutes, making it easy to understandhazardous areas and safe work practices
through subtitles (including foreign languages) and audio. Until now, the dangers of work were confirmed throughprocedure manuals, but now they canbe easily and clearly understood using
videos.

Technical interns: How to tie the main rope

41 │ NITTOC CONSTRUCTION CO., LTD.

Integrated Report 2023 │New employees: Slope ascending anddescending practice

1. Implementation of safety and quality patrols
At NITTOC, under the leadership of the Safety, Environment, and Quality
Control Division at the Headquarters, the Safety, Environment, and Quality
Department at each branch takes the lead in conducting safety and quality
patrols at each site. In civil engineering work, the work environment andconditions differ from site to site. We aim to create a safe site and workplaceenvironment that prevents accidents and construction issues by checking
the status of safety management at each site not only by the site supervisor,
but also from the perspective of the Headquarters and executives.
2. Education for subcontractors (business owners)
We provide periodic training for business owners (presidents and executivesof partner companies), including disaster prevention education based on
past disasters, explanations of legal revisions at the time of amendments,and survey reports on the implementation rate of business owner patrols.

Safety and quality patrols

ESG Section

1. Safety education for new employees
We provide safety education every April
when employees join the Company. We
offer employees a hands-on experienceon slope protection practices to learn
how to use safety equipment and to learn
how to manage and instruct workers.

Safety and quality patrols and education for subcontractors

Education for subcontractors (business owners)

Conducting health and safety patrols using wearable cameras

Technical interns: Slope ascending anddescending practice

By strengthening site monitoring using real-time cameras (image sharing between the Headquarters and branches), we directly contact personnel in thefield to point out and improve unsafe behaviors and unsafe equipment, thereby utilizing the system for early response to prevent accidents and disasters.

Nisshinkai and Safety and Health Promotion Convention

Slope protection contractor training:
Lecture on how to tie the main rope

Slope protection contractor training:
Slope ascending and descending practiceDrone operation training

How to take construction photos

New employees: Drone operation training

New employees: How to take construction photos

Implementation of health and safety patrols
using wearable cameras

Every June, we hold the Safety and Health Promotion Convention at the Headquarters and each branch withrepresentatives from employees and partner companies, and in Indonesia, staff and workers gather in November
for the same purpose. At the Safety and Health Promotion Convention, the Company, Nisshinkai, staff, andworkers unite to declare safety and pledge to achieve zero fatalities or serious disasters.

Headquarters

Branches

Data Section

We provide various education programs as
required for safety activities so that employees and employees of partner companies do not cause accidents at work sites
and other locations.

Growth Strategy

Health and safety activities and safety training

Overseas: Indonesia│ NITTOC CONSTRUCTION CO., LTD.

Integrated Report 2023 │ 42

ESG Section

SocialImproving company
recognition

Year 1 to 2

Year 3 to 5

Year 6 to 10

From year 11 and beyond

Engineering managers/

Job level

Younger employees (1) Younger employees (2)Senior manager/manager

Assistant managers

Construction managers construction division managers

Training
concept

Improvement in ﬁeld skills Improvement in specialized(familiarity, knowledge,knowledge and ﬁeld skills
communication)(ability to respond to problems)

Acquisition of specialized
knowledge and ﬁeld skills

Acquisition ofmanagement skills

Improvement incontrol capabilities

Purpose andideal person

Responding andadapting to
the environment

Becoming
helpfulBecoming a professionalYears of service

Becoming
a leaderImprovement inmanagement skills

Diversity

Leader/manager

Dissemination of informationfrom senior employees

Leader/manager

From year 11 and beyond

Job level

Senior foremen/foremen

Training
concept

Improvement in specialized knowledge and communication skills

Purpose andideal person

Specialization
New employees training
New employees’
follow-up training

Training
contents

Younger employees
training

Senior foremen/foremen training

Mid-career recruit training (plan)

Grade 4A
promotion training

New construction
manager training

New engineering
manager training

Construction
manager training

Construction division manager
and engineering section

Skills improvement training

Explanatorynotes

New employee follow-up

Common training hosted by Headquarters

Foremen promotion training

Selective training hosted by Headquarters

Skills improvement training

Selective training hosted by branches

Senior foremen/foremen selective training

Qualifications eligible for allowances (including lump-sum payments for acquisition)

Administration

Ph.D. (engineering, science), professional engineer, first-class and second-class civil engineering manager (civil, chemical
grouting), assistant first-class civil engineering manager, first-class and second-class architect, first-class and second-classarchitectural construction manager, first-class and second-class landscape construction manager, first-class and secondclass plumbing construction manager, first-class and second-class construction machinery and construction manager,
first-class and second-class electrical construction manager, class I, II, and III chief electrical engineer, class I and II
electrician, class A and B explosives handling safety manager, licensed surveyor, assistant surveyor, geological survey
technician, foundation construction engineer, landslide prevention construction engineer, class I and II sewerage
engineering examination passer, microtunneling engineer, concrete diagnostician, value engineering leader, well-driller(first and second class), automobile mechanic (first, second and third class), class A and B hazardous goods handler,
occupational safety and health consultant, pollution control manager, principal pollution control manager, groundanchor construction engineer, building cost estimator, construction manager (bullet train and conventional lines), jetgrout engineer, slope protection works managing engineer, soil contamination investigation technical manager, fisheriesengineer (fisheries civil engineering), first-class pavement construction managing engineer, civil consulting manager,comprehensive dam construction managing engineer, small-scale dam project comprehensive manager
Certified public accountant, assistant certified public accountant, tax accountant, patent attorney, judicial scrivener,
certified real estate appraiser, assistant certified real estate appraiser, real estate transaction specialist, licensed land andhouse investigator, first-, second-, and third-class construction industry accountant, systems auditor, IT strategist(systems analyst), system architect (application engineer), project manager, network specialist, database specialist,
information security specialist, IT service manager, labor and social security attorney, health supervisors, applied
information technology engineer (class I information processing engineer and software development engineer),administrative scrivener, first-grade bookkeeping, basic information technology engineer (class II information processing
engineer), IT passport (junior system administrator), TOEIC test

43 │ NITTOC CONSTRUCTION CO., LTD.

Integrated Report 2023 │Balance of work types

Correction of long
working hours
Retention ofyounger employees
Improvement oflabor conditions

Appointment toprime contractor sites
Engagement

Training

Securing engineers⃝ Continuation and strengthening of hiring activities

Improving company
recognition⃝ Website renewal(Clearly and plainly communicate our management philosophy and the significance of existence,
expressing what makes NITTOC unique to the fullest)

Local employment

Expand hiring in regions with fewer hires to correct the regional disparity in hiring.

Diversity⃝ Hiring of female employees (ratio of females of more than 20% among new graduate hires in general
positions (11.8% in fiscal 2022)), hiring of foreign national employees, employment of people withdisabilities (more than the statutory employment rate), and establishment of diverse career paths

Work style reform
Follow up for
single-person sites⃝ Follow up from back office, use of business chats, webcams, systematic placement in the field

Diverse work styles⃝ Follow up during life events (childcare leave acquisition rate: 100%)

Correction of long
working hours⃝ Introduction of new construction management system plus DX to save labor, improve the efficiency
and management accuracy of field employees, and thereby reducing loss and establishing a backup
office (overtime within 360 hours, and 8 days off in 4 weeks: 100% achievement)

Retention ofyounger employees⃝ Review of the training system⃝ Presenting a model case for each life event for looking ahead and gaining a sense of security for the
futureImprovement oflabor conditions⃝ Average annual salary increase through wage increase (including regular salary increases), review ofvarious allowances⃝ Extension of retirement age⃝ Enhancement of welfare benefits including facilities

Development
Development ofyounger employees⃝ Establishment of a system for accumulating construction information and easily utilizing the information to pass on technologies⃝ Utilization of information tools to activate communication within teams for efficient management
and elimination of work loss

Balance of work types⃝ Visualization of skills by work type, implementation of systematic work type rotation (skill map)

Appointment to prime
contractor sites⃝ Acquisition of comprehensive management skills

Engagement
Training

What is NITTOC?

Diverse work styles

HiringExpert training

Qualification acquisition support: We support our employees in obtaining qualifications by offering various
forms of support including qualification allowances.
We provide various support to our employees to help them obtain the qualifications necessary for our operations.
In particular, we provide training and proofreading of essays for first-class civil engineering managers, which is
required to serve as a site supervisor. For professional engineers, the NITTOC Engineers Association is playing
a central role in providing support. In addition, we provide qualification allowances to the qualification holders,which boosts the motivation of our employees to acquire qualifications.

Engineering

Local employment

Development ofyounger employees

ESG Section

Years of service

HiringEmployee education system

Follow up for
single-person sites

Growth Strategy

Securing engineers

Data Section

We have established an education system for future dreams, looking ahead to the future, based on the concept
shown in the table below.
Furthermore, by valuing the feelings of each employee and fostering their individuality, we promote growth
into versatile individuals with specialized expertise and interests in various things.

NITTOC is engaged in human resource development and creating a workplace environment where employees
can work comfortably. We have set securing and developing human capital as one of the key measures in theMedium-Term Management Plan 2023 (fiscal 2023 to fiscal 2025)

Development

Education system: We have established a training system for each job level to bring out thepotential of our employees.

Initiatives for human resource development and workplace environment improvement: We are promoting the development of human resources and the creation of a comfortable workplace environment.

Work style reform

Human capital⃝ Clarification of our significance of existence to improve engagement and motivation⃝ Review of training for new and younger employees⃝ Compliance training│ NITTOC CONSTRUCTION CO., LTD.

Integrated Report 2023 │ 44

ESG Section

Enhance the Company’s ability to communicate, increase its market value,and strengthen its power.
Expect a company that has a presence such as spice which is“small, but packs a punch”
My impression of NITTOC is that it is a prudent company with high sociality that contributes to restoration and reconstruction in times of disaster, while striving to improve infrastructure and build national resilience in times of peace. My impression of NITTOC’s
employees is that they are earnest, dedicated, and loyal to the Company. This has notchanged in the six brief years since I was appointed as an Outside Director. The organization has an open atmosphere and a corporate culture that allows anything to be said.
One issue the Company needs to work on is strengthening its ability to communicate. The
Company’s ability to communicate must be improved as soon as possible, as it affects its
reputation in the market and the recruitment of new talent.
In terms of my expectations in NITTOC, I want the Company not to needlessly expand its
scale, but to develop human resources, build human capital, promote technological development, and solidify its absolute position in an unsurpassable specialized field. At the same
Katsuo Nakamura time, I hope to see the Company enhance its ability to communicate, increase its market
value, and strengthen its power.
Outside Director
To achieve this, I hope that both the Company and individual employees are willing totake on new challenges and will work to improve their own quality. It is said that “the opposite of success is not failure, it
is not trying.” However, that does not mean to say that we should be forging ahead blindly. “Success occurs when preparation meets opportunity.” This means, undertaking painstaking preparations, waiting for an opportunity, and when the timecomes, boldly taking on the challenge without flinching. I hope NITTOC will build such a corporate culture to become acompany that employees are happy to work for and business partners are happy to work with, and that has a presence suchas spice that may be small, but that packs a punch.

45 │ NITTOC CONSTRUCTION CO., LTD.

Integrated Report 2023 │At NITTOC, each and every employee takes pride in developing Japan’snational land using its overwhelming on-site capabilities and highly
specialized, advanced technology. Hope to use the power ofcommunication to raise awareness.
In May 2023, NITTOC announced its Medium-Term Management Plan 2023, Next Challenge Stage III. At the center of this plan is “securing and developing human capital” and“improving productivity.” The construction market is expected to continue to grow, and thenext three years are an opportunity for NITTOC to make even greater strides. NITTOC isfocusing on promoting, educating, and training employees regarding the appeal of the Company in order to enhance their individual personalities, while at the same time doing its best
to engage in DX with the help of several experts to improve productivity.
I was appointed as an Outside Director in June 2022. Since I am not an expert in theconstruction industry, I visited dams, highway slope protection, seaside ground improvement
work sites, etc. in order to understand the Company, and I had opportunities to exchange
information with employees, business partners, and subcontractors. What impressed methere was NITTOC’s “solid technical and on-site capabilities.”
Safety is paramount at construction sites. Ensuring safety requires a deep understanding
Naoko Okada
ofthe construction sites and advanced technical capabilities. Recognizing this, management
Outside Director
has thoroughly instilled “strengthening health, safety, and quality control” at construction
sites so that employees and subcontractors can work with pride. It should be noted that management regularly visits construction sites and often interacts with employees and business partners.
I sense the need for NITTOC to reaffirm its stance that “values everyone involved and uses the power of civil engineering
to create the national land of the future,” and to communicate this stance far and wide in a manner that comes across asconfident and is easy-to-understand. I will continue to strengthen and support internal and external communication to sharethese wonderful values with investors, business partners and customers, new associates who work with us, and NITTOC’s
employees and their families.

│ NITTOC CONSTRUCTION CO., LTD.

Growth Strategy
ESG Section

The Company’s Board of Directors, made up of nine
Directors including three Outside Directors, works
to strengthen governance by receiving oversight andadvice from an external perspective.
Currently, companies are required to engage inconstructive dialogue with stakeholders in order toachieve sustainable growth and enhance corporate
value over the medium to long term.
On these pages, we have asked our Outside Directors to give our stakeholders, including shareholders,
their impressions and evaluation of the Company
from an external perspective, as well as their viewson the challenges to our sustainable growth.

NITTOC adheres to its credo of “continuing to be a company needed by society by sincerely providing technology, precisely in the areas that cannot be seen.” NITTOC’s basic stanceis not to be flashy, but to diligently and painstakingly enhance its technology even when thattechnology cannot be seen and to support efforts to build Japan’s national resilience.
I have been involved with NITTOC for eight years as an Outside Director. During thattime, the President & Representative Director changed three times, to President Nakamori,then President Nagai, and now President Wada, all of whom have “excellent personalities”
and are “dependable and trustworthy.” All officers and employees take pride in their work
and work together as one to support top management.
NITTOC boasts a strong track record in the fields of slope protection and ground improvement works. Especially in slope protection works, it has one of the largest market shares inJapan and is trusted for its safety and quality. In the ground improvement works, its hard work
Masayuki Watanabe has paid off and NITTOC is building a stable revenue base. These achievements are the result of the hard work and efforts of each and every employee, and their teamwork.
Outside Director
Although I am an Outside Director, I am also a fan of NITTOC. If I were to make one
recommendation, I would have to say that I would like to see the Company more aggressively promote its technologies andachievements externally. This is because the Company can sometimes come across as being very modest, and I think it
deserves much more recognition from investors and the media. I would like more people to discover the allure of NITTOC.
Making NITTOC more attractive to younger employees so that they will support it in the future is a task that lies ahead.
NITTOC is not a company where some people shine, but a company where everyone works together to shine. Thatstance will not change. I would like every officer and employee to take greater pride in this stance. NITTOC is a company
that continues to shine in places that cannot be seen.

Data Section

Message from Outside Directors

Diligently and painstakingly enhance technology and support efforts tobuild Japan’s national resilience.
Aggressive promotions enhance the Company’s reputation and make it amore attractive company that continues to shine where it cannot be seen.

What is NITTOC?

GovernanceIntegrated Report 2023 │ 46

ESG Section

What is NITTOC?

Management Members

Yasuo Wada

Hiroshi Yamada

Toshikazu Kawaguchi

Vice President & Representative
Director

Director

Masayuki Watanabe

Katsuo Nakamura

OutsideOutsideDirector

Independent

Director

Naoko Okada

Independent

Director

OutsideIndependent

Growth Strategy

President & Representative
Director

Naoto Kami

Katsuhiro Yorozu

Director

Iwao Aso

Director

Yoshihiro Abe

DirectorStanding Corporate Auditor

Corporate Auditor

OutsideSkill Definition

Positions andresponsibilities

Corporate
Sales/
Legal affairs/
Engineering
management construction compliance

President &Representative
Director●●●

Hiroshi
YamadaVice President & Representative
Director and responsible foroverseas operations andengineering & development

●

●

●

Toshikazu
Kawaguchi

Director, Managing Executive
Officer, General Manager,
Corporate Strategy Division

●

Naoto
Kami

Director, Managing Executive
Officer, General Manager,
Business Operation Division●

Katsuhiro
YorozuDirector, Managing Executive
Officer, General Manager,
Administration Division●●

Iwao Aso

Director●●

Masayuki
WatanabeOutside Director

KatsuoNakamura

Outside Director

Naoko
Okada

Outside Director

Yasuo
Wada

Atsushi Ono
Outside47 │ NITTOC CONSTRUCTION CO., LTD.

IT/DX

Overseas
expertise

●
●

●

●
●
●

●

●
●

Integrated Report 2023 │

●

●

●
●

Safety and Personnel
qualityand labor
controlmanagement●●●

Finance/accounting

Corporate management

Contribution to decisions on corporate strategy, etc. fromexperience of involvement in important corporate decision-making

Sales/construction

Contribution to decisions on sales strategy from knowledge ofsales and construction

Legal affairs/complianceContribution to management from experience and knowledge oflegal affairs and complianceEngineering

Contribution to management from experience and expertisein engineering

IT/DX

Contribution to management from experience and expertisein IT and DX

Finance/accounting

Contribution to management from knowledge and experiencein finance, accounting, and tax matters

Overseas expertise

Contribution to management from experience and expertisein overseas operations

Safety and quality control

Contribution to management from knowledge and experience ofsafety, quality control, and environment

Personnel and labor
management

Contribution to management from experience and expertisein human resource development, workstyle reform, andenvironmental improvement

●
●

●

●

│ NITTOC CONSTRUCTION CO., LTD.

ESG Section

NameStanding Corporate
AuditorData Section

Skills matrix

Makoto Kaai

Integrated Report 2023 │ 48

ESG Section

Corporate Governance

The Company attaches great importance to the interests of all stakeholders who support its corporate activities
and recognizes the importance of corporate ethics that comply with not only various legal norms but also internal standards and social decency and common sense. At the same time, the Company’s basic policy on corporate governance is to build an organization that can contribute to the development of social infrastructure byraising transparency and the soundness of management, through efforts such as continuous corporate development, the acquisition of social credibility, and the elimination of illegal payoffs to antisocial organizations.

1 Board of Directors

The Board of Directors shall deliberate and decide basic management
policies and execution policies, as well as decide or approve importantmatters concerning the execution of business operations. The Company strives to improve the effectiveness of the Board of Directors byreceiving objective opinions from Outside Directors. As a general rule,
meetings are held once a month, or as needed.

2 Board of Corporate
Auditors

The Board of Corporate Auditors receives reports, engages in discussions, or passes resolutions on important matters concerning audits.
However, the Board of Corporate Auditors cannot prevent individual
Corporate Auditors from exercising his or her authority. Meetings areheld once a quarter, or as needed.

3 Compliance Committee

The Compliance Committee discusses and decides individual issues
stipulated in the compliance program, which is a specific practical planfor establishing compliance within the Company, and manages the
progress of the program. Meetings are held at least four times a year.

NITTOC’s corporate governance system
Based on our basic approach to corporate governance, we have adopted the following system to ensure thorough risk management and compliance and improve internal controls, with regard to swift responses to thebusiness environment, as well as decision-making, execution, and supervision of business operations.

Annual Shareholders’ Meeting

Directors/Board of Directors
Election/
Dismissal
Supervision
ReportRepresentative Directors

Instruct

ReportReportOperating Oﬃcers
Business
execution

ManageRisk management

Cooperation

Election/
Dismissal

Election/Dismissal

Accounting Auditor

Accounting audit

ReportCorporate
Strategy Division

Management
Meeting

ReportInternal audit

ReportReportReportReportDiscuss/Report

Instruct

Corporate Auditors/
Board of Corporate
Auditors

Audit

Audit
Department

Recommend

ReportElection/Dismissal

Election/Dismissal

Guidance
AdviceAs an advisory body to the Board of Directors, the Nomination andCompensation Committee deliberates the establishment and revisionInternal audit

Corporate lawyer

4 Nomination andCompensation
Committeeof the officer compensation system and evaluation system, as well as
evaluation results, fixed compensation, and performance-linked compensation. The Committee consists of the following five members:

ESG Section

SpecialCommittee

Various committees including
Compliance Committee

Nomination andCompensation Committee

What is NITTOC?

Summary of our corporate governance system

Growth Strategy

Basic approach to corporate governance(Chair)Independent Outside Director(Members) President & Representative Director,
two (2) independent Outside Directors,
one (1) independent Outside Corporate Auditor

Guidance/Advice
ControlGroup Companies

49 │ NITTOC CONSTRUCTION CO., LTD.

Integrated Report 2023 │5 Management Meeting

The Management Meeting is a place where matters to be discussed by
the Board of Directors are preliminarily examined, and each division
reports on the progress of business execution. For this reason, meetings
are held once a month before the regular Board of Directors meeting.

│ NITTOC CONSTRUCTION CO., LTD.

Data Section

Headquarters/Branches

Integrated Report 2023 │ 50

ESG Section

Corporate Governance

Masayuki
Watanabe

Masayuki Watanabe has expertise and experience in corporate legal
affairs gained through working as an attorney-at-law. The Company
has appointed him as an Outside Director as it believes that, by making
use of his broad insight, he will be able to appropriately perform his
duties as an Outside Director at the Company as well. In addition, hewill be involved in the nomination of candidates for officer of the Company and determination of compensation, etc. for officers from an objective and neutral standpoint as a member of the Nomination andCompensation Committee, a voluntary committee.

7 years

KatsuoNakamura

Katsuo Nakamura has abundant experience as a corporate manager
and has served in many prominent positions at Nihon University. The
Company has appointed him as an Outside Director as it believes that,by making use of his broad insight, he will be able to appropriately
perform his duties as an Outside Director at the Company as well. In
addition, he will be involved in the nomination of candidates for officerof the Company and determination of compensation, etc. for officers
from an objective and neutral standpoint as a member of the Nomination and Compensation Committee, a voluntary committee.

6 years

Naoko
Okada

Naoko Okada has a wealth of experience as a corporate manager andan expert in corporate public relations. The Company has appointed
her as an Outside Director as it believes that, by making use of her
broad insight, she will be able to appropriately perform her duties as an
Outside Director at the Company as well.

1 year51 │ NITTOC CONSTRUCTION CO., LTD.

Integrated Report 2023 │What is NITTOC?

Reasons for appointment and expected roles

16/16(100%)
Growth Strategy

Name

Officer compensation
The basic policies for compensation for Directors are made so that they will contribute to the sustainable enhancement of the Group’s corporate performance and shareholder value. To this end, the Group offers a compensation level and compensation system that are commensurate with the duties of Directors, comparable tothose of other companies in the same industry and of the same size in Japan and adequate for securing and retaining excellent human resources. The amount of compensation for officers of the Company shall be determined for each position. The compensation shall consist of fixed compensation (basic compensation) andperformance-linked compensation (bonuses) as monetary compensation, and share compensation as non-monetary compensation. The amount of compensation for non-executive Directors shall be based on individual
agreements, and only fixed compensation shall be paid as performance-linked compensation and share compensation are not appropriate.
The amount of fixed compensation, which is part of the compensation for individual Directors, shall be determined by position depending on responsibilities and roles, and paid monthly.
As for performance-linked compensation, which is part of the compensation for individual Directors, the Company shall formulate regulations that stipulate matters, including calculation standards, and payment shall bemade every July, taking into consideration the progress assessment of the historical amount of consolidated
operating profit, which the Company believes is the most important indicator, its published amount for the relevant fiscal year, and its historical average for the past three years, as well as individual performance evaluation
by department.
Regarding non-monetary compensation, which is part of the compensation for individual Directors, restricted
shares shall be allotted. The number of shares to be allotted shall be determined by a resolution of the Board of
Directors based on the standard amount depending on positions and responsibilities, and allotment shall bemade on the date determined by the resolution of the Board of Directors.
The amount of compensation shall be determined so that the ratio of fixed compensation, performance-linked
compensation, and non-monetary compensation will be approximately 70%, 20%, and 10% when calculated
based on the maximum amount of performance-based compensation.
The details of the compensation for individual Directors shall be determined by a resolution of the Board of
Directors after the Board received a recommendation from the Nomination and Compensation Committee,
which had been consulted by the Board and deliberated on them.

Attendance at
the Board ofYears
Directors
servedmeetings infiscal 2022

16/16
(100%)

13/13(100%)ESG Section

The Company conducts a self-evaluation and analysis of the Board of Directors using an external organization,with the aim of improving the functions of the Board of Directors and increasing the corporate value.
The self-evaluation and analysis were conducted in February 2023 for all members of the Board of Directors (nineDirectors including three Outside Directors and three Corporate Auditors including two Outside Corporate Auditors) in the form of a questionnaire that was answered directly to the external organization to ensure anonymity.
The questionnaire includes sections on the Board of Directors composition, operation, discussion, monitoring
functions, training, and dialogue with shareholders, as well as open-ended sections.
The results of this questionnaire were reported and discussed at the Board of Directors meeting on April 28,
2023, and while there were some issues, the evaluation was generally positive. The Company thus recognizes
that the effectiveness of the Board of Directors as a whole, including the evaluation by the external organization,
has been ensured.
The Company has formulated a succession plan, which has been an issue, including in this questionnaire, andwe will operate in accordance with this plan going forward. The composition of the Board of Directors, theCompany’s addressing of diversity, and the creation of a skills matrix have improved following the appointmentof a female Outside Director and the disclosure of the skills matrix in the Notice of the Annual Shareholders’Meeting. However, we will continue to further improve the functions of the Board of Directors going forward. In
addition, there were opinions on future issues, such as organizing items for deliberation for deeper discussions
in a limited time, ensuring sufficient time for discussions of future strategies and plans, exercising supervisionfunctions over sustainability initiatives, and providing sufficient feedback on the status of dialogue with shareholders (investors), and such issues were shared for improving the functions of the Board of Directors and invigorating discussions.
Going forward, the Company’s Board of Directors will consider and address issues based on this effectivenessevaluation. In addition, the Company will continue its efforts to improve the functions of the Board of Directors
by regularly evaluating its effectiveness.

Reasons for appointment as Outside Director

Training policy for Directors and Corporate Auditors
Directors and Corporate Auditors shall constantly and actively strive to gather information on and study theCompany’s financial condition, legal compliance, corporate governance, and other matters in order to fulfill theirroles, and the Company shall provide the necessary opportunities for training.

Internal controls
The Company’s Board of Directors recognizes that management is responsible for establishing an appropriate
system for operations based on its management policy, and has adopted a resolution on its basic policy on aninternal control system.
The Company’s internal control system based on this basic policy consists of the Board of Directors as thehighest organization in the system; the headquarters divisions, branches, and affiliated companies that executebusiness; the Audit Department, which directly reports to the Board of Directors and is in charge of internal
audits; and various committees that assist the Board of Directors.

│ NITTOC CONSTRUCTION CO., LTD.

Data Section

Evaluating the effectiveness of the Board of Directors

Integrated Report 2023 │ 52

Risk Management

Compliance

Basic approach

Basic approach

To continue to engage in sound business activities, the Company engages in management activities to identify
various possible risks, prevent the occurrence of such risks, and minimize their impact should they occur.

The Company positions compliance as an important issue to gain the trust of our various stakeholders. In order
to continue to be a company trusted and needed by society, we have established a Code of Conduct and Ethics
and are committed to social responsibility by disseminating and practicing this code.

Business Continuity Plan (BCP)The Company has formulated a Business Continuity Plan (BCP), aiming to prevent and avoid risks, ensure thesafety of human life in the event of a disaster, control and mitigate damage to the Company’s assets, prevent
secondary disasters, and resume business operations as soon as possible by establishing necessary matters fordisaster prevention and crisis management at the headquarters, branches, and sales offices, as well as to fulfill
our social responsibility as a corporate citizen.
The Company continues to conduct BCP training in cooperation with branches every year to prepare for theoccurrence of actual disasters, etc.

Information security
The Company has established Information System Protection Rules, with the aim of preventing the loss of information assets by clarifying the arrangements and responsibilities for the appropriate protection of information
assets handled on the Company’s information systems. Under these rules, the Company manages “information
security” to appropriately maintain and ensure the confidentiality, integrity, and availability (information isavailable whenever it is needed) of information assets. In addition, the Company provides various training programs, such as e-learning, to employees to maintain and ensure information security.

Compliance system

Compliance objectives
The Company’s compliance objectives are as follows.
① To establish an organizational structure to effectively manage compliance promotion activities.
② To have various measures and mechanisms to ensure effectiveness, and to steadily promote such measuresand mechanisms based on a compliance program founded on a medium- to long-term perspective.
③ To thoroughly familiarize all officers and employees with the necessity and importance of compliance, and tofoster a legal mindset (ability to think legally in a logical manner and make accurate judgments in the courseof business).
④ To ensure that damage suffered by the Company is minimized through appropriate handling based on predetermined response procedures when misconduct, etc. is discovered.

Education⃝Workshops

The Company has established a compliance program and provides compliance training at various meetings
throughout the year.
Examples : Training for new employees, joint training for construction, sales, and engineering staff, joint train-

ing for general managers of sales offices and construction managers, training for managers andsection managers of administration departments, training for compliance and risk management
promotion managers, training for senior managers and managers, training for mid-career hires, etc.

⃝Education through internal newsletters, e-learning, and monthly meetings

Compliance courses that introduce various specific examples are included in the internal newsletter each month.
In addition to regular e-learning, the Company works to raise awareness of and educate each employee aboutcompliance at monthly meetings at the headquarters and branches at the beginning of each month, at which
officers explain important matters regarding the Company.

53 │ NITTOC CONSTRUCTION CO., LTD.

Integrated Report 2023 │Growth Strategy

Under the Company’s compliance promotion system, the Board of Directors makes decisions on important matters related to compliance promotion activities. Under the Board of Directors, the Compliance Committee, which
is chaired by the President & Representative Director and whose members include Directors, general managers
of each division, and corporate lawyers, has been established to discuss and decide individual issues in the compliance program for compliance education, and to manage the progress of the compliance program. As a general rule, the Compliance Committee holds meetings at least four times a year.

ESG Section

In terms of risk management, the Company has established a Risk Management Committee under the Board of
Directors, which is chaired by the President & Representative Director and whose members include Representative Directors, Directors in charge of each division, general managers and deputy general managers of each division, and corporate lawyers. The Committee is an organization to discuss and approve issues and measuresrelated to company-wide risk management. As a general rule, the Risk Management Committee holds meetings
four times a year.
The Committee deliberates and approves the matters related to risks to be controlled and their management
and supervises the implementation of such controls, deliberates and approves the overall policy and direction ofrisk management initiatives, deliberates and approves annual plans, budgetary measures, and corrective measures related to risk management, manages the progress of annual plans related to risk management, gives instructions to ensure thorough risk management at headquarters divisions, branches, and affiliated companies,
and manages the progress of initiatives conducted.

│ NITTOC CONSTRUCTION CO., LTD.

Data Section

Risk management system

What is NITTOC?

ESG Section

Integrated Report 2023 │ 54

Data Section

Unit

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

Net sales(Millionsof yen)53,24757,26460,703

57,63857,17462,94363,26465,516

67,95566,076

72,918Operating profit(Millionsof yen)

2,438

3,035

4,198

3,465

3,583

4,100

3,970

4,903

5,358

4,523

5,451

Ordinary profit(Millionsof yen)

2,249

2,904

3,905

3,431

3,555

4,119

4,004

4,880

5,419

4,626

5,462

Profit attributable to owners of parent(Millionsof yen)

3,552

1,663

1,664

2,110

2,342

2,688

2,721

3,258

3,500

3,329

3,526

Current assets(Millionsof yen)29,611

31,35933,27033,42037,16139,93339,93741,00342,282

42,52642,431

Total assets(Millionsof yen)39,111

41,04742,30640,38544,225

48,142

49,04850,15951,971

51,71252,809Current liabilities(Millionsof yen)18,05818,981

19,372

16,42918,285

19,962

19,633

19,214

18,931

16,79016,559Net assets(Millionsof yen)15,02916,37018,116

19,781

21,81323,256

24,676

26,55028,80030,61032,127

Interest-bearing debt

(Millionsof yen)

2,000

1,600

1,200

0

0

1,100

826

552

278

0

0

(Millionsof yen)

4,933

1,011

2,435

(630)

2,501

(301)

3,108

7,357

1,426

4,750

2,659

(Millionsof yen)

(206)

(189)

(277)

1,209

(393)

(867)

(1,252)

(217)

(705)

(23)

(1,788)(Millionsof yen)(1,756)

(678)

(775)

(1,592)

(321)

(144)

(1,624)(1,625)(1,784)(1,785)(2,171)

Free cash flows(Millionsof yen)

4,726

822

2,158

579

2,107

(1,169)

1,856

7,140

720

4,727

870

 ash and cash equivalents atC
end of period(Millionsof yen)12,132

12,277

13,698

12,681

14,462

13,114

13,346

18,713

17,722

20,723

19,457

Operating results

What is NITTOC?

11-Year Financial Summary

Growth Strategy

Financial position

 et cash provided by (used in)Noperating activities
Net cash provided by (used in)investing activities
Net cash provided by (used in)financing activities

ESG Section

Cash flows

Dividend per share

(Yen)

6.00

8.00

9.00

10.00

17.00

24.00

30.00

38.00

36.00

40.00

45.00

Basic earnings per share

(Yen)

82.78

39.06

39.08

49.58

55.03

64.13

65.24

78.12

83.93

79.83

84.56

Net assets per share(Yen)

352.84384.37425.56461.17509.02554.76588.33632.68686.19729.42763.67Return on assets (ROA)

(％）

5.9

7.2

9.4

8.3

8.4

8.9

8.2

9.8

10.6

8.9

10.5

Return on equity (ROE)

(％）

26.2

10.6

9.7

11.2

11.3

12.0

11.4

12.8

12.7

11.3

11.3

Equity ratio

(％）

38.4

39.9

42.8

48.6

49.0

48.1

50.0

52.6

55.1

58.8

60.3

Capital expenditure(Millionsof yen)

202

173

358

443

350

876

1,157

381

381

900

1,352

Depreciation(Millionsof yen)

175

198

257

276

284

269

324

380

402

507

583

Research and development expenses(Millionsof yen)

338

156

162

188

201

169

241

372

336

391

387

Financial indicators

Data Section

Per-share information

Other

55 │ NITTOC CONSTRUCTION CO., LTD.

Integrated Report 2023 ││ NITTOC CONSTRUCTION CO., LTD.

Integrated Report 2023 │ 56

Data Section

Financial Statements(March 31, 2022)(March 31, 2023)

AssetsLiabilities

Current assets

Current liabilities

Cash and deposits

20,723

19,457

 otes payable, accounts payable forN
construction contracts and otherAdvances received on construction
contracts in progress(March 31, 2023)

11,921

11,539

593

423

0

－

555

1,149

25

170

168

28

1,150

1,138

33

39

 otes receivable, accounts receivable fromNcompleted construction contracts and other

17,934

18,395

 lectronically recordedEmonetary claims - operating

2,563

3,462

Merchandise and finished goods

25

31

Real estate for sale00

 osts on constructionC
contracts in progress

301

284

Raw materials and supplies

285

355

 rovision for bonuses forP
directors (and other officers)

Other

693

446

Other

2,341

2,070

(2)

(2)

Total current liabilities

16,79016,55942,52642,431

4

－

4,209

4,023

97

98

4,311

4,122

21,101

20,681

 llowance for doubtful
Aaccounts
Total current assets

Lease obligations
Income taxes payable rovision for warranties forP
completed construction
Provision for loss on
construction contracts
Provision for bonuses

Non-current liabilities
Lease obligations

Non-current assets

Retirement benefit liability

Property, plant and equipment

Other

Buildings and structures, net

1,639

1,674

M
 achinery, vehicles, tools,
furniture and fixtures, net

1,314

1,542

Land

2,578

2,578

0

－

253

633

Share capital

6,052

6,052

2

2

Capital surplus

1,753

1,753

5,787

6,430

Retained earnings

22,56023,918

607

578

(0)

(2)

30,36531,722

Leased assets, net
Construction in progress
Other, net
 otal property, plant andTequipment
Intangible assets

Deferred tax assets

Total liabilities

Net assets
Shareholders’ equity

Treasury shares
Total shareholders’ equity

Investments and other assets
Investment securities

Total non-current liabilities

417

1,040

Accumulated othercomprehensive income
Valuation difference on
available-for-sale securities
Foreign currency translation
adjustment
Remeasurements of defined
benefit plansTotal accumulated othercomprehensive income

112

138

3

17

(58)

(29)

56

126

188

278

2,003

1,978

Other

403

370

 llowance for doubtful
Aaccounts

(32)

(21)

 otal investments andTother assets

2,791

3,368

Total non-current assets

9,185

10,377

Total net assets

30,61032,12751,71252,809Total liabilities and net assets

51,71252,809Total assets

57 │ NITTOC CONSTRUCTION CO., LTD.

Integrated Report 2023 │Non-controlling interests

75th fiscal year

76th fiscal year

(April 1, 2021 to March 31, 2022)(April 1, 2022 to March 31, 2023)

65,882
194
66,076

72,697
221
72,91853,84992
53,941

59,117
115
59,233

12,032
102
12,134
7,611
4,523

13,579105
13,685
8,233
5,451

7
36
16
49
29
139

6
12
14
40
23
97

5
22
5
2
35
4,626

7
17
55
6
86
5,462

0
372
372

−
−
−

11
−
11
4,986
1,513
155
1,668
3,318
(11)
3,329

22
4
27
5,435
1,827
(0)
1,826
3,608
81
3,526

Net sales
Net sales of completed construction contracts
Sales in other businesses
Total net sales
Cost of sales
Cost of sales of completed construction contracts
Cost of sales in other businesses
Total cost of sales
Gross profit
Gross profit on completed construction contracts
Gross profit - other businessTotal gross profit
Selling, general and administrative expenses
Operating profit
Non-operating income
Interest income
Dividend income
Patent income
Foreign exchange gains
Other
Total non-operating income
Non-operating expenses
Interest expenses
Guarantee commission
Commission for syndicated loans
Other
Total non-operating expenses
Ordinary profit
Extraordinary income
Gain on sale of non-current assets
Gain on sale of investment securities
Total extraordinary income
Extraordinary losses
Loss on sale and retirement of non-current assets
Impairment losses
Total extraordinary losses
Profit before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes
ProfitProfit (loss) attributable to non-controlling interests
Profit attributable to owners of parent

Consolidated Statements of Comprehensive Income

ProfitOther comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Remeasurements of defined benefit plans, net of tax
Total other comprehensive income
Comprehensive income
Comprehensive income attributable to owners of parent
Comprehensive income attributable to non-controlling interests(Millions of yen)75th fiscal year

76th fiscal year

(April 1, 2021 to March 31, 2022)(April 1, 2022 to March 31, 2023)

3,318

3,608

(200)
57
35
(106)
3,211
3,203
8

26
22
29
78
3,686
3,597
89

│ NITTOC CONSTRUCTION CO., LTD.

What is NITTOC?

75th fiscal year 76th fiscal year

(March 31, 2022)(Millions of yen)

Growth Strategy

75th fiscal year 76th fiscal year

Consolidated Statements of IncomeESG Section(Millions of yen)

Data Section

Consolidated Balance SheetsIntegrated Report 2023 │ 58

Data Section

Financial Statements
Consolidated Statements of Cash Flows

Accumulated othercomprehensive income

Valuation
Non-con- Total
Foreign RemeasureTotal
Total
differencenetcurrency ments of accumulated trolling
Share Capital Retained Treasury shareon
interests assets
translation defined
othercapital surplus earnings shares holders’ available- adjustbenefit comprehensive
for-saleequityment
plans
incomesecurities
Balance at beginning of period

6,052

2,022

21,419 umulative effects of changes inCaccounting policies
Restated balance

6,052

2,022

(1,057) 28,436

102

102

21,521(1,057) 28,538

312

(34)

(95)

183

180

28,800
102

312

(34)

(95)

183

180

28,902

Dividends of surplus(1,501)(1,501)(1,501)

 rofit attributable to owners ofPparent

3,329

3,329

3,329

Purchase of treasury shares
Cancellation of treasury shares(269)

Total changes during period
Balance at end of period

5,435

507

583

Increase (decrease) in allowance for doubtful accounts

(28)

(11)

1

144

Increase (decrease) in provision for loss on construction contracts

(71)

(140)

Increase (decrease) in provision for bonuses

(351)

(11)

Increase (decrease) in provision for warranties for completed construction

Increase (decrease) in provision for bonuses for directors (and other officers)(3)

6

Increase (decrease) in retirement benefit liability

97

(143)

Loss (gain) on sale of property, plant and equipment

2－

Loss on retirement of non-current assets

9

22

(43)

(19)

(788)

(269)

1,039

6,052

1,753

22,560

6,052

1,753

22,560Purchase of treasury shares

(372)

－

Impairment losses

－

4

2,686

(1,314)227

17

Decrease (increase) in other assets

(279)

156

1,056

37

36

(126)

8

(118)

1,826

(200)

37

36

(126)

8

1,708

(0) 30,365

112

3

(58)

56

188

30,610

Accumulated othercomprehensive income(0) 30,365

112

3

(58)

Cancellation of treasury shares
Net changes in items other than

56

188

30,610(2,168)

3,526

3,526

(1)

(1)

ー

ー

ー

shareholders’ equity

26

14

29

Increase (decrease) in trade payables

534

(379)

(1,085)(172)

Increase (decrease) in accrued consumption taxes

94

(45)

Increase (decrease) in other liabilities

263

(48)

7,162

4,079

Interest and dividends received

43

19Interest paid

(5)

(7)

Income taxes paid

(2,450)(1,432)

Net cash provided by (used in) operating activities

4,750

2,659

(5)

(585)

Increase (decrease) in advances received on construction contracts in progress

Subtotal

Cash flows from investing activities(2,168)

(1)

70

89

159

ー

ー

1,357

(1)

1,356

26

14

29

70

89

1,516

6,052

1,753

23,918(2) 31,722

138

17

(29)

126

278

32,127

Integrated Report 2023 │Loss (gain) on sale of investment securities

Decrease (increase) in costs on construction contracts in progress

3,526

parent(11)

ー(2,168)

Profit attributable to owners of

(20)

ー

Changes during period
Dividends of surplus

7

Foreign exchange losses (gains)

1,057

Valuation
Non-con- Total
Foreign RemeasureTotal
Total
differencenetcurrency ments of accumulated trolling
Share Capital Retained Treasury shareon
interests assets
translation defined
othercapital surplus earnings shares holders’ available- adjustbenefit comprehensive
for-saleequityment
plans
incomesecurities
Balance at beginning of period

5

(0)

(200)
ー

Interest expenses(0)

Shareholders’ equity

59 │ NITTOC CONSTRUCTION CO., LTD.

4,986

Depreciation(0)

Fiscal year ended March 31, 2023 (from April 1, 2022 to March 31, 2023)

Balance at end of period

Profit before income taxes

Decrease (increase) in trade receivables

 et changes in items other thanNshareholders’ equity

Total changes during period

Cash flows from operating activities

Interest and dividend income

Changes during period

76th fiscal year
(April 1, 2022 to March 31, 2023)

Purchase of investment securities
Proceeds from sale of investment securities

645－

Purchase of property, plant and equipment(627)(1,130)

Proceeds from sale of property, plant and equipment
Purchase of intangible assets
Payments for retirement of non-current assets

75

－

(273)

(62)

－

(15)

Payments of guarantee deposits

(15)

(6)

Proceeds from refund of guarantee deposits

12

12

Other payments

(10)

(0)

Other proceeds

1730Net cash provided by (used in) investing activities(23)(1,788)Cash flows from financing activities
Repayments of long-term borrowings
Repayments of lease obligations
Purchase of treasury shares

(278)

－

(5)

(5)

(0)

(1)

Dividends paid

(1,501)(2,165)

Net cash provided by (used in) financing activities(1,785)(2,171)

Effect of exchange rate change on cash and cash equivalents

60

34

Net increase (decrease) in cash and cash equivalents

3,001(1,266)

Cash and cash equivalents at beginning of period

17,722

20,723

Cash and cash equivalents at end of period

20,723

19,457│ NITTOC CONSTRUCTION CO., LTD.

Data Section

Shareholders’ equity

75th fiscal year
(April 1, 2021 to March 31, 2022)

What is NITTOC?

Fiscal year ended March 31, 2022 (from April 1, 2021 to March 31, 2022)(Millions of yen)

Growth Strategy(Millions of yen)

ESG Section

Consolidated Statements of Changes in Net Assets

Integrated Report 2023 │ 60

Data Section

Corporate Overview and Stock Information (As of March 31, 2023)

NITTOC CONSTRUCTION CO., LTD.

Headquarters

Daiwa Higashi-Nihonbashi Bldg., 3-10-6, Higashi-Nihonbashi, Chuo-ku,
Tokyo 103-0004, Japan

Established on

December 17, 1947

Capital¥6,052 ｍillion

Stock exchange
Number of employees

Midori Industries Co., Ltd
4F, Daiwa Higashi-Nihonbashi Bldg., 3-10-6, Higashi-Nihonbashi, Chuo-ku, Tokyo 103-0004, Japan TEL: +81-3-5645-5150
Shimane Earth Engineering Co., Ltd
2F, Suto Bldg., 310-1, Tsuda-cho, Matsue-shi, Shimane 690-0055, Japan

TEL: +81-852-21-7337

Yamaguchi Earth Engineering Co., Ltd
2-3-13, Hirano, Yamaguchi-shi, Yamaguchi 753-0015, Japan

TEL: +81-83-901-1050

Tokyo Stock Exchange Prime Market

Ehime Earth Engineering Co., Ltd.
2F, Taiyo Amayama Bldg., 2-6-12, Amayama, Matsuyama-shi, Ehime 790-0951, Japan

TEL: +81-89-998-8881

1,074 persons

Fukui Earth Engineering Co., Ltd.
24-21-2, Ebata-cho, Fukui-shi, Fukui 918-8016, Japan

TEL: +81-776-38-8505

PT. NITTOC CONSTRUCTION INDONESIA
Jakarta Selatan (South Jakarta), Indonesia

TEL: +62-21-2994-1582

Status of Stock
Total number of authorized shares

50,000,000 shares

Total number of issued shares

41,708,367 shares (including 2,817 treasury shares)

Number of shareholders

13,430 persons

Headquarters, Branches, Business Offices, etc.

Major shareholders
Number of Shareholding
shares held
ratio

Name

AN Holdings Corp.
The Master Trust Bank of Japan, Ltd. (Trust Account)
Custody Bank of Japan, Ltd. (Trust Account)
NITTOC Employee Shareholding Association
NITTOC Shareholding Cooperative Association
BNYM RE BNYMLB RE GPP CLIENT MONEY AND ASSETS AC
Masato Takeuchi
BNYM SA/NV FOR BNYM FOR BNYM GCM CLIENT ACCTS M ILM FE
THE BANK OF NEW YORK MELLON 140040
Religious Corporation Catholic Society of St. Paul

(thousand shares)(%)

24,155

57.91

2,487
1,334
1,276

5.96
3.20
3.06

447

1.07

300

0.71

400
188
153
153

● Number of shares by shareholder
2 thousand shares

Securities
companies

Foreign investors

thousand shares(1.07%)

Treasury shares

447(0.01%)

2,933

Individuals
and others

thousand shares(7.03%)

9,537

thousand shares(22.87%)

0.95
0.45
0.36
0.36

Other domestic
corporations

Financial
institutions

thousand shares(59.42%)

thousand shares(9.60%)

24,785

4,002

Notes: 1. Shareholding ratio is calculated by deducting treasury shares.
2.	The number of shares held by The Master Trust Bank of Japan, Ltd. (Trust Account) andCustody Bank of Japan, Ltd. (Trust Account) is related to the trust business of the banks.

Stock Chart

Headquarters
Daiwa Higashi-Nihonbashi Bldg., 3-10-6, Higashi-Nihonbashi, Chuo-ku, Tokyo 103-0004, Japan TEL: +81-3-5645-5041
Sapporo Branch UD Sapporo Kitaichijo Bldg., 10-1-15, Kitaichijonishi, Chuo-ku, Sapporo-shi, Hokkaido
TEL: +81-11-596-8096
060-0001, Japan
Tohoku Branch 1-18-8, Tomizawaminami, Taihaku-ku, Sendai-shi, Miyagi 982-0036, Japan
TEL: +81-22-243-4439
Tokyo Branch
Daiwa Higashi-Nihonbashi Bldg., 3-10-6, Higashi-Nihonbashi, Chuo-ku, Tokyo 103-0004, Japan TEL: +81-3-5645-5100
Hokuriku Branch 1-4-4, Minamidekijima, Chuo-ku, Niigata-shi, Niigata 950-0963, Japan
TEL: +81-25-383-8700
Nagoya Branch Nagoya Sanzo Bldg., 1-16-6, Sakae, Naka-ku, Nagoya-shi, Aichi 460-0008, Japan
TEL: +81-52-202-3211
Osaka Branch
Sanyo Senko Kawaramachi Bldg., 2-2-7, Kawaramachi, Chuo-ku, Osaka-shi, Osaka
TEL: +81-6-6232-2109
541-0048, Japan
Hiroshima Branch Wako Inarimachi Bldg., 2-14, Inarimachi, Minami-ku, Hiroshima-shi, Hiroshima 732-0827, Japan TEL: +81-82-506-2109
Kyushu Branch
Meiji-dori Business Center, 1-3, Shimokawabatamachi, Hakata-ku, Fukuoka-shi, Fukuoka TEL: +81-92-271-6461
812-0027, Japan
Direct Control
Daiwa Higashi-Nihonbashi Bldg., 3-10-6, Higashi-Nihonbashi, Chuo-ku, Tokyo 103-0004, Japan TEL: +81-3-5645-5111
Grout Division
Overseas Business Daiwa Higashi-Nihonbashi Bldg., 3-10-6, Higashi-Nihonbashi, Chuo-ku, Tokyo 103-0004, Japan TEL: +81-3-5645-5055
Division
Sales Offices
Asahikawa, Hakodate, Doto, Aomori, Morioka, Akita, Yamagata, Fukushima, Gunma, Utsunomiya, Mito, Yokohama,
Saitama, Chiba, Nagano, Sado, Joetsu, Toyama, Kanazawa, Fukui, Gifu, Shizuoka, Mie, Keiji, Nawa, Kobe, Tottori, Matsue,
Okayama, Yamaguchi, Takamatsu, Matsuyama, Kochi, Saga, Nagasaki, Kumamoto, Oita, Miyazaki, Kagoshima, Okinawa
Sub-branch
Sanriku
Laboratory
Tojo
Equipment
Chuo (Saitama), Eniwa, Natori, Toyama, Koshoku, Haibara, Tojo, Hiroshima, Tosu, Grout/
NITTOC Sashima General Center/NITTOC Hasuda General Center
Centers, etc.

Growth Strategy

Trade nameWhat is NITTOC?

Subsidiaries

ESG Section

Corporate Overview

2,500▪

TOPIX

Sapporo Branch

NITTOC stock price

2,000▪

Hokuriku Branch
Fukui Earth Engineering Co., Ltd.

1,500▪

Shimane Earth Engineering Co., Ltd

1,000▪

Tohoku Branch

Hiroshima Branch
Yamaguchi Earth Engineering Co., Ltd

500▪

Headquarters

Kyushu Branch0

Data Section(Stock price (yen) /TOPIX (points))

201961 │ NITTOC CONSTRUCTION CO., LTD.

2020

Integrated Report 2023 │

2021

2022

2023

Ehime Earth Engineering Co., Ltd.

Tokyo Branch
Nagoya BranchMidori Industries Co., Ltd

Osaka Branch│ NITTOC CONSTRUCTION CO., LTD.

Integrated Report 2023 │ 62